IMPORTANT POINT
The main legal point established in the judgment is that compliance with essential tender conditions, such as furnishing Earnest Money Deposit (EMD), is crucial for the validity of a technical bid. The court emphasized that it would not interfere with the tender process unless the decision-making was arbitrary.

ORDER :

The petitioner, which is a partnership concern, is before this Court calling in question an order dated 29-02-2024 which rejects the technical bid of the petitioner for tenders as found in the prayer. A consequent direction by issuance of a writ in the nature of mandamus is also sought to consider the bids of the petitioner afresh without insisting upon EMD along with other bids for the procurement year 2023-24.

2. Heard Sri Udaya Holla, learned senior counsel appearing for the petitioner, Sri K.S.Harish, learned Government Advocate appearing for respondent No.1, Sri Gangadhar Gurumath, learned senior counsel appearing for respondent No.2/Company and Sri P. Prasanna Kumar, learned counsel appearing for impleading applicants on I.A.No.1 of 2024.

3. The facts, in brief, germane are as follows:-

The petitioner, a proprietorship concern claims to be a Micro, Small and Medium Enterprise (‘MSME’) registered on 03-02-2021. The petitioner was treated as a small enterprise by the 2nd respondent/Karnataka Soaps and Detergents Limited (hereinafter referred to as ‘the Company’ for short). The bids submitted by the petitioner were accepted without insisting upon earnest money deposit for the year 2023. The petitioner then emerges as the successful tenderer for the previous year. For the current year, the notice inviting tender is issued by the Company in the month of December, 2023 for supply of chemicals and perfumery raw materials. The specification in the tender was that companies which were small enterprises are exempted from payment of earnest money deposit. The petitioner at the time of registration was a small enterprise but due to increase in turn over, it became a medium enterprise after the year 2021-22. It is the submission that in the notification issued by the competent authority it is stated that in the event of enterprise gets transformed from micro or small enterprise to medium enterprise, it would be entitled to certain continued benefits for a period of three years from the said date of change. The petitioner claims to have exercised its right of not furnishing any EMD on the score that it continues to get the benefit of small enterprise. Technical bid of the petitioner is rejected without divulging any ground. Therefore, the petitioner knocks at the doors of this Court, on noticing on the web portal that the technical bid of the petitioner had been rejected. This Court granted an interim order of status quo to be maintained, which is in operation till date.

4. The learned senior counsel Sri Udaya Holla representing the petitioner would contend that the petitioner is entitled to claim exemption from payment of EMD on the score that it continues to get the benefit of being a small enterprise. The tender document clearly indicated that such tenderers need not furnish EMD if they are small or micro enterprises. The learned senior counsel would submit that in terms of law, the petitioner is entitled to get the benefit of being a small enterprise and the rejection is erroneous. He, therefore, seeks a direction to the respondents to assess its tender as well.

5. Per-contra, the learned senior counsel Sri Gangadhar Gurumath representing the 2nd respondent/Company would vehemently refute the submissions to contend that the petitioner is blowing hot and cold. It has in fact furnished EMD long after the opening of the financial bid. Therefore, it is not its case that the petitioner was a small enterprise or is a micro enterprise. It is a medium enterprise which is not eligible to seek exemption of EMD. He would contend that the application should be clearly filled up as to whether it is claiming exemption or not. It is not for the Tender Scrutiny Committee to scrutinize why someone has not claimed exemption and how a tenderer has claimed exemption. The petitioner does not answer unequivocally along with the supporting documents on this issue and the petitioner has admittedly changed from being micro enterprise or a small enterpri