At, High Court of Karnataka
By, THE HONOURABLE MR. JUSTICE ASHOK B. HINCHIGERI
For the Petitioner: Uday Holla, Senior Counsel for M.H. Hidayathulla, Advocate. For the Respondents: R1, R3 to R7, S.S. Naganand, Senior Counsel for S. Sriranga, M/s. Just Law, Advocates, Madhusudhan R. Naik, AG.
Published In:- Published In 2017 (1) BC 412, 2017 (2) AIR (Kar) R 247
(Prayer: This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to quash and canceling the impugned tender dated 19.8.2016 (being Annexure - A) issued by the R1 and declaring the response/impugned order dated 14.9.2016 (being Annexure - E) of the R1 as not in accordance with law.)
1. The petitioner has called into question the tender issued by the respondent No.1 for the supply of power contending that certain terms and conditions of the tender are arbitrary and discriminatory. It has also sought a writ that the first respondent's order, dated 14.9.2016 (Annexure-E) on the petitioner's representation seeking clarifications is not legal. The petitioner, who claims to be a prospective bidder, sought interim stay of the impugned tender process. On 26.9.2016, this Court turned down the petitioner's request for the grant of interim stay. Aggrieved by the same, the petitioner filed W.A.No.3869/2016. The Division Bench, by its order, dated 6.10.2016 directed the respondents not to award the contract without the leave of the Court. It was continued till the first week of January 2017 by the Division Bench, by its order, dated 25.10.2016. In the meanwhile, the impugned tender process was called off vide first respondent Board's resolution, dated 18.11.2016 and the Letter of Award ('L.O.A.' for short), dated 21.11.2016 was issued by the respondent No.1 to the Maharashtra State Electricity Distribution Company Limited ('MSEDCL' for short) for restraining the respondents from taking steps/executing any documents pursuant to the said L.O.A.. The respondent Nos.1 and 3 to 7 filed the memo seeking the dismissal of this
Please Login To View The Full Judgment!
etition as infructuous on 19.11.2016. This Court, by its order, dated 30.11.2016 allowed the said I.A. Two factors which weighed with this Court in allowing the said I.A. was the Division Bench's interim order that the authorities may finalise the tender process but shall not award contract without the leave of the Court. This Court, by its order, dated 29.11.2016 in W.P.No.61187/2016 granted the interim order staying the Karnataka Electricity Regulatory Commission's ('K.E.R.C.)'s order, dated 21.11.2016.2. The Division Bench, by its judgment, dated 2.12.2016 dismissed W.A.No.3869/2016 as having become infructuous due to the subsequent event. It reserved the liberty to the parties to raise all the contentions in the writ petitions. It also observed that the learned Single Judge before whom the petitions are pending shall consider them uninfluenced by the order of dismissal of the said appeal. In the wake of the dismissal of the said writ appeal, the respondent No.1 filed I.A.No.4/2016 for recalling the interim order, dated 30.11.2016.3. The petitioner filed I.A.No.5/2016 contending that the respondent No.1 is not entitled to any right of ordinance, as it has been violating the orders passed by the Courts.4. Sri Naganand, learned Senior Counsel appearing for Sri Sriranga for the respondent No.1 submits that I.A.No.3/2016 was allowed by granting interim stay on 30.11.2016 mainly on the ground of the granting of the interim order by the Division Bench on 06.10.2016 and its continuance thereafter till the first week of January 2017. He submits that the Division Bench has dismissed the said appeal as having become infructuous due to subsequent event. In view of the dismissal of the writ appeal, he requests that the order, dated 30.11.2016 be recalled. He submits that as the writ appeal itself is dismissed as having become infructuous, this writ petition is also liable to be dismissed as having become infructuous. In this regard, he also brings to my notice calling off of the impugned tender process on 18.11.2016 and the issuance of the L.O.A. to the MSEDCL. The learned Senior Counsel submits that the granting of the interim stay on 29.11.2016 in W.P.No.61187/2016 also does not come to the rescue of the petitioner, because what is stayed by this Court in the said writ petition is the K.E.R.C.'s order, dated 21.11.2016 and not the supply of power by the MSEDCL to the respondent No.1. He submits that the State is hard-pressed for power. To meet the State's pressing power requirements, the MSEDCL is given the L.O.A. to supply the power for a short term. He submits that the power is being supplied by the MSEDCL at the lowest ever rate of Rs.3.62 per unit.5. He submits that the petitioner is not even a tenderer. He has not supplied a unit of power. The petitioner is only abusing the process of law. It cannot be permitted to indulge in the arm- twisting of the respondents.6. He submits that the continuing of interim order does not benefit the petitioner; on the other hand it causes harm to the public interest.7. He relies on the Delhi High Court's decision in the case of MAN INDUSTRIES (INDIA) LTD. vs. UNION OF INDIA AND ANOTHER in W.P.(C) No.9595/2009 disposed of on 02.07.2009 for advancing the submission that the judicial review in the contractual matters cannot be invoked for safeguarding the private interests.8. Sri Madhusudhan R.Nayak, learned Advocate General appearing for the second respondent Department of Energy submits that the K.E.R.C.'s function is to see that the consumers of electricity are not over-burdened with the higher rates. He submits that if it finds that the power is purchased at a higher rate, it may ask the Government and the respondents to bear the additional burden. But the order of the K.E.R.C. may not ultimately have any bearing on the procurement of power and that too when it is for a short term.9. He submits that the courts would not interfere even if the procedural aberrations or error in assessment to the tender are made out. The power of judicial review can not be invoked to protect private interest at the cost of public interest in the commercial contracts. He submits that for the short term supply of power, even the permission of the K.E.R.C. is not necessary under Regulation 21.2 of the Karnataka Electricity Regulatory Commission (Conditions of Licence for ESCOMs) Regulations, 2004.10. In support of his submissions, he cites the following decisions:(i) (2014) 11 SC 288 in the case of Siemens Aktiengeselischaft and Siemens Ltd. vs. Delhi Metro Rail Corporation.(ii) (2000) 2 SCC 617 in the case of AIR India Ltd. vs. Cochin International Airport Ltd. and others.(iii) (2012) 8 SCC 216 in the case of Michigan Rubber (India) Ltd. vs. State of Karnataka.(iv) (2012) 6 SCC 464 in the case of Tejas Constructions and Infrastructure Pvt. Ltd. vs. Municipal Council Sendhwa.(v) (2014) 3 SCC 493 in the case of Sanjay Kumar Shukla vs. Bharat Petroleum Corporation Ltd.11. Sri Udaya Holla, learned Senior Counsel appearing on behalf of the petitioner complains of the contumacious conduct of the respondent No.1. He submits that even in the wake of the two interim orders of stay, the first respondent continues to procure power from the MSEDCL. He submits that there is no power shortage in Karnataka. The bogey of power crisis is being raised only to justify the supply of power from MSEDCL in defiance of this Court's orders. He submits that the rule of law and majesty of law have to be upheld. Unless power supplied from MSEDCL is forthwith stopped pursuant to the interim orders passed by this Court, the respondent No.1 is not entitled to any right of audience . In support of his submissions he relies on the following decisions:(i) (2001) 8 SCC 650 in the case of Pravin C.Shah vs. K.A.Mohd. Ali and another.(ii) AIR 1924 Calcutta 953 in the case of Raj Rajeswari Jiu and others vs. Gati Krishna Chakrabarti and others.(iii) All England Law Reports 567 in the case of Hadkinson vs. Hadkinson.12. He submits that no appeal is filed against this Court's order, dated 30.11.2016, although the first respondent's learned advocate insisted for the immediate issuance of the certified copy of the stay order to enable them to file the writ appeal. He submits that they have filed W.A.No.4786/2016 against the order, dated 29.11.2016 passed in W.P.No.61187/2016. But the respondent No.1 has not made any efforts to have the said appeal brought up before the Division Bench for the stay of the order, dated 29.11.2016 passed in W.P.No. 61187/2016.13. He submits that under Section 19 of the Electricity Act, 2003, the K.E.R.C. can revoke the licence of the first respondent, if it commits willful and prolonged default in doing anything required of it by or under the said Act or the rules or regulations made thereunder. Therefore it cannot be said that the K.E.R.C.'s orders have no bearing on the procurement and supply of power. He submits that the respondent No.1 cannot hold secret negotiations and place an order with somebody. In support of his submissions, he relies on the following decisions:(i) ILR 1990 Kar.1153 in the case of Indian Hume Pipe Co. Ltd. vs. Bangalore Water Supply and Sewerage Board.(ii) AIR 1985 SC 1147 in the case of Ram and Shyam Company vs. State of Haryana and others.14. He submits that the MSEDCL had also submitted its tender in response to the impugned tender notification, but its tender notification was liable to be rejected as M/s.JSW was the L1 bidder. Whereas M/s.JSW offered to supply power at the rate of Rs.3.87 per unit, MSEDCL offered to do it at the rate of Rs.3.90 per unit. Now the MSEDCL is given the contract for malafide reasons. He submits that the petitioner has filed the affidavit to supply the power to the respondents at the rate of Rs.3.61 per unit. Public interest demands that the power be purchased at the lowest possible rate.15. On I.A.No.2/2016 for amendment, he submits that the first respondent's act of issuing L.O.A. to the MSEDCL by abandoning the impugned tender process gives a continuing cause of action. He submits that the petitioner has challenged the subsequent development of issuing the L.O.A.. He submits that the amendment applications are to be considered liberally. If the petitioner is made to file a fresh petition, it would only lead to multiplicity of proceedings. If it is permissible for the petitioner to file a fresh petition, there is no reason why the same relief which could be prayed in a new petition cannot be permitted to be incorporated in this petition. In support of his submissions, he relies on the following decisions:(i) (2002) 7 SCC 559 in the case of Sampath Kumar vs. Ayyakannu and another.(ii) (2004) 6 SCC 415 in the case of Pankaja and another vs. Yellappa (dead) by LRs. and others.(iii) (2006) 4 SCC 385 in the case of Rajesh Kumar Aggarwal and others vs. K.K.Modi and others.(iv) (2006) 6 SCC 498 in the case of Baldev Singh and others vs. Manohar Singh and another.16. Relying on the Hon'ble Supreme Court's decision in the case of ANITA INTERNATIONAL vs. TUNGABADRA SUGAR WORKS MAZDOOR SANGH AND OTHERS reported in (2016) 9 SCC 44 he would contend that the respondent No.1 ought not to have violated the interim orders when they are subsisting.17. Sri Naganand, learned Senior Counsel submits, on instructions, that the petitioner's offer to supply the power at the rate of Rs.3.61 could be placed before the K.E.R.C. by the respondent No.1.18. The submissions of the learned counsel have received my thoughtful consideration.19. The first question that falls for my consideration is whether I.A.No.2 for amendment is to be allowed?20. The prospective bidder has filed this writ petition aggrieved by certain terms and conditions of the impugned tender notification. It has also challenged the first respondent's order issuing clarifications on the queries raised by the petitioner. It is not in dispute that the impugned tender process itself is called off pursuant to the first respondent Board's resolution, dated 18.11.2016 and subsequently the L.O.A. is issued to the MSEDCL for the supply of power. When the impugned tender process itself is abandoned, nothing survives for any consideration of this petition. This petition is liable to be dismissed as having become infructuous. The cause of action is that which gives occasion for and forms the foundation of the petition. The cause of action comprises the facts which give a person a right to seek judicial redress or relief against another. But the cause of action and the remedy sought are entirely different matters. The cause of action for filing the writ petition is the inclusion of certain terms and conditions in the first respondent's notification/advertisement calling for tenders. The amendment application is for the incorporation of the prayer for raising the challenge to the abandonment of the tender process and giving the contract to the MSEDCL without resorting to the bid process. I am of the considered view that the causes of action for filing the writ petition and for seeking the amendment are entirely distinct and separate. The facts and grounds for assailing the terms and conditions of the tender notification are different from the facts and grounds for assailing the abandonment of the tender process and giving the contract to the MSEDCL. Even assuming, but without delivering any finding on the allegation, that the respondent No.1 had acted in a defiant way, the petitioner's remedy would be to file a fresh and a duly constituted petition challenging the respondent's issuance of L.O.A. to the MSEDCL. I therefore dismiss I.A.No.2/2016 for amendment.21. The second question that falls for my consideration is what orders are to be passed on I.A.No.4/2016 for recalling the order, dated 30.11.2016? As the writ petition itself is being disposed of as having become infructuous, the interim order, dated 30.11.2016 would obviously cease to be in operation from today. With this clarification, I.A.No.4/2016 is disposed of.22. Nextly I am left with I.A.No.5/2016 filed by the petitioner not to hear the first respondent on I.A.No.4/2016, until and unless it has complied with the interim order, dated 30.11.2016 staying the L.O.A., dated 21.11.2016. The dismissal of I.A.No.2/2016 has virtually rendered this petition infructuous. Consequently, I.A.No.4/2016 is disposed of by issuing the clarification that interim order of stay has ceased to be in force with the disposal of the writ petition.23. In view of the dismissal of I.A.No.2/2016 for amendment, nothing survives for consideration of this petition. This petition is disposed of as having become infructuous. But the question that remains to be considered is what relief can be given to the petitioner, even when this petition has become infructuous. The petitioner cannot be denied of the relief to which it is entitled to. When the petitioner has undertaken, by filing the necessary affidavit, to supply the power at the rate of Rs.3.61 per unit, its offer cannot be ignored. It is all the more so, when the MSEDCL is given the contract to supply the power at the rate of Rs.3.62 per unit. It is in the interest of the electricity consuming public of Karnataka State and of the respondents to purchase the power from any source but at the lowest possible rate. But I do not propose to give any binding direction that the power should be purchased from the petitioner, because the petitioner's offer is to be examined by the concerned technical experts or by the concerned authority. This Court is not a forum for undertaking the said exercise, as it has no technical expertise.24. The ends of justice would therefore be met by my directing the petitioner to submit a detailed representation to the first respondent, furnishing all the material particulars, within one week from today. The respondent No.1 shall place the anticipated representation before the K.E.R.C. within one week from the date of the receipt of the anticipated representation. The K.E.R.C. is requested to consider the petitioner's anticipated representation, the first respondent's remarks thereon and by putting all the concerned parties on notice. It is for the K.E.R.C. to decide as to whether the petitioner has the eligibility and entitlement, whether its offer is preferable to the offer of the MSEDCL, who is in a better position to supply better quality of power, whose power-supply would be assured and dependable and all other matters connected therewith. The K.E.R.C. shall take a decision in the matter as expeditiously as possible and in any case within three weeks from the date of the first respondent's placing the petitioner's anticipated representation on the record of the K.E.R.C. Needless to state that all the contentions are left open to be urged before the K.E.R.C.25. This writ petition is accordingly disposed of. No order as to costs.
"2017 (1) BC 412" == "2017 (2) AIR (Kar) R 247,"