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Gajanana Power Controls Pvt. Ltd., Represented by its Director, N. Anil, Bengaluru v/s The Deputy General Manager (ELE) Operations-I, Bengaluru & Another

    Writ Petition No. 20761 of 2022 (GM - TEN) c/w Writ Petition No. 20762 of 2022 (GM - TEN)
    Decided On, 09 November 2022
    At, High Court of Karnataka
    By, THE HONOURABLE MR. JUSTICE M. NAGAPRASANNA
    For the Common Petitioner: M.S. Rajendra, M/s. Holla & Holla Associates, Advocates. For the Common Respondents: R1, S. Sriranga, Sr. Advocate, Sumana Naganand, Advocate, R2, M. Vinod Kumar, AGA.


Judgment Text
(Prayer: Writ Petition No.20761 of 2022 is filed under Articles 226 and 227 of the Constitution of India praying to quash the order rejecting the technical bid submitted by the petitioner in respect of the tender notification bearing No. COM/CGM(OP)/DGM(OP-1)21-22/54 dtd 28.03.2022 Annexure-F; declare that the bid submitted by the petitioner under the tender notification bearing NO.COM/CGM(OP)/DGM(OP-1)21-22/54 Dtd 28.03.2022 is technically responsive Annexure-F.

Writ Petition No. 20762 of 2022 is filed under Articles 226 and 227 of the Constitution of India praying to quash the order rejecting the technical bid submitted by the petitioner in respect of the tender notification bearing No.COM/CGM(OP)/DGM/(OP-1)21-22/76 dtd.28.3.2022 Annexure-E; declare that the bid submitted by the petitioner under the tender notification bearing No.COM/CGM(OP)/DGM/(OP-1)21-22/76/28.3.2022/Call-2 dtd.28.3.2022 is technically responsive Annexure-E.)

1. The petitioner common in both these petitions calls in question the rejection of his technical bids submitted pursuant to notice inviting tenders dated 28-03-2022 and consequently seeks a declaration that his bids are responsive.

2. Heard Sri.Rajendra.M.S., learned counsel for M/s Holla and Holla Associates appearing for petitioner, Sri.S.Sriranga, learned senior counsel appearing for respondent No.1 and Sri.M.Vinod Kumar, learned Additional Government Advocate appearing for respondent No.2.

3. Brief facts that lead the petitioner to this Court in the subject petitions, as borne out from the pleadings, are as follows:-

The petitioner claims to be in the business of repair and distribution of transformers for close to 25 years and further claims that he has a recognized name in the reconditioning and distribution of transformers. The 1st respondent/Bangalore Electricity Supply Company Limited (‘BESCOM’ for short) issued a notice inviting tenders on 28-03-2022 for the work of repair and re- conditioning 11 KV class single coil/multi coil conventional and 3, 4, 5 star rated failed distribution transformers of various capacities from 25 to 100 KVA and other allied works of lumpsum percentage on rate contract basis. The petitioner in both these cases submits his bids for Doddaballapura Taluk, Nelamangala Division of BESCOM. The tender was to be a two cover tender - first part would be the technical bid and the second the price bid. The last date for submission of technical bid was 26-04-2022. As observed hereinabove, the petitioner participates in the competitive bidding process finding himself eligible in terms of the notice inviting tenders, as according to him, he was qualified in all the terms and conditions and submits all necessary documents within the time stipulated. EMD of Rs.1,50,995/- was also deposited as required in terms of NIT. The technical bids of the petitioner come to be rejected on 01-10-2022, the same was displayed in the e- procurement portal of BESCOM. The petitioner, on the ground that he was the lowest bidder, submitted a representation seeking BESCOM to furnish the reason for rejection. No reply was received on the said representation of the petitioner. He appears to have come to understand that infrastructure facilities depicted by him in the tender documents were not countersigned by the competent authority i.e., the Executive Engineer of BESCOM. On the ground that they did not bear the signature endorsing the infrastructure, the petitioner’s bid had come to be rejected. It is this rejection that drives the petitioner to this Court in the subject petitions.

4. The learned counsel appearing for the petitioner would contend that the bids of the petitioner could not have been rejected as signature part of the document was a curable defect and is only ancillary to the terms and conditions; it is not the primary term or condition that would entail rejection of technical bids altogether. He would submit that only thing that is not found in the documents is attestation of infrastructure by the Executive Engineer.

5. On the other hand, the learned senior counsel Sri S. Sriranga appearing for the 1st respondent/BESCOM would refute the submissions to contend that the petitioner though had submitted everything did not get the infrastructure available with him endorsed by the competent authority. This was the necessity in the tender and without this, technical bid could not have been accepted. The learned senior counsel would submit that most of the tenderers bids who did not have this endorsement have been rejected at the technical bid stage itself, as the lacunae is uniformly applied to deny acceptance of technical bids. He would submit that the petition lacking in merit be dismissed.

6. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.

7. Notice inviting tenders is for short term. The conditions stipulated in the bid are depicted in Clause 15 which deals with Technical requirement and in column ‘Transformer Repair’ clauses (c) and (d) which are germane read as follows:

“(c) The bidder shall upload all the transformers repaired during the year for the same year uploaded in QR-I (b). For example if Bidder has repaired 1250 nos. of transformers during 2018-19 and has uploaded 400 nos. for meeting technical requirement as in QR 1(b), in such case the bidder should upload performance certificate for total 1250 nos. of repairs carried out in that particular year i.e.,2018-19.

The Bidder shall upload the Performance Certificate for the above (ex.1250 nos.) along with percentage failure rate of repaired distribution transformers within guarantee period is less than 6% issued by the concerned jurisdiction al officer not below the rank of Executive Engineer (Ele.) of C, O&M Divisionis of BESCOM/ESCOMs of Karnataka as per Revised Abstract-2 (enclosed) to be uploaded.

(d) Bidder should have necessary infrastructure for repairing at least 150 Nos. of Distribution Transformers per month. The Bidder should upload necessary self-declaration and Annexure-D.”

(Emphasis added)

Clause (c) directs that the tenderer shall upload all the transformers repaired during the year for the same year uploaded and clause (d) mandates that bidders should have necessary infrastructure for repairing at least 150 Nos. of distribution transformers per month and the bidder should upload self-declaration to that effect which is styled as Annexure-D. This is the technical requirement of any tender.

8. The petitioner uploads all the documents and with regard to details of T & P materials and testing equipments available with the bidder at the bottom of the list it had to be endorsed by the competent authority i.e., the Executive Engineer in terms of sub- clause (d) of Clause 15.1 supra. What the petitioner does is gives a declaration that he has submitted all the documents and has complied with all the conditions and stipulations and has not done any deviation whatsoever. This is declared by the petitioner as being the Director of the Company. What the petitioner would do is put his signature in place of signature of the Executive Engineer. What is found in the document is the signature of the petitioner alone with the seal of the company in place of Executive Engineer (Ele.). Therefore, the petitioner has not got his list of infrastructure endorsed at the hands of the competent authority i.e., the Executive Engineer as is required in the tender conditions of the notice inviting tender. The petitioner if had stopped at that would have been a circumstance altogether different. But, the petitioner puts his signature at the place of the signature of the Executive Engineer only to show that the document is complete in all respects and further declares that he has submitted all the documents in tune with the terms and conditions stipulated. Therefore, the act of the petitioner in not getting it signed by the competent authority is the first flaw and his act of signing the document in place of the Executive Engineer to make it complete is the next flaw, which would deny the relief to the petitioner.

9. The contention of the learned counsel for the petitioner is with reference to Clause 12.11 of the tender conditions which reads as follows:

“12.11The bidder shall establish the infrastructure required for carrying out transformer repairs at repair center within 15 days from the date of issue of DWA.”

Clause 12.11 permits the Bidder to establish the infrastructure to carry out transformer repairs, at the repair center within 15 days from the date of issuance of work order. This is relied on to contend that 15 days time is available to the petitioner to demonstrate that he had the infrastructure to submit his technical bid is unacceptable. What is to be furnished by the tenderer is found in Clause 15 to be the Technical requirement. What is found in Clause 12.11 is he should establish the infrastructure within 15 days of awarding of contract at the place where he is awarded the contract. This clause would not mean, even after the award of contract he can display his infrastructure. Displaying of infrastructure is a pre- requisite for submitting the technical bid. It cannot be a post award of contract act on the part of the tenderer. Therefore, the submission that he has 15 days time even to submit that he has infrastructure is misplaced on a reading of clause 12.11, as the Clause itself clearly depicts within 15 days of issuance of DWA.

10. Therefore, there is no ground that would warrant any interference in favour of the petitioner for the reason that the petitioner has misled the Tendering Inviting Authority by affixing his signature in place of the signature of the Executive Engineer only to make it complete which is a tender condition. That condition is ancillary to the main condition or not need not be gone into, because of the act of the petitioner in misleading the Tender Inviting Authority. He has not submitted the documents with clean hands and the condition in the tender clearly indicated that it has to be endorsed by the Executive Engineer. Being in violation of the tender condition, no fault can be found with the 1st respondent/BESCOM in declining to accept the tender of the petitioner at the technical bid stage itself.

11. The submission of the learned senior counsel for the respondent/BESCOM that this rule has been uniformly applied to all the tenderers who have submitted their infrastructure without getting it countersigned by the Executive Engineer and rejected would also be another circumstance apart from what is narrated hereinabove, to decline any interference at the hands of this Court.

12. The judgments relied by the learned counsel for the petitioner in the case of GUJARAT LIQUI PHARMACAPS PRIVATE LIMITED, VADODARA v. THE SECRETARY, DEPARTMENT OF HEALTH AND FAMILY WELFARE SERVICES, BANGALORE – 2008 SCC OnLine Kar 506 and in the case of BMM ISPAT LIMITED v. STATE OF KARANTAKA AND ANOTHER – 2016 SCC OnLine Kar 4549 to contend that such a condition being ancillary to the tender conditions cannot overpower the tender conditions to reject the tender are also unacceptable, as the issue in those cases was entirely different and the issue in the case at hand is violation of tender condition coupled with the act of the petitioner to have mislead the Tender Inviting Authority. Therefore, the judgments would not become applicable to the facts of the case at hand. Even otherwise, as held by the Apex Court in the case of N.G. PROJECTS LIMITED v. VINOD KUMAR JAIN AND OTHERS – (2022) 6 SCC 127 the Apex Court holds that constitutional Courts, in exercise of their judicial review, cannot substitute their opinion in respect of any condition of tender. The case before the Apex Court was concerning a particular format of a bank guarantee which the bidder was required to stick to, and that particular format alone had to be submitted. Both the learned single Judge and the Division Bench had held that, that was not a condition that could have led rejection of the tender. The Apex Court upturns the said finding by observing as follows:

“13. This Court sounded a word of caution in another judgment reported as Silppi Constructions Contractors v. Union of India [Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489] , wherein it was held that the courts must realise their limitations and the havoc which needless interference in commercial matters could cause. In contracts involving technical issues, the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above, the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. The courts must also not interfere where such interference would cause unnecessary loss to the public exchequer. It was held as under: (SCC p. 501, paras 19- 20)

“19. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts, but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give “fair play in the joints” to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.

20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind, we shall deal with the present case.”

(emphasis supplied)

14. In National High Speed Rail Corpn. Ltd. v. Montecarlo Ltd. [National High Speed Rail Corpn. Ltd. v. Montecarlo Ltd., (2022) 6

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SCC 401] , this Court sounded a word of caution while entertaining the writ petition and/or granting stay which ultimately may delay the execution of the mega projects. It was held as under : (SCC para 48) “48. Even while entertaining the writ petition and/or granting the stay which ultimately may delay the execution of the Mega projects, it must be remembered that it may seriously impede the execution of the projects of public importance and disables the State and/or its agencies/instrumentalities from discharging the constitutional and legal obligation towards the citizens. Therefore, the High Courts should be extremely careful and circumspect in exercise of its discretion while entertaining such petitions and/or while granting stay in such matters. Even in a case where the High Court is of the prima facie opinion that the decision is as such perverse and/or arbitrary and/or suffers from mala fides and/or favouritism, while entertaining such writ petition and/or pass any appropriate interim order, High Court may put to the writ petitioner's notice that in case the petitioner loses and there is a delay in execution of the project due to such proceedings initiated by him/it, he/they may be saddled with the damages caused for delay in execution of such projects, which may be due to such frivolous litigations initiated by him/it. With these words of caution and advise, we rest the matter there and leave it to the wisdom of the Court(s) concerned, which ultimately may look to the larger public interest and the national interest involved.” 13. In view of the preceding analysis, finding no merit to entertain the petitions, the petitions would necessarily meet its dismissal and are accordingly dismissed. Consequently, pending applications also stand disposed.
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