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M/s. Transvision Software & Data Solutions Pvt.Ltd. & Another v/s The State of Karnataka, Rep. By Energy Department & Others

    W.P.Nos. 44453-44455 of 2014 (GM-TEN) c/w W.P.Nos. 50128-50130 of 2014 (GM-TEN)

    Decided On, 25 August 2015

    At, High Court of Karnataka


    For the Petitioners: P.S. Rajagopal, Aditya Sondhi, Senior Counsels, Madhukar M. Deshpande, Santosh S. Nagarale, Advocates. For the Respondents: R1, Vijayakumar A. Patil, AGA, R2, R3, R4, R6 & R7, Naganand, Senior Counsel for S. Sriranga, R9, V.S. Naik, R10, M. Naga Prasanna, K. Putte Gowda, Advocates.

Judgment Text

(Prayer: These writ petitions are filed under Articles 226 & 227 of the Constitution of India, with a prayer to set aside proceedings of the pre bid meeting of the R-2 dated 14.8.2014 vide Ann-R; Set Aside Conditions 3[d], 3[e], E[f] AND 3[j] of the Tender Document Vide Ann-N issued by the R-2 & 7; Set Aside Conditions 3[d], 3[e], E[f] and 3[j] of the Tender Document Vide Ann-P Issued by the R-2 & 7 and Etc.)

1. The petitioners in these petitions claim to be aggrieved by the conditions at 3(d)(e)(f) and (j) of the tender enquiry document dated 26.07.2014 at Annexures-N and P to the petitions issued by the second respondent. The petitioners had raised their grievance with regard to the same in the pre-bid meeting held on 14.08.2014. The committee of the second respondent has not acceded to the change sought by the petitioners. Hence the petitioners are also assailing the said proceedings of the pre-bid meeting dated 14.08.2014 at Annexure-R to the petitions. In that light, the petitioners are seeking issue of mandamus to direct the respondents No.1 and 2 to 6 to conduct the tender process fairly and without discrimination.

2. The second respondent has invited tender for providing web-based Total Revenue Management ('TRM' for short) services inclusive of supply of hardware, software, manpower, stationeries and the consumables to its subdivisions. Among other conditions, the qualifying requirement for the bidders is contained in clause 3.00. The relevant clauses therein with which the petitioners claim to be aggrieved are the following:

"3.00 Qualifying requirement for Bidders:

(a) ----------

(d) The bidder should be in operation of web- enabled total revenue management services for a minimum of 2 years on the date of bid and should have been providing such services for at least one power utility/ESCOMs of Karnataka.

(e) (i) The total Average Annual Turn over in the last 2 year (Fy 12-13 & Fy 13-14) from web-enabled TRM service provided to ESCOMs shall not be less than rupees two crores. (ii) The Liquid asset and or enjoying of credit facility shall be at least Rupees Fifty Lakhs in the immediate preceeding financial year 2013-14.

(f) The Bidder should have been working as a Service Provider for MBC Services to Electric Utility companies (ESCOMs), Electricity Boards in India and should have been serving at least in 2 utilities individually and should be serving a minimum of 10 Lakh consumers per month as on the date of issue of this Tender. Experience certificate to be submitted as per proforma (Annexure-I).

(g) -----------

(j) Those of the Software Provider Agencies whose earlier Work Awards have been terminated for non- performance and disqualified in the subsequent Tenders of GESCOM/blacklisted in any of the electric power utilities are not eligible to participate in this tender and their offers will be rejected at technical evaluation stage and the EMD of such bidder will be forfeited.

(k) --------- "

3. The petitioners who claim to be in the field of development of software and having rendered their services to several public sector undertakings in TRM system and also having rendered their services in TRM services to the second respondent and to another electricity supply company, contend that the said qualifying requirements have been fixed only with the intention of eliminating other competent bidders including the petitioners and to aid the respondents No.9 and 10 to remain as the only bidders in the field. In that view, it is claimed that there is no level playing field. It is the contention that if the restriction is made with regard to the bidders who have executed the web based TRM work at least for two years and the average annual turnover of Rs.2 crores from web based TRM activities is insisted upon, only the respondents No.9 and 10 would qualify in that regard. The experience of 10 lakh installations is also a condition which can only be satisfied by respondents No.9 and 10 and none others. The clause relating to termination for poor performance and blacklisting being limited only to the second respondent is not justified. In that view, it is their case that the said clauses if not modified would limit the competition only amongst respondents No.9 and 10 and exclude all others. Further the petitioners also claim to be aggrieved by the Corrigendums dated 21.08.2014 and 03.09.2014 which extends the time and the clause 2.01(IV) which alters the scope of work.

4. The respondents No.2, 4 and 7 and also the respondents No. 9 and 10 have filed their objection statement. Since the challenge by the petitioners is to the tender conditions and it has been raised at the pre- bid stage, the contention of the second respondent alone would be relevant at this stage. The said respondent apart from contending that the petitioners not having submitted their bid and therefore not having locus standi have also sought to justify their action. It is contended that the conditions mentioned in the tender document is essential for the efficient functioning of the Web Based TRM system having a large consumer base.

5. Heard Sri P.S.Rajagopal, Sri Aditya Sondhi, learned senior counsel for the respective petitioners, Sri Naganand, learned senior counsel, Sri V.S.Naik, Sri Nagaprasanna, learned counsel and Sri Vijayakumar A.Patil, learned Government Advocate for the respective respondents. Perused the petition papers in that light.

6. The petitioners though have not submitted their bids in response to the tender notifications, on securing the tender documents have found some of the conditions to be not justified according to them. In that view, they have taken part in the pre-bid meeting and have sought deletion or modification of such conditions. On consideration, their request has been declined. It is in that background they are before this Court. If that be the position, it is not as if the petitioners were never interested in the tender process and in that view, they have not responded. The contention is that the conditions are onerous and as such are prevented from taking part. Therefore, the locus standi of the petitioners to maintain these petitions cannot be in doubt. As such the contention of the second respondent to that effect cannot be accepted.

7. The learned senior counsel for the parties have referred in detail with regard to the scope of work to be performed for the billing process in TRM system and the Web-Based TRM system. With regard to the scope of work to be performed, even if it is accepted that the petitioners have the capability to carry out such work, the question is as to whether they can contend that the second respondent cannot impose the pre- qualification condition with regard to the length of previous experience in the same field and the quantum of work performed both in financial terms and the customer base, in the manner has been done. Admittedly, if such condition is imposed, the petitioners would not qualify and the possibility is that respondents No.9 and 10 would be the only tenderers who may remain in the field.

8. Since the conditions imposed by the tender documents are assailed, the scope of interference permissible by way of judicial review is to be kept in perspective. The learned senior counsel for the second respondent in order to emphasise the limited scope available to this Court, has relied on the decisions in the case of Delhi Development Authority and another vs. UEE Electricals Engineering (P) Ltd and another (2004(11) SCC 213); in the case of Michigan Rubber (India) Limited vs. State of Karnataka and others [(2012)8 SCC 216)] and in the case of Pathan Mohammed Suleman vs. State of Gujarat and others [(2014)4 SCC 156]. To the same effect, the learned counsel for the tenth respondent has relied on the decision in the case of Sanjay Kumar Shukla vs. Bharat Petroleum Corporation Limited and others [(2014)3 SCC 493].

9. Having perused the above cited decisions, I am of the opinion that it is not necessary to overburden this order by referring to the details and analysing the said decisions, since the said legal position was considered by me in a somewhat similar situation between the same parties in relation to another ESCOM and the order passed in W.P.No.19155/2013(GM-TEN) dated 21.08.2013 is a part of these petition papers at Annexure-H. Suffice it to reproduce the relevant portion of that order wherein the position has been summarised, which reads as hereunder;

"8. The further contention of the learned senior counsel for the petitioner is that the qualifying requirement contained in 9(e) and (f) of the tender document is not appropriate inasmuch as none of the persons responding to the bid would possess such qualification.

On the other hand, the learned counsel appearing for respondents No.2 and 3 as also the learned senior counsel appearing for the fifth respondent would contend that the conditions to be prescribed for prequalification and the interference by way of judicial review in that direction is well settled and in that regard, the decisions in the case of Michigan Rubber (India) Ltd vs. State of Karnataka and ors (2013(4) Kar.L.J. 231 (SC)), in the case of Tata Cellular vs. Union of India [(1994)6 SCC 651], in the case of Directorate of Education and ors vs. Educomp Datamatics Ltd and ors [(2004)4 SCC 19] and in the case of Jagadish Mandal vs. State of Orissa and ors {(2007)14 SCC 517} are relied upon. A cumulative perusal of the said decisions would indicate that the process of inviting tenders is a administrative decision for which the Court does not have the expertise and the fixing of the eligibility criteria is within the domain of the tender inviting authority. Hence, the Courts would not interfere unless it is arbitrary, discriminatory or biased.

9. When the power to be exercised by the Court is circumscribed by the observations of the Hon'ble Supreme Court and when it is seen that in the instant case the petitioner is making out a grievance that the eligibility criteria fixed in clause 9(e) and (f) is of a nature which cannot be fulfilled as the petitioner nor any other person can claim to comply with the same, such contention cannot be accepted at this juncture, as it is for the Tender Inviting Authority ('TIA' for Short) to assess the market and fix the requirements and find out as to whether the persons who have responded have the qualification. Merely because the petitioner is unable to satisfy the said criteria, it cannot be said that it is unreasonable. Further, when the petitioner also contends that none of the bidders can comply such conditions and even at this stage, contends that the fifth respondent has not complied with the said conditions, it cannot be a case where it can be said that the said condition has been fixed only to favour a particular bidder so as to term it as arbitrary discriminatory or biased and interfere with the ongoing process."

(emphasis is presently supplied)

10. The decisions cited and referred above is reiteration of the said position and would reinforce the conclusion about the limited scope of judicial review permissible in matters of the present nature.

11. In the instant case, the contention no doubt is not that none will satisfy the pre qualification criteria, but it is contended that the conditions would disentitle the petitioners to participate and permit only respondents No.9 and 10. As such, the impugned conditions are tailor made to suit that situation, is the contention. The contention in that regard is that apart from respondents No.9 and 10, none would have two years experience and the financial turn over as sought and the blacklisting clause is made specifically to enable the private respondents herein to participate without disqualification. The petitioners contend that they have the experience in TRM system which is similar to Web Based TRM system, except that the platform is 'internet' for Web Based. In that regard the petitioner has sought to rely on the opinion given by an expert in the field, which is filed along with a memo dated 12.08.2015. The certificate dated 08.01.2015 at Annexure-W is relied to contend that the petitioner is undertaking similar Web Based TRM system work for HESCOM. The contention is also that the impugned conditions do not form a part of the tender conditions of the other ESCOMS and as such it should be uniform.

12. The learned senior counsel for the petitioners have relied on the decision in Natural Resources Allocation in Re.Special Reference No.1 of 2012 [(2012) 10 SCC 1] wherein in a matter relating to disposal of natural resources, the entire issue of public largesse and the procedure to be adopted was considered keeping in view the scope of judicial review. Reliance is placed on the case of Reliance Energy Ltd and another vs. Maharashtra State Road Development Corporation Ltd and others [(2007)8 SCC 1] wherein it is held that judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. The non-discrimination envisaged under Article 14 of the Constitution is adverted and the concept of right to life is considered on the basis of level playing field. In that view it is held, if there is vagueness or subjectivity in the said norms, it may result in unequal and discriminatory treatment and it may violate the doctrine of level playing field.

13. The decision relied on is also in Re The Special Courts Bill, 1978 [(1979)1 SCC 380) wherein on the question that was being considered, a similarity was found with regard to the persons involved in that case, but had been differentiated only with reference to the point in time and as such it was held that they were birds of the same feather and they should be flocked together.

14. In the above background, the question is as to whether the pre-qualification condition imposed in the instant tender process can be considered as discriminatory merely because the petitioners do not answer the requirement, while somebody else does? Is the concept of level playing field violated for that reason in the present facts?

15. The very nature of the query made by the petitioners in the pre-bid meeting on 14.08.2014 depicted in Annexure-R will disclose that the petitioners do not possess the said pre-qualification sought for, while they admit that respondents No.9 and 10 satisfy the same. From the decisions noticed above, the legal position that the fixing of the eligibility criteria is within the domain of the tender inviting authority and that in respect of such administrative decision the Court does not have the expertise, is well established. In that light, what can be considered is only to the extent as to whether the fixing of the eligibility criteria is so arbitrary that it would call for judicial intervention.

16. Obviously the Web-Based TRM system for billing is an advanced mode which will need the expertise depending on the area of operation and the customer base of the particular ESCOM. The technology involved is for uploading the picture position to the server. The process involves billing a consumer instantaneously and on that basis, recovering the cost of energy consumed which is an important activity from the view point of both the ESCOM as well as the consumer. The petitioners may have the knowledge as well as the expertise and may also be capable of undertaking such project. But, it does not mean that the Tender Inviting Authority cannot seek the tenderer to satisfy the Tender Inviting Authority that such work has been performed by them for a reasonably long period without complaints so that the Tender Inviting Authority can be sure of the credentials of the entity to whom such important task is being entrusted.

17. Even if the other ESCOMS have not imposed such condition, that does not mean that one of them keeping in view the customer base, the volume of work and area of operation should not insist on such experience both in length of time and value of work performed in similar situation so as to be sure of the capability. In fact, if the other ESCOMS do not have such condition, it makes it more meaningful since the entities like the petitioners would have the opportunity of competing in the tender of such ESCOMS and gaining the experience which would be a gateway for higher avenues. On the other hand, depending on the need if one of the ESCOMS has set a higher standard as eligibili

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ty and if there are entities who have the capacity to satisfy such requirement, it cannot be contended that it is tailor made for them. It cannot be expected that the standard of assessment should be lowered only because the petitioners cannot measure up to the requirement. 18. In that light, even if the decisions relied on by the learned senior counsel for the petitioners is noted, the application of Article 14 of the Constitution is not envisaged to treat un-equals as equals and in that regard apply the concept of level playing field. Providing level playing field does not mean that the Tender Inviting Authority is required to lower the bar to suit the competence of every person or the entity who intends to respond to the tender. It may be true that by lowering the bar and diluting the eligibility criteria, there would be more applicants, accordingly more horses would no doubt run the race and there may be more competition in the financial bid, but it would be without knowing the capability to perform though one may have the technical qualification without the proven experience. 19. Thus, it is seen that in the instant case the eligibility criteria at Clause 3.00 (d), (e) and (f) is with a purpose to ensure that an appropriate and experienced service provider is ultimately selected, which has a nexus to the object to be achieved. Hence, it cannot be termed as arbitrary or discriminatory to call for judicial intervention. If that be the position, when the petitioners do not satisfy the said basic pre-qualification requirements, considering the validity of the other conditions which are assailed and the challenge to the corrigendum is of no consequence, which therefore need not be adverted to in detail. In the result, the petitions being devoid of merit stand dismissed without order as to costs.