MANU/KA/1141/2019

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

Writ Petition No. 8174 of 2019 (GM-TEN)
Decided On: 28.02.2019
Appellants: Karam Chand Thapar & Brothers (Coal Sales) Limited
Vs.
Respondent: Karnataka Power Corporation Limited
Hon'ble Judges/Coram:
Alok Aradhe, J.
Counsels:
For Appellant/Petitioner/Plaintiff: M. Nagaprasanna, Sr. Counsel for Suvarna M.L., Adv.
For Respondents/Defendant: Uday Holla, Sr. Counsel for Ajay J. Nandalike, Adv.
ORDER
Alok Aradhe, J.
1 . Mr. M. Nagaprasanna learned Senior counsel for Ms. Suvarna M.L., learned counsel
for the petitioner.
Mr. Uday Holla, learned Senior counsel for Mr. Ajay J. Nandalike, learned counsel for
the respondent.
2 . The writ petition is admitted for hearing. With consent of the parties, the same is
heard finally.
3. In this petitioner under Articles 226 & 227 of the Constitution of India, the petitioner
inter alia seeks quashment of pre bid modifications made to the tender notification
dated 8.11.2018. In order to appreciate the petitioner's challenge to the impugned
modifications, few facts need mention, which are stated hereinafter.
4 . The petitioner is engaged in the business of liaisoning, movement, handling and
delivery of raw coal from the coalfields to thermal power stations either by rail route or
rail-sea-rail route for several decades and has been awarded contracts on several
occasions. It is averred in the writ petition that during the subsistence of the contract
with the petitioner, a tender notification was issued by the respondent on 24.05.2018.
The petitioner submitted a representation on 13.06.2018 for cancellation of the
aforesaid tender notification. However, on 08.11.2018, another tender notification for
liaisoning movement, handling and delivery of raw coal from Mahanadi coal fields Ltd.,
Talcher in the State of Odisha to Raichur Thermal Power Station/Bellary thermal power
station in the State of Karnataka by rail-sea-rail route. It is pleaded in the writ petition
that a lot of clarification were submitted by the tenderers in the pre-bid meeting and
pre-bid clarifications are uploaded by the respondents. However, it is averred that in the
garb of pre-bid clarification, the respondent herein has materially altered several
conditions of the tender clauses pertaining to eligibility of the tenderers, which amounts
to amendment of the tender notification on 10.01.2019 with a view to help certain
tenderer. The petitioner thereupon submitted a detailed representation on 29.01.2019.
However, the representation submitted by the petitioner failed to evoke any response

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 and date of opening of financial bids was fixed as 19.02.2019. In the aforesaid factual
backdrop, the petitioner has approached this Court.
5. Learned Senior counsel for the petitioner submitted that Notice Inviting Tender was
issued on 08.11.2018 and one pre-bid clarification meet was held on 27.11.2018,
whereas, another pre-bid clarification was made on 20.12.2018. It is further submitted
that the respondents were well within their rights to issue clarifications but could not be
permitted to alter the conditions in the Notice Inviting Tender pertaining to eligibility
criteria. It is submitted that the modifications in the Notice Inviting Tender have been
issued suo motu and the conditions of eligibility in the Notice Inviting Tender have been
changed to favour a particular tenderer. It is also submitted that being aggrieved, the
petitioner submitted a representation. However, no action was taken on the
representation. In support of aforesaid submissions, reference has been made to
decisions of Supreme Court in MICHEGAN RUBBER (INDIA) LTD., VS. STATE OF
KARNATAKA AND OTHERS', MANU/SC/0662/2012 : (2012) 8 SCC 216 AND 'MUNICIPAL
CORPORATION UJJAIN AND ANOTHER VS. B.V.G. INDIA LTD., AND OTHERS',
MANU/SC/0293/2018 : (2018) 5 SCC 462.
6. On the other hand, Learned Senior Counsel for the respondents submitted that KPCL
had floated the tender for transportation of coal. Rule 14 of Karnataka Transparency
Public Procurements Rules, 2000 (hereinafter referred to as 'the Rules' for short) as well
as Clause 4.05 of the NIT, empowers the respondent to issue pre-bid clarifications even
suo motu. It is also pointed out that pre-bid clarifications were uploaded on
09.01.2019. The petitioner submitted its bid on 16.01.2019 with his eyes wide open
and therefore, the petitioner is estopped by conduct from contending at this point of
time that in the garb of pre-bid clarifications, the respondent cannot be permitted to
alter the terms and conditions of the Notice Inviting Tender. It is also pointed out that
thereafter on 19.01.2019, the technical bids were opened and this petition was filed on
15.02.2019. It is further submitted that the Notice Inviting Tender in question as an
element of public interest as the respondent to seek to procure the coal as there is a
shortage of coal in the State of Karnataka. It is also urged that under Rule 14 of the
Rules, the respondent has the authority to make any change in the tender condition. It
is argued that this Court in exercise of powers under Article 226 of the Constitution of
India would interfere in contractual matter only when there is an overwhelming public
interest is involved and not because legal point is made out. It is also urged that even if
procedural abrasion or error is made out the Court will not interfere if the award of
contract is in public interest and tendering authority has discretion to set eligibility
criteria and scope of interference with the terms and conditions of the contract is
extremely limited. In support of aforesaid submissions, reliance has been placed on
decisions of Supreme Court in 'RAUNAQ INTERNATIONAL LTD., VS. I.V.R.
CONSTRUCTION LTD. AND OHTERS', MANU/SC/0770/1998 : (1999) 1 SCC 492, '
MASTER MARINE SERVICES (P) LTD. VS.L METCALFE & HODGKINSON (P) LTD. AND
ANOTHER', MANU/SC/0300/2005 : (2005) 6 SCC 138, 'MUNICIPAL CORPORATION,
UJJAIN AND ANOTHER VS. BVG INDIA LIMITED AND OTHERS', MANU/SC/0293/2018 :
(2018) 5 SCC 462, 'ELECTRONIC ENTERPRISES VS. KARNATAKA POWER CORPORATION
LTD.,', MANU/KA/0297/1993 : ILR 1994 KAR 125, MICHIGAN RUBBER (INDIA) LIMITED
VS. STATE OF KARNATAKA AND OTHERS', MANU/SC/0662/2012 : (2012) 8 SCC 216
and 'SUNEETA AGGARWAL VS. STATE OF HARYANA AND OTHERS',
MANU/SC/0091/2000 : (2000) 2 SCC 615 and decision of this Court in 'K. NARAYANA
BHAT AND OTHERS VS. MANGALORE ELECTRIC Supply COMPANY LIMITED (MESCOM),
MANGALORE', MANU/KA/0425/2013 and order dated 07.04.2013 passed in 'M/S
KANARA TECHNICAL AND OTHERS VS. MANGALORE ELECTRICITY SUPPLY COMPANY
(MESCOM) LTD., AND ANOTHER in W.P. Nos. 6638-6647/2013.

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 7 . I have considered the submissions made on both the sides and have perused the
record. Before proceeding further it is apposite to take note Rule 14 of the Rules, which
is reproduced below for ready reference:
"14. Clarification to tender documents - At any time after the issue of the tender
documents and before the opening of the tender, the Tender Inviting Authority
may make any changes, modifications or amendments to the tender documents
and shall send intimation of such change to all those who have purchased the
original tender documents."
From perusal of Rule 14 of the Rules it is evident a that any time of issue of tender
documents and before opening the tender the tender inviting authority may make any
changes, modifications or amendments to the tender document. Thus, it is evident that
under Rule 14 the tender inviting authority has the power to make any changes,
modifications or amendments to the tender documents. Thus, the contention of the
petitioner that in the garb of pre bid clarification, the respondent has no authority to
make any changes in the tender document is sans substance.
8 . It is pertinent to note that pre-bid clarifications were uploaded on 09.01.2019 and
the petitioner submitted its bid on 16.01.2009 without any demur. Thereafter, the
technical bids were opened on 19.01.2019 and the writ petition was filed on
15.02.2019. The petitioner, therefore, in the facts of the case is estopped from his
conduct from raising the contention that the respondent could not have changed the
terms and conditions of the Notice Inviting Tender.
9. Besides that, for yet another reason, no interference is called for in the instant writ
petition. The scope of interference of this court in exercise of powers under Article 226
of the Constitution of India is delineated by a catena of decision of the Supreme Court.
It is well settled in law that discretion to grant largesse including award of jobs,
contracts, quotas, license and so on must be structured by rational, relevant and non-
discretionary standard or norms. If the Government departs from such standard or
norms, its action would be liable to be struck down unless the Government can
establish that departure was not arbitrary, but was based on some valid principles
which in itself was not irrational, irrelevant, unreasonable or discriminatory (See:
NARENDRA KUMAR MAHESHWARI VS. UNION OF INDIA, MANU/SC/0388/1989 : 1990
(SUPP) SCC 440): (AIR 1989 SC 2138). It is equally well settled legal proposition that it
is open to the State to prescribe conditions in the tender, prescribing the eligibility
criteria and if the State can justify the tender conditions in the context of particular
contract, the Courts will not interfere and whenever there are different alternatives, it is
not for the courts to suggest that a particular alternative is justified. IN awarding
contract, the public interest is of paramount consideration and there should be no
arbitrariness in awarding the contract and all participants in the tender process must be
treated alike. IN the celebrated case of 'TATA CELLULAR VS. UNION OF INDIA
MANU/SC/0002/1996 : (1994) 6 SCC 651: (AIR 1996 SC 11), the Supreme Court while
dealing with the scope of judicial power of review held that it would apply to exercise of
contractual powers by Government bodies in order to prevent arbitrariness or
favoritism. It has been held that the ground upon which the administrative action is
subject to control by judicial review is on the grounds of illegality, irrationality and
procedural impropriety. It has further been held that terms of the invitation to tender
are not open to judicial scrutiny because invitation to tender is in the realm of contract
and more often than not, such decision are made qualitatively by experts. It has further
been held that the Government must have freedom of contract. In other words, a fair
play in the joints is a necessary concomitant for an administrative body functioning in

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 an administrative sphere or quasi-administrative body functioning in an administrative
sphere or quasi-administrative sphere. However, the decision must not only be tested
by the application of Wednesbury principle of reasonableness but must be free from
arbitrariness not affected by bias or actuated by mala fides.
10. The principles regarding award of contract were again reiterated by the Supreme
Court in 'IN DIRECTOR OF EDUCATION VS. EDUCOMP DATAMATICS LIMITED',
MANU/SC/0210/2004 : (2004) 4 SCC 19: (AIR 2004 SC 1962) and it was held that
Government must have a free had in setting the terms of tender and the Courts cannot
strike down the terms of tender prescribed by the Government because it feels that
some other terms in the tender would have been fairer, wiser or more logical. The
courts can interfere only if the policy decision is arbitrary, discriminatory or actuated by
malice. In 'SHAMNIT UTSCH INDIA PRIVATE LIMITED VS. WEST BENGAL TRANSPORT
INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED', MANU/SC/0382/2010 :
(2010) 6 SCC 303: (2010 AIR SCW 3974), the Supreme Court while taking note of the
law laid down in ASSN. OF REGISTRATION PLATES VS. UNION OF INDIA',
MANU/SC/1013/2004 : (2005) 1 SCC 679: (AIR 2005 SC 469), reiterated that State
Government has the right to get the right and most competent person and in the matter
of formulating conditions of tender documents, unless the action of tendering authority
is found to be malicious and is a misuse of statutory powers, the tender conditions are
unassailable. In 'SIEMENS AKTIENGESELEISCHAFT AND SEIMENS LIMITED VS. DELHI
AND SEIMENS LIMITED VS. DELHI METRO RAIL CORPORATION LIMITED AND OTHERS',
MANU/SC/0101/2014 : (2014) 11 SCC 288 : (AIR 2014 SC 1483), it was held that
tenders floated by the Government are amenable to judicial review only in order to
prevent arbitrariness and favoritism and protect the financial interest of the State and
the public interest. Thus, the scope of judicial review is confined as to whether there
was any illegality, irrationality or procedural impropriety committed by the decision
making authority. It has further been held that the court cannot sit in appeal over the
soundness of the decision made by the competent authority and the Court can only
examined whether the decision making process fir, reasonable, transparent and
bonafide with no perceptible injury to public interest. In 'CENTRE FOR PUBLIC
INTEREST LITIGATION VS. UNION OF INDIA', MANU/SC/0372/2016 : (2016) 6 SCC
408; (AIR 2 916 SC 1777) has held minimal interference is called for by the Court of
Judicial Review with a decision taken by the technical experts after due deliberations
inasmuch as the Courts are not well equipped to fathom into such domain which is left
to the discretion of the executive. It has further been held that primary and secondary
purpose of review is to ensure that administrative bodies act in efficient, transparent,
fair, unbiased manner and keep in forefront public interest. Similar view has been taken
in 'TANGEDCO VS. CSEPDI - TRISHE CONSORTIUM', MANU/SC/1312/2016 : (2017) 4
SCC 318: (AIR 2016 SC 4879) AND SAM BUILT WELL (P) LTD. VS. DEEPAK BUILDERS
MANU/SC/1598/2017 : (2018) 2 SCC 176: (AIR 2018 SC 44).
1 1 . In view of aforesaid enunciation of law, no interference in the fact situation is
called as no element of public interest is involved in this case, the tender has been
issued for transportation of coal and in case the proceeding are stalled the public
interest would be adversely affected.
In view of preceding analysis, I do not find any merit in the writ petition, the same fails
and is hereby dismissed.
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