M/s Swastik Cement Udyog, N.H-4, Bangalore Pune Road, Kamdodh Village, Tq: Rani v. Gulbarga Electricity Supply

Judgment

4. M/s Swastik Cement Udyog, N.H-4, Bangalore Pune Road, Kamdodh Village, Tq: Rani Bennur, Dist: Haven. Through its Managing Partner Madhusudan Malu. M/s Meka Industries, # 5 Vidya Nagar, Near Manasa Nursing Home, Hubli - 580 001. Through its Manager Guruprasad Rao. M/s Ghanshyam Enterprises, Sy.No.652/1 Gadag Road, Koppal — 583 231. Represented by its partner Hemanth. M/s Mahadev Products, Moka Road, Tq: & Dist: Ballary-583101. Through its partner Ganesh Tapadiya. Petitioners (By Sri Shivakumar Kalloor and Sri Ravi B.Patil, Advocates) AND:

4. Gulbarga Electricity Supply Company Ltd., Having its Corporate Office At Station Road, Opposite to Hotel Parivar, Gulbarga — 585 102. Represented by its Managing Director. The Chief Engineer, Electricity Corporate Planning, Gulbarga Electricity Supply Company Ltd., Gulbarga — 585 102. The Superintending Engineer, EL., MIS., Gulbarga Electricity Supply Company Ltd., Gulbarga — 585 102.

Sri Datta Sai Cement Concrete Products, Sr.No.20, Bassinpalli, Gooti (M) Dist: Anantpura — 413 512. Andhra Pradesh-1 Rep.by Managing Director.

5. Manchukonda Prakasham Industries India Pvt. Ltd., Manchukonda House, 63-347/12/8/12/3 Dwarkapuri Colony, Panja Gutta, yderabad-500082. Rep.by Managing Director. ... Respondents (By Sri Ravindra Reddy, Advocate for R-1 to R-3 Sri Umesh.V.Mamadapur, Advocate for R-4 and R-5) These writ petitions are filed under Articles 226 and 227 of the Constitution of India praying to issue a writ of certiorari any other writ or direction to quash the order impugned passed in appeal No: EN 230 EEB 2011 dated 7.1.2012 as at Annexure-H as illegal and contrary to law. These writ petitions coming on for further orders this day, the Court made the following: ORDER The petitioners’ grievance is over the acceptance of the bid of the respondent No.5 for the supply of 9 mtrs. long PSC and RCC poles.

2. Sri Shivakumar Kalloor, the learned counsel for the petitioners submits that as per clause 2.0 of the Instructions to Bidders appended to the Invitation for Bidders, the scope of the tender is for manufacture and supply of the poles. There is no provision for accepting the bid for PSC or for RCC poles only. has to be composite for both the types of the poles. It

3. He also relied on the Division Bench’s judgment of this Court in the case of MIS. GAJANANA ENGINEERS v. THE PRINCIPAL SECRETARY TO GOVERNMENT ENERGY DEPARTMENT AND OTHERS reported in ILR 2005 KAR 3973 wherein it is held that the tender inviting authority cannot relax the condition of the tender because such discretion is not vested in it by the tender notification.

4. The learned counsel submits that the petitioners had filed the appeal before the Appellate Authority (Additional Chief 4 Secretary to the Government) invoking Section 16 of Karnataka Transparency in Public Procurements Act, 1999 (‘KTPP Act’ for short). The appeal came to be dismissed as premature based on the submissions of the respondent Nos.1 to 3 that there is no acceptance of the bid of the respondent No.5. He brings to my notice the minutes of the 43rd Purchase Committee meeting of 29.10.2011 accepting the bid in principle. He read out para 43/2.03 and 43/2.04 of the said minutes, which are extracted hereinbelow: the Board of Directors of GESCOM held ‘43/2.03: The Committee noted that the Li offer of 23O0.096 Unit FORD price for 9M PSC poles was 16.30% below the common SR in respect of Gulbarga circle and that of the Li rates of i2200.096 for Be/lary and Raichur circles was 18.06% be/ow the common SR 20i0-li rates. Hence, the Committee felt that the Li offer could be accepted by the competent authority incase of the various tenders viz., MD for Gulbarga circle 9M PSC poles, PC for Be//ary circle PSC poles and Board for Raichur circle PSC poles. 43/2.04: The Committee further noted that in the case of 914 RCC rectangular poles, there were 4 Li bidders in respect of Bel/ary circle and 6 Li bidders in respect of Raichur circle. The computed FORD price of 4 Li bidders for Bellary and Raichur circles is 5,095,00 and 5073.00 respectively. This is higher than the common SR price of ABH. 4755 and previous PG price of 4900. 00. The Committee felt that it may be appropriate for the Managing Director to negotiate with the Li bidders to accept the common SR rate of 4755.00 or to consider retender.

5. The learned counsel for the petitioners submits that the matter has progressed further pursuant to the afore-extracted resolutions. The respondent No.1 has also issued the letter of intent in favour of the respondent No.5 for the supply of the poles. Suppressing these developments and misleading the Appellate Authority, the respondents have secured the order of the dismissal of the petitioners’ appeal before the Appellate Authority.

6. He submits that the tender accepting authority has only invited the respondent No.5 for further negotiations. It is his grievance that if the petitioners were also to be given similar opportunity, they also would have considered reducing their quoted prices.

7. Sri Ravindra Reddy, the learned counsel respondent Nos.1 to 3 submits that the Appellate Authority’s order dismissing the appeal is proper because no order accepting the fifth respondent’s bid was passed under Section 13 of the KTPP Act at the time of the disposal of the appeal. Sri Ravindra ABEL 6 Reddy submits that clause 2 referred to by Sri Shivakumar Kalloor specifies that the tenderer shall be manufacturer of PSC or RCC or PCC poles and can participate in supply of either PSC or RCC poles. According to him clause 2.0 containing the scope of the proposal only requires that the bidder has to bid for the entire quantity mentioned under the each type of the poles.

8. Sri Umesh.V.Mamadapur, the learned counsel for the respondent Nos. 4 and 5 there is no legal impediment in accepting the bid of the respondent No.5, as its bid is accepted at 2,200/- per pole. submits that

9. In the course of rejoinder, Sri Shivakumar Kalloor submits that as the petitioners haa: the benefit of interim order during the pendency of the appeal, its effects may please be continued during the pendency of the remanded matter, if this Court inclined to remand the matter to the Appellate Au t ho r i ty.

10. On specifically asking whether the petitioners are ready to supply pole at the rate of 2,200/- or below that, he submits that the said rate is not workable for the petitioners. He submits that the respondent No.5 is an outsider and enjoys 7 certain tax exemptions in respect of certain items brought from outside Karnataka. He complains that the local manufacturer/ supplier is being discriminated against.

11. The submissions of the learned counsel have received my thoughtful consideration. The only question that falls for my consideration is: ‘Whether the Appellate Authority is justified in dismissing the appeal on 7.1.2012 holding that the appeal is premature?”

12. To answer this question, it is necessary to refer to the provisions contained in Sections 13 and 16 of the KTPP Act. They read as follows: “13. Acceptance of Tender. - The Tender Accepting Authority shall, after following such procedure as may be prescribed pass order accepting the tender and shall communicate the information relating to acceptance of tender together with a comparative analysis and reasons for accepting of tender to the procurement entity and the Tender Bulleting Officer: Provided that where the Tender Accepting Authority consists of single officer who is due to retire within the next six months, from the date fixed for the acceptance for tender, he shall not act the tender without obtaining prior approval of the Procurement Entity: to accept 8 Provided further that subject to such general or special order as may be issued by the Government from time to time, the Tender Accepting Authority may before passing order accepting a tender negotiate with lowest ten derer.

16. AppeaL- (1) Any tenderer aggrieved by an order passed by the Tender Accepting Authority other than the Government under Section 13 may appeal to the prescribed authority within thirty days from the date of receipt of the order. Provided that the prescribed authority may, in its discretion al/ow further time not exceeding thirty days for preferring any such appeal, appellant had sufficient cause for not preferring the appeal /n time. is satisfied that if it (2) The prescribed giving opportunity of being heard to both the parties pass such order thereon as it deems fit and such order shall be final. authority may (3) The prescribed authority shall as far as possible dispose of the appeal with/n thirty days from the date of filing thereof.”

13. The perusal of the afore-extracted provisions indicate that any order communicating the information relating to acceptance of the tender can be challenged by way of appeal. The provisions cannot be construed to mean that only a final, formal order of acceptance is amenable to the challenge. On 29.10.2011 the Purchase Committee expressed 9 considered view that the Li offer could be accepted by the competent authority and that it may be appropriate for Managing Director to negotiate with the Li bidder (the respondent No.5). The matter has not stopped at that point. Thereafter the negotiations have taken place. The exercise of negotiations has culminated in the issuance of the letter of intent, dated 2.li.2Qii. Its starting line reads as follows: “LOT is placed on you for supply of following quantities of 9 Mtr. PSC Poles for Niranthara Jyoti works in Bellary circle at the prices as noted.” It has enumerated 7 conditions. The seventh condition reads as follows: “Please send your ‘Acceptance Letter’ within seven days from the date of this LOT”.

14. The letter intent clause referred hereinabove are clearly indicative of the acceptance of the bid of the respondent No.5. Therefore, the Appellate Authority’s order that the appeal is premature is not sustainable.

15. The communication relating to acceptance of tender, be it styled as letter of intent, memorandum of intent, memorandum of understanding, term sheet, commitment letter, is amenable to the challenge by the unsuccessful tenderer invoking Section 16 of the KTPP Act. Such a letter may not be L3I1 10 used to enforce the obligations of the sender and the receiver of the letter of intent. However, vis-à-vis the third party tenderer, it cannot be held that it has no significance at all.

16. I have no hesitation in holding that the Appellate Authority’s dismissing appeal

7.1.2012 premature is unsupportable and unsustainable in view of proceedings of the meeting held on 29.10.2011. It is therefore quashed. There is also a subsequent development, which not only firms up the cause of action, but also gives the continuing cause of action. Further, on 10.1.2012, the first respondent has issued the purchase order to the respondent No.5.

17. Considering all these aspects of the matter, I deem it just and necessary to quash the Appellate Authority’s order, dated 7.1.2012 (Annexure-H) and remand the matter to the Appellate Authority for fresh enquiry in accordance with law. Liberty is also reserved to the petitioners to place on record the subsequent event of the issuance of the letter of intent and the purchase order on the record of the Appellate Authority.

18. All the parties to these petitions shall appear before the Appellate Authority on 1.2.2012 without waiting for any I! notice from the said Appellate Authority. The Appellate Authority shall dispose of the remanded matter within one month from 1.2.2012 in the letter and spirit of the timeframe prescribed under Section 16(3) of the KTPP Act.

19. If the petitioners are seeking any interim order of stay, the same shall be considered within three days from 1.2.2012.

20. The tender acceptance and issuance of the purchase order, dated 10.1.2012 and the supply of the poles, if any, shall be subject to the outcome of the appeal.

21. No order as to costs. Sd/ JUDGE MD