Chandragiri Construction Co. vs The Karnataka Slum Clearance Board and Others

R. Gururajan, J.—The Petitioner Chandragiri Construction Company is seeking a declaration declaring that the acceptances of the tenders of the 4th Respondent by the 1st Respondent in respect of both Gulbarga and Bellary cities in terms of Annexure ''A'', a tender notification as illegal an unsustainable. The facts are as under:

A tender notification was issued inviting tenders from pre-qualified Contractors for execution of works for slum upgradation and development programme (Nirmala Jyothi) in about 9 cities in Karnataka. The cities have been divided into categories depending on the approximate value of the work estimated. The said 9 cities were divided into category I or II. Annexure ''A'' is a tender document issued by the Karnataka Slum Clearance Board (for short the Board). The tender Notification dated 2.5.2000 in terms of Clause 6 would restrict to one work in each category subject to a maximum of two works. The Petitioner was one of the pre qualified Contractors. The Petitioner submitted his tender for the execution of work at Gulbarga and Bellary. Both Gulbarga and Bellary fall under Category II. The fourth Respondent submitted his tender for the very same city. On opening of the tender, it was noticed that the 4th Respondent was the lowest tenderer in respect of the tenders submitted for Gulbarga as well as the lowest tenderer for Bellary. The Petitioner was the next lowest tenderer after the 4th Respondent in respect of Gulbarga city. According to the Petition averments, there was some minor defects in following the procedural requirements and therefore, his case was not considered in so far as Bellary is concerned.

It is stated that in respect of 4th Respondent tender for Gulbarga and Bellary, its tender for Gulbarga was 5.17% over and above the estimated value of the works required to be executed and its tender for Bellary was 4.45% over and above the estimated value of the works required to be executed. Thus the quota of the 4th Respondent was much higher than the estimated value in respect of Gulbarga than in respect of Bellary. According to the Petitioner, though the 4th Respondent may have quoted the lowest both in respect of Gulbarga and Bellary. He is eligible for one work in terms of tender condition. According to the Petitioner, the grant of two works in category II, Gulbarga and Bellary is arbitrary, unsustainable and illegal.

Notice was issued. Respondents have entered appearance.

The Slum Board has filed a very detailed affidavit in the case on hand. It states that for Gulbarga City, 4 tenders were received by the Respondent No. 1 i.e., Karnataka Slum Clearance Board. On evaluation it was found that the tender of M/s. Chandragiri Construction Company i.e., the Petitioner was the 2nd lowest, which was quoted at 21.28% above the estimated rates. Whereas M/s. GVPR Engineers Limited the Respondent No. 4 was the first lowest tenderer who had quoted at merely 5.17% above the estimated rates. Then the tenders were submitted to the Government for further directions. As per the directions given by the Government in its letter dated 9.8.2002, negotiations were conducted with the first lowest tender on 17.8.2002 who reduced his rates further down and quoted at 4.44% above the estimated rates further, Government directed the KSCB to examine the further reductions. Accordingly on further negotiations for the 2nd time, M/s. GVPR Engineers Limited. Further reduced the rates, at only 3.99% above the estimated rates. Negotiations were also conducted with the Petitioner and the Petitioner had offered a rate at 4% above the estimated rates during negotiations which was still higher than the rate offered by the Respondent No. 4. Hence, even after negotiations with both the Respondent No. 4 and the Petitioner, the rate offered by the Respondent No. 4 was lowest and thus tenders of the Respondent No. 4 were accepted for Gulbarga city and the work order has already been issued by the Respondent No. 1 to the 4th Respondent. They further say that as far the tender for Bellary, the Petitioner has no locus standi at all to challenge this award of tender in favour of 4th Respondent. The Petitioner has absolutely no right or claim whatsoever as far as Bellary city is concerned since his tender was defective and does not merit any consideration since the required EMD (Earnest Money Deposit) was not furnished at the time of tendering. Hence his tender was rejected at the very initial stage and not considered for evaluation. They justify their action.

The 4th Respondent filed a reply statement. He also justify the matter. The 4th Respondent also says that writ remedy was not available to the Petitioner.

A rejoinder has been filed by the Petitioner. The Petitioner admits of a negotiation in terms of Gulbarga city.

Matter is heard for final disposal. Sri G.S. Vishweshwara, learned Senior Counsel appears before me. His main argument is that the Respondents cannot be permitted to grant two works to the 4th Respondent. It is impermissible in law. Learned Counsel says that Article 14 is violated in the case on hand. He relies on the judgment of the Supreme Court in the case of Ramanna Shetty''s case to contend that Article 14 is violated. Learned Counsel also relies on a judgment of the Supreme Court in West Bengal State Electricity Board Vs. Patel Engineering Co. Ltd. and Others, . The Supreme Court has ruled that in the matter of global tenders instructions are to be considered scrupulously and no relaxation is permissible according to him.

Per contra, the learned Counsel for the Respondents says that the Petitioner has no locus to maintain the Petition. In so far as Bellary is concerned, it is in-eligible. In so far as Gulbarga is concerned, after noticing that the Respondent No. 4 is the lowest tenderer, tender is awarded in the light of the directions by the Government. They have held discussions with the Petitioner. The Petitioner also has been given Tumkur work, according to them. Records were made available to me.

Admittedly, the Petitioner is challenging two works given to Respondent-4. Let me see as to whether the Petitioner has made out a case for invoking my discretionary jurisdiction.

Admittedly, Annexure ''A'' provides for two Categories I and II. It further provides for a right to quote for any or all the categories. Clause VI says that however, the Contractors would be awarded one work in each category subject to a maximum of two works. Clause 7 further provides for negotiating the terms and prices and for accepting any bid in full or part at his discretion. In the case on hand, the Petitioner admittedly cannot question the award of Bellary Contract in favour of Respondent-4. Admittedly the Petitioner is ineligible even according to him. Therefore, there is no question of interference of grant of Bellary work at the instance of the Petitioner to the 4th Respondent.

In so far as Gulbarga is concerned, the Petitioner contends that the grant in favour of Gulbarga to Respondent No. 4 is contrary to Clause 6 of the tender condition. According to the Petitioner, in the event of the Respondent relaxing Clause 6, the rates would have been different from the Petitioner''s side. This is how the Petitioner explains his grievance and complains in the matter of awarding Gulbarga in favour of the 4th Respondent.

The Respondents have stated in paragraph 3 as to how the Gulbarga Contract came to be issued in favour of 4th Respondent. They say that negotiations were conducted between the Petitioner and the Petitioner offered 4% during negotiation. Still it was higher than the rate offered by the 4th Respondent. After tender quotings were obtained negotiations have been held between the Petitioner and the 4th Respondent for Gulbarga by the Respondent-Board. The Petitioner, knowing fully well that the 4th Respondent has been granted Bellary, has chosen to participate in the negotiations and he did not raise any objections at the time. It is only after his failure in the negotiations and it is only after his failure to provide a reasonable rate compared to 4th Respondent, has chosen to move this Court in this Petition. This conduct is to be noticed by this Court. Moreover, a careful reading of the tender condition would show that the Contractors would be awarded one work in each work subject to maximum of two works. The words are not one work only. I am saying so because Clause 7 provides for a discretion in the matter. If the intention is to restrict one work in each category, they would have said in Clause 7 that the term in Clause 7 is subject to Clause 6. Therefore if Clauses 6 and 7 are read together, it would show that in normal circumstances, one work in each category would be awarded. But if circumstances do warrant, the Board at its discretion may hold negotiations accepting the bid in full or part in terms of its discretionary powers. The material facts of this case would show that negotiations were held not only with the Respondent but also with the Petitioner. It is only thereafter the 4th Respondent''s bid is accepted after the Petitioner''s failure to provide reasonable/acceptable offer. Therefore, I do not find any legal infirmity not-withstanding Clause 6 in the light of Clause 7. At any rate, the contract granted to the 4th Respondent cannot be set aside at the instance of the Petitioner who was a party for negotiations in respect of Gulbarga. The participation of the Petitioner for negotiation for Gulbarga, his ineligibility for Bellary compel me not to exercise my discretion in favour of the Petitioner at this stage.

Moreover, it is seen that the Contract in favour of the 4th Respondent has been awarded after Government''s intervention and after Government''s directions. The same is made clear from the statement as well as from the original records. The Government has invested substantial money in the contract. It is in terms of the Policy of the Government this slum work is undertaken by the Board. In this connection, it is to be noticed that provisions of the Karnataka Slum Clearance provides for a power to give a direction to the Board. In the light of the conduct of the Petitioner, the direction by the Government and the contract read as a whole compel me not to exercise my discretionary power under Article 226 of the Constitution of India in this case.

In so far as Ramanna Shetty''s case is concerned, there cannot be any quarrel that Article 14 provides for a just and fair act by the authority. In the case on hand, the Petitioner has been provided with an opportunity to participate and also provided an opportunity in negotiations. It cannot be said that any fairness is lacking in the given set of circumstances. In so far as West Bengal State Electricity Board Vs. Patel Engineering Co. Ltd. and Others, is concerned, the facts of this case would show that it is not a case of relaxation but it is a case of negotiations in terms of Clause 7 of the tender conditions. Looking from any angle, no case is made out by the Petitioner.

Petition stands rejected. No costs.