Bhairavi Pumps Pvt. Ltd. and Others vs The State of Karnataka and Others

A.S. Bopanna, J.—1. Learned Government Advocate to appear for respondent No. 1, since he is served and unrepresented. He is permitted to file memo of appearance in four weeks.

Though the petitions are listed to consider the application for vacating the stay, with the consent of learned Counsel for the parties, the petitions itself are taken up for consideration.

The petitioners are assailing the tender notification vide Annexure-G series dated 11.01.2016 to 06.02.2016. The pre-conditions prescribed as the qualification to apply in response to the tender notification is assailed. The respondents 7 to 34 have floated the tender at Annexure-G series for supplying, installation and electrification of irrigation Submersible Pumpsets with accessories for the borewells in different packages as per the specification contained therein. The petitioners claim to be the manufacturers of Pumpsets who are running the Micro and Small enterprises under the Micro Small and Medium Enterprises Development Act, 2006. In that light, the petitioners claim that the conditions as prescribed with regard to the annual turn over is not justified when the present tender is issued District wise and the same turn over of Rs. 1 crore which was earlier being indicated in the State wise tender is continued presently also.

That apart, the contention on behalf of the petitioners is that the Government of Karnataka by its notification dated 08.09.2015 has amended the Rule contained in the Karnataka Transparency in Public Procurements (Amendment) Rules, 2015 (''KTPP Rules'' for short), whereby the goods manufactured by Micro and Small enterprises located in the State has to be given 15% price preference against the Larger and Medium Industries of the State and Industries of other states. It is also the case of petitioners that by further Amendment to Rule 26 thereto, the Micro and Small Enterprises registered with NSIC should be given the benefit of exemption from payment of earnest money deposit during the purchase made by all Government departments and state owned PSUs.

The respondents have filed their objection statement opposing the claim put forth by the petitioners. It is contended that in so far the fixation of annual turn over, it is a prerogative of the respondents to assess the suppliers who would respond to the same and the said criteria cannot be lost sight. In so far as the amendment to Rule 25 of the KTPP Rules, it is contended that the same does not apply to the ''Ganga Kalyana scheme'' for which the present tenders have floated. It is further contended that the benefit as claimed under Rule 26 of KTPP Act, would also be not available to the present tender. In any event, they contend that the petitioners cannot assail the preconditions for qualification imposed in the tender documents and as such the petitions are liable to be dismissed.

In so far as the contention that the annual turn over fixed is onerous, when the tender have been floated district wise or division wise, this Court at this stage cannot go into that aspect when the matter in as much as the qualification criteria to be fixed is a matter which has to be decided by the Tender Inviting Authority and in that light, the interference is called only if it is arbitrary. Keeping in view the nature of supplies to be made the worth of persons who respond to the tender has to be assessed by knowing the annual turn over of such industry so that supply be uninterrupted. Certainly this Court cannot arrive at a conclusion that the same is arbitrary.

The next question that arises for consideration is with regard to the benefit of the amendment made through the notification dated 08.09.2015. For the first of package, the tender invited was on 20.10.2015. If that be the position, the amendment made through the notification dated 08.09.2015 which was prior to the same was necessarily to be kept in view and the benefit of the provision therein should be made available in all tender process in that regard to the extent the benefit is available. Even if this aspect of the matter is kept in view, the issue for consideration is as to ''whether the benefit as claimed by the petitioners through the amendment made to Rule 25 would be available?''

As rightly pointed out by the learned Government Advocate, the proviso which is sought to be inserted is by deleting the existing first proviso and the explanation thereto. If in that light, the amendment is made and incorporated, certainly the benefit is no doubt provided to the Micro and Small enterprises with regard to the 15% price preference as against the Larger and Medium Industries. However, since the second proviso to Rule 25 is retained intact, the said proviso indicates that nothing contained in the first proviso shall apply for the purchase of Pumpsets in ''Ganga Kalyana scheme'', to be implemented by Social Welfare Department. If that be the position, even if the amendment is made, Rule 25 will not apply to the present case. The benefit would therefore not be available to the petitioners and as such the same in any event, has not vitiated the tender notification. In so far as the amendment made to Rule 26, as already indicated, the amendment being on a date prior to the issue of tender notification, the said benefit ought to have been provided to the Micro and Small Enterprises registered with the NSIC.

The learned Counsel for respondents 7 to 34 would contend that since the Rule is specific that such benefit would be only to Micro and Small Enterprises registered with NSIC, this aspect is to be considered by the Tender Inviting and Tender Accepting Authority while undertaking the technical evaluation of the tender applied in response to the tender notification. Therefore, in case where the requirement of the Rule is satisfied, the benefit would be available and it is only on the said examination, if any of the tenderer has submitted the same without the earnest money, the benefit will be given, the certificate is enclosed or else it will non-responsive. Therefore, the said benefit in any event, at this stage has to be held as available, but to be assessed by the Tender Inviting Authority in accordance with law.

Having arrived at the conclusion that the benefit of Rule 26 would be available and as also a methodology that is required to be adopted, the question is as to whether the entire tender process should be re-done. When the petitioners filed these petitions and the matters had been taken up by this Court, this Court vide order dated 12.02.2016 had permitted the petitioners to participate in the tender process notwithstanding that one of the alleged condition would eliminate them. If that be the position, redoing of tender process, in any event, is unnecessary, since only the petitioners herein who claim to be the Micro, Small and Medium Enterprises have approached this Court, the benefit could be still extended to them if respondents 7 to 34 are directed to consider the tender documents of the petitioners, if they have already submitted.

Learned Counsel for the petitioners submits that in respect of some of the packages/Districts, the last date for submission of the tender document is not yet over. If that be the position, in respect of the packages/Districts where still time is available to respond to the tender notification, the petitioners herein would have the benefit of applying in that regard and the consideration thereafter shall be made in the same manner as has been indicated above.

In terms of the above, these petitions stands disposed of.