ABDUL NAZEER, J
1. In this case, the petitioner has questioned the validity of the decision/resolution passed by the Board of Directors of the BESCOM in its meeting held on 28.8.2010 in subject No.43/2006 in so far as it relates to award of the contract against enquiry No.BCP-396/2008-09 (Tender Notification – Annexure ‘A’) dated 1.4.2008 pertaining to Single Phase 5-30 Amps Class 1 State energy meter in favour of the third respondent and for quashing the order passed by the 4th respondent dated 27.102010 (Annexure ‘R’) in appeal No.EN.198.EEB.2010. The petitioner has further sought for a mandamus or such other appropriate writ or order directing the first respondent not to accept the bid/tender submitted by the third respondent in pursuance of the tender Notification at Annexure ‘A’ and to consider the bid of the petitioner and other bidders, who have qualified in the techno commercial bid and in the price bid in accordance with law.
2. The petitioner has been carrying on the business of manufacture and sale of Energy Meters. The first respondent floated tender bearing No.BESCOM/GME(P)/BCP-396/2008-09 dated 1.4.2009 inviting sealed bids from eligible bidders for sale of (i) LT Single phase 5-30 Amps static energy meters, (ii) LT Three phase whole current 5-30 Amps Static energy meters and (iii) LT three phase CT operated ETV meters confirming to technical specifications stipulated in the tender in retail outlets of BESCOM for a period of two years. The petitioner submitted its sealed tender in pursuance of the said tender invitation through E Tender Platform. The petitioner also submitted three sample meters confirming to the prescribed specifications duly sealed along with the routine test certificates. Similarly, the third respondent, who had also participated in the tender, had submitted three sample meters. From amongst the tenderers, who had submitted the sealed bids, BESCOM evaluated the technical bids submitted and collected the random samples (3 meters) for each type from factory premises as per the relevant clause in the tender. After verification of the qualifying requirements, BESCOM selected four bidders in LT Single Phase 5-30 Amps Static Energy Meter type and submitted the random samples (3 Nos. each type) collected CPRI, Bangalore, for all type and other tests converted under specification. During the testing at CPRI, Bangalore, the samples of the third respondent failed to meet the specification, whereas the other three bidders’ samples passed including that of the petitioner. It is contended that a letter dated 10.12.2009 has been written by the first respondent to the third respondent confirming that CPRI vide its letter dated 4.12.2009 referred to therein had informed the first respondent that the sample single phase meters supplied by the third respondent did not comply with requirements of the standards. It is further contended that in the said letter dated 10.12.2009, the first respondent by ex-post facto illegal incorporation of Clause 12.2.1 of IS 13779:1999 sought for three more samples for being tested at random from the third respondent. The first respondent allowed the re-submission of fresh set of samples by the third respondent based on the said Clause.
3. It is the case of the petitioner that having come to know of the same, the petitioner addressed a letter dated 20.1.2010 as per Annexure ‘B’ to the 2nd respondent informing that the 3rd respondent’s bid shall have to be rejected, as the samples so submitted by the third respondent had failed and requesting the second respondent to intervene in the matter and not to allow the first respondent to consider the price bid of the third respondent, as it would be grossly unfair and unjust to the other genuine qualified bidders like the petitioner. It is further contended that the third respondent had never supplied products of good quality and that there has been gross defects in the meters of the third respondent as supplied to the other Electricity Boards. The Gujarat Electricity Board (presently called Gujarat Urja Vikas Nigam Ltd.) has blacklisted the third respondent and has stopped dealing with it for three years as per the circular at Annexure ‘C’ dated 22.8.2006. It is further contended that in the daily leading newspaper of Andhra Pradesh, namely, ’Vartha’ dated 18.2.2008, a news report has been published of cheap/junk meters having been supplied by the third respondent to Andhra Pradesh Distribution Companies and criticizing the ‘AP Discom’ for having not purchased the meters from good companies like the petitioner, who have earlier submitted meters of good quality. The first respondent having special interest in the matter has illegally called upon the third respondent to again supply samples for further testing by misquoting Clause No.12.2.1of IS 137679:1999 without any authority and in gross violation of the tender conditions. Therefore, petitioner gave further representation dated 28.6.2010 to the first respondent in this regard (Annexure ‘F’) informing him that the tender bid of the third respondent requires to be rejected and the samples cannot be called for from the third respondent for the second time much less subjected to any second test even assuming and without considering that the samples so supplied by the third respondent was found to be satisfactory in respect of the second sample test. Despite the said representation, the first respondent has illegally opened the price bid of the third respondent. It is further contended that the bid of the third respondent was also liable to be rejected as it is not registered under the Karnataka Sales Tax Act, which information is specifically sought for in the tender document at Annexure ‘V’ in Vol. II Section I i.e. Techno Commercial Sheets. That apart, the third respondent has, in it price bid offered a wrong rate of tax under the VAT. This aspect was also duly emphasized by the petitioner in its letter dated 28.6.2010 addressed to the first respondent requesting to reject the bid of the third respondent. However, the first respondent in its letter dated 3.7.2010 has again referred to Clause 12.2.1 of IS 13779:1999 and also IS 14697 with a new version to substantiate his illegal action calling for the second test of sample meters. Though the third respondent is not legally qualified in having not satisfied the techno-commercial specification and having not submitted a “techno commercial responsive bid”, its price bid was opened. In terms of the price bid, the third respondent’s name is found at L-1. His price bid being opened, he is considered as one of the lowest tenderers, who is said to have submitted a valid tender.
4. In view of the rejection of the representation of the petitioner dated 28.6.2010 by the first respondent, the petitioner filed an appeal before the 4th respondent as respondent Nos.1 and 2 were not considering the genuine legitimate claim of the petitioner and were illegally considering the techno commercial bid and the price bid of the third respondent,. Who is ineligible and is legally disqualified from participating in the bid. The 4th respondent has rejected the appeal without going into the merits of the claim of the petitioner. Thereafter, the petitioner received a letter dated 9.9.2010, whereunder it has been stated that the tender for sale of meters through retail outlets in BESCOM area has been finalized and the petitioner is required to close the Single Phase 5-30 Amps static meter retail outlets operating in BESCOM jurisdictional area on 31.10.2010 and that the existing meters in retail outlet can be sold only up-to 31.10.2010. Thereafter, he came to know that the Board of Directors of the BESCOM on 28.8.2010 in Subject No.43/2006 have passed the impugned resolution awarding the contract in favour of the third respondent in the supply of Single Phase 5.30 Amps Class 1 static energy meter. The petitioner again preferred an appeal challenging the said resolution under Section 16 of the Karnataka Transparency in Public Procurement Act, 1999 before the 4th respondent-Appellate Authority. However, the 4th respondent has dismissed the appeal by its order at Annexure ‘R’ dated 27.10.2010. The 4th respondent was the Chairperson of the BESCOM. She was biased against the petitioner. That is why the appeal has been dismissed without assigning justifiable reasons.5. Respondent Nos. 1 and 2 have filed their statement of objections contending that along with the tender, three sealed sample meters were submitted by the bidders and they will be in the custody of the BESCOM or the owners within the meaning of Clause 10A Section I Volume-II of Annexure ‘A’. After evaluation of the technical bid in accordance with the pre-qualifying requirement, three more sample meters were picked up from the manufacturing facility of the bidders of only such of the firms who have satisfied the pre-qualifying requirements. These samples have been subjected to test at CPRI. The total number of bids or tenders that were received for LT Single Phase 5-30 Amps Static meters were five in numbers including the petitioner and the third respondent. All the five bidders satisfied the pre-qualifying requirement criteria and they were requested to keep ready the samples of the meters for enabling the officials of the BESCOM to pick up the samples from their facility either from the storage place of the factory or from the manufacturing line. Even after repeated extension of time, only four bidders including the petitioner and the third respondent kept the sample meters ready, which were picked up by the officers of the BESCOM. While conducting type tests by CPRI, one of the sample meters of the third respondent had failed in one of the type tests i.e. short time over current test and CPRI intimated the same by its letter dated 4.12.2009. The sample meters of other tenderers have passed the type tests. According to clause 2.4 of Section I, Volume-II, unless otherwise specified elsewhere in the specification, the meter shall conform in all respects including performance and testing thereof to the following Indian/International Standards to be read with up to date and latest amendments/revisions thereof. The triable form at Sl.No.1, the standard IS 13779:1999 with latest Amendment all applicable tests for Specification AC State Watthour meters, Class 1 and 2 specification. The Indian standard has prescribed procedure and Rules for IS 13779:1999 styled as Indian Standard AC Static Watthour Meters-Specification. Therefore, there is no illegality in the letter dated 10.12.2009. The meter procurement is one of the most sensitive activities in any of the distribution utility supply company. It is in the interest of public revenue, since supply companies will suffer if there is any defect in the meter recording system. Hence, a large number of tests have been notified in the technical specifications of tender documents. All the tests are defined in Clause 11 of the technical specifications of tender documents for LT Single Phase meter. Principally there are three Clauses under tests, namely, 11.1 which relates to type tests, 11.2 relates to acceptance tests and 11.3 relates to routine test.
6. All the four bidders had the type test certificates. They were subjected to tests at CPRI for the satisfaction of the utility. After CPRI notified the failure of sample of respondent No.3 by their letter dated 4.12.2009, as per IS clause 12.2.1, it was decided to call for three more samples to be picked up at random in assembly line at the facility and the same was intimated by letter dated 10.12.2009. Hence, it is in conformity with Clause No.10 of the tender specification, where sample is to be tested for type test mentioned as IS. There is no illegality committed by the BESCOM in picking up second set of samples, which were picked up at random by GM Commercial by visiting manufacturers facility. The collection of three more meters is in accordance with the Indian Standard. It is further contended that the petitioner cannot dictate which tests are to be conducted. Once the type tests are already defined and the method of testing has to conform to the specification under IS, it is not open for the procurer to change the same. The BESCOM received a copy of the circular dated 22.8.2006 of Gujarat Urga Vikas Nigam Ltd., regarding stop dealings for participation in future tender for manufacture and supply of energy meter with the third respondent. In order to check the authenticity of the circular, letter was addressed to Gujarat Urga Vikas Nigam Limited, dated 5.1.2010 to confirm whether such a circular was issued to the third respondent. In reply to the said letter, the Chief Engineer (Tech)., Gujarat Urja Vikas Nigam Limited, vide letter dated 18.2.2010 informed that Gujarat Urja Vikas Nigam Limited had stopped dealing with the third respondent vide circular dated 22.8.2006 for not attending the faulty meters and thereafter, on attending the defective meters, the circular was revoked vide circular dated 14.3.2007. In so far as the news item appeared in ‘Vartha’ dated 18.2.2008, it is contended that BESCOM cannot take any cognizance for reports published in a newspaper and in the absence of any authenticated document BESCOM cannot disqualify a tenderer. The price bids were opened on 23.6.2010 duly indicating the reasons for disqualification in the e-tendering platform for the disqualified bidders. In Annexure-5 of Techno Commercial Sheet of the tender document, it has been mentioned that the bidders have to furnish information regarding Sales Tax Registration and other details. There is no Clause in the tender stating that if the bidder fails to furnish Karnataka Sales Tax Registration, his offer will have to be rejected. The Tender Accepting Authority has not given any price advantage to the third respondent. The third respondent has complied with all the pre-qualifying requirements stipulated in the tender and in view of that, the offer of the third respondent was responsive and was recommended by Tender Scrutiny Committee. The subject was placed before the Board of Directors, BESCOM and the Board after going through the details of the tender had passed the resolution to award the sale of static meters in retail meter outlets of BESCOM to the third respondent.
7. The third respondent has filed his statement of objections contending that the price which the petitioner had offered was Rs.1,190/- per meter whereas the bid of the third respondent was Rs.954/- per meter. The difference in cost is Rs.236/-, which works out to nearly 25%, which means the price at which the third respondent would be selling to the consumers of BESCOM through the retail outlets would be Rs.236/- less per meter than at which the petitioner has offered to sell. Since the total meters which would be sold is in the region of 3.72 lakhs per annum, and the contract is for a period of two years, the cost difference in the region is Rs.15 crores. The petitioner had filed an appeal under Section 16 of the Karnataka Transparency in Public Procurement Act, 1999, which was rejected on merits by a well considered order by the appellate authority, which does not call for interference under Articles 226 and 227 of the Constitution of India. The petitioner has suppressed the fact that testing of meter is required to be carried out in terms of clause 10 of the tender conditions as per IS standards. All the energy meters are required to be mandatorily conform to ISI standard and mark. It is for this reason the tender in question also specifies that the testing has to be as per ISI standards. Clause 11 of the tender condition specifies the tests of type, which are required to be carried out and specifically stipulates that the tests shall conform to IS 13779:1999. Clause 11.2(A) specifies that even after the successful bidder is identified, before commencement of the outlet, the successful bidder shall manufacture atleast 15% of the annual requirement of the meters and offer the same for inspection and the meters hall pass all acceptance tests laid down in IS 13779:1999. Clauses 10 and 11 of Volume II, Section 1 (Technical Specification) of the tender document stipulates that the samples for the testing shall be taken by the authorities of BESCOM. As per the condition, three sample meters are required to be drawn by the three Officers of the BESCOM from a lot of 50 meter from the storage place of the bidder or from the manufacturing line of the bidder. Clause 11 of the technical specification stipulates that the type of test shall be as per IS 13779:1999, which specifies the modality of test and stipulates that in the event of one specimen failing to comply with the requirement of the standard, further three specimens shall be taken, all of which shall comply with the requirements of the standard. The authorities of the BESCOM drew samples as per IS 13779:1999 from the factory of the four bidders. Tests were conducted at the CPRI. The first test in respect of all the samples of the three bidders failed. Thereafter, in accordance with Clause 11 of the Technical Specification of the tender document IS 13779:1999, the second sample was drawn by the Officers of BESCOM from the factories of all the three bidders. The second test conducted in respect of all the samples of the three bidders was passed. Thereafter, price bids of all the four bidders were opened. At this point, it was found that the price of the third respondent was the lowest and was extremely beneficial to the consumers of the general public with the benefit of Rs.15 crores to the consumers to whom the meters are to be sold by BESCOM. The procedure adopted by the BESCOM is strictly in conformity with the tender document and IS 13779:1999. The writ petition is also liable to be dismissed on the ground of suppression of material facts.8. The petitioner has filed rejoinders to the statement of objections filed by respondent Nos.1 and 2 and also respondent No.3.
9. The third respondent has filed additional statement of objections contending that as per the tender conditions, the successful bidders are required to furnish performance guarantee for Rs.1.30 crores and security deposit of Rs.65 lakhs. The performance guarantee and security deposit is in respect of three types of meters for which tender has been invited. In view of the fact that only a part of the tender was given to the third respondent, security deposit and performance guarantee has been directed to be furnished by the third respondent in proportion to the value of order placed upon it.
10. Petitioner has filed additional rejoined to the additional statement of objections filed by the third respondent along with certain documents.
11. I have heard Sri R.L.Patil, Learned Counsel appearing for the petitioner, Sri N.K. Guptha, Learned Counsel appearing for respondent Nos.1 and 2 and Sri Udaya Holla, Learned Senior Counsel for Sri H.N. Shashidhar, for respondent No.3.
12. Sri R.L.Patil, Learned Counsel contends that the decision of the Board at Annexure ‘K’ awarding the contract in favour of the third respondent in pursuance of the notification at Annexure ‘A’ in relation to Single Phase 5.30 Amps Class 1 static energy meters is wholly arbitrary, illegal and unjust. The decision has been taken with sinister motives to some how help the third respondent. The tender has not been proceed or evaluated in accordance with the tender conditions or in due conformity with the provisions of the Karnataka Transparency in Public Procurements Act, 1999 (for short ‘KTPP Act’). The Board cannot arbitrarily and by expost-facto subjective interpretation of the tender conditions resort to quixotic, whimsical and unfair method of continuing to collect samples from the persons to whom it wants to favour, till such time the samples of such favoured bidder satisfy the test undertaken by CPRI. It is argued that condition No.12 of the tender document read with Volume II Section 1 deals with technical specification for LT Single Phase Two Wires 5.30 Amps. Whole current static energy meter with LCD Display and Accuracy are essential conditions of legibility and not ancillary or subsidiary. The authority issuing the tender has to strictly enforce them. The conduct of the first respondent having collected a second set of sample from the third respondent after the first set of samples of the third respondent failed to satisfy the test requirements/standards laid down by CPRI and in having ignored the representation of the petitioner is wholly arbitrary, unjust and illegal. The evaluation of bids are not in order and BESCOM cannot carry out test in accordance with claims of Clause 12.2.1 of IS inasmuch as it would tantamount to BESCOM itself carrying out these tests and relegating itself to that of a testing unit of IS/Indian Standards. The quality of the product to be supplied has been deliberately given a go-bye. Merely because the price offered by the petitioner was slightly more than the price offered by the third respondent, the respondent could not have proceeded to some how award the contract to the third respondent. Relying on the decision of the Apex Court in RAMANA DAYARAM SHETTY vs. THE INTERNATIONAL AIRPORT AUTHORITY OF INIDA and OTHERS1-, it is contended that the choice of a contractor must be dictated by public interest and must not be unreasonable or unprincipled. The State cannot act arbitrarily in selecting the persons with whom to enter into contracts. He has also relied on the decision of the Apex Court in WEST BENGAL ELECTRICITY BOARD vs. PATEL ENGINEERING Co. LTD, and OTHERS2 – to contend that adherence to the instructions issued to bidders cannot be given a go-bye by branding it as a pedantic approach. Otherwise it will encourage and provide scope for discrimination, arbitrariness and favourtisim which are totally opposed to the rule of law and our constitutional values. The very purpose of issuing rules/instructions is to ensure their enforcement lest the rule of law should be a casualty. He has also relied on the decision of the Division Bench of this Court in M/S GUJANANA ENGINEERS vs. THE PRINCIPAL SECRETARY TO GOVERNEMNT ENERGY DEPARTMENT and OTHERS3 – to buttress his argument that there can be no relaxation of the conditions by tender inviting authority because such discretion is not vested in it by the tender Notification. He has also relied on the decision of this Court in M/s. NSOFT (INDIA) SERVICES PVT, LTD. Vs. M/s BESCOM LTD., and OTHERS4 – to contend that when the whole machinery of an instrumentality of the State is directed towards preferring a particular individual or a company in preference to other persons who are similarly placed and the anxiety shown by the statutory authority in awarding contract, in utter violation of the provisions of the KTPP Act clearly demonstrates that the Authorities are acting in violation of the rule of law.
13. It is further contended that the 4th respondent could not have decided the appeal filed by the petitioner challenging the order passed by the Board of Directors of BESCOM. The 4th respondent was the Chairperson of the BESCOM during the relevant point of time. The recommendation of the Tender Scrutiny Committee awarding the contract to the third respondent was placed before the Board. It is no doubt true that the 4th respondent has not participated in the meeting of the Board, which considered the said proposal. Since the Chairperson of the Board was also an Appellate Authority, she could not have applied her mind objectively to the dispute before her. Therefore, the proceedings before the 4th respondent was vitiated. It is argued that the third respondent is not a registered dealer under the Karnataka Sales Tax act. Without considering the serious infirmity in the bid of the third respondent, the BESCOM has awarded the contract in its petitioner by the BESCOM seeking to justify its decision to pick up second set of sample meters from the third respondent, which is again arbitrary.
14. On the other hand, Sri N.K. Gupta, Learned Counsel appearing for the first and second respondents has sought to justify the award of contract in favour of the third respondent. It is argued that while conducting the type test by CPRI, one of the sample meters of the third respondent had failed in one of the type tests i.e. short time over current test. The sample meters of M/s Genus Power Infrastructures Ltd., Jaipur and that of the petitioner passed the type tests. The CPRI intimated the BESCOM vide its communication dated 4.12.2009 that one of the samples of the third respondent had failed to comply with the requirement of the standard during short time over current test. This is one of the type tests defined under IS 13779:1999. Clause 2 of Section I Volume II of the tender document prescribes applicable standards. According to Clause 2.4 of Volume II, unless otherwise specified elsewhere in the specification, the meter shall conform in all respects including performance and testing thereof to the Indian/International Standards to be read with up to date and latest Amendments/revisions thereof. The triable form at Sl.No. 1 the standard IS 13779:1999 with latest Amendment all applicable tests for special ac status Watt hour meters. Class 1 and 2 specification. The Indian Standard has prescribed procedure and rules for IS 13779:1999 styled as Indian Standard AC Static Watt hour Meters Specification. Therefore, there is no illegality in the letter dated 10.12.2009. The meter procurement is one of the most sensitive activities in any of the distribution utility. Hence, a large number of tests have been notified in the technical specifications of tender documents. All the tests are defined in Clause II of the Technical specifications of tender documents for LT Single Phase meter. Principally there are three Clauses under tests namely, 11.1 which relates to type tests, 11.2 relates to acceptance tests and 11.3 relates to routine test. When the CPRI notified the failure of sample of respondent No.3, it was decided to call for three more samples to be picked up at random in assembly line at the facility, which is in conformity with clause No.10 of tender specification, where samples to be tested for type test mentioned as per IS. Thus, there is no illegality committed by the BESCOM in picking up second set of samples, which were picked up at random. It is contended that under the terms of PQR, Clause No. 12(xi) indicates that the bidder should not have been blacklisted in any of the electric utilities or any Department of Government of Karnataka and a self declaration certificate to this effect shall be enclosed. The third respondent has furnished self declaration in this regard. However, BESCOM received a copy of circular dated 22.8.2006 of Gujrat Urga Vikas Nigam Limited, regarding stop dealings for participation in future tender for manufacture and supply of energy meter with M/s HPL Socomec Pvt. Ltd. New Delhi. In order to check the authenticity of the circular, a letter was addressed to Gujrat Urja Vikas Nigam Ltd., vide letters dated 5.1.2010 and 16.1.2010 to conform whether such a circular was issue to M/s HOL Socomec Pvt. Ltd. In reply to the aforesaid letter, the Chief Engineer (Tech), Gujrat Urja Vikas Nigam Ltd., vide letter dated 18.2.2010 received by post on 24.2.2010 informed that Gujrat Urja Vikas Nigam Ltd., had stopped dealing with M/s HPL Socomec Pvt. Ltd., vide circular dated 22.8.2006 for not attending the faulty meters and thereafter on attending the defective meters, the circular was revoked vide circular dated 14.3.2007. The third respondent has complied with all the pre-qualifying requirements stipulated in the tender and in view of that, the offer of the third respondent is responsive as recommended by Tender Scrutiny Committee. The subject was placed before the Board of Directors, BESCOM and the Board after going through the details of the tender had passed the resolution to award the sale of static meters in retail meter outlets of BESCOM to the third respondent. It is further contended that when the fourth respondent has passed the order at Annexure ‘R’ dated 27.10.2001 as he Appellate Authority, she has not participated in the said proposal though she was the Chairperson of the BESCOM. As the Chairperson of the BESCOM, she had retired from the meeting. She has not participated in the decision making process of the subject tender. One of the Directors was elected as chairperson while discussing the subject. The tender in respect of single phase meter quoted by the third respondent is Rs.954/- per meter whereas the petitioner has been selling the meter for Rs.1190/- and in respect of every meter there is a difference of Rs.236/- per meter and the consumer of the BESCOM would be benefited since the consumer has to bear the cost of the meters.15. Relying on the decision of the Apex Court in MASTER MARINE SERVICES (P) LTD. Vs. METCALFE and HODGKINSON (P) LTD. and ANOTHER5 and ASIA FOUNDATION and CONSTRUCTION LTD. Vs. TRAFALGAR HOUSE CONSTRUCTION (I) LTD. and OTHERS6, Sri Udaya Holla, Learned Senior Counsel submits that the modern trend points to judicial restraint in case of Government contracts. Only when overwhelming public interest is involved should Courts interfere. In Government contracts, Court must keep in mind the cost of escalation and delay caused by its interference. The reasonableness in administrative law must be distinguished between proper use and improper abuse of power. He further submits that in the matters relating to tender fair play in action is an essential requirement. Similarly, free play in the joints is also a necessary concomitant for an administrative sphere. In this connection, he has relied on the decision of the Apex Court in FASIH CHAUDHARY vs. DIRECTOR GENERAL, DOORDARSHAN and OTHERS7. It is further contended that even when defects are found, the Courts must exercise powers under Article 226 with great care and should exercise power only in furtherance of public interest. If the decision is taken in a bonafide manner although not strictly following the norms laid down by the Courts, such decisions should be upheld. In support of the said contentions, he has relied on the decision of the Apex Court in AIR INDIA LTD, vs. COCHIN INTERNATIONAL AIRPORT LTD. and OTHERS8, and STERLING COMPUTERS LIMITED. Vs. M/s M and N PUBLICATIONS LIMITED and OTHERS9. It is further contended that deviation in tenders for non-requirement of minor technicalities can be waived. Minor discrepancy cannot invalidate the tender. Waiver of strict compliance with every tender document is permissible. In support of the said contention, he has relied on the decision of the Apex Court in PODDAR STEEL CORPORATION vs. GANESH ENGINEERING WORKS and OTHERS10; RAM GAJADHAR NISHAD vs. STATE OF U.P. and OTHERS11 and G.J. FERNANDEZ vs. STATE OF KARNATAKA and OTHERS12. He has also relied on the decision of the Apex Court in B.S.N. JOSHI and SONS LTD. Vs. NAIR COAL SERVICES LTD. and OTHERS13 and S.S. and COMPANY vs. ORISSA MINING CORPORATION LIMITED14 to contend that it is a mistake to see the notice inviting tender through prism of the Act and Rules. The notice should not be viewed in the highly pedantic and legalistic manner. He prays for dismissal of the writ petition.16. Before adverting to the contentions urged, it is relevant to extract the relevant Clauses of the tender conditions. Clause 8 of the tender notification provides for submission of the bid, which is as under:
“Submission Bid:
Bids shall be submitted in 2 parts viz (i) Techno Commercial Bid and Price Bid. Bids will be received up to 15.00 hours IST on 9.6.09 at the office of the General Manager (Elecl)., (Procurement), BESCOM, K.R.Circle, Bangalore – 560 001. The Techno Commercial Bid will be opened at 16.00 hours on 9.6.09 in the presence of the Bidders/representatives (limited to 2 persons per firm), who choose to attend at the office of the General Manager (Elec)., (Procurement), BESCOM, K.R. Circle, Bangalore – 560 001. If the office happens to be closed on the last day of receipt of the Bids for any reason, the Bids will be received and opened on the next working day of the office at the same venue and time.
The price bids of those bidders whose Techno Commercial Bid are found responsive will be opened at a later date under intimation to such bidders in the presence of bidders/representatives who choose to be present.”
17. The qualifying requirements stipulated in condition No. 12 of the tender document in particular, conditions (v) and (vi) continued therein are reproduced below:
“(v) The bidder shall furnish test certificates for type test conducted as per IS/TEC standards at any of the Govt. NABL accredited laboratories on the same type of meters tendered. Such certification shall not be older than two years from the date of bid opening.
(vi) Two samples (later on Amended to three samples) meters for each type conforming to the specification duty sealed along with the type test certificates shall be furnished with the bid failing which the bid shall be ignored. The type test charges will have to be borne by the bidder. A team of officers will also be deputed to the factory premises of the bidders to assess the manufacturing quality and facility and also pick up some more samples as per requirement of type tests either from storage places of factory or from the manufacturing line.” 18. Volume-II Section I of the tender documents deals with technical specifications for LT Single Phase Two Wires 5 .30 amps. Whole current static energy meter with LCD Display and Accuracy Clause 1.0. Clause 2.0 thereunder refers to applicable standards and Clause 2.4 being relevant is reproduced below. “The meter shall conform in all respects including performance and testing thereof to the following Indian/International Standards to be read with up to date and latest Amendments/revisions thereof.
| Sl. No. | Standard No. | Title |
| 1. | IS:13779:1999 (with latest Amendments) | Specification for AC Static watt hour meters class 1 and 2.” |
“10.0 SAMPLES FOR TESTING:
a) Two samples (later on Amended as three) meters confirming to this specification duly sealed along with the routing test certificates shall be furnished with the bid. A team of officers will also be deputed to the factory premises of the bidder to assess the manufacturing quality and facility and also pick up some more sample as per requirement of tests either from storage places of factory or from the manufacturing line.
The above sample meters shall be tested in CORI or other accredited lab/labs of NABL for all type and other tests covered under this specification or relevant standards as deemed necessary by the purchaser at the cost of bidder. The sample meters shall comply to the tests in all respects as per this specificationIn case sample meters are found not conforming to the requirements of specified tests conducted at CPRI lab, the price bid of the offer shall not be opened and offer will be rejected. It will be mandatory to submit two samples of meters each along with bid failing which the bid shall be ignored.
a) Type test as per IS:13799: The type test certificates for all tests as per IS:13779-1999 (with latest Amendments) shall required to be furnished along with offer. Type test certificates from any one of the standard Laboratories such as CPRI/ERDA/NPL/ERTL (NABL accredited for particular equipment/test) shall only be considered. Type test certificates from Educational Institute(s) will not be accepted. The type test certificates shall not be more than 2 years old from the date of bid opening. In absence of these type tests should have been conducted on meter having similar constructional and other features.” 20. In compliance of the terms and conditions regarding the capabilities i.e. both technical as well as financial requirements, the petitioner as also the third respondent submitted three sample meters confirming to the prescribed specification. As per the tender specification, a team of officers will be deputed to the factory premises of the bidder to assess the manufacturing quality and facility and also pick up some more samples as per requirement of type tests other form storage places of factory or from the manufacturing line. The above sample meters have to be tested in CPRI or other accredited lab/labs of NABL, for all type and other tests covered under this specification or relevant standards as deemed necessary by the purchaser at the cost of bidder. The sample meters shall comply with the tests in all respects as per this specification. If the sample meters are found not conforming to the requirements of specified tests conducted at CPRI lab, the price bid of the offer could not be opened and the offer will be rejected. From amongst the tenderers, who had submitted the sealed bids, BESCOM evaluated the technical bids and collected the random samples (3 meters) for each type from the factory premises as per the relevant Clause in the tender. After verification of qualifying requirements, BESCOM selected four bidders in LT Single Phase 5.30 A static energy meter type and submitted the random samples (3 Nos. each type) collected to CPRI, Bangalore, for all type and other tests covered under this specification and relevant standards as deemed necessary by the purchaser at the cost of bidder. During the testing at CPRI, Bangalore, samples of the third respondent failed to meet the specification whereas the other three bidders including the sample of the petitioner passed in the said test. The first respondent sent a letter to the third respondent dated 10.12.2009 confirming that CPRI vide its letter dated 4.12.2009 had informed the first respondent that the sample single phase meters supplied by the third respondent did not comply with requirements of the standards. The first respondent sought for three more samples for being tested at random from the third respondent based on clause 12.2.1 of IS 13779-1999 standards. For ready reference, clause 12.2.1 of IS 13779:1999 standard is extracted, which is as under:
“Type Tests shall be applied to three test specimens; in the event of one specimen failing to comply in any respect, further three specimens shall be taken all of which shall comply with the requirements of the standard.”
Type Test is defined as under:
“Series of tests carried out on one meter or a small number of meters of the same type having identical characteristics, selected by manufacturer to prove conformity with all the requirements of the standard for the relevant class of meter. These are intended to prove the general qualities and design of a give type of meter.”
21. As per this definition, the type test is carried out by the manufacturers to prove the quality and design of a given type of meter. All the Clauses related to Type in the standard like 12.2.1 number of samples and criteria for conformity apply when a manufacturer is carrying out the type test to prove the quality and design of meter. That is why the petitioner sent a letter as per Annexure ‘B’ dated 20.1.2010 to the second respondent informing his that the third respondent’s bid have to be rejected as the sample so submitted by the third respondent failed and requesting the second respondent to intervene in the matter and not to allow the first respondent to consider the price bid of the third respondent. 22. Therefore, the question for consideration is whether Clauses 10 and 11 of the tender conditions are essential conditions of eligibility or are merely ancillary or subsidiary?
23. The Apex Court in BSN JOSHI and SONS LTD. Vs. NAIR COAL SERVICES LTD. and OTHERS (Supra) – has held that the requirements in a tender notice can be classified into two categories those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary. In the first case, the authority issuing the tender may be required to enforce them rigidly. In the other cases, it must be open to the authority to deviate from and not to insist upon the strict literal compliance with the condition in appropriate cases. It has been further held as under:
“66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under:
(i) if there are essential conditions, the same must be adhered to;
(ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied here it is possible for all the parties to comply with all such conditions fully;
(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;
iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise funds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction; (v) When a decision is taken by the appropriate authority upon the consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with.
(vi) The contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority;
(vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint.”
24. It is clear from Clauses-10 and II of the tender documents that each bidder has to supply three sample meters conforming to the specifications, duly sealed along with the routine certificates. A team of officers will be deputed to the factory premises of the bidder to assess the manufacturing quality and facility and also pick up some more samples as per requirement of the tests either from storage places of the factory or from the manufacturing line. The above sample meters shall be tested in CPRI or other accredited lab/labs of NABL for all type and other tests covered under the relevant specifications or standards, as deserved necessary by the purchaser at the cost of the bidder. The sample meter shall comply with the tests in all respects as per the specifications. In case, sample meters are found not conforming to the requirements of specified tests conducted at CPRI, the price bid of the offer could not be opened and the offer will be rejected. The tender documents do no authorize the BESCOM to relax the above conditions. It is an essential condition, which has to be adhered to by the bidder. The Board cannot continue to collect samples from a bidder to whom it wants to favour till such time the samples of such favoured bidder satisfy the test undertaken by the CPRI. It is true that Clause-11 of the technical specification stipulates that the type of test shall be as per IS 13779:1999 which specifies the modality of the test. It further stipulates that in the event of one specimen failing to comply with the requirement of the standard, further three specimens shall be taken, all of which shall comply with the requirement of standard. Even if one specimen has failed to comply with the requirements, the Board had already collected required numbers of samples under Clause-10. When the sample meters furnished/picked are found not conforming to the requirement of specified tests conducted at CPRI lab, the price bid should not have been opened and the offer should have been rejected. The Board was therefore not justified in drawing second set of samples from the 3rd respondent. It is well established that standard of eligibility laid down in the notice for tenders cannot be departed arbitrarily because such departure from the standard would amount to denial of equality of opportunity (See RAMANA DAYARAM SHETTY vs. INTERNATIONAL AIRPORT AUTHORITY OF INDIA AND OTHERS15.
25. In WEST BENGAL ELECTRICITY BOARD vs. PATEL ENGINEERING Co. LTD. and OTHERS (Supra), the Apex Court was considering a similar question. In the said case, West Bengal Electricity Board invited tenders for carrying out main civil work (lot No.4) for “Purulia Pumped Storage Project”. The authority concerned evaluated the bid and informed the bidders that during the checking of documents, errors were discovered. Challenging the validity of the said letter of the Authority, the respondent therein field’s writ petition before the High Court of Calcutta. The High Court directed the authority to consider the representation made to it by the bidder, which was decided by the evaluation committee of the authority. The decision taken by the authority pursuant to the order of the High Court did not meet with the approval of the High Court. Therefore, the Learned Single Judge of the High Court directed the authority to reconsider the representation after giving them an opportunity of being heard. Against the said order of the Learned Single Judge, appeals and cross appeals were filed by both the authority concerned and the bidder. A Division Bench dismissed the appeals. Feeling aggrieved by the said order, the authority filed an appeal before the Hon’ble Supreme Court. After considering the matter in detail, the Supreme Court has held as under: “25. It is essential to maintain the sanctity and integrity of process of tender/bid and also award of a contract. The appellant, respondent Nos.1 to 4 and respondent Nos. 10 and 11 are all bound by the ITB which would be complied with scrupulously. In a work of this nature and magnitude where bidders who fulfil pre-qualification alone are invited to bid, adherence to the instruction cannot be given a go-bye by branding it as a pedantic approach otherwise it will encourage and provide scope for discrimination, arbitrariness and favouritism which are totally opposed to the Rule of law and our constitutional values. The very purpose of issuing Rule/instructions is to ensure their enforcement lest the Rule of law should be a casualty. Relation or waiver of a rule or condition, unless so provided under ITB, by the State or its agencies (the appellant) in favour of one bidder would create justifiable doubt in the minds of other bidders, would impair the rule of transparency and fairness and provide room for manipulation to suit the whims of the Sate agencies in picking and choosing a bidder for awarding contracts as in the case of distributing bounty or charity.” 26. In M/s. GAJANANA ENGINEERS vs. THE PRINCIPAL SECRETARY TO GOVERNMENT ENGERCY DEPARTMENT AND OTHERS (Supra), a Division Bench of this Court was considering a similar matter wherein the successful bidder had not satisfied essential tender conditions of furnishing the documents in support of the initial working capital (cash credit limits) from any Scheduled Bank/Nationalised Bank of Rs.40 lakhs and worksheet of costs involved in repairing 25 KVA, 63 KVA and 100 KVA distribution transformers. The writ petition was opposed by the BESCOM and the successful bidders contending that the Tender Inviting Authority has discretion to relax the applicability of the tender conditions. Alternatively, it was contended that the said condition was not an essential condition but only a subsidiary and ancillary condition. It was also contended that the price offered by the successful bidder was less than the price offered by the appellant-petitioner and therefore, the BESCOM would be beneficial financially Rejecting the said contentions, this Court has held as under: “It is pertinent to notice that since the guarantee of equal protection enshrined in Article 14 of the Constitution embraces the entire domain of State Action’ it would extend not only when an individual discriminated in the matter of exercise of his rights or in the matter of imposing liabilities upon him, but also in the mater of granting privileges, e.g., granting licenses for entering into any business, inviting, tenders for entering into a contract relating to Government business, or issuing quotas, giving jobs and in all these cases, the principle is that should be no discrimination between one person and another if their position or circumstance is the same, in other words, the State’s action must not be arbitrary but must be based on some valid principles which itself must not be irrational or discriminatory. It is well established by the Indian Administrative Law that an executive or statutory Authority must be rigorously held to the stands by which it professes its actions to be judged and it must scrupulously observe those standards on pain or invalidation of an action taken in violation of them. It is true that every activity of the State has the public element in it and must, therefore, be informed with reason and fair play in action and guided by public interest. It is also true if the Government awards contracts or otherwise deals with its property or grants any other largesse, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and it is fails to satisfy either test, it would be unconstitutional and invalid. The public Authority cannot exercise its discretion arbitrarily in the matter of giving contracts to a party on its sweet will and pleasure giving a go-by to the norms and procedure imposed by it. In other words, the action of the Authority in the matter of awarding contract should inspire transparency and openness and reflect justification and legality.”
The Court has further held that there can be no relaxation of the conditions of the Tender Inviting Authority because such discretion is not vested in it by the Tender Notification or under the relevant rules. The condition requiring the proof of financial capacity to an extent of Rs.40 lakhs cannot be regarded as a subsidiary or ancillary condition. It is further held as under: “If we carefully peruse the certificates produced by the appellant and the contesting respondents 4 to 6 extracted above, the certificates produced by respondents-4 to 6 cannot be said to be the certificates in proof of the qualify condition of financial capacity. As on the date of submission of tender, in terms of the tender conditions incorporated in the tender Notification, the tenderers should have the minimum capacity to spend Rs.40 lakhs, which the appellant has as per the certificate issued by the State Bank of India, where as the contesting respondents 4 to 6 did not have. There can be no relaxation of the conditions of the tender inviting authority because such discretion is not vested in a by the Tender Notification or under the relevant rules. The condition requiring the proof of financial capacity to an extent of Rs.40 lakhs cannot be regards as a subsidiary or ancillary condition. The prescription that a tenderer should produce the proof of financial capacity of Rs.40lakhs to spend is undeniably an essential tender condition to ensure that a tenderer would carry out the work effectively and without any default, if ultimately the contract is awarded to such tenderer. There can be no relaxation of the condition by the tender inviting authority in view of the condition specified in the Tender Notification and also in view of Rules 27 and 28 of the Rules. We do not find any merit in the contention of Sri. N. K. Gupta that the tender condition requiring the tenderer to produce proof of financial capacity in respect of financial bid is only subsidiary condition. We also do not agree with Sri. N.K. Gupta that Clause-9 of the Tender Notification produced at page-90 of the material papers reserved discretion to relax conditions. A careful reading of that Clause by applying ‘Golden rule of interpretation’ would not tell us to accept the contention of Sri. N. K. Gupta as well founded.”
The contention of the BESCOM that the price offered by the successful bidder was less than the price offered by the appellant-petitioner and that therefore, the BESCOM would be beneficial financially was also rejected by holding as under:
“The other defence raised by the BESCOM authorities to support their action despite violation of qualifying conditions by the contesting respondents is that the price offered by them is less than the price offered by the appellant petitioner and therefore, the BESCOM would be beneficial financially. That defence raised by BESCOM authorities and accepted by the Learned Single Judge, in our considered opinion, is not well founded. It is well settled that price need nor always be the sole criterion for awarding contract. It is so held by the Apex Court in AIR INDIA LIMITED vs. COCHIN INT. AIRPORT LTD. and OTHERS (Supra) and several other judgments to follow. The mere difference in the prices offered by the two tenderers may not be decisive in deciding whether any public interest is involved or ensure. If all things are equal in terms of law and procedure, public interest may be served well in awarding a contract to a tenderer who has offered lesser rate for the service and that principle has no application where a tenderer though offers lesser rate for service has not complied with or satisfied the essential qualifying conditions of tenders. In its pleading, the appellant-petitioner has stated that the prices offered by the contesting respondents are unworkable and, in fact, efficient work cannot be done at the prices quoted by the contesting respondents. It is further alleged that the contesting respondents have failed to carry out the work awarded to them. It is said about respondent No. 1 that it has entrusted the work and got 4000 Distribution. Transformers repaired through other agencies giving the rate more than what was quoted by the appellant in respect of repairs of 25 KVA, 63 KVA and 100 KVA Distribution Transformers.” 27. In M/s. NSOFT (INDIA) SERVICE PVT. LTD. Vs. M/s. BESCOM LTD.,and OTHERS (Supra), this Court has again held as under:“Having regard to the object with which the Act was passed by the Karnataka Legislature nearly nine years back, the tendency of the first respondent, an Instrumentality of the State, to continue to indulge in manipulations and distributing the public largesse is quite evident in this case. When the whole machinery of an instrumentality of the State is directed towards preferring a particular individual or a company in preference to other persons who are similarly placed and the anxiety shown by the statutory authority in awarding authority in awarding contract, in utter violation of the provisions of the Act clearly demonstrates that the authorities are acting in violation of the rule of law. In fact, the way tender is worded also gives an impression that from the inception they have kept in mind the interest of the second respondent and not the authority. When these facts are brought to the notice of this Court, this Court cannot be a silent spectator. It is not a mere issue of a writ to quash an illegal action. A duty is cast on the Court to see in future such illegalities do not occur. Therefore, it is very much necessary for this Court to quash these contracts in particular the second contract which is granted in utter violation of the provisions of the Act. As the petitioner has succeeded in showing the illegality he is entitled to succeed and is entitled to get both the contracts quashed.”28. Let us now consider the decisions relied on by Sri Udaya Holla. Learned Senior Counsel appearing for the third respondent. In RAUNAQ INTERNATIONAL LTD. (supra), the challenge in the writ petition filed by M/s I.V.R. Construction Limited is that M/s Raunaq International Limited did not fulfil the qualification criterion of having laid pipe line for a distance of 3 kms. It was noticed that M/s IVR Construction Limited also did not fulfil the qualifying criterion. In this background, the Supreme Court held that the Court must be satisfied that there is some element of public interest involved in entertaining such a writ petition. Unless the Court is satisfied that there is a substantial amount of public interest or the transaction is entered into malafide, the Court should not intervene under Article 226 in disputes between two rival tenderers.
In MASTER MARINE SERVICES (P) LTD.’S CASE (supra), the Apex Court has held that the Government must have freedom of contract. Fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere of quasi-administrative sphere. The State, its Corporations, instrumentalities, and agencies have the public duty to be fair to all concerned. In ASIA FOUNDATION and CONSTRUCTION LTD,’s case (supra), Apex Court has observed that the consultant found some discrepancy in the bid documents about the amount of concrete required for pre-cast planks for the wharf deck. In this background, the Court has held that direction for re-bidding would be grossly detrimental to the public interest.
In G.B. MAHAJAN’s case (supra), the Apex Court has held that the ‘reasonableness’ in administrative law must, therefore, distinguish between proper use and improper abuse of power. Nor is the test the Court’s own standard of ‘reasonableness’ as it might conceive it in a given situation.
In FASIH CHAUDHARY’s case (supra), the Apex Court has held that he Authorities like the Doordarshan should act fairly and their action should be legitimate and fair and transaction should be without any aversion, malice or affection. Nothing should be done which gives the impression of favouritism or nepotism. While, fair play is an essential requirement, similarly, however, ‘free-play in the joints’ is also a necessary concomitant for an administrative sphere or quasi-administrative sphere. Even if all the proposals might not have been considered strictly in accordance with order of precedence, such proposals must have been considered fairly, reasonably, objectively and without any malice or ill-will.
In AIR INDIA LTD.’s case (supra), the Apex Court has held that in arriving at a commercial decision, considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract.
In UNITED INDIA PERIODICALS PVT. LTD.’S case (supra), the Apex Court has held that even in contractual matters, the public authority should not have unfettered discretion. In contracts having commercial element, some more discretion has to be conceded to the authorities so that they may enter into contracts with persons, keeping an eye on the augmentation of the revenue. In PODDAR STEEL CORPORATION’s case (supra) the Apex Court has held that as a matter of general proposition, it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or not significance. The requirements in a tender notice can be classified into two categories. Those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case, the Authority issuing the tender may be required to enforce them rigidly. In the other cases, it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases.In G.J. FERNANDEZ’s case (supra), the Apex Court has held even if there has been slight deviation from the terms of contract, it has not deprived the appellant of its right to be considered for the contract. On the other hand, its tender has received the due and full consideration.
In S and S COMPANY’s case (Supra), the Apex Court has held that the NTI should not be viewed in the highly pedantic and legalistic manner as suggested by the Learned Counsel but it should be read and understood for what it is.29. It is clear from the aforesaid decisions that the award of a contract, whether it is by a private party or by public body of the State, is essentially, a commercial transaction. In arriving at a commercial decision consideration which are of paramount importance are commercial consideration. The State can choose its own method to arrive at a decision. It can fix its own terms of invitations to tender and that it is not open to judicial scrutiny unless such terms could be condemned on the touchstone of Article 14 postulates. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation for bona fide reasons, It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms,. Standards, procedure laid down by them and cannot depart from them arbitrarily. Through the decision taken by them is not amenable to judicial review on merit, the Court can examine the decision making process and interfere if it is found vitiated by malafides. Unreasonable and arbitrariness and due to violation of he terms and conditions, imposed by the authority itself. It is trite law that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. As has been noticed above, the BESCOM has ignored the essential tender conditions of eligibility such as condition Nos. 10 and 11. They are not the ancillary or subsidiary conditions. It is well established that the essential conditions must be enforced rigidly. Therefore, the decisions relied on by Mr. Udaya Holla are not applicable to the facts of this case.
30. That brings me to the next question as to whether the petitioner is justified in contending that bias is attributable to the 4th respondent while deciding the appeal filed under Section 16 of the Karnataka Transparency in public procurement Act, 1999. In this connection, the contentions urged by the petitioner is that immediately after receipt of the copy of the resolution of subject No.43/2006 under the Right to Information Act relating to the award of the contract in favour of the 3rd respondent, it filed an appeal before the 4th respondent in appeal No.EN.198.EEB.2010. The 4th respondent mechanically issued notices to respondent Nos. 1 to 3 in the appeal. The 4th respondent has passed an order as per Annexure-R because she is also supporting the case of the 3rd respondent. The 4th respondent who was acting as the appellate authority was herself the Chairperson of the BESCOM, who had attended the board meeting of the BESCOM on 28.2.2010 and has participated in the decision making process and passed the impugned resolutions. Respondent Nos.1 and 2 have filed objections contending that the 3rd respondent has complied with all the requirements stipulated in the tender. The subject was placed before the Board of Directors, BESCOM and the Board after going through the details of the tender had passed the resolution to award the sale of static meters in retail meter outlets of BESCOM to the third respondent. It is further contended that the 4th respondent was the Chairperson of the BESCOM during the relevant point of time. She had not participated while considering the said proposal though she was the Chairperson of the BESCOM. As the Chairperson of the BESCOM, she had retired from the meeting when the resolution dated 28.8.2010 was passed. One of the Directors was elected as chairperson while discussing the subject. Thus, there was no impediment for the 4th respondent to decide the appeal. Therefore, the question for consideration is whether the 4th respondent was justified in deciding the appeal filed under Section 16 of the Karnataka Transparency of Public Procurements Act, 1999?
31. An essential element of judicial process is that the Judge has to be impartial and neural and to be in a position to apply his mind objectively to the dispute before him. Proceedings before a Judge may be vitiated if he is biased, if there are factors, which may influence him to improperly favour one party at the cost of the other party in the dispute. Bias disqualifies and individual from acting as Judge flows from two principles: (i) no one should be a Judge in his own cause, and (ii) justice must not only be done but seen to be done.
32. Whether there was a real likelihood of bias or not in a situation should be ascertained with reference to right-minded persons; whether they considered that there was a real likelihood of bias. The question of bias is thus to be decided by the Court not on the ground whether in the mind of the Court, there was a real likelihood of bias or not but by applying the yardstick as to what a reasonable man would think about the matter, whether he would suspect bias in the circumstances. Even when the Court may feel that there was no real likelihood of bias in the circumstances of the case, the Court may still quash a decision if right –mined ed people would suspect bias on the part of the adjudicator. The test therefore boils down to the reasonable suspicion test as has been held by the Apex Court in MANAKLAL vs. DR.PREMCHAND SINGHVI and OTHERS16. In this case, a complaint alleging professional misconduct against Manak Lal, an Advocate of Rajasthan high Court was filed by Prem Chand. The Bar Council Tribunal appointed by the Chief Justice of the High Court to enquire into the alleged misconduct of Manak Lal, consider dot the Chairman and two other members. The Chairman had earlier represented Prem Chand in a case. He was, however a Senior Advocate and was once the Advocate General of the Rajasthan High Court. The Supreme Court had no hesitation in assuming that the Chairman had no personal contact with his client and did not remember that he had appeared on his behalf in certain proceedings. The Court was thus satisfied that there was no real likelihood of bias, but still it held that the Chairman was disqualified on the ground that justice not only be done but must appear to be done to the litigating public. Actual proof of prejudice was not necessary; reasonable ground for assuming the possibility of bias was sufficient. The Court emphasized that a Judge should be able to set judicially, objectively and without any bias. In such cases, the test is not whether is fact bias has affected the judgment, but whether litigant could reasonable apprehend that bias attributable to a member of the Tribunal might have operated against him in the final decision of the Tribunal.33. when a person for a post for which he himself is a candidate even though he may not participate in its deliberation when his name is considered is one of the form of personal bias as has been held by the Apex Court in A.K.KRAIPAK vs. UNION OF INDIA17. In G.SARANA vs. LUCKNOW UNIVERSITY18, the Supreme Court has observed that the real question is not whether a member of an Administrative board while exercising quasi judicial powers or discharging quasi judicial functions, was biased, for it is difficult to prove the mind of a person. What has to be seen is whether there is a reasonable ground for believing that he was likely to have been biased. 34. Coming to the facts of the present case, the 4th respondent was the Chairman of the Board the relevant point of time. She may not have participated in the proceedings while accepting the proposal of the Tender Scrutiny Committee. She was an appellate authority under Section 16 of the Karnataka Transparency in Public Procurement Act, 1999 and the appeal challenging the award of tender by the Board was filed before the 4th respondent. Therefore, there is a reasonable ground for believing that she was likely to have been biased. Actual proof of prejudice was not necessary. Reasonable ground for assuming the possibility of bias was sufficient. In my opinion, the 4th respondent should not have decided the appeal on its merits. Since the petitioner apprehends that the 4th respondent was biased against it which has resulted in dismissal of the appeal, the order at Annexure ‘R’ is liable to be quashed.
35. In view of my finding that the award of tender by the 2nd respondent in favour of the 3rd respondent in opposed to the essential tender conditions and the order of dismissal of the appeal by the 4th respondent at Annexure ‘R’ is on account of apprehension of bias, it is unnecessary to answer the other questions raised by the Learned Counsel for the petitioner. 36. In the result, the writ petition succeeds and it is accordingly allowed. The award of contract in favour of the 3rd respondent as per the resolution passed by the Board of Directors of the BESCOM in its meeting held on 28.8.2010 in subject No.43/2006 (Annexure-K) in so far as it relates to award of the contract against enquiry No.BCP-396/2-8-09 (Tender Notification – Annexure ‘A’) dated 1.4.2009 pertaining to Single Phase 5-30 Amps Class 1 Static energy meter in favour of the third respondent is hereby quashed. The order passed by the 4th respondent date 27.10.2010 at Annexure ‘R’ is also hereby quashed. The 1st and 2nd respondent are directed to consider the bid of the petitioner and other bidders, who have qualified in the Techno Commercial Bid and in price bid in accordance with law. No costs.