Disposed

M/S G.S. Management Services Pvt. Ltd, v. the Managing Director, Bescom

Karnataka HC13 Dec 2023WP/8830/2023

Case brief

AI extract

What is this about?

The High Court disposed of a writ petition challenging the extension of a manpower contract for two additional years. The Court observed that while the tender permitted extension, such practice raises transparency concerns and directed BESCOM to re-examine tender conditions in the future, ultimately dismissing the petition.

What did the court decide?

The writ petition stands disposed, and pending interim orders are also disposed of as a consequence.

M/S G.S. Management Services Pvt. Ltd, Vs the… — Company and Corporate | Karnataka HC (2023)

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NC: 2023:KHC:45407 WP No. 8830 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 13^TH DAY OF DECEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 8830 OF 2023 (GM-TEN)

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BETWEEN:

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M/S. G.S. MANAGEMENT SERVICES PVT. LTD., (A COMPANY REGISTERED UNDER THE INDIAN COMPANIES ACT, 1956)

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NO.1091, 2^ND FLOOR, SRNG COMPLEX OTC ROAD, NAGARTHPET BENGALURU – 560 002 REPRESENTED BY ITS MANAGING DIRECTOR MR.H.S.GOPAL.

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…PETITIONER

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(BY SRI D.R.RAVISHANKAR, SR.ADVOCATE FOR SRI. ABHIJEET S.K.RAI, ADVOCATE)

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Digitally signed by PADMAVATHI B K Location: HIGH COURT OF KARNATAKA

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AND:

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THE MANAGING DIRECTOR BESCOM CORPORATE SERVICE K.R.CIRCLE BENGALURU – 560 001.

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THE GENERAL MANAGER (ELE.,) PROCUREMENT, CORPORATE OFFICE, BESCOM, 4^TH FLOOR, K.R.CIRCLE,

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NC: 2023:KHC:45407 WP No. 8830 of 2023

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BENGALURU – 560 001.

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M/S. MERU INFO SOLUTIONS

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(A PARTNERSHIP FIRM) NO.07, 2^ND FLOOR ABOVE AXIS BANK OLD OUTER RING ROAD 2^ND STAGE, NAGARBHAVI BENGALURU – 560 072, REPRESENTED BY ITS PARTNER MR.SRIDHAR K.

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…RESPONDENTS

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(BY SRI.S.SRIRANGA, SR.ADVOCATE FOR SMT.SUMANA NAGANAND, ADVOCATE FOR R-1 AND C/R-2; SRI ARUNA SHYAM, SR.ADVOCATE FOR SRI SUYOG HERELE, ADVOCATE FOR C/R-3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH / SET ASIDE EXTENSION ORDER DTD. 10.03.2023 BEARING NO. BESCOM/GMP/DGMP/BC-10/2022-23/9139-44 ISSUED BY THE R2 IN FAVOUR OF R3 VIDE ANNX-A TO THE WP AND ETC.,

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THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner is before this Court calling in question an

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order of extension of the contract issued by respondent No.2 in favour of respondent No.3 and consequently, seeks quashment

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NC: 2023:KHC:45407 WP No. 8830 of 2023

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of Clause 6(32) of the general conditions of instructions in the tender document.

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Heard Sri D.R.Ravishankar, learned senior counsel

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along with Sri Abhijeet S.K. Rai, learned counsel for the petitioner, Sri S. Sriranga, learned senior counsel along with Smt. Sumana Naganand, learned counsel for respondent Nos.1 and 2, Sri Aruna Shyam, learned senior counsel along with Sri Suyog Herele, learned counsel for respondent No.3

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Facts in brief germane, are as follows:

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The petitioner claims to be a company incorporated under

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the Companies Act, 1956 and is in the business of Human Resource Outsourcing i.e., providing manpower services to various government and private organizations. Respondent No.2 – Bangalore Electricity Supply Company Limited (for short ‘BESCOM’) issues a notice inviting tender (for short ‘NIT’) for a Decision Oriented Systematic Analysis (for short ‘DOSA’), for providing manpower to certain places in BESCOM. The tender notification comes to be challenged by the petitioner in W.P.No.3206/2022, where no interim order was granted. A

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notice dated 08.02.2022, was issued by respondent No.2 to the petitioner to vacate the premises as the contract period was coming to an end on 28.02.2022. The co-ordinate bench of this Court by its order dated 28.02.2022, rejected the writ petition holding that the award of tender in favour of respondent No.3 was in accordance with law. The petitioner then prefers a review petition in R.P.No.413/2022; this comes to be rejected on the submission made by the learned senior counsel representing the petitioner, that the contract itself is coming to an end in the next two months. The findings to reject the review petition is as follows:

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“2. The above review petition is against the order dated 28.02.2022 in W.P.No.3206/2022 wherein the writ petition filed by the petitioner questioning the correctness and legality of tender notification dated 25.01.2022, for availing manpower services was rejected. Learned senior counsel Sri.K.G.Raghavan would submit that this Court proceeded to dismiss the writ petition on the ground that the tender condition that tenderer shall have turnover of not less than two times the amount put to tender in any previous two financial years out of five financial years is in consonance with the Government Order dated 14.10.2008 as well as Circular dated 09.09.2020 of the BESCOM. Learned senior counsel would submit that the petitioner has placed on record, materials to demonstrate that in the previous and subsequent tenders the BESCOM has not adhered to the above stated Government Order and the BESCOM has deviated with regard to above tender condition.

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3. When this Court pointed out that the tender period would come to an end in another two months, learned senior counsel Sri.K.G.Raghavan fairly submits that the review petition could be disposed of observing that the observations in the order under review is on the fact situation of the present case, keeping open all the contention of the parties to be urged in any other appropriate proceedings.

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4. Taking note of the above submission, present review petition is disposed of, making it clear that any observation made in the order under review is on fact situation of the present case. The contentions raised by the petitioner as well as respondents are kept open to be urged in any future proceedings.”

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The submission was that, the contract would come to an end in

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the next two months. Therefore, the review petition was disposed, which would mean that a fresh tender was expected to be issued after the term would come to an end as the subject tender therein, was only for a period of one year.

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After the disposal of the review petition, the BESCOM did not issue any fresh tender notification but extended the contract awarded to respondent No.3 for another period of two years. It is this extension of the tender, that is challenged in the subject petition.

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Sri D.R.Ravishankar, leaned senior counsel would submit that the action of the BESCOM is arbitrary as the review

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petition comes to be disposed on the score that the contract period is coming to an end. All the participants in the tender, particularly the petitioner thought that a fresh tender notification would be issued, what happens is otherwise. For the capacity of one year’s tender, it is extended by two years. It is this that becomes arbitrary, is the submission of the learned senior counsel for the petitioner.

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Sri S. Sriranga, learned senior counsel representing respondent Nos.1 and 2 - BESCOM would refute the submissions by taking this Court to the tender notification, particularly, Clause 6(32) of the general conditions of the tender to contend that the tender notification itself would provide extension of the contract by two more years. He would submit that the petitioner himself is the beneficiary in the past of such extension on numerous occasions. Therefore, the petitioner cannot now turn around and challenge the very clause, which had benefited him in the past. He would seek dismissal of the petition.

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Sri Aruna Shyam, learned senior counsel for respondent No.3 would toe the lines of the learned senior counsel representing BESCOM.

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I have given my anxious consideration to the submissions made by the learned senior counsel for the respective parties and have perused the material on record.

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The afore-narrated facts are not in dispute and lie in a narrow compass. The notice inviting tender dated 25.01.2022, in which, respondent No.3 is awarded the contract, becomes the subject matter in W.P.No.3206/2022; this comes to be dismissed on 28.02.2022; a review petition comes to be filed, which also comes to be disposed in terms of the afore-quoted order. The impugned contract awarded to respondent No.3 is extended for a period of two years by the impugned communication. What requires to be noticed is, whether the BESCOM could have extended the term by two years and not call for a fresh tender.

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It is trite that the Tender Inviting Authority is the best to impose such conditions in the tender according to its need. This Court would not step into the shoes of the Tender Inviting

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Authority and tinker those conditions except in cases where such actions would become arbitrary. What merits acceptance is, the submissions qua the impugned extension. The tender notification issued in the year 2022, in which certain clauses of the tender are germane to be noticed.

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“32. The Contract is for a period of ONE year from the date of contract order and based on the satisfactory performance, the same is extendable up to two more years at the same terms & conditions of the contract. In case of any unsatisfactory performance, BESCOM has the right to cancel the order without giving any notice.

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28.0 This contract is for a period of 1 year from the date of contract order and based on the satisfactory performance, the same is extendable up to two more years at the same terms & conditions of the contract. In case of any unsatisfactory situations BESCOM has the right to cancel the order without giving any notice. Contract Agency and its employees has no right to disclose any Technical secrecy, Commercial secrecy and Social secrecy of BESCOM to others.”

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(Emphasis added)

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The aforesaid clauses permit BESCOM to extend the contract which was initially for a period of one year and extendable for two more years on the same terms and conditions of the initial contract. The tender conditions in the contract is restricted for a period of one year is discernable and based on the performance of the contract, it is extendable to two more

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years. If the tender is called for one year and the criteria for awarding a contract in terms of the said tender is only for a period of one year, extending it on the same terms and conditions for a period of two years would not inspire confidence nor generate transparency in the procedure. Though this Court would not find any fault in the impugned tender, it is for the BESCOM to streamline the grant of extension for a period of two years, as the term for which the tender is notified is for one year, and the criteria is also assessed qua 12 months in the initial tender.

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The extension in the considered view of this Court cannot run beyond the period for which the tender is itself called. This Court would not direct that the tender should be called in a particular manner, but the extension granted for two

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more years or the tender being invited for one year and extendable for two years needs to have a re-look by the respondents - BESCOM for it to escape non-arbitrariness. The BESCOM shall take note of the observations made in the course of the order and have a re-look at the conditions of tender in future. The impugned order does not warrant any interference.

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NC: 2023:KHC:45407 WP No. 8830 of 2023

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10 -

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With the aforesaid observations, the petition stands

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disposed.

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Pending I.As’. stand disposed, as a consequence.

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Sd/JUDGE

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nvj List No.: 1 Sl No.: 24

M/S G.S. Management Services Pvt. Ltd, v. the Managing Director, Bescom

Case brief

What is this about?

What did the court decide?

M/S G.S. Management Services Pvt. Ltd, v. the Managing Director, Bescom

Case brief

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