Case Note & Summary
The writ appeal arose from the dismissal of a writ petition that challenged a condition in a tender floated by Karnataka Power Corporation Limited for the Sharavathy Pumped Storage Hydro Electric Project. The project, valued at Rs. 8005 crore, involved a turnkey EPC contract combining civil, electro-mechanical, and hydro-mechanical works. The appellant, Larsen and Toubro Limited, objected to the 21-day period provided for bid submission, contending it was arbitrary, violative of Article 14 of the Constitution, and insufficient given the complexity and need for specialised tie-ups. The tender process began with a draft NIT on 7 January 2024, and final tender on 2 February 2024. The last date, initially 21 February, was extended to 23 February 2024 by corrigendum after a pre-bid meeting. The appellant had communicated its concerns on 17 January and 5 February 2024, seeking at least 90-120 days. The respondent Corporation defended the timeline, pointing to prior knowledge and site visits by the appellant. The Single Judge dismissed the petition on 6 March 2024. In appeal, the Division Bench framed key legal questions regarding a bidder's right to insist on a particular timeline, the right to challenge such conditions, the existence of a right to bid in a particular manner, and the extent of judicial review over tender timelines. The arguments centred on unreasonableness and stifling of competition versus adequacy of time and prior information. The extracted text does not include the court's final analysis or decision.
Issue of Consideration
Whether an intending bidder could ask and insist that he should be allowed a particular timeline to submit his bid; whether the appellant-bidder could have any right to call in question the condition in the tender regarding the time period within which the bid–offer was required to be submitted; whether there exists in law any right such as right to bid in particular way and whether the condition in the tender prescribing the time period for submission of the bid would fall within the breath of judicial review by the court.
Law Points
- Judicial review of tender conditions
- Article 14 of the Constitution
- reasonableness and arbitrariness in tender timelines
- right to bid
- Karnataka Transparency in Public Procurement Rules
- 2000
- Rule 17
- scope of writ jurisdiction
- challenging bid submission deadlines
- EPC contract conditions
Case Details
2024 LawText (KAR) (04) 46
WRIT APPEAL NO.381 OF 2024 (GM-RES)
N.V. Anjaria, Chief Justice, Justice Krishna S Dixit
Udaya Holla, Lomesh Kiran N, Samhita Mehra, Shashi Kiran Shetty, Ajay J.N., K.G. Raghavan, K. Vivek Reddy, Ajay, Vardhan Reddy
Larsen and Toubro Limited
Karnataka Power Corporation Limited, M/s Megha Engineering and Infrastructures Limited
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Nature of Litigation
Writ petition under Article 226 of the Constitution challenging the reasonableness of a bid submission timeline in a public tender process, and subsequent writ appeal against dismissal of the petition.
Remedy Sought
Appellant-petitioner sought a declaration that the last date for submission of bid (23 February 2024) was unreasonable, arbitrary and violative of Article 14, and a direction to the respondent Corporation to extend the deadline to 3 May 2024 or such other date as deemed appropriate.
Filing Reason
The timeline of 21 days was considered insufficient by the appellant to prepare a comprehensive bid given the project's complexity, including need for tie-ups and geotechnical studies.
Previous Decisions
Learned Single Judge dismissed the writ petition on 6 March 2024, permitting the tender process to continue.
Issues
Whether an intending bidder could ask and insist that he should be allowed a particular timeline to submit his bid.
Whether the appellant-bidder could have any right to call in question the condition in the tender regarding the time period within which the bid–offer was required to be submitted.
Whether there exists in law any right such as right to bid in particular way.
Whether the condition in the tender prescribing the time period for submission of the bid would fall within the breath of judicial review by the court.
Submissions/Arguments
Appellant argued that the 21-day timeline was arbitrary and violated Article 14, as the project required extensive preparation, including tie-ups with E&M and HM agencies, site surveys, and geotechnical studies, and that a minimum of 90-120 days was necessary.
Appellant contended that the short period stifled competition and prevented capable bidders from participating, resulting in sub-optimal bids.
Respondent No.1 (Corporation) contended that the appellant had advance knowledge of the project, as its representative visited the office multiple times from 18 January 2024, had detailed discussions on geotechnical aspects, and undertook site visits on 1-2 February 2024, so the timeline was adequate.
Respondent further argued that the appellant's objections were raised belatedly and that the tender conditions were reasonable and in compliance with procurement rules.
Judgment Excerpts
Whether an intending bidder could ask and insist that he should be allowed a particular timeline to submit his bid; whether in the facts and circumstances of the case, the appellant-bidder could have any right to call in question the condition in the tender regarding the time period within which the bid–offer was required to be submitted; whether there exists in law any right such as right to bid in particular way and whether the condition in the tender prescribing the time period for submission of the bid would fall within the breath of judicial review by the court – are few of the questions of the kind and nature, that have arisen for consideration in this appeal.
The tender was in respect of 'Sharavathy Pumped Storage Hydro Electric Project (8x250mw) Upper Dam (Shimoga) and Lower Dam (Uttara Kannada) District, Karnataka'.
Design, Engineering, Manufacturing, testing at manufacturer’s works before dispatch, Supply, transportation, storage at site, intra-site transportation, insurance (transit, storage cum erection testing & commissioning), erection, testing and commissioning of 8 nos. Vertical Francis Reversible Pump-Turbines and synchronous Motor-Generator sets each of 250MW capacity along with all associated auxiliary and ancillary equipment, 420KV GIS, Pothead yard & Power evacuation Structures including civil works and hydro-mechanical works of Sharavathy Pumped Storage Project on EPC (TURN KEY) basis at Upper dam (Shimoga) & Lower dam (Uttara Kannada) District, Karnataka.
Procedural History
Draft Notice Inviting Tender was published on 7 January 2024. The tender was floated on 2 February 2024. Appellant raised objections via email dated 17 January 2024 and letter dated 5 February 2024. Pre-bid meeting held on 14 February 2024. Answers to bidders’ queries were published on 17 February 2024. Last date for submission was initially 21 February 2024, extended to 23 February 2024 by corrigendum. Writ petition was filed on 20 February 2024. The Single Judge dismissed the writ petition on 6 March 2024. The writ appeal was filed under Section 4 of the Karnataka High Court Act, 1961, and after hearing, judgment was reserved and pronounced on 25 April 2024.
Acts & Sections
- Karnataka High Court Act, 1961: Section 4
- Constitution of India: Article 226, Article 14
- Karnataka Transparency in Public Procurement Rules, 2000: Rule 17
- Companies Act, 2013:
