M/S G S Management PVT LTD. vs. The Commissioner Of Police

Facts

The petitioner, M/s G S Management Pvt Ltd., responded to a tender notification (Annexure 'B') dated 25.10.2024. They are aggrieved by a corrigendum (Annexure 'C') dated 08.11.2024, which they contend disqualifies them. The corrigendum altered eligibility criteria: the minimum annual turnover requirement for Call Centre/Manpower Services was increased from Rs. 10 crores (in any three of the preceding five years) to Rs. 18 crores (in any two of the preceding five years). Additionally, the requirement for liquid funds deleted the term 'mutual funds'. The petitioner participated in a pre-bid meeting on 05.11.2024, and was later called for another on 08.11.2024, after which the corrigendum was issued. The petitioner alleges the changes were made to exclude them and benefit Respondent No. 4, the previous successful bidder, and Respondent No. 5. The tender value is approximately Rs. 10 crores including GST.

Held

The Court held that the impugned corrigendum dated 08.11.2024 and the original tender document dated 25.10.2024 are quashed and set aside. The reasoning is that the changes introduced by the corrigendum, particularly the increased turnover requirement and the deletion of 'mutual funds', along with the modification to allow non-registered companies to bid (benefitting Respondent No. 5), created a situation where the petitioner would be disqualified if the corrigendum stood, and Respondent No. 5 would be disqualified if it were set aside. This would leave Respondent No. 4 as the sole bidder, which is not in the larger public interest due to lack of competition. The Court found that if the Tender Inviting Authority (Respondent No. 3) believed changes were necessary, it would have been prudent to recall the tender and issue a fresh one. This fresh tender should incorporate conditions aligned with the KTPP Act and relevant standard documents ('K/W-4' or 'K/W-6'), while also allowing flexibility for service-based tenders. The Court directed the Tender Inviting Authority to issue a fresh tender within four weeks, prioritizing public interest and ensuring fair competition.

Key Issues

1. Whether the corrigendum dated 08.11.2024, which modified the eligibility criteria for the tender, is arbitrary and violative of the principles of natural justice and fair play, particularly concerning the increase in turnover requirement and deletion of 'mutual funds' from liquid assets, thereby prejudicing the petitioner's participation? (Question of law and mixed fact and law). Petitioner's arguments: The corrigendum arbitrarily enhances the financial turnover requirement and removes 'mutual funds' from the definition of liquid assets, effectively excluding the petitioner. The changes were made after a pre-bid meeting and appear designed to favour existing bidders (Respondents 4 and 5). The petitioner relies on the Karnataka Transparency in Public Procurements Act, 1999 (KTPP Act) and the principle that changes should not disqualify existing eligible bidders without proper justification. They also cite Electronic Enterprises Vs. Karnataka Power Corporation Ltd. to argue against arbitrary exclusion. Respondents' arguments: Respondent No. 4 contends the changes may stem from a standard government document 'K/W-4'. The respondents also argue that modifying eligibility criteria to expand competition and ensure compliance with KTPP Act is justifiable. The removal of the 'registered company' requirement for Respondent No. 5 is also defended as reasonable, given that standard tender documents for construction works do not mandate this. The court notes that the respondents' justification for the specific changes made in the corrigendum is not entirely clear, particularly regarding the turnover increase and deletion of 'mutual funds'.