M/S Ksf 9 Corporate Services PVT LTD vs. The State Of Karnataka

Facts

The petitioner, M/s. KSF-9 Corporate Services Pvt Ltd, challenged an order dated 14.10.2022 passed by the Appellate Authority (1st respondent), which upheld the award of a contract for outsourcing 1500 manpower on a contractual basis for two years. The tender was issued by the 2nd respondent, Director Operations, Suvarna Arogya Suraksha Trust. The contract was awarded to the 3rd respondent, M/s. Sharp Watch Investigation Security Services Pvt Ltd. The petitioner's appeal before the Appellate Authority was rejected, leading to the present writ petition. The tender notification was issued on 18.10.2021, with the last date for bid submission on 17.11.2021. Both the petitioner and the 3rd respondent participated in the tender.

Held

The Court held that the petitioner's contention regarding clause 9.2(f) was unsustainable. Citing a previous judgment of a co-ordinate bench concerning the 3rd respondent and the Supreme Court case of NEW HORIZONS, the Court found that the existence of the 3rd respondent prior to its incorporation as a private limited company, i.e., as a proprietorship concern, could be taken into consideration. This approach was deemed not to be in violation of clause 9.2(f). Regarding clause 13.6, the Court noted that the Appellate Authority had considered the aggregate financial turnover of the three bidders. It found that the 3rd respondent had a turnover of Rs. 124.47 crores, while the petitioner had a turnover of Rs. 104.56 crores, making the 3rd respondent the preferred bidder. The Court found the reasons provided by the Appellate Authority to be cogent and saw no warrant for interference. Therefore, the writ petition was dismissed.

Key Issues

1. Whether the award of contract to the 3rd respondent is contrary to clause 9.2(f) of the tender notification, which requires the service provider to have been in existence for at least 5 years prior to the last date for bid submission, given that the 3rd respondent was incorporated as a private limited company on 25.07.2020 and previously operated as a proprietorship concern? The petitioner argued that the 3rd respondent did not meet the 5-year existence requirement. The respondents contended that the experience of the proprietorship concern should be considered, citing a previous High Court judgment. 2. Whether the evaluation of bids under clause 13.6 of the tender notification was done correctly, particularly concerning the aggregate financial turnover of the bidders when their evaluated bid amounts were the same? The petitioner argued that an average of all tenderers' bids should have been considered. The respondents countered that the 3rd respondent had the highest turnover (Rs. 124.47 crores) compared to the petitioner (Rs. 104.56 crores) over three financial years, as per the tender conditions.