M/S Darshan Enterprises vs. State Of Karnataka

Held

The Court dismissed the writ petition, finding it to be devoid of merit. Regarding the first issue, the Court held that the stipulation in Clause 14, requiring tenderers to pay processing fees and a non-refundable amount by demand draft, was neither arbitrary nor unreasonable. The Court noted that the petitioner had already participated in the tender and complied with this stipulation, making it impermissible to challenge it subsequently. Concerning the second issue, the Court found that the provision for a one-year contract with a yearly extension up to a maximum of three years, depending on performance and without price change, was within the discretion of the tender-issuing authority. The Court emphasized that the authority has the right to stipulate the tender period and the tenderer cannot dictate it. The Court also noted the purchaser's right to terminate the contract for non-performance. No specific decision was made on the petitioner's broader concerns about the KTPP Act compliance beyond the two clauses challenged.

Facts

M/s Darshan Enterprises, a proprietorship, filed a writ petition challenging a tender notification dated August 24, 2026, issued by the Director cum Dean of Shimoga Institute of Medical Sciences (SIMS). The petitioner argued that Clause 14 of the tender, requiring tender processing fees and a non-refundable deposit in the name of the Managing Director, breached tenderer confidentiality. Additionally, Clause 18.2, which allowed for a maximum of 3 years' extension of a one-year contract without price change, was challenged. The petitioner had already participated in the tender process and paid the required fees and Earnest Money Deposit (EMD).

Key Issues

1. Whether Clause 14 of the tender notification, requiring tender processing fees and non-refundable deposit in the name of the Managing Director, breaches the confidentiality of tenderers, and if so, is it arbitrary or unreasonable? 2. Whether Clause 18.2 of the tender notification, allowing for a yearly extension of a one-year contract up to a maximum of three years without a change in contract price, is arbitrary or unreasonable? Petitioner's Arguments: The petitioner contended that Clause 14 violates tenderer confidentiality by requiring the demand draft for fees to be in the name of the Director and Dean, thereby revealing the identity of the tenderer before evaluation. Regarding Clause 18.2, the petitioner argued that stipulating an extension for up to 3 years for a one-year contract was restrictive. The petitioner also sought a fresh tender process adhering to the Karnataka Transparency in Public Procurements Act, 1999 (KTPP Act) and its rules, specifically addressing the experience clause, confidentiality, EMD quantification, and advance payment clauses. Revenue/State's Arguments: The respondents did not explicitly file detailed arguments in the provided text. However, the Court's reasoning implies that the respondents likely defended the tender conditions as reasonable and within their discretion.