Facts of the Case

The petitioner, Rajath R, proprietor of R.R. Enterprises, claimed to be a registered firm engaged in the supply of food articles. The petitioner had been supplying readymade food and diet to the District Hospital, Ramanagara, from 2021.

On 31 March 2022, the Health and Family Welfare Department issued a Notice Inviting Tender for procurement of food and diet for Government hospitals in Ramanagara. Considering himself eligible under the original tender conditions, the petitioner applied pursuant to the NIT.

Subsequently, a corrigendum dated 8 April 2022 was issued modifying the requirement concerning the GST certificate. Under the original condition, a one-year GST certificate was required; through the corrigendum, this requirement was increased to three years.

The petitioner possessed and had submitted a GST certificate for only one year. Consequently, the modified condition rendered him ineligible to participate in the tender process. Aggrieved by the corrigendum, the petitioner approached the High Court seeking its quashing.

The tender timeline was material to the controversy. The NIT was issued on 31 March 2022; the corrigendum was issued on 8 April 2022; the last date for submission of bids was 11 April 2022; technical bids were scheduled to be opened on 13 April 2022; and financial bids were scheduled to be opened on 16 April 2022. The chart reproduced on page 5 of the order records this tender schedule, which became central to the Court’s application of Rule 14.

Issues Involved

The principal issue before the High Court was:

Whether the corrigendum modifying the tender condition by enhancing the GST certificate requirement from one year to three years contravened the Karnataka Transparency in Public Procurements Rules, 2000?

The connected questions were whether the Tender Inviting Authority possessed the legal power to modify tender conditions after issuance of the tender notification but before opening of bids, and whether a corrigendum that rendered an existing bidder ineligible amounted to an impermissible alteration of the “rules of the game” after commencement of the tender process.

Petitioner’s Arguments

The petitioner contended that alteration or modification of tender conditions after issuance of the tender notification was impermissible under the Karnataka Transparency in Public Procurements framework.

It was argued that the petitioner had applied on the basis of the original eligibility condition requiring a one-year GST certificate. The subsequent corrigendum increased this requirement to three years and thereby excluded the petitioner from the tender process.

According to the petitioner, such a modification effectively took away his right to participate after the tender process had already commenced. The petitioner therefore sought quashing of the corrigendum and acceptance of his tender.

The petitioner further maintained that changing an essential eligibility condition after issuance of the NIT amounted to an unlawful alteration of tender conditions and could not be sustained merely because the modification was described as a corrigendum.

Respondents’ Arguments

The respondents opposed the writ petition and relied specifically on Rule 14 of the Karnataka Transparency in Public Procurements Rules, 2000.

The learned Additional Government Advocate argued that Rule 14 expressly empowers the Tender Inviting Authority to make changes, modifications or amendments to tender documents after issuance of the tender documents and before opening of the tender.

It was submitted that the impugned corrigendum had been issued on 8 April 2022, whereas the last date for submission of bids was 11 April 2022 and the technical bids were to be opened only on 13 April 2022. Therefore, the modification was made within the period expressly permitted by Rule 14.

The respondents further submitted that the corrigendum became necessary because the original stipulation requiring only a one-year GST certificate was itself contrary to the applicable Government order, which required three years of GST certificate in such tenders. Accordingly, dismissal of the writ petition was sought.

Court’s Findings and Order

The High Court examined Rule 14 of the Karnataka Transparency in Public Procurements Rules, 2000, which permits the Tender Inviting Authority, at any time after issuance of tender documents and before opening of the tender, to make changes, modifications or amendments to the tender documents, subject to the prescribed requirement of intimation.

The Court found the chronology decisive:

  • Tender notification issued: 31 March 2022
  • Corrigendum issued: 8 April 2022
  • Last date for submission of bids: 11 April 2022
  • Technical bid opening: 13 April 2022
  • Financial bid opening: 16 April 2022

Since the corrigendum was issued before even the last date for submission of bids and, in any event, before opening of the technical bid, the Court held that the modification fell squarely within the permissible exercise of power under Rule 14.

The Court observed that Rule 14 unequivocally empowers the Tender Inviting Authority to make a change, modification or amendment after issuance of the tender and before opening of the tender. Applying the statutory rule to the dates in the case, the Court found no illegality in the action of the Tender Inviting Authority.

The Court also accepted the respondents’ submission that the one-year GST certificate stipulation was contrary to the Government order requiring three years of GST certificate and that the corrigendum had been issued to align the tender condition with that requirement.

Accordingly, the High Court held that the impugned corrigendum was in consonance with the power available under Rule 14 and dismissed the writ petition for lack of merit.

Important Clarification

The High Court made an important distinction concerning the timing of amendments to tender conditions.

A change in tender conditions made after issuance of the tender notification but before opening of the tender is not inherently illegal. Rule 14 expressly authorises such changes, modifications or amendments.

The Court clarified that where changes are made after the last date for submission of bids but before opening of the technical bid or any bid, information regarding such changes must be given to all tenderers. In the present case, however, the corrigendum was notified on 8 April 2022, well before the last date for submission of bids on 11 April 2022; therefore, the modification was treated as information available to all tenderers.

Most significantly, the Court held that the modification did not amount to changing the rules of the game after the game had commenced. The mere fact that the petitioner became ineligible and was moved out of the race because of the amended condition did not render the corrigendum illegal.

Thus, individual disqualification resulting from a lawfully issued tender corrigendum does not, by itself, invalidate the corrigendum.

Section / Rule Involved

Rule 14 of the Karnataka Transparency in Public Procurements Rules, 2000 – Clarification to Tender Documents

Rule 14 provides, in substance, that at any time after issuance of tender documents and before opening of the tender, the Tender Inviting Authority may make changes, modifications or amendments to the tender documents and must intimate such changes to those who purchased the original tender documents.

Articles 226 and 227 of the Constitution of India

The writ petition was instituted under Articles 226 and 227 seeking judicial review and quashing of the modification order/corrigendum dated 8 April 2022.

Link to download the order -

https://mytaxexpert.co.in/uploads/1783320397_1109compressed.pdf 

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