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Karnataka HC Dismisses Contractors’ Plea Challenging Government Tender Value Limits

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Published on: December 06, 2023 at 17:50 IST

The Karnataka High Court has declined to intervene in the government’s decision to issue tenders under the Amrutha Nagarothana Scheme, where the value of each tender exceeds Rs. 1 crore.

In a recent judgment, Justice M I Arun dismissed a series of petitions filed by the Hangal Taluka Civil Contractors Association and others, stating that no person can claim a fundamental right to do business with the government.

The petitioners, small-time civil contractors, argued that they were unable to compete for tender works exceeding Rs. 1 crore. They contended that issuing tenders valued over Rs. 1 crore violated the government circular dated May 11, 2022.

Referring to the circular, which decided that tender works at the taluk level should not exceed Rs. 1 crore, the petitioners highlighted discussions between the Chief Minister and the Karnataka State Contractors’ Association, leading to the circular’s issuance to assist small-time contractors.

However, the government asserted that a prior Government Order dated January 14, 2022, specifically applied to works under the Amrutha Nagarothana Scheme. It mandated that the tender value should be over Rs. 1 crore.

The government argued that the circular dated May 11, 2022, was a general circular, not specifically applicable to the works under the Amrutha Nagarothana Scheme, and the government order would override any circular in case of conflict.

Justice M I Arun observed that the executive has the authority to fix the value of tenders, and the court’s role is limited to striking down arbitrary or unreasonable actions that violate the law.

The court emphasized that the Government Order dated January 14, 2022, issued under Article 162 of the Constitution, takes precedence over the circular dated May 11, 2022.

While expressing dissatisfaction with the conflicting positions taken by the state, the court noted the need for policies that avoid confusion and benefit society.

Despite an earlier assurance from the state government to strictly adhere to the circular dated May 11, 2022, in future tenders, the court ruled that such assurances cannot act as an estoppel against the Government Order.

Acknowledging the tenders in this case adhered to the Government Order dated May 11, 2022, the court dismissed the writ petition.

The court concluded by advising the state to formulate policies that do not conflict with each other.

Case Title: Hangal Taluka Civil Contractors Association AND State of Karnataka & Others,