- 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JANUARY, 2025 PRESENT THE HON'BLE MR. N. V. ANJARIA, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE K. V. ARAVIND WRIT APPEAL No.971 OF 2024 (GM-RES) C/W CCC No.608 OF 2024 (CIVIL) IN WA No.971/2024 BETWEEN: 1 . DEPUTY COMMISSIONER/ RETURNING OFFICER, 24 - BENGALURU NORTH MP CONSTITUENCY, BENGALURU URBAN DISTRICT, BENGALURU - 560009. 2 . TAHASILDAR/ ELECTORAL REGISTRATION OFFICER (ERO), 150- YELAHANKA CONSTITUENCY, BYATARAYANAPURA, YELAHANKA ZONE, BENGALURU - 560092. 3 . TAHASILDAR/ ELECTORAL REGISTRATION OFFICER (ERO), 155- DASARAHALLI CONSTITUENCY, BBMP DASARHALL ZONE, OFFICE BUILDING, HESARUGHATTA MAIN ROAD, BAGALAGUNTE, BENGALURU - 560073. 4 . TAHASILDAR/ ELECTORAL REGISTRATION OFFICER (ERO), - 2 - 171 -MMAHADEVAPURA CONSTITUENCY, BENGALURUEAST TALUK, K. R. PURA, BENGALURU - 560063. 5 . TAHSILDAR / REVENUE OFFICER / ELECTORAL REGISTRATION OFFICER (ERO), 176-BENGALURU SOUTH CONSTITUENCY, BENGALURU SOUTH SUB DIVISION, KANDHAYA BHAVANA, 2ND FLOOR, K.G. ROAD, BENGALURU 560009. 6 . TAHSILDAR/ELECTORAL REGISTRATION OFFICER (ERO), 177- ANEKAL CONSTITUENCY, ANEKAL TALUK, ANEKAL, BENGALUR - 562106. 7 . CHIEF ELECTORAL OFFICER, ELECTION COMMISSION OF INDIA, NIRVACHANA NILAYA, SHESADRI ROAD, AMBEDKAR VEEDHI, BENGALURU 560001, EMAIL.CEOKARNATAKA@ECI.GOV.IN. 8 . ADDITIONAL DISTRICT ELECTORAL OFFICER (ADC), BENGALURU URBAN DISTRICT, BENGALURU 560009. ...APPELLANTS (BY SRI KIRAN V. RON, AAG A/W SRI K.S. HARISH, GOVERNMENT ADVOCATE) AND: 1 . M/S DREAMS OF FOUNTAINS PVT. LTD., FORMERLY KNOWN AS: M/S CHILUME ENTERPRICES PVT. LIMITED AND DAP HOMBALE PVT. LTD., COMAPNY REGISTERED UNDER THE PROVISION OF COMPANIES ACT, 2013, HAVING ITS REGISTERED OFFICE AT No.161/1, 2ND MAIN, 17TH CROSS, BEHIND SHEKAR NURSING HOME, MALLESHWARAM, BENGALURU 560003, REP. BY ITS DIRECTOR, SHRUTHI B., - 3 - 2 . ASSISTANT RETURNING OFFICER (ARO), 150- YALAHANKA CONSTITUENCY, MINI VIDHANA SOUDHA, YALAHANKA ZONE, BENGALURU 560064. 3 . ASSISTANT RETURNING OFFICER (ARO), 152-BYTARAYANAPURA CONSTITUENCY, BYTARAYANAPURA, YALAHANKA ZONE, BENGALURU 560092. 4 . ASSISTANT RETURNING OFFICER (ARO), 153-YESHWANTHAPURA CONSTITUENCY, No.569 AND 570, 2ND FLOOR, KENGERI, SATELLITE TOWN, BENGALURU 560060. 5 . ASSISTANT RETURNING OFFICER (ARO), 155-DASARAHALLI CONSTITUENCY, BBMP DASARAHALLI ZONE, OFFICE BUILDING, HESARUGHATTA MAIN ROAD, BAGALAGUNTE, BENGALURU 560073. 6 . ASSISTANT RETURNING OFFICER (ARO), 174-MAHADEVAPURA CONSTITUENCY, BENGALURU EAST TALUK, K. R. PURA, BENGALURU 560036. 7 . ASSISTANT RETURNING OFFICER (ARO), 176-BENGALURU SOUTH CONSTITUENCY, BENGALURU SOUTH SUB DIVISION, KANDHAYA BHAVANA, 2ND FLOOR, K G ROAD, BENGALURU 560009. 8 . ASSISTANT RETURNING OFFICER (ARO), 177-ANEKAL CONSTITUENCY, ANEKAL TALUK, ANEKAL, BENGALURU 562106. 9 . REVENUE OFFICER / ELECTROL REGISTRATION OFFICER (ERO), 152 BYATARAYANPURA, YELAHANKA ZONE, BENGALURU - 560092. - 4 - 10 . ELECTROAL REGISTRATION OFFICER (ERO), 153-YESHWANTHAPURA CONSTITUENCY, No.569 AND 570, 2ND FLOOR, KENGERI, SATELLITE TOWN, BENGALURU 560060. 11 . CHIEF ELECTION COMMISSIONER, ELECTION COMMISSION OF INDIA, NIRVACHAN SADAN, ASHOKA ROAD, NEW DELHI - 110001. RESPONDENTS (BY SRI PRABHULING K. NAVADAGI, SENIOR COUNSEL A/W SRI PRITHVEESH M.K., ADVOCATE FOR R1; SRI S.R. DODDAWAD, ADVOCATE FOR R11; (R2-R10 MEMO FOR DISPENSATION SERVICE OF NOTICE FILED ON 25.11.2024)) THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 28.05.2024 PASSED BY THE LEARNED SINGLE JUDGE OF THIS HON'BLE COURT IN WP No-26881/2023 AND CONSEQUENTLY ALLOW THE PRESENT WRIT APPEAL. IN CCC No.608/2024 BETWEEN: 1 . M/S DREAMS OF FOUNTAINS PVT. LTD., FORMERLY KNOWN AS: M/S CHILUME ENTERPRICES PVT. LIMITED AND DAP HOMBALE PVT. LTD., COMAPNY REGISTERED UNDER THE PROVISION OF COMPANIES ACT, 2013, HAVING ITS REGISTERED OFFICE AT No.161/1, 2ND MAIN, 17TH CROSS, BEHIND SHEKAR NURSING HOME, MALLESHWARAM, BENGALURU 560003, REPRESENTED BY ITS DIRECTOR, SHRUTHI B., ...COMPLAINANT (BY SRI PRABHULING K NAVADAGI, SENIOR COUNSEL A/W SRI PRITHVEESH M. K.,) - 5 - AND: 1 . MR. DAYANANDHA K. A., DEPUTY COMMISSIONER/RETURNING OFFICER, 24-BENGALURU NORTH MP CONSTITUENCY, BENGALURU URBAN DISTRICT, BENGALURU 560009. 2 . MR. MANOJKUMAR MEENA, CHIEF ELECTORAL OFFICER, KARNATAKA NIRVACHANA NILAYA, SHESADRI ROAD, AMBEDKAR VEEDHI, BENGALURU 560001. EMAIL: CEO KARNATAKA@ECI.GOV.IN., 3 . STATE OF KARNATAKA, REPRESENTED BY ITS CHIEF SECRETARY, ROOM No. 320, 3RD FLOOR, VIDHANASOUDHA, BANGALORE-01. …ACCUSED (BY SRI KIRAN V RON, AAG A/W SRI K.S. HARISH, GOVERNMENT ADVOCATE FOR R1 & R3; SRI S.R. DODDAWAD, ADVOCATE FOR R2; A2 TO R10 MEMO FOR DISPENSATION SERVICE OF NOTICE FILED ON 25.11.2024)) THIS CCC IS FILED UNDER SECTIONS 11 AND 12 OF THE CONTEMPT OF COURTS ACT, 1971, BY THE COMPLAINANT PRAYING TO NOTICE TO THE ACCUSED No.1 AS THE ACCUSED No.1 HAVE DELIBERATELY AND INTENTIONALLY DISOBEYED THE ORDER PASSED BY THIS HON'BLE COURT DATED 28.05.2024 IN W.P.No.26881/2023 (ANNEXURE-A) AND FURTHER DIRECT THE ACCUSED No.1 TO COMPLY THE ORDERS DATED 28.05.2024 PASSED IN W.P.No.26881/2023 (ANNEXURE-A) AND THE PUNISH THE ACCUSED No.1 UNDER THE CONTEMPT COURTS ACT, 1971. THESE WRIT APPEAL AND CCC HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER: - 6 - CORAM: HON'BLE THE CHIEF JUSTICE MR. JUSTICE N. V. ANJARIA and HON'BLE MR. JUSTICE K. V. ARAVIND C.A.V. JUDGMENT (PER: HON'BLE MR. JUSTICE K. V. ARAVIND) Heard learned Additional Advocate General Mr. Kiran V Ron along with learned Government Advocate Mr. K.S.Harish for the appellants, learned Senior Advocate Mr. Prabhuling K Navadagi along with learned advocate Mr. M.K.Prithveesh for respondent No.1 and learned advocate Mr. S.R.Doddawad for respondent No.11. 2. This appeal is directed against the order of learned Single Judge in Writ Petition No.26881 of 2023 dated 28.05.2024. Respondent No.1 preferred writ petition against the appellants and respondent Nos.2 to 11 praying direction to release the payments in terms of the proceedings dated 13.12.2019 of appellant No.1 herein along with interest at 18% p.a. till the date of payment. 3. Appellant No.1 invited tenders for various services during the Parliamentary Elections of 2019. The multiple tenders were related to the installation of various electronic devices, supply of manpower, stationery and food. The present petition concerns the - 7 - tender for the supply of food items namely, three meals, snacks, mineral water, coffee and tea to the election staff during meetings and training. The supply was to cover 7 assembly constituencies in Bangalore Urban District. Petitioner-respondent No.1 participated in the tender, emerged as the successful bidder with the least bid quote and was awarded work. 4. Respondent No.1, after conclusion of the election, submitted bills raising 348 invoices which were certified by the Assistant Returning Officer and Electoral Registration Officer. Appellant No.1-Deputy Commissioner convened a meeting of respondent No.1 and Returning Officers. The total bills submitted by respondent No.1 were for an amount of Rs.15,01,78,000/-, upon negotiation, the same was reduced to Rs.14,21,08,000/- at the instance of appellant No.1 and was subject to the condition that the agreed payment would be cleared within seven days. 4.1 However, the petitioner was paid a sum of Rs.3 crores. The repeated representations made to pay the remaining amount of Rs.10,81,47,606/- was not considered. Hence, the writ petition was preferred. Learned Single Judge considering the host of aspects where the bills submitted were endorsed to be correct by the respective authorities and the dispute arose in light of the audit - 8 - objection on hyper technical grounds, directed appellant No.1- Deputy Commissioner to release the amount of Rs.10,81,47,606/- with interest at the Bank rate till the date of payment. 5. Learned Additional Advocate General Mr. Kiran V Ron along with learned Government Advocate Mr. K.S.Harish appearing for the appellants submits that the writ petition was not maintainable as the amount in question arises out of a contract. The nature of the dispute is to be adjudicated by a civil court and in a case where disputed facts are involved, the exercise of jurisdiction under Article 226 of the Constitution of India is impermissible. 5.1 Learned AAG further submits that the meeting was convened, the total claim made through the bills raised was negotiated. The total amount was determined by the joint audit conducted by the Joint Chief Electoral Officer, Additional Chief Electoral Officer and Chief Electoral Officer, Zilla Parishat, Bengaluru Urban, wherein the value of services and supplies were considered. The amounts due towards respondent No.1 were paid in intervals. The claim made in the writ petition to release a sum of Rs.10,81,47,606/- is without considering and without providing set of the amounts already paid. - 9 - 5.2 Learned advocate for the appellants further submits that the bills raised by respondent No.1 were highly inflated. Hence, the bills were revised after audit and verification. If compared with the expenditure incurred in the preceding years, the bills raised towards the supply of materials and services in connection with the General Elections to Lok Sabha 2019 are notably exorbitant. 6. Learned Senior Advocate Mr. Prabhuling K Navadagi along with learned advocate Mr. M.K.Prithveesh appearing for respondent No.1 submits that work orders were issued to respondent No.1 to supply various materials and food. Respondent No.1 has completed all the services and supplies as per the contract. Learned Senior Advocate further submits that bills were submitted to appellant No.1 after certification by Assistant Returning Officers and other authorities in terms of the work order. All 348 bills submitted are verified, approved and counter-signed by the concerned officers before being sent to appellant No.1. Appellant No.1 has certified bills and approved for payment and ordered to release the amount. It is further submitted that appellant No.1 has issued a work completion certificate. 6.1 The amount in question is the figure arrived on negotiation at the instance of appellant No.1. In that view, there is no dispute on - 10 - the amount in due. Learned Senior Advocate further submits that appellant No.1 having certified and approved the bills for payment and issued completion certificate, it is not open to raise the dispute on the correctness of the claim made in the bills. 6.2 Learned Senior Advocate further submits that appellant No.1 has conducted the verification of the pending bills, negotiated with respondent No.1 and proceedings have been drawn on 13.12.2019 determining a sum of Rs.14,21,08,000/- as payable to respondent No.1. Under these proceedings, the dues were crystallized. The departure from the above proceedings based on the audit report is only to delay the payment. 6.3 Learned Senior Advocate further submits that when there is no dispute to the contract terms entered into by the State, it is open for the Court to direct the State to perform the contract in the exercise of jurisdiction under Article 226 of the Constitution of India. It is the further submission of the learned Senior Advocate that the very issue of the inflation of bills has been replied by appellant No.1 in a communication to the Chief Electoral Officer dated 11.02.2020 wherein, it is explained as to how the supply of food has increased manifold. - 11 - 7. A memo dated 25.11.2024 is filed by learned advocate for the appellants to dispense service of notice to respondent Nos.2 to 10. Hence, no notice is issued to respondent Nos.2 to 10. 8. Heard learned counsel for the parties. There is no dispute concerning the tender process, the eligibility of respondent No. 1, the award of the contract, or the completion of the supply and service obligations. The appellants contend that the dispute involves factual issues and monetary claims under a commercial contract, which cannot be adjudicated under Article 226 of the Constitution of India. Additionally, they allege that the invoices for food supply are inflated, citing discrepancies in the number of election personnel claimed to have been served compared to those actually deployed. 9. The work orders are part of the writ petition, covering various supplies and services. Reference is made to the work order dated 02.03.2019, at Annexure-E, to examine and evaluate the conditions outlined in the order. The work order details the quoted rate per unit and enumerates the items to be supplied, which include coffee/tea, breakfast, lunch, light refreshments, and drinking water. The work order specifies that the food must be delivered directly to the offices of the District Magistrates of Bangalore Urban District, - 12 - as well as to the assembly constituencies of Yelahanka, Byatarayanapura, Yeshwanthpur, Dasarahalli, Mahadevapura, Bangalore South, and Anekal. Upon completion of the supply, a confirmation letter from the respective electoral registration officers is required to be submitted to the office of appellant No. 1. Additionally, the conditions mandate arrangement to supply extra food, as necessary, at the specified rate. 10. The appellants have submitted additional documents along with an affidavit filed on 22.10.2024, which includes the tax invoices raised by respondent No. 1. The invoices detail the date of supply, the units of food, snacks, coffee/tea, light refreshments, meals, and water. These invoices have been certified for both the quantity and quality of the supply. The appellants contend that the supply is inflated in relation to the staff deployed for election duty, asserting that the units supplied exceed the actual number of election staff. However, this contention is neither substantiated nor sustainable for more than one reason. Firstly, neither the tender conditions nor the work order specifies the exact number of units to be supplied. The work order, however, mandates respondent No. 1 to supply additional food if required. A reading of condition No. 2 of the work order reveals that the number of units to be supplied will be based on the requirements of the electoral registration officers - 13 - and the extent of the supply will be confirmed by them. Upon examination of the work order, it is apparent that only the rate per unit is fixed and respondent No. 1 is obligated to supply at the quoted rate. The number of units to be supplied is to be determined based on the daily requirements, as assessed by the electoral registration officers. Consequently, the appellants' contention that the supply of food is inflated beyond the number of election officers deployed is found to be without merit and is, therefore, rejected. 11. As per the conditions under the work order, the power to requisition supplies is vested with the electoral registration officers. These officers have issued a certificate confirming the supply in terms of both quantity and quality. It is not within the purview of appellant No. 1 to dispute the number of units supplied. The attempt by appellant No. 1 to raise such a dispute is, therefore, unsustainable. The conditions in the work order are as below; "Subject: Regarding the arrangement of meals in connection with the upcoming General Lok Sabha Elections-2019. Reference: ……. Conditions: 1) …… - 14 - 2) As mentioned in the above column, arrange for the food supply directly to the offices of the District Magistrates of Bangalore Urban District and the assembly constituencies of 150-Yelahanka, 152- Byatarayanapura, 153- Yeshwanthpur, 155- Dasarahalli, 174-Mahadevapura, 176-Bangalore South, and 177-Anekal. Obtain a confirmation letter from the respective electoral registration officers and submit it to this office. No payment will be made. Separate transportation costs will not be paid for the supply. 3) In case additional food arrangements are required, supply them at the specified rate. 4) No advance payment of any kind will be made before supplying the materials. The full amount of the bill will be paid only after all the materials are supplied to the respective assembly constituencies. 5) If any defect is found in the supplied materials or if the quantity supplied is less than the requirement, the supplier must re-supply the same to the respective assembly constituencies at their own expense within the stipulated time. Additionally, no extra payment will be made. Sd/- B. M. Vijay Shankar, Deputy Commissioner, Bengaluru District, Bengaluru" 12. The Court finds another valid ground to reject the appellants' contention. Appellant No. 1 had invited respondent No. 1 for negotiations, during which the total bill amount of Rs. 15,01,78,000/- was reduced to Rs. 14,21,08,000/-, with an agreement to make payment within 7 days. These facts are - 15 - recorded in the proceedings dated 13.12.2019. Further, in compliance with the negotiated terms, a payment of approximately Rs. 3 crores was made, leaving a balance of Rs. 10,81,47,606/-. If appellant No. 1 had any issues regarding the correctness of the claim concerning the number of units supplied, there was no hindrance in raising such concerns during the negotiation proceedings recorded on 13.12.2019. 13. Respondent No. 1 has raised the contention that the grounds put forth by appellant No. 1 for clearing the bills are frivolous and aimed at prolonging the payment. The Court finds some merit in this contention, particularly in light of the communication from respondent No. 1 to the Chief Electoral Officer dated 11.02.2020, which is annexed as Annexure-B. Appellant No. 1 has explicitly stated that the bills raised by respondent No. 1 pertain to the supply of food for 7 assembly constituencies covering 2997 polling booths. The justification for the high number of units supplied is explained that, during the election exigencies, food was provided to the driver, office staff, Group-D employees, and official staff involved in the mustering and de-mustering work, in accordance with the orders of the previous Deputy Commissioner. It was further explained that without arrangements for lunch and breakfast, the effectiveness of election work would be hampered, as election staff - 16 - would have to leave the office premises for meals, thereby disrupting the work. The supply of food was also made on humanitarian grounds. The Court finds no justifiable reason to accept the grounds raised in this appeal that contradict this explanation. Appellant No. 1, being well-versed in the conduct of elections and the associated staffing requirements and facilities, could not have been unaware of the arrangements made for the election workforce. Therefore, the claim of inflated food supplies is not only unsustainable but appears to be an arbitrary exercise. 14. The Learned Single Judge, after considering the above aspects and the serious prejudice caused to respondent No. 1 due to the delay in settling the bills, has directed the settlement of the bills with applicable bank interest. The Learned Single Judge correctly observed that the dispute was raised only after the supply was completed, and the competent authority had certified both the quantity and quality. Furthermore, negotiations were held concerning the amounts raised in the bills, leading to the reduction of some amounts, with an agreement to pay the settled amount within the stipulated time. In light of these proceedings, the ground regarding inflation is not sustainable. The Learned Single Judge, taking into account the timing of the supply and the possible - 17 - financial implications for respondent No. 1, has justifiably directed that the bills be settled with interest within four weeks. 15. Insofar as the contention raised regarding the maintainability of the writ petition in contract matters, this contention is rejected for the reasons outlined below. The eligibility, issuance of the supply order, completion of supply in terms of its quantity and quality, and certification of such supply by the competent authorities are undisputed. Appellant No. 1 has provided an explanation regarding the increase in the number of food units and the necessity for the same. The explanation is available on record at page No.822. The same is extracted herein for convenience; "…… During the election exigency, driver, staff of the office, the Group D employees and the official staff for the mustering de mustering work have been provided food as per the orders of the previous DC. If there is no arrangement for lunch/breakfast, the effectiveness of election works will be hampered on account of the election staff leaving the office premises for breakfast and lunch and the food is also provided on the basis of humanity." 16. Following this, a negotiation meeting was held, during which respondent No. 1 was persuaded to reduce the bill amount, which was duly accepted and reduced, with the condition of payment within 7 days. Despite these developments, when the time came for payment, the issue of inflation of food units was raised, which - 18 - contradicted appellant No.1's own records. The contention of respondent No.1 that the frivolous ground of inflation was raised solely to prolong the payment, cannot be dismissed outright, given the material available before the Court. The action of appellant No. 1 in failing to settle the bill amounts can only be described as an arbitrary exercise. 17. Though it is a settled principle that contracts cannot be interfered with while exercising jurisdiction under Article 226 of the Constitution of India, it is also well-established that when contracts have been entered into between private parties and the State, and the Court finds that the State has not acted fairly, judicial intervention becomes necessary to inspire confidence among participants to engage in the tender process. The restrictions on interference, as observed by the Hon'ble Supreme Court, primarily relate to the nascent stage, when examining the correctness or otherwise of the terms and conditions of the tender notification. 18. The scope of interference by the Court in exercise of jurisdiction under Article 226 of the Constitution of India has been considered by Hon'ble Supreme Court in the case of Subodh Kumar Singh Rathour vs. Chief Executive Officer and Others [2024 SCC Online SC 1682]. The Hon'ble Supreme Court has - 19 - held that the contracts entered into by the State with the private parties is to be dealt by the State without any arbitrary and ill motive. When the action of the State in dealing with the contract is arbitrary and unreasonable, it is for the Court to protect the binding nature of the contract, failing which would erode public faith in the contracts and tenders. Arbitrary actions would create uncertainty and unpredictability, thereby discouraging public participation. The reluctance in private parties participating in the public procurement processes will lead to negative impact on the ventures and the public would have to bear the brunt thereby frustrating the very object of public interest. The State cannot be allowed to reeling out of the contractual obligations beyond the terms of the contract merely the State have executive powers to exercise. When the powers exercised by the State is tested on reasonableness, if found, unjustifiable and arbitrariness in the decision, the contract can be saved in exercise of jurisdiction under Article 226 of the Constitution of India. 19. The jurisdiction exercised by the learned Single Judge under Article 226 of the Constitution of India is justified. In light of the aforementioned reasons, this Court holds that the findings recorded and the reasons assigned by the learned Single Judge are valid and justifiable and well-founded. No grounds have been made out - 20 - to warrant interference. Furthermore, no error can be booked from the order. 20. Consequently, the writ appeal must fail and accordingly, it is dismissed. 21. The appellants are granted six weeks from today to comply with the directions of learned Single Judge in Writ Petition No. 26881 of 2023, dated 28.05.2024. In view of dismissal of the appeal, the interlocutory application would not survive and it stands accordingly disposed of. In view of the order in Writ Appeal No.971 of 2024, the Contempt Petition No.608 of 2024 would not survive for consideration and the same is dismissed. Sd/- CHIEF JUSTICE Sd/- JUDGE DDU