Kar HC | Challenge to constitutional validity of amendment in Karnataka Transparency in Public Procurements Act making concessions in favour of SC/ST rejected

Karnataka High Court: B. Veerappa, J. dismissed the writ petition filed under Articles 226 and 227 of the Constitution of India,  by a Public Works Department Contractor.

In this petition Section 6 of the Karnataka Transparency in Public Procurements (KTTP) Act, 1999, was upheld by this Court. It enabled to make reservations in the process of Tenders for Scheduled Castes and Scheduled Tribes.

The facts of the case are as follows:

The Karnataka Transparency in Public Procurements Act, 1999 came into force w.e.f. 04-10-2000. The main intent behind coining this Act was that it streamlined the procedure in public procurement and also ensured accountability. The State Government made it mandatory for all the procurement agencies under the Government to follow the tendering process in public procurement.

Section 6 of the KTTP Act, says that no tender shall be invited, processed or accepted by a Procurement Entity after the commencement of this Act except in accordance with the procedure laid down in this Act or the Rules made thereunder. The KTTP rules are made by the Government of Karnataka, exercising the powers conferred under sub-section (1) of Section 23. The Government by the impugned amendments amended the provisions of Section 6 of the KTTP Act by the KTTP (Amendment) Act, 2016 and also inserted Rule 27(A) in the KTTP Rules by the Karnataka Transparency in Public Procurements (Amendment) Rules 2017.

Transparency in Public Procurements (Amendments) Rules, 2017, resulted in certain reservations created in the process of Tender, for the benefit of the Scheduled Castes and Scheduled Tribes. According to the Amendment, the Tender Inviting Authority has to reserve 17.15% of the works to the Scheduled Castes category and 6.95% of works to the Scheduled Tribes Category in the construction works. The value of such work should not exceed Rs 50,00,000. Hence, the petitioner challenged the said amendments.

The counsel for the petitioner, S.M. Chandrashekhar, contends that while making the reservations, the Constitution of India provided social, economic and educational and cultural safeguards to the Scheduled Caste and Scheduled Tribe under Articles 17, Article 46 and Article 15(4) of the Constitution of India. The Constitution of India also provides for political safeguards under Article 243D, Article 243T, Article 330 and Article 332. Service safeguards are covered under Article 16(4), Article 16(4A) and Article 16(4B). Article 164 of the Constitution of India provided other safeguards to the Scheduled Castes and Scheduled Tribes.

Further, Article 19(1)(g) of the Constitution of India states that every citizen has a right to practice any profession or to carry on any occupation, trade or business. The Amendment made by the State Government violated Article 19(1)(g) of the Constitution of India. Hence, it was contended by the petitioner that the amendment was ultra vires of the Constitution of India and should be struck down. It was brought to notice that the amendment was in violation of the Fundamental Rights and does not conform to constitutional principles and is discriminatory. It was also contended that the amendment is discriminatory and arbitrary, hence it is in violation of Article 14 of the Constitution of India on the same ground.

Still, further, Article 14 of the Constitution of India guarantees Equality, and the Right to Equality includes the prohibition of discrimination on grounds of religion, race, caste, sex or place of birth and equality of opportunity in matters of employment. Both the insertion of proviso to Section 6 of the KTTP Act and insertion of Rule 27(A) in KTTP Rules are arbitrary and unconstitutional and hence they should be struck as per the contentions of the petitioner.

The counsel for the respondent, R. Nataraj, Additional Advocate General, contended that the petition filed by the petitioner is not maintainable either in law or on facts and there it should be dismissed. The counsel further states that the Legislation is based on the principle of distributive justice, protect the interests of weaker sections of the people under Article 42 of the Constitution of India. The said Article protects the Scheduled Castes and Scheduled Tribes and protects them from social injustice and all the forms of the exploitation. The counsel further contends that the impugned Legislation was brought to minimize the inequalities, distributive its largess to the weaker sections and to make life worth living with dignity. It was said that providing reservation in Government contracts to the persons belonging to the above-mentioned group would also achieve the constitutional objectives of rendering socio-economic justice, which in turn improve their economic status so that their economic development is improved.

Further, it elaborated that Economic empowerment is a basic human right and a fundamental right as part of the right to live, equality and status and dignity to the poor, weaker sections, Dalits and tribe.

The two questions framed by the Court were:

  1. is the amendment of inserting proviso 6 in the KTTP Act and inserting Rule 27(A) in the rules are justified?
  2. I the amendment in violation of the Constitution of India?

The Court on considering these arguments mentioned for the first issue that the reservation shall only apply for education, employment and not in any other subjects including the Tender process and Part III of the Constitution does not provide such reservation for Scheduled Castes and Scheduled Tribes and therefore the impugned reservation is in utter violation of the provisions of Articles 14, 15(1), 16(1) and 19(1)(g) of the Constitution of India. Court held that though the argument is attractive the Court is not in the position to accept the same as the impugned reservation does not abrogate or abridges rights guaranteed by Part III of the Constitution and it is not violative of the basic structure.

It was observed that equal status is to be provided to those communities which are backward and is depressed. Along with that, it is for them on whom injustice has been perpetrated. It was the growth of the country and so that many parties in the country may not mislead the poor. Hence, the prayer of the petitioner was not accepted.

The first issue raised was answered in affirmative. The 2nd issue was answered in the negative holding that the impugned amendments were not violative of the Articles 14, 15, 16, 19(1)(g) and 21 of the Constitution of India and are reasonable and in consonance with the right and spirit of the Constitution of India. [Vishwanath H.M. v Govt. of Karnataka, 2019 SCC OnLine Kar 2671, decided on 20-12-2019]

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