M/S MATHA TECHNOLOGIES vs STATE OF KARNATAKA
- Court
- Karnataka High Court
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HC-KAR
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WA No. 2183 of 2026
CNR: KAHC010653052026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 30 DAY OF SEPTEMBER, 2026
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA
WRIT APPEAL NO. 2183 OF 2026 (GM-TEN)
BETWEEN:
1. M/S MATHA TECHNOLOGIES
REPRESENTED BY ITS MANAGING PARTNER
AND DULY AUTHORIZED SIGNATORY
MR. RAMAPPA RATHOD
O/A NO.106, MATHURA KRUPA
ST TH
1 MAIN, 5 CROSS
SAPTHAGIRI NAGARA
Digitally
signed by K
P SWETHA
Location:
High Court
of Karnataka
YALAKKI SHETTAR COLONY
DHARWAD - 580 004
…APPELLANT
(BY SRI PRABHULING K. NAVADGI, SENIOR ADVOCATE A/W
MS. SANJEEVINI PRABHULING NAVADGI, ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY PRINCIPAL SECRETARY
DEPARTMENT OF HIGHER EDUCATION
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TH
6 FLOOR, M.S.BUILDING
DR. AMBEDKAR VEEDHI
BENGALURU - 560 001
2. THE COMMISSIONER
DEPARTMENT OF TECHNICAL EDUCATION
GOVERNMENT OF KARNATAKA
TANTRIKA SHIKSHANA BHAVANA
PALACE ROAD
BENGALURU – 560 001
…RESPONDENTS
(BY SRI K.S. HARISH, GOVERNMENT ADVOCATE)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER DATED 25/04/2026 PASSED BY THE LEARNED SINGLE
JUDGE IN W.P. NO.12143/2026 & ETC.
THIS APPEAL, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MRS. JUSTICE K.S. HEMALEKHA
ORAL JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. For the reasons stated in the affidavit accompanying the
application (I.A.No.1/2026) the same is allowed, and the delay of
114 days in filing the appeal is condoned.
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2. The appellant has filed the present intra-court appeal
impugning the common order dated 25.04.2026 [ impugned order ]
passed by a learned Single Judge in W.P.No.12143/2025 (GM-
TEN) connected with W.P.No.12145/2025 (GM-TEN).
3. Whilst W.P.No.12143/2025 was filed by the appellant,
W.P.No.12145/2025 was filed by a partnership firm, M/s.Object
Technologies. They challenged the notice dated 12.02.2025 issued
by respondent No.2 canceling the tender awarded to the writ
petitioners as well as the communication dated 24.01.2025,
whereby respondent No.1 had accorded approval for such
cancellation. They essentially seek specific performance of the
agreements entered into with respondent No. 2. According to the
appellant, the respondents could not terminate the agreement
dated 22.09.2018. The learned Single Judge rejected the said writ
inter alia
petitions, , for the reason that the contracts were
determinable.
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PREFATORY FACTS
4. The appellant is a firm engaged in manpower recruitment
and deployment of skilled, semi-skilled and unskilled workers to
various organizations on a contractual basis.
5. Respondent No.2 had issued a tender notification dated
20.02.2018 inviting tenders for supply of D-category employees to
Technical Education Departments across the State. It is stated that
thirteen entities participated in the bidding process. The bids
submitted by the appellant as well as M/s.Object Technologies (writ
petitioner in W.P.No.12145/2025) were found to be the lowest.
Respondent No.2 (the Commissioner) declared them L1 bidders
because both parties had furnished identical bids. Thereafter, in the
negotiations held by the Tender Committee on 22.03.2018, the
appellant and M/s Object Technologies mutually decided to divide
the contract by allocating 15 districts each. The appellant claims
that respondent No. 2 accepted this and consequently, the contract
was jointly awarded to both parties.
6. By an order dated 21.07.2018, a Work order was issued to
the appellant and M/s.Object Technologies for providing manpower
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services for more than 500 Group ‘D’ vacancies of office assistant
grade in Government Engineering Colleges, Government Junior
Technical Schools, Government Polytechnics/Boys/Girls Hostels
and Head Office of the Department; and around 919 unskilled
Group ‘D’ vacancies of assistant cadre in workshops. The operative
part of the said order is set out below.
“In consideration of the facts mentioned in the
Preamble, it is hereby ordered that M/s Object
Technologies, Bengaluru and (2) M/s Matha
Technologies, Dharwad, who have emerged as
successful tenderers for providing manpower
services through outsourced agencies shall
provide manpower services until, further
Government Direct Recruitment, around five
hundred Group 'D' vacancies of office assistant
grade in government engineering
colleges/government junior technical schools /
government polytechnics / boys / girls hostels
and head office of the department, and to
around nine hundred nineteen unskilled Group
'D' vacancies of assistant cadre in workshops, at
the rates mentioned in Annexure-1 and for
1,499 posts and also in accordance with the
demands of the department as shown in
Anneuxre-2, and for additional posts under
Section 4(c) of the Karnataka Transparency in
Public Procurement Act, 1999, subject to the
conditions laid down in Anneuxre-3.”
7. The preamble of the said order indicates that the appellant
and M/s Object Technologies had mutually decided to provide
services in 15 districts each out of the 30 districts and had issued a
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mutual consent letter in this regard. The said arrangement was
accepted by the Tender Acceptance Committee.
8. Thereafter, on 22.09.2018, the appellant entered into an
agreement with respondent No.2. The appellant states that, under
the agreement, respondent No.2 was to pay the appellant a service
charge calculated at the rate of 13% on the wages distributed to
the employees. The appellant states that, contrary to the terms of
the agreement, respondent No.2 stopped paying the 13% service
charge on the enhanced salary under the Minimum Wages Act,
1948, from April 2022 onwards. The appellant states that it
submitted various representations to release the payments but
there was no response to the said representations.
9. M/s Object Technologies filed a suit Com.O.S.No.1249/2024
before the learned LXXXVIII Additional City Civil and Sessions
Judge, Bengaluru [ Commercial Court ], alleging breach of the
terms of the contract and seeking recovery of the difference in the
applicable service charges along with interest, as well as penalties
paid on the statutory payments on account of delayed payment by
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respondent No.2. M/s.Object Technologies also sought interim
relief.
10. The appellant states that, by an order dated 27.09.2024, the
learned Commercial Court restrained respondent No.2 from
terminating the contract of M/s Object Technologies dated
22.09.2018.
11. The appellant states that the Department of Treasury
withheld clearance of its invoices from August 2024 onwards on the
ground that the letter of intent was not furnished. Aggrieved by the
same, the appellant and M/s Object Technologies filed writ
petitions, being W.P.No.34593/2024 and W.P.No.34481/2024. In
the said proceedings (W.P.No.34593/2024), this Court, by an order
dated 19.12.2024 directed the Commissioner, Department of
Treasury to consider the appellant’s case for release of the amount
due under the work order dated 21.07.2018 without insisting upon
inter alia
a letter of intent, , referring to the Government Order dated
01.08.2018.
12. On 12.02.2025, respondent No.2 issued a notice, alleging
that the appellant and M/s Object Technologies had been charging
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excess service charges. Accordingly, the Government decided to
scrap their short-term tenders and invite fresh tenders. The
appellant was directed to stop providing outsourced manpower
services in the Department of Technical Education within three
months.
13. Aggrieved by the said notice, the appellant filed the writ
inter alia
petition (W.P.No.12143/2025), , impugning the notice
dated 12.02.2025 as well as the communication dated 24.01.2025,
whereby the Government had accorded permission to cancel the
short-term tenders in favour of the appellant and M/s Object
Technologies.
14. The respondents filed their statement of objections. The
respondents claimed that under the contract between the parties,
charges at the rate of 13% of the basic wages were fixed and the
definite amounts were specifically mentioned in the Annexure-I to
the Work Order. However, notwithstanding the same, the appellant
misinterpreted the contract and raised invoices by unilaterally
increasing the service charges at the rate of 13% of the total salary
paid to the employees for the period from April, 2019 to March
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2022. The respondents claimed that the appellant had made
wrongful gains by misrepresentation and caused financial losses to
the Exchequer. The respondents also stated that it was
impermissible to split the contract between the two L1 bidders and
enter into two separate agreements, as this was contrary to the
Karnataka Transparency in Public Procurements Act, 1999 [ KTTP
Act ].
15. The respondents also claimed that, under a Circular dated
16.01.2025, Government Departments/Procurement Authorities
were required to re-examine all agreements entered into with
various contractors and cancel contracts that did not meet the
criteria contained therein. The respondents claimed that the
contract with the appellant violated the said circular as it is a split
tender and it was executed for an indefinite period. Therefore, it
was decided to cancel it. Additionally, it was submitted that the
contracts were not in the public interest and that it was necessary
to cancel them to avoid further losses.
16. The learned Single Judge examined the terms of the contract
and found first, that the agreement was for a fixed period of five
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years commencing from the year 2018, which had come to an end
by efflux of time; and second, that according to clause 9 of the
agreement, the contract was determinable in nature and could be
terminated by issuing a three months’ notice. The learned Single
Judge also observed that although the respondents had pointed
out procedural irregularities and the manner in which the work
order came to be split between the two entities, it was not
necessary to elaborate on the same as they were rendered
academic in view of the conclusion that the contract itself came to
an end.
SUBMISSIONS
17. Mr Prabhuling K. Navadgi, the learned Senior Counsel
appearing for the appellant, contended that the learned Single
Judge's conclusion that the agreement had come to an end by
ex facie
efflux of time is erroneous. He referred to clause 1 of the
terms and conditions of the Agreement and submitted that the
duration of the said agreement was not for five years, but until the
happening of a future event; that is, until the Government
undertakes direct recruitment. According to him, the agreement is
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valid and could not be terminated in the manner as sought to be
done by the respondents. He contended that the appellant is
entitled to specifically enforce the performance of the agreement.
18. We have heard the learned Senior Counsel appearing for
the appellant.
19. At the outset, it is relevant to note that the notice inviting
tender was a short-term tender. The notice inviting tender did not
set out any fixed term of the contract. However, it provided that the
service would be only for a temporary appointment and the
outsourced staff would not be eligible for any facilities.
20. The tender notification indicates that, by its very nature, the
manpower supply contract was a temporary arrangement, whereby
respondent No.2 had decided to hire persons on an outsourced
basis. Thus, the Work Order also did not specify any fixed term of
the agreement. However, the appellant relies on clause (1) of the
inter alia
tender terms and conditions, which, , sets out the duties of
a tenderer.
21. The said clause is set out below:
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“1. As stated in the Preamble, the tenderers
shall provide manpower services to the
vacancies at such government engineering
colleges/offices where at present such services
are not being availed of temporarily, and
subject to the condition that the tenderers shall
start their service after the expiry of the service
period of the agencies which are now providing
manpower on temporary basis. The tenderers
shall provide manpower from the date of issue
of work order till the government fills the
vacancies by direct recruitment/on
compassionate ground/transfers. If a vacancy
is filled by direct recruitment/appointment on
compassionate ground/transfers, the
outsourced employees shall vacate such posts.
And, the tenderers shall provide manpower for
the posts which fall vacant on account of
transfers / superannuation/promotion and any
other reasons, as per the instructions of the
director of the Department.”
22. As apparent from the above, under clause (1), the appellant
was obliged to provide manpower for posts that may fall vacant on
account of transfers/superannuation/promotion, from the date of
issue of the work order until the Government fills the vacancies. It
is important to note that clause (1) only sets out the obligations of
the tenderer. The Government has no reciprocal obligation to
outsource employees from the appellant. The Government was
thus at liberty to seek the services of the appellant to the extent it
considers expedient.
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23. The contention that the work order was for an indefinite
period, whereby respondent No.2 was obliged to continue sourcing
manpower from the appellant until it filled the vacancies by direct
recruitment, appointment on compassionate ground, or transfers, is
without merit.
24. The agreement dated 22.09.2018 also does not specify any
obligation on the part of respondent No.2 to source manpower from
the appellant till the vacancies are filled up by direct recruitment/
appointment on compassionate ground / transfer.
25. Clause 1 of the said agreement is set out below:
“1. The second party shall provide
manpower from the date of issue of work
order till the government fills the vacancies
by direct recruitment/appointment on
compassionate ground/transfers. If a
vacancy is filled by direct
recruitment/appointment on
compassionate ground/transfers, the
outsourced employees shall vacate such
posts. And, the tenderers shall provide
manpower for the posts which fall vacant
on account of transfers /superannuation
/promotion, as per the instructions of the
director of the department.”
26. It is also relevant to refer to clause 9 of the terms and
conditions of the agreement which reads as under:
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“9. In case the tenderer violates any
terms/conditions or if the service provided
by the tenderer is not satisfactory, the
contract will be cancelled by issuing a
three-month advance notice. The decision
of the Director is final in this regard.
Similarly, if the tenderer wants to stop
outsourcing, he should issue a three-
month advance notice.”
27. A plain reading of the said clause indicates that the
respondents were entitled to terminate the contract by issuing a
three-month notice if the appellant violated any terms and
conditions or if the services were not satisfactory. The decision of
the Director was held to be final. Similarly, the appellant was also
entitled to issue a three months’ notice if it decided to stop
providing human resources on outsourced basis.
28. As noted above, the agreement by its very nature is a
determinable one, and we are unable to accept that the appellant
could insist on supplying the manpower till the Government finally
recruits persons to fill up the vacancies. Although clause (9) states
that the contract would be terminated if the tenderer violates any
terms and conditions or if the services are not satisfactory, the said
conditions are not exhaustive. The appellant was entitled to
terminate the contract by three months’ notice. The use of the word
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“similarly” in the last sentence of clause 9 indicates that the right of
the appellant to terminate the contract was similar to the right of the
respondents. This also indicates that the respondents' right to
terminate the contract on three months’ notice, if they wanted to
discontinue the outsourcing arrangement, was not qualified by any
other condition.
29. The learned Single Judge rightly concluded that the contract
in question was determinable and could not be considered as a
perpetual one.
30. Under the head ‘Duties of First Party’, in the agreement, the
respondents' obligation was confined to furnishing the staff
th st
attendance on the 30 or 31 of every month, and perusing the
salary bills and crediting the amount to the appellant's account
th
before the 5 of every month. The relevant extract specifying the
duties of respondent No.2 is set out below:
“ DUTIES OF FIRST PARTY:
1. The heads of respective
officers/department shall furnish the staff
attendance of the Second Party to the
st
tenderer on 30/31 of every month.
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2. The Director's office, subject to the
availability of grants, shall peruse the
salary bills, and credit the amount to the
account of the Second Party through
th
cheque/ECS before the 5 of every month
without any delay.”
31. As noted above, respondent No.2 had not undertaken any
obligation to continue the procurement of staff on an outsourced
basis in perpetuity.
32. It is also relevant to note that the dispute involved is a
contractual dispute. Thus, in any event, it would not be apposite for
the court to finally adjudicate the dispute. According to the
respondents, the appellant has overcharged by raising bills in
excess of the service charges as specified in the Work Order. This
is clearly a contractual dispute, and it is not apposite for the court to
adjudicate it in proceedings under Article 226 of the Constitution of
India.
33. In view of the above, we find no infirmity in the impugned
order to the extent that the learned Single Judge found the contract
in question to be determinable.
34. In view of the above, the notice dated 12.02.2025
discontinuing the contract requires no interference in these
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proceedings. However, we clarify that this order will not preclude
the appellant from availing its remedies for recovery of any
albeit
amounts which, according to the appellant, are outstanding,
in accordance with law. All rights and contentions of the parties in
this regard are reserved.
35. The appeal is dismissed with the aforesaid observation.
36. In view of the dismissal of the appeal, the pending
interlocutory application is also disposed of.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(K.S. HEMALEKHA)
JUDGE
KPS, List No.: 2 Sl No.: 18