With the consent of learned counsel for the parties, the Writ Petition is disposed of at the stage of admission itself.
The present Writ Petition is field being aggrieved by the action of the Telangana Foods (A Unit of Telangana State Nutrition Council), respondent No.1 in taking steps to finalize the tender for transportation of Balamrutham as snack food from district godowns to Anganwadi Centres in Telangana State in favour of unqualified tenderers, respondent Nos. 2 to 9, as illegal, arbitrary, violative of tender conditions under Para 19(a) of the tender notice read with subsequent corrigendum, dated 31.07.2020 and consequently, direct the respondent No. 1 to finalize the tenders in favour of the qualified bidders basing on the rates quoted by them.
The case of the petitioner, M/s. Lakshya Air Travels, in brief, is that it is a proprietorship firm and engaged in the business of transportation of goods including Balamrutham etc., of the respondent No. 1. Presently, the petitioner firm is in contract of transportation of Balamrutham and other snack foods of respondent No. 1 to various places in Telangana State. While so, the respondent No. 1 issued a Tender Notification, dated 31.07.2020 inviting tenders for transportation of Balamrutham as snack food from district godowns to Anganwadi District in 31 districts of Telangana State for the year 2020-2021 i.e. from 01.09.2020 to 31.08.2021. In response to the notification, the petitioner firm submitted its bid through online and the same was also accepted. However, it is the grievance of the petitioner that although the other bidders, i.e. the respondent Nos. 2 to 9 have not submitted the documents as required under Para 19(a) of the tender notice, the respondent No. 1 entertained their bids in an irregular and illegal manner, thereby putting the petitioner firm in disadvantageous position, which happens to be the next lowest bidder. Pointing out the deficiencies in furnishing the documents by the respondent Nos. 2 to 9, the petitioner firm submitted a representation dated 21.08.2020, to the respondent No. 1 with a further request not to permit them to participate in financial bid. Without considering the said representation submitted by the petitioner firm, the respondent No. 1 is taking steps to finalise the tender process. Hence, the writ petition.
The Managing Director of respondent No. 1 filed a counter affidavit denying the averments made in the writ petition. According to the respondent No. 1, it is working under the administrative control of Women Development and Child Welfare & Senior Citizen Department and works round the clock throughout the year in three shifts producing and supplying nutritious food, Balamrutham, and snack food for the malnourished children, aged three months to six years under poverty line in Anganwadi centres of Integrated Child Development Services Projects under Supplementary Nutrition Program in Andhra Pradesh and Telangana States. For the last many years, the Balamrutham and Snack Food were being dispatched to Integrated Child Development Services Project (‘ICDS’) and the said ICDS was responsible for distribution of food to the respective Anganwadi Centres from the projects. However, from May, 2019, the respondent No. 1 is supplying the Balamrutham and Snack Food directly to Anganwadi Centres through first level contractor. However, from March, 2020, the said process has been taken by TSRTC, which is said to be Stage-II Transportation. Even the tender period for Stage-II Transportation for the year 2019-2020 is expired by 31.05.2020. As the TSRTC had informed that the they were not in a position to take up the Stage-II Transportation, the impugned tender notification, through e-procurement, for transportation of finished food to Anganwadi Centres from District Godowns (Stage-II) for the year 2020-2021 i.e. from 01.09.2020 to 31.08.2021 was published on 31.07.2020 in Namaste Telangana Newspaper. The petitioner firm, being the Stage-II Transport Contractor, was successful bidder for the tenders floated through e-procurement for the year 2019-2020 for fourteen districts. However, for the year 2020-2021, the petitioner firm participated in the tender notification dated 31.07.2020, for transportation of Balamrutham and Snack Food to Anganwadi Centres from District Godowns (Stage-II) and stood as L-1 (Lowest quoted) for one District, namely Medak. As per the schedule, the Technical bid was opened on 11.08.2020 at 11:00 a.m. by the Purchase Committee in the presence of Tenderers. The Financial bid was also opened on 13.08.2020 at 3:00 p.m. and finalized the tenders in the presence of Purchase Committee Members of the Organization. It is stated that out of eighteen tenderers, twelve were qualified in Technical Bids; six bids were disqualified.
With regard to the allegation of the petitioner firm that although the documents submitted by the unofficial respondents are not in order, the respondent No. 1 is proceeding to finalize the tender process in their favour, it is stated at para No. 4 of the counter that “Auditor’s opinion is taken regarding the Firm Registration Certificate and GST Certificate. The Auditor opined that if the GST certificate is taken under proprietorship, Firm Registration is not required. That the Income Tax Returns will be in the name of the proprietor, thus PAN card is the basis for the business made by the proprietor and is linked with the GST. The PAN card will be in the name of the sole proprietor, the GST certificates are verified along with the PAN and IT returns. Hence, the bidders who have not submitted Firm Registration and having GST as proprietorship are made eligible for the Financial Bids”.
It is stated that the documents submitted by the petitioner firm and the unofficial respondent Nos. 2 to 9 were duly verified in accordance with the tender condition No. 19(a) by the Purchase Committee and thereafter, they were allowed to Technical bid. Thus, there was no irregularity, or illegality in the process followed by the respondent No. 1. It is stated that the successful bidders have submitted all the required documents and upon the expert opinion, the condition No. 19(a) of the tender was fulfilled, and therefore, those who have qualified as per condition 19(a) of the tender, were considered for financial bid as they have sufficient experience in transportation business. The representation sent by the petitioner firm, through Whatsapp was endorsed with remarks on 17.08.2020, and considering the said representation, the Purchase Committee once again examined the documents submitted by the bidders. It is only after satisfying that the said documents were in order, work orders were issued to the successful bidders. As per condition No. 12 of the terms and conditions of the tender, the decision of respondent No. 1 with regard to acceptance of tender shall be final and conclusive. Therefore, only after concluding the tender, the work orders were issued to the successful bidders. Having emerged as successful bidder only for one district i.e. Medak, the petitioner firm approached this Court on 24.08.2020 with unclean hands with an intention to have wrongful gain by avoiding successful bidders, in respect of other districts, on a technical ground. Hence, the respondent No. 1 sought to dismiss the writ petition.
The respondent No.2, 3 and 5 filed their respective counter affidavits inter alia contending that these respondents have fulfilled all the criteria as required under the tender conditions, and that the violations as pointed out by the petitioner firm are not bona fide and that the same are purposefully invented for the purpose of filing the writ petition with a mala fide intention. According to these respondents, as per the schedule mentioned in the tender notification, the technical bids were opened on 11.08.2020 and financial bids were opened on 13.08.2020. Only after verifying the documents/certificates submitted by these respondents by Experts of Purchase Committee, the work orders were issued in favour of these respondents. Therefore, they sought to dismiss the writ petition.
Heard Sri K. Rami Reddy, the learned counsel for petitioner, Sri M. Muralidhar, the learned Standing Counsel for respondent No.1, Sri H. Srinivas Rao, the learned counsel for respondent No. 2, Sri T. Mahender Rao, the learned counsel for respondent No. 3, and Mr. V. Rama Krishna Reddy, for respondent No. 5.
The learned counsel for the petitioner has argued that the petitioner firm, engaged in the business of transportation of goods, pursuant to the impugned notification, had tendered its bid through online. After the technical bids were opened, the petitioner found that the unofficial respondent Nos. 2 to 9 are ineligible, as they had not complied with the requirements of the tender documents; they do not have the requisite qualification, nor have they submitted the necessary documents in support of proof of their having the required experience. Therefore, the official respondent, in spite of rejecting the bids of these respondents, have allowed them to participate in the financial bid. The learned counsel further asserts that the writ petition was filed even before the tenders were finalized. Therefore, the contention of the respondents that the writ petition is liable to be dismissed on the ground of issuance of work order cannot be countenanced. The learned counsel has taken this Court through the relevant condition of the tender dealing with the furnishing of the documents by the participants, which specifies as under:-
“a. The tenderer has to furnish the following documents:
1. Firm Registration Certificate
2. GSTIN Certificate
3. Experience certificate along with turn over details for last 3 years 2017-18, 2018-19 and 2019-20
4. Up-to date Income Tax Clearance Certificate (latest income tax assessment) Copy of PAN
5. Copy of Partnership Deed along with the permanent and present addresses, Phone Nos of the Partners in case of partnership firm.
6. R.C. Books on firms name for a minimum of 5 vehicles.
7. Since the tenders are on e-procurement platform, the successful bidders are requested to submit hard copies of document after finalization of bids.
8. The tender document uploaded with signature on each paper.
9. ESI & EPF Remittance.”
Referring to the above documents, the learned counsel for the petitioner submits that the respondent No. 1 had not considered the same while processing the bids of the unofficial respondents and contrary to the tender conditions, the respondent No. 1 had awarded the work contracts in favour of the unofficial respondents. In this regard, the learned counsel for the petitioner has relied on a decision of the Apex Court in Bharat Coking Coal Ltd., V. AMR Dev Prabha (2020 SCC Online SC 335). In the said decision, the Hon'ble Supreme Court, at paras 29, 31 and 32, has observed as under:
“29. The scope of judicial review in tenders has been explored in-depth in a catena of cases. It is settled that constitutional Courts are concerned only with lawfulness of a decision, and not its soundness. Phrased differently, Courts ought not to sit in appeal over decisions of executive authorities or instrumentalities. Plausible decisions need not be overturned, and latitude ought to be granted to the State in exercise of executive power so that the constitutional separation of powers is not encroached upon. However, allegations of illegality, irrationality and procedural impropriety would be enough grounds for Courts to assume jurisdiction and remedy such ills. This is especially true given our unique domestic circumstances, which have demonstrated the need for judicial intervention numerous times. Hence, it would only be the decision –making process which would be the subject of judicial enquiry, and not the end result.
31. But merely because the accusations made are against the State or its instrumentalities doesn’t mean that an aggrieved person can bypass established civil adjudicatory processes and directly seek writ relief. In determining whether to exercise their discretion, writ Courts ought not only confine themselves to the identity of the opposite party but also to the nature of the dispute and of the relief prayed for. Thus, although every wrong has a remedy, depending upon the nature of the wrong there would be different forums for redress.
32. In cases where a constitutional right is infringed, writs would ordinarily be the appropriate remedy. In tender matters, such can be either when a party seeks to hold the State to its duty of treating all persons equally or prohibit it from acting arbitrarily; or when executive actions or legislative instruments are challenged for being in contravention to the freedom of carrying on trade and commerce. However, writs are impermissible when the allegation is solely with regard to violation of a contractual right or duty. Hence, the persons seeking writ relief must also actively satisfy the Court that the right it is seeking is one in public law, and not merely contractual. In doing so, a balance is maintained between the need for commercial freedom and the very real possibility of collusion, illegality and squandering of public resources.”
Per contra, the learned Standing Counsel appearing on behalf of respondent No. 1, has submitted that the tender committee has gone through the allegations made by the petitioner, and only after finding the said allegations to be baseless, the Committee has recommended and the tenders were finalized and the work orders were awarded in favour of the unofficial respondents. The learned Standing Counsel has drawn the attention of this Court to the fact that out of eighteen tenderers, twelve were qualified in Technical Bids, and they were asked to submit the required documents. One of the requirements of the tender documents was that the tenderer should submit the Firm Registration and GSTIN Certificate. When it was found that the twelve tenderers, including the petitioner, did not submit the Firm Registration, the opinion of the auditors was obtained regarding the requirement of submission of Firm Registration and GSTIN Certificate, before opening the financial bids. The auditors have opined as under:-
“…if the GST certificate is taken under proprietorship, Firm Registration is not required. That the Income Tax Returns will be in the name of the proprietor, thus PAN card is the basis for the business made by the proprietor and is linked with the GST. The PAN card will be in the name of the sole proprietor, the GST certificates are verified along with the PAN and IT returns. Hence, the bidders who have not submitted Firm Registration and having GST as proprietorship are made eligible for the Financial Bids.”
Basing on the above opinion of the auditors, the tenders were finalized, and those eligible tenderers only, who have quoted the lowest price, were awarded the contract work. It is submitted that the main reason for calling for the tenders is for transportation of Balamruthan and Snack Foods for school going children, and as it is a time bound programme, all the tenderers, who have qualified in the technical as well as financial bids, were already awarded work orders on 31.08.2020, and that are executing the work of transporting the nutritious food, Balamrutham, and snack foods for the malnourished children, aged three months to six years under poverty line in Anganwadi centres of Integrated Child Development Services Projects under Supplementary Nutrition Programme. Having been benefited by the recommendations made by the auditors and having secured the contract work for Medak District for supply of the snack foods, the petitioner now cannot turn around, and challenge the very same relaxation of condition of submission of the Firm Registration and GSTIN certificates. Further, the same criteria has been applied to all the bidders participated in the tenders and no special concession has been given to any particular tenderer. The present writ petition is only a speculative one, and the awarding of the contract work to various unofficial respondents is in no way prejudicial to the petitioner, or to the State.
In order to support his contention that the petitioner having benefited from the relaxation of tender conditions, cannot turn around and question the same, the learned Standing Counsel has relied on a decision of the Hon'ble Supreme Court in State of NCT of Delhi and Another v. Sanjeev alias Bittoo (2005) 5 SCC 181), wherein the Apex Court has held as under:
“We are not oblivious of the expansive role of the superior Courts on judicial review.
We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under:
i) If there are essential conditions, the same must be adhered to;
ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principles of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;
iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing.
iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the Court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal land without jurisdiction.
v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfere with.
vi) The contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority.
vii) Where a decision has been taken purely on public interest, the Court ordinarily should exercise judicial restraint.”
The learned Standing Counsel has taken this Court through another decision of the Apex Court in B.S.N.Joshi & Sons Ltd., Vs. Nair Coal Services Ltd. (2006) 11 SCC 548). The Apex Court, at para 66, while reiterating its observations made in Sanjeev alias Bittoo (supra), has further observed as under:-
“It may be true that a contract need not be given to the lowest tenderer but it is equally true that the employer is the best judge therefore, the same ordinarily being within its domain, Court’s interference in such matter should be minimal. The High Court’s jurisdiction in such matters being limited in a case of this nature, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the fact of the record.”
In Jagdish Mandal Vs. State of Orissa (2007) 14 SCC 517), the Hon'ble Supreme Court, at para 21, held as under:
“22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made lawfully and not to check whether choice or decision is sound. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, Courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil Court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade Courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousand and millions and may increase the project cost manifold. Therefore, a Court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; OR Whether the process adopted or decision made is so arbitrary and irrational that the Court can say; the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached;
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of site/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.
In Raunaq International Ltd., Vs. I.V.R. Construction Ltd (1999) 1 SCC 492), the Hon'ble Supreme Court has observed as under:-
“The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount importance are commercial considerations. These would be: (1) The price at which the other side is willing to do the work; (2) Whether the goods or services offered are of the requisite specifications; (3) Whether the person tendering has the ability to deliver the goods or services as per the specifications. When large works contracts involving engagement of substantial manpower or requiring specific skills are to be offered, the financial ability of the tenderer to fulfill the requirements of the job is also important; (4) the ability of the tenderer to deliver goods or services or to do the work of the requisite standard and quality; (5) past expericne of the tenderer, and whether he has successfully completed similar work earlier; (6) time which will be taken to deliver the goods or services; and often (7) the ability of the tenderer to take follow up action, rectify defects or to give post contract services. Even when the State or a public body enters into a commercial transaction, considerations which would prevail in its decision to award the contract to a given party would be the same. However, because the State or a public body or an agency of the State enters into such a contract, there would be, in a given case, an element of public law or public interest involved even in such a commercial transaction.
What are these elements of public interest? (1) Public money would be expended for the purposes of the contract; (2) The goods or services which are being commissioned could be for a public purpose, such as, construction of roads, public buildings, power plants or other public utilities. (3) The public would be directly interested in the timely fulfillment of the contract so that the services become available to the public expeditiously. (4) The public would also be interested in the quality of the work undertaken or goods supplied by the tenderer. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in re-doing the entire work – thus involving larger outlays or public money and delaying the availability of services, facilities or goods, e.g. A delay in commissioning a power project, as in the present case, could lead to power shortages, retardation of industrial development, hardship to the general public and substantial cost escalation. When a writ petition is filed in the High Court challenging the award of a contract by a public authority or the State, the Court must be satisfied that there is some element of public interest involved in entertaining such a petition. If, for example, the dispute is purely between two tenderers, the Court must be very careful to see if there is any element of pubic interest involved in the litigation. A mere different in the prices offered by the two tenderers may or may not be decisive in deciding whether any public interest is involved in intervening in such a commercial transaction. It is important to bear in mind that by Court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the Court would ultimately effect in public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the Court is satisfied that there is substantial amount of public interest, or the transaction is entered into mala fide, the Court should not intervene under Article 22l6 in disputes between two rival tenderers.”
In Air India Ltd. Vs. Cochin International Airport Ltd. (2000) 2 SCC 617), the Hon'ble Supreme Court while summarizing the scope of interference as enunciated in several earlier decisions, held thus:
“The award of a contract, whether it is by a private party or by a pubic body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its Corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene.”
The respondent Nos. 2, 3 and 5 have filed their respective counters reiterating the contents made in the counter filed by respondent No. 1. It is their case that pursuant to the awarding the contract on 31.08.2020, the work orders were also issued in their favour and that they have already commenced the work for transportation of Balamrutham, and snack food to the Anganwadi centres, as per the terms and conditions of the tender. There is no violation in awarding the contract to nay of the unofficial respondents. As a matter of fact, the respondents have filed all the required documents as envisaged under the tender document. The writ petition itself has become infructuous as the cause of action does not survive for adjudication.
The learned counsel appearing for respondent No. 2 contends that the petitioner having participated in the tender and having been awarded with the contract work in respect of Medak District, cannot challenge the process of the tender, more particularly, when he had benefited from the relaxation given by the respondent No. 1 on par with the unofficial respondents. It is contended that once the contract has been awarded to the unofficial respondents and the work order has already been issued, the question of passing any order in the present writ petition, at this stage, does not arise. Therefore, the writ petition has to be dismissed in limini.
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tedly, in the case on hand, the impugned tender notification has been issued calling for applications for supplying nutritious food, Balamrutham, and snack food for the malnourished children, aged three months to six years under poverty line in Anganwadi centres of Integrated Child Development Services Projects under Supplementary Nutrition Program. The tenderers were required to submit certain documents, extracted above, including Firm Registration and GSTIN Certificate. According to respondent No. 1, insofar as the condition of submission of document Nos. 1 and 2, i.e. Firm Registration and GSTIN Certificate is concerned, the respondent No. 1, after due consultation with the auditors, has taken a decision not to insist for submission of Firm Registration as the Auditors have opined that “if the GST certificate is taken under proprietorship, Firm Registration is not required”. Moreover, in case the Income Tax Returns are in the name of the proprietor, the PAN card is the basis for the business made by the proprietor and is linked with the GST”. There is no dispute with regard to the proposition of law laid down by the Apex Court in the decisions relied on by the learned Standing Counsel for the respondent No. 1. The decision in AMR Dev Prabha (supra), relied on by the learned counsel for the petitioner, is not applicable to the facts of the present case. Coming to the facts of the case, when it is the specific stand of the respondent No. 1 that even the petitioner did not submit his Firm Registration and was benefited from the relaxation given in that regard, the same has not been denied or disputed by the petitioner in his reply. When the relaxation of condition of submitting certain documents has been extended to all the tenderers, including the petitioner, it is not understandable as to how the petitioner can contend that it was prejudiced by such relaxation. Inasmuch as the petitioner is one of the beneficiaries of such relaxation of condition of submission of certain documents, he cannot seek a direction to declare the said relaxation given by the respondent No. 1 as illegal insofar as other tenderers are concerned. Having benefited by the relaxation given by the respondent No. 1, the petitioner cannot turn around and challenge the relaxation. Moreover, as seen from the record, the supply of nutritious food, Balamrutham, and snack food for the malnourished children, under poverty line in Anganwadi centres is a time bound scheme. A large number of malnutrition children are dependant on this scheme for sustenance and no impediments can be caused to stop the transportation of the supply of the nutrition food at the instance of the writ petitioner. The public interest outweighs the private commercial interest of the writ petitioner. In case the tenders are not finalized and work orders were not issued within the stipulated time, the very object of floating the tender will be defeated. This Court does not see any merit in the present writ petition for the reasons mentioned supra. Hence, the writ petition is liable to be dismissed. For the reasons stated above, the writ petition is dismissed. The miscellaneous petitions pending, if any, shall stand closed. There shall be no order as to costs.