Telangana High Court
M/S. Star Light vs The State Of Telangana on 3 October, 2024
1
* THE HON'BLE SRI JUSTICE N.V.SHRAVAN KUMAR
+ W.P.Nos.18543 of 2024; 25466, 27046, 27104, 27225,
27226 and 34350 of 2023
% 03.10.2024
# Between:
Mohammed Saleem
Petitioner
Vs.
State of Telangana
Rep by its Secretary Ministry of Animal Husbandry Dairy
Development and Fisheries
Secretariat Buildings
Secretariat Hyderabad & another.
Respondents
! Counsel for Petitioner : Mr.Kishore Rai
^ Counsel for Respondents : Additional Advocate General
<GIST:
> HEAD NOTE:
? CASES REFERRED
1. AIR 2022 SC 2745
2. 2009 (1) RCR (Civil) 398
3. (2016) 14 SCC 172
4. (2012) 8 SCC 216
5. (2024) INSC 486
6. (2006) 13 SCC 382
7. MANU/SC/0607/2022
8. MANU/PH/2117/2008
9. (2022) 6 SCC 127 : 2022 SCC OnLine SC 336 at page 141
10. (2012) 8 SCC 216 : 2012 SCC OnLine SC 614 at page 225
11. 2019 DHC 2829
12. (2016) 14 SCC 172
13. (2024) 4 SCC 166
14. 2022 SCC OnLine Del 122
15. (1999) 3 SCC 172
16. (2005) 125 DLT 5 (DB)
2
THE HON'BLE SRI JUSTICE N.V. SHRAVAN KUMAR
W.P.Nos.18543 of 2024; 25466, 27046, 27104, 27225,
27226 and 34350 of 2023
Common Order:
W.P.No.18543 of 2024 is filed to declare the Order dated 08.07.2024 vide Proc.No.648/T2/MAF/2021 whereby the second respondent cancelled the Tender Notification No.684/T2/MAF/TSSGDCFL/2021 dated 01.09.2023 for the work of Redevelopment of Modern Abattoir Facility MAF, Chengicherla on "Redevelopment, Operate, Maintain and Transfer (ROMT) basis in PPP mode" after opening the price bid of the petitioner as illegal, contrary to law and to set aside the same and consequentially to award the tender for the work of "Redevelopment of Modern Abattoir Facility MAF Chengicherla on Redevelopment, Operate, Maintain and Transfer (ROMT) basis in PPP mode" to the petitioner.
Writ Petition Nos.25466, 27046, 27104 and 34350 of 2023 are filed to declare the Request for Proposal (RFP) issued by respondent No.2 vide Tender No.684/T2/MAF/TSSGDCFL/2021 dated 01.09.2023 to the extent of imposing onerous condition of Technical/Experience Criteria stipulated under Clause 4.5.8 wherein a bidder is 3 required to have an "Operations and Management" experience for a minimum period of 12 years in the last 25 years on license/lease/O and M basis for any Integrated Modern Abattoir Facility for both Cattle and Sheep established by a Central/State/ Local Government Department/Authority/ Corporation / Government Cooperative Federation in India and also not permitting the Consortiums from participating in the bidding process in terms of the said tender as being arbitrary illegal, irrational, discriminatory and unreasonable apart from being malafide and in violation of Article 14, 19(1)(g) and 21 of the Constitution of India and consequently
(i) Quash the term/condition stipulated under Clause 4.5.8 of the Request for Proposal issued vide tender dated 01.09.2023; and
(ii) direct respondent No.2 to permit and allow even 'Consortiums' to participate in the bidding process. Writ Petition Nos.27225 and 27226 of 2023 are filed to declare the action of respondent No.2 in insisting on the submission of the tender bid mandatorily by online upload to its e-portal/website as illegal and irrational and consider the tender bid of the petitioner sent by e-mail on 26.09.2023 to the e-mail ID of respondent No.2.
4
2. As the issue involved in all the writ petitions are related to tender condition in Notification No.684/T2/MAF/ TSSGDCFL/2021 dated 01.09.2023, all the writ petitions are being disposed of by way of this common order and W.P.No.18543 of 2024 is taken as the lead case.
3. The brief facts of the case as per the pleadings are that respondent No.2 has floated the tender on e-pronouncement platform for the work of "Redevelopment of Modern Abattoir Facility (MAF), Chengicherla on Redevelopment, Operate, Maintain and Transfer (ROMT) basis in PPP mode" with an estimated contract value of Rs.25.00 Crores for a License period of 30 years (15+15). As per the tender notification dated 01.09.2023, bids were to be submitted online and also by way of hard copies within the stipulated time as per the Request for Proposals (RFP) conditions. Respondent No.2 opened technical bid to evaluate the eligibility of the bidders meeting the criteria stipulated in the Bid notification. Thereafter, technical bids will be opened and after short listing, respondent No.2 would proceed to open the price bids only for short listed bidders and only the highest among them would be awarded with work. 5
4. The petitioner submits that it is an existing 'O & M Agency' and had the Right of First Refusal (ROFR) and as per earlier prevailing norms and tender notifications, no negotiation is permissible with any of the bidders at any stage of evaluation of bids. The petitioner had submitted bid through online as well as by hard copies offline. That upon opening of the tenders, the bid of another bidder M/s.Star Light, Hyderabad was found not to be technically qualified as such the same was rejected and the petitioner was found to be technically qualified and accordingly respondent No.2 informed the petitioner that the petitioner has passed the specified eligibility criteria of the Request for proposal (RFP) and hence qualified in the technical bid evaluators.
5. Thereafter, vide letter dated 04.10.2023, the petitioner was informed to attend for opening on financial bids on 09.10.2023. Upon opening the financial bid on 09.10.2023, the petitioner was informed as under:
"With reference to the subject cited, it is to inform that the financial Bid Committee met on 09.10.2023 and opened the financial bids for awarding the Modern Abattoir Facility (MAF), Chengicherla Project.
The minutes of the Financial Bid Committee have been forwarded to the Government for further orders.6
After receipt of the orders from the Government, further necessary action will be initiated.
This is for information."
6. It is further submitted that as per the tender notification the Bid Parameter for 'Annual License Fee' was mentioned as reserved amount over and above Rs.2.56 Crores and the petitioner had quoted the Annual License Fee for Rs.2.60 Crores per annum. The petitioner submits that it is technically qualified and the bid of the petitioner is highest as such the petitioner ought to have been given Letter of Intent for fulfilling other requirements for entering into License Deed. It is also submitted that the petitioner is existing 'O&M Agency' and was permitted to continue the operations at Modern Abattoir Facility (MAF) Chengicherla, with existing terms and conditions till further orders vide letter dated 28.06.2018, as the petitioner was successfully running the facility since 2008 as per G.O.Ms.No.68 dated 14.07.2008 and lease agreement dated 21.07.2008.
7. The petitioner thereafter addressed a letter dated 15.04.2024 to respondent Nos.1 and 2 to expedite the process of concluding the Agreement for Operation & Maintenance of MAF, Chengicherla at the earliest and also addressed another letter dated 05.06.2024 to respondent Nos.1 and 2 and also marked a 7 copy to Chief Secretary, Government of Telangana to expedite the process of agreement. The annual license fee quoted by the petitioner was Rs.2,60,77,777/- as against the respondent's estimated contract value of Rs.2,56,00,000/- which is 1.87% more than the estimated reserved value. It is further submitted that respondent No.2 after waiting for a period of 9 months proceeded to issue an order dated 08.07.2024 vide Proc.No.648/T2/MAF/2021 and the contents of the order are extracted hereunder:
"1. The Tenders notice for Redevelopment of Modern Abattoir Facility (MAF), Chengicherla on Redevelopment, Operate, Maintain& Transfer (ROMT) basis in PPP mode was issued on 02.09.2023 through e-procurement platform. As per the Request For Proposal (RFP) conditions, the bidders were required to submit the bids online and also hard copies offline within the stipulated time period.
2. In response to the tender call, we have received two (2) bids from (2) companies. Out of two (2) received, one M/s Mohammed Saleem, Hyderabad got qualified technically and the other one MIs Star Light, Hyderabad, was disqualified by the Technical bid committee, leaving behind only one bidder.
3. As per the tender conditions, one of the Tender Conditions is that the bidding entity shall have Operations & Management (O&M) experience for a minimum period of 12 years in the last 25 years on 8 License/ Lease/ 0&M basis for any integrated Modern Abattoir Facility for both cattle and sheep with a minimum project cost of Rs.25.00 crores. The said condition appears to be onerous, due to which several other bidders appear to have not participated in the tender and as such there was no competition.
4. Even after opening the financial bid in October 2023, the bidder did not deposit any money towards the bid amount and no agreement has been entered with the bidder till date.
5. The Telangana Sheep and Goat Development Cooperative Federation Limited, Hyderabad is of the opinion that the bid amount quoted is on the lower side, and in the interest of the institution, it has now been decided to cancel the tender and call for fresh tender by reviewing tender conditions to ensure adequate competition in the interest of the State Exchequer.
6. In view of the above, the Tender No. 684/T2/MAF/TSSGDCFL/2021, Dated:01.09.2023 is hereby cancelled."
8. Learned senior counsel appearing for the petitioner would submit that the contention of respondent No.2 that one of the tender conditions is that the bidding entity shall have Operations & Management (O & M) experience for a minimum period of 12 years in the last 25 years for any integrated Modern Abattoir Facility for both cattle and sheep with a minimum project cost of Rs.25.00 Crores and such condition appears to be 9 onerous is absolutely uncalled for as the said condition was framed as policy guidelines by the Telangana Project Consultants Private Limited and is not valid and the contention of respondent No.2 is contrary to the stand taken by the consultants appointed by the Government and the same is liable to be set aside. He would further submit that the opinion of respondent No.2 that the bid amount quoted is on the lower side which is also incorrect as the petitioner has quoted 1.87% over and above the bid price reserved in the Tender notification. As regards the contention of respondent No.2 that no payment was made by the petitioner, learned senior counsel would submit that the payment is to be made only after issuance of Letter of Intent (LoI) and no LoI is issued till date and that the payment as required in the tender notification dated 01.09.2023 i.e., Rs.50 Lakhs as mentioned in RFP has already been paid. Questioning the cancellation, the present writ petition is filed.
9. A counter affidavit has been filed on behalf of respondent No.2 i.e., The Managing Director, Telangana Sheep and Goat Development Company-Operative Federation Limited (TSSGDCFL), Hyderabad denying all the allegations and averments in the affidavit. It is submitted that the Government of Telangana vide letter No.1268/AH-II(1)/2023 dated 10 31.08.2023 of AHDD&F (AH) Department has accorded permission to call for the tenders for identification of private partner for Redevelopment of Abattoir facility at Chengicherla in PPP mode with an estimated cost of Rs.25.00 Crore and minimum reserve price offer is of Rs.2.56 Crore per annum of License Fee which is to be paid to TSSGDCFL. It is further submitted that vide G.O.Rt.No.85 dated 31.08.2023 of AHDD&F (AH) Department, Government have also constituted technical bid evaluation committee and financial bid evaluation committee for scrutiny and finalization of both technical and financial bids. The tender notification was issued in two news papers and tender has been floated on e-procurement platform on 02.09.2023.
10. It is submitted that technical bids were opened on 29.09.2023 by the Technical Bid Committee and after thorough scrutiny and evaluation, technical bids were finalized on 03.10.2023 and as per the schedule they were opened on 09.10.2023. During the said period, the following writ petitions were filed before this Court challenging the tender process, which are as follows:
11
S.NO. WP No./ Petitioner Objections raised Year 1 25466/2023 M/s.AsianFoods,Hyderabad Stipulated under M/s.MemeAgro class 4.5.8 of the Request for Proposal issued and also allow even Consortiums to participate in the bidding process.
2 27046/2023 Food Pvt. Ltd, New Delhi The tender imposes certain arbitrary conditions having 12years experienceand also does not allow consortiums to participate 3 27104/2023 M/s. Star light, Hyderabad Quash the term/ M/s.AI-Dua Food condition stipulated under class 4.5.8 of the Request for Proposal issued and also allow even Consortiums to participate in the bidding process.
4 27225/2023 Processing Pvt.Ltd, New Submission of Tender
Delhi M/s.Al-Hamd Bid
mandatorily by online
upload to its e-
portal/ website as
illegal.
5 27226/2023 Agro Food Products Pvt. Submission of Tender
Ltd, U.P Bid
mandatorily by online
upload to its e-
portal/ website as
illegal.
6 34350/2023 M/s. Asian Foods, The Request for
Hyderabad Proposal (RFP)
/Tender issued by
12
TSSGUCFL had
imposed certain
terms and conditions
in the said tender
and thereby
prohibited/eliminated
all Persons/entities
from participating in
the bidding
11. It is further submitted that information with respect to the other Abattoirs in the GHMC and lease/royalty amounts, that were received by respondent No.2 was also annexed in the counter affidavit. As per the said list, it is clear that the abattoirs which are lesser in extent of area and capacity are procuring more funds to the public exchequer than the MAF, Chengicherla, which is one of the largest facility in the state established in an extent of Ac.35-17 gts., and in the said circumstances, respondent No.2 deemed it appropriate to reconsider the said tender dated 01.09.2023. In pursuance to the news article dated 08.01.2020, the General Administration (Vigilance and Enforcement) Department has also addressed a note to Secretary to Government, Animal Husbandry and Fisheries Department vide Alert Note No.11 dated 26.10.2021, wherein it was observed that the lease rentals have not been increased in the Modern Abattoir Facility, Chengicherla in which the petitioner is the 13 lessee as per the lease agreement dated 21.07.2008. In the said note, it was recommended to issue necessary instructions to increase the lease amount from the present lessee (i.e., petitioner herein) considering the market value of land in which the facility is located and further collect the same from the present lessee from the date of expiry of the lease. It is submitted that in the said alert note, it is clear that the lease amount has been enhanced with respect to MAF, Chengicherla in the best interest of the state and institution. It is further submitted that as per the request for proposal (RFP) of tender notification, respondent No.2 is well within the right to annul the bid process without assigning any reasons at any stage. The relevant clauses are extracted hereunder:
"xxv (ii) Please note that the TSSGDCFL reserves the right to accept or reject all or any bids without assigning any reason whatsoever and annul the bid process at any stage , under intimation to the shortlisted bidders if any."
"Clause 8.1 AUTHORITY'S RIGHT TO REJECT ANY OR ALL BIDS The authority reserves the right to accept or reject any bid, and to annul the bidding process and reject all bids at any time prior to the award of the license, without thereby incurring any liability to the affected bidder or bidders and/ or any obligation to the affected Bidder of Bidders on the grounds for its action"
"Clause 11.2. The authority, in its sole discretion and without incurring any obligation or liability, reserves the right, at any time to;14
(a) Suspend and/or cancel the bidding process and/or amend and/or supplement the bidding process or modify the dates or other terms and conditions relating thereto;"
12. It is further submitted that that the amount quoted by the petitioner is on the lesser side and is not in the best interest of the public exchequer and considering that the other abattoirs are procuring more money to the public exchequer and that there was only one qualified bidder and in the interest of the institution decided to cancel the tender dated 01.09.2023 to ensure adequate competition in the interest of the state exchequer vide impugned order dated 08.07.2024. It is further submitted that the State Entities are at liberty to pursue contractual objectives in the best interest of the State and the petitioner has no enforceable right vested upon him to seek tender be conferred in his favour and it is the discretion of respondent No.2 and in the interest of the State, has cancelled the tender dated 01.09.2023 and in view of all the above prays this Court to dismiss the present writ petition.
13. A counter affidavit has been filed by the Manager, TSSGDCFL i.e., respondent No.2 in W.P.Nos.27226 and 27225 of 2023 wherein the writ petition was filed against the insisting on the submission of the tender bid mandatorily by online upload to 15 its e-portal/website. In the counter affidavit it is stated that e- procurement platforms offers several advantages making the process more efficient, transparent and cost effective. It is further submitted that e-procurement platforms are designed to ensure a standardized and fair process for all bidders and by allowing offline applications may create a perception of bias or favouritism, especially if specific bidders are allowed to submit offline while others are not and accordingly prayed to dismiss the said writ petitions.
14. A counter affidavit has been filed by the Manager, TSSGDCFL i.e., respondent No.2 in Writ Petition Nos.25466, 27046, 27104 and 34350 of 2023 which are filed to declare the Request for Proposal (RFP) issued by respondent No.2 vide Tender No.684/T2/MAF/TSSGDCFL/2021 dated 01.09.2023 to the extent of imposing onerous condition of Technical/Experience Criteria stipulated under Clause 4.5.8 wherein a bidder is required to have an "Operations and Management" experience for a minimum period of 12 years in the last 25 years. It is submitted that keeping in view of Animal Welfare, long term experience is required to understand and improve animal welfare practices in the slaughter process, such condition has been stipulated. It is further submitted that 12 16 years of experience ensures that the prospective operator has a substantial track record in the field of slaughter house operations which can demonstrate their competence, knowledge and expertise in managing such facilities effectively. Therefore, it is prayed to dismiss the said writ petitions.
Submissions of the Petitioner:
15. Mr.Kishore Rai, learned senior counsel appearing on behalf of the petitioner would submit that the rejection of the bid without assigning any reason as per clause 8.1 of RFP and the frivolous grounds raised to cancel the bid vide the order dated 08.07.2024 is violative of Article 14 of the Constitution of India and against the principles of natural justice as held by the Hon'ble Supreme Court in Mihan India Ltd., v. GMR Airports Ltd., 1 and that clause No.XXV (ii) requires notice to short listed bidders. As regards the other abattoirs which are lesser in extent of area and capacity are procuring more than the MAF at Chengincherla resulting in reconsideration of tenders is contrary to their own contention in W.P.No.27046 of 2023 stating that the decision of leasing out of MAF, Chengicherla was taken after detailed examination of previous bids, market conditions, international export scenarious, existing lease rentals and so on 1 AIR 2022 SC 2745 17 and that the tenders cannot be cancelled after opening the price bid and more so on flimsy excuses. He would further submit that such opening of the financial bid has affected the rights of the petitioner and suffers from arbitrariness and the same could not have been rejected as held in Bharat Hotels Limited, New Delhi v. State of Haryana and another 2.
16. Learned senior counsel further contends on the issue of limiting interference of judiciary in tender matters stating that the State has right to decide whether to enter into a contract or not citing State of Jharkhand and others v. CWE- SOMA Consortium 3 finds no relevance because in the said case there was no pleading of malafide exercise of power or arbitrariness against the Tender Committee. He would further submit that the decision of respondent No.2 to cancel the tender suffers from arbitrariness and is malafide exercise of power as it was politically motivated. He would further submit that the interference of Court is justified as per the finding of the Apex Court in M/s.Michigan Rubber(I) Ltd vs State Of Karnataka & Ors 4.
2 2009 (1) RCR (Civil) 398 3 (2016) 14 SCC 172 4 (2012) 8 SCC 216 18
17. In support of his contentions, learned counsel for the petitioner has also relied on the following judgments:
(i) In Subodh Kumar Singh Rathour v. The Chief Executive Officer and others 5, the Hon'ble Supreme Court held as follows:
"126. The sanctity of public tenders lies in their role in upholding the principles of equal opportunity and fairness. Once a contract has come into existence through a valid tendering process, its termination must adhere strictly to the terms of the contract, with the executive powers to be exercised only in exceptional cases by the public authorities and that too in loathe. The courts are duty bound to zealously protect the sanctity of any tender that has been duly conducted and concluded by ensuring that the larger public interest of upholding bindingness of contracts are not sidelined by a capricious or arbitrary exercise of power by the State. It is the duty of the courts to interfere in contractual matters that have fallen prey to an arbitrary action of the authorities in the guise of technical faults, policy change or public interest etc.
(ii) In Nagar Nigam, Meerut v. Al Faheem Meat Exports Pvt.Ltd., 6 the Hon'ble Supreme Court held as follows:
"We have no doubt that in rare and exceptional cases, having regard to the nature of the trade or 5 (2024) INSC 486 6 (2006) 13 SCC 382 19 largesse or for some other good reason, a contract may have to be granted by private negotiation, but normally that should not be done as it shakes the public confidence. The law is well-settled that contracts by the State, its corporations, instrumentalities and agencies must be normally granted through public auction/public tender by inviting tenders from eligible persons and the notification of the public-auction or inviting tenders should be advertised in well known dailies having wide circulation in the locality with all relevant details such as date, time and place of auction, subject-matter of auction, technical specifications, estimated cost, earnest money Deposit, etc. The award of Government contracts through public-auction/public tender is to ensure transparency in the public procurement, to maximise economy and efficiency in Government procurement, to promote healthy competition among the tenderers, to provide for fair and equitable treatment of all tenderers, and to eliminate irregularities, interference and corrupt practices by the authorities concerned. This is required by Article 14 of the Constitution.
However, in rare and exceptional cases, for instance during natural calamities and emergencies declared by the Government; where the procurement is possible from a single source only; where the supplier or contractor has exclusive rights in respect of the goods or services and no reasonable alternative or substitute exists; where the auction was held on several dates but there were no bidders or the bids offered were too low, etc., this normal rule may be departed from and such 20 contracts may be awarded through 'private negotiations'. (See Ram and Shyam Company vs. State of Haryana and Others, AIR 1985 SC 1147)."
(iii) In Mihan India Ltd., v. GMR Airports Ltd., and others 7, the Hon'ble Supreme Court held as follows:
"46. In view of the above, it is apparent that in government contracts, if granted by the government bodies, it is expected to uphold fairness, equality and rule of law while dealing with contractual matters. Right to equality under Article 14 of the Constitution of India abhors arbitrariness. The transparent bidding process is favoured by the Court to ensure that constitutional requirements are satisfied. It is said that the constitutional guarantee as provided under Article 14 of the Constitution of India demands the State to act in a fair and reasonable manner unless public interest demands otherwise. It is expedient that the degree of compromise of any private legitimate interest must correspond proportionately to the public interest. It is specified that using a ground of public interest or loss to the treasury cannot undo the work already undertaken by the authority."
(iv) In Bharat Hotels Ltd., v. State of Haryana and others 8, the High Court of Punjab and Haryana held as follows: 7
MANU/SC/0607/2022 8 MANU/PH/2117/2008 21 "16. It was not open to the respondents to open the financial bid of the petitioner as M/s. Banarsi Das Chandiwala has not submitted even the earnest money.
In the absence of proof of payment of the earnest money, Part-II of the financial bid of the petitioner could not have been opened. Such opening of the financial bid has affected the rights of the petitioner. Such decision suffers from arbitrariness and lacks bond-fide. Therefore, we are of the opinion that once the financial bid of the petitioner has been opened, the same could not have been rejected on account of the fact that there is no competition."
(v) In an unreported judgment of this Court in W.P.Nos.6595 of 2020 and batch, this Court held as follows:
"Thus, the decision of the Tendering Authority in cancelling the tenders in the present case must not only be tested by application of principle of reasonableness, but must be free from arbitrariness not affected by bias or actuated by mala fides. This Court under Article 226 of the Constitution of India, while exercising its power of judicial review can scrutinize the award of contracts by the Government or its Agencies."
(vi) In N.G. Projects Ltd. v. Vinod Kumar Jain 9 the Hon'ble Supreme Court held as follows:
"16. In Galaxy Transport Agencies v. New J.K. Roadways [Galaxy Transport Agencies v. New J.K. 9 (2022) 6 SCC 127 : 2022 SCC OnLine SC 336 at page 141 22 Roadways, (2021) 16 SCC 808 : 2020 SCC OnLine SC 1035] , a three-Judge Bench again reiterated that the authority that authors the tender document is the best person to understand and appreciate its requirements, and thus, its interpretation should not be second-guessed by a court in judicial review proceedings. It was observed as thus : (SCC paras 17-18 & 20) "17. In accordance with these judgments and noting that the interpretation of the tendering authority in this case cannot be said to be a perverse one, the Division Bench [New JK Roadways v. UT of J&K, 2020 SCC OnLine J&K 733] ought not to have interfered with it by giving its own interpretation and not giving proper credence to the word "both" appearing in Condition No. 31 of the NIT. For this reason, the Division Bench's conclusion that JK Roadways was wrongly declared to be ineligible, is set aside.
18. Insofar as Condition No. 27 of the NIT prescribing work experience of at least 5 years of not less than the value of Rs 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the Appellant before us.
Without therefore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a particular tender, particularly when it comes to technical evaluation, is not to be second-guessed by a writ court. Thus, in Jagdish Mandal v. State of Orissa [Jagdish Mandal 23 v. State of Orissa, (2007) 14 SCC 517] , this Court noted :
(SCC pp. 531-32, para 22) '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 thousands 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 24 or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.'
20. This being the case, we are unable to fathom how the Division Bench, on its own appraisal, arrived at the conclusion that the Appellant held work experience of only 1 year, substituting the appraisal of the expert four-member Tender Opening Committee with its own."
17. Therefore, the position of law with regard to the interpretation of terms of the contract is that the question as to whether a term of the contract is essential or not is to be viewed from the perspective of the employer and by the employer. Applying the aforesaid position of law to the present case, it has been the contention of Respondent 1 that the format for bank guarantee was not followed strictly by the State and that the relaxation given was not uniform, in that Respondent 1 was singled out. The said contention has found favour with the courts below."
(vii) In Michigan Rubber (India) Ltd. v. State of Karnataka 10 the Hon'ble Supreme Court held as follows:
"16. The further contention advanced in Assn. of Registration Plates case [(2005) 1 SCC 679] was that creation of monopoly in favour of a few parties having connection with foreign concerns is violative of the 10 (2012) 8 SCC 216 : 2012 SCC OnLine SC 614 at page 225 25 fundamental right of trade under Article 19(1)(g) and discriminatory under Article 14 of the Constitution. It was also pointed out that in the name of implementing the amended Rule 50 of the Motor Vehicles Rules, 1989, the States are imposing conditions in the tender that would take away the existing rights of the manufacturers of plates in India.
(viii) In Din Bandhu Dass vs Delhi Technological University 11, the High Court of Delhi held as follows:
"15. A careful reading of sub-rule (xix) and (xx) of the GFR would show that the respondent No. 1 is certainly empowered and justified to reject the W.P.(C).5020 & 3110 of 2019 Page 6 of 9 bids if an effective competition is lacking. Lack of competition mentioned in sub-rule (xix) has been explained in sub-Rule (xx). It is submitted in sub- Rule (xx) that lack of competition will not be determined solely on the basis of number of bids. It is further stipulated that even when only one bid is submitted, the process can be considered valid, provided the three conditions mentioned in sub-Rule (xx) are satisfied. The said conditions mentioned as (a), (b) and (c) are; when the procurement is satisfactorily advertised and sufficient time is given for submission of the bids; the qualification criteria was not unduly restrictive and prices are reasonable in comparison to market values.
16. After examining the rule position, we are of the view that the present tender would be governed by the General Financial Rules, 2017, as is clear from reading para 8, 11 2019 DHC 2829 26 which we have extracted above. We thus reject the contention of respondent No. 2 is that the circular dated 4.2.2013, would apply to the present tender. The present tender will have to be examined in the light of Rule 173 of the GFR 2017.
17. What emerges from a reading of the rule in totality is, that there is no bar in accepting a tender even when there is only one bidder. In fact, the Rule itself states that the lack of competition will not be determined only by the number of bids. Therefore, the contention of the respondent that minimum of three bids are required for the tender to be valid is certainly not borne out from Rule 173. The Rule, thus, postulates that even one bid would be sufficient to proceed with the tender, of course, with certain conditions being satisfied which are mentioned in the Rule itself. In the present case, it is not even the case of the respondent that the three conditions mentioned in sub-Rule (xx) have not been satisfied by the petitioners. Thus, the bid of the W.P.(C).5020 & 3110 of 2019 Page 7 of 9 petitioners, even though was a single bid, is valid and there is no reason why the same should not be accepted. The respondents cannot be permitted to flout their own Rules.
18. There is no quarrel with the proposition that in judicial review, interference with the tender matters should be minimal. It is, however, equally well settled that even in tender matters, the decision making process can be examined by the Court and in case it is found that there is arbitrariness or malafide in the decision making process or that the tender process is not as per the Rules, the interference would be justified. In the present case, we find 27 that the action of the respondent is in violation of its own Rule 173. In addition, we also find that there is malice in law inasmuch as for the past 25 years, the respondent has not successful in any tender process and the present contractor is continuing. There is substance in the contention of the learned senior counsel for the appellants that Respondent No. 1 wants to favour the present contractor and therefore, tenders have been invited a number of times but have been cancelled for one reason or the other. The reason for which the present invitation of tender was cancelled is completely perverse and against Rule 173 and this action of the Respondent No. 1 is only a pointer to the fact that the effort was again to help respondent No. 2. We are, thus, of the opinion that the facts and circumstances of this case certainly warrant an interference by this Court in judicial review. Thus the judgment relied upon by the Respondent would not come to its aid owing to the special facts and circumstances of this case.
18. Rule 173 of General Financial Rules, 2017 reads as follows:
"Transparency, competition, fairness and elimination of arbitrariness in the procurement process: All Government purchases should be made in a transparent, competitive and fair manner, to secure best value for money. This will also enable the prospective bidders to formulate and send their competitive bids with confidence. Some of the measures for ensuring the above are as follows:- (i) the text of the bidding document 28 should be self-contained and comprehensive without any ambiguities. All essential information, which a bidder needs for sending responsive bid, should be clearly spelt out in the bidding document in simple language. The condition of prior turnover and prior experience may be relaxed for Startups (as defined by Department of Industrial Policy and Promotion) subject to meeting of quality & technical specifications and making suitable provisions in the bidding document. The bidding document should contain, inter alia. (a) Description and Specifications of goods including the nature, quantity, time and place or places of delivery. (b) the criteria for eligibility and qualifications to be met by the bidders such as minimum level of experience, past performance, technical capability, manufacturing facilities and financial position etc or limitation for participation of the bidders, if any. (c) eligibility criteria for goods indicating any legal restrictions or conditions about the origin of goods etc which may required to be met by the successful bidder. (d) the procedure as well as date, time and place for sending the bids. (e) date, time and place of opening of the bid. (e) Criteria for evaluation of bids (f) special terms affecting performance, if any. (g) Essential terms of the procurement contract (h) Bidding Documents should include a clause that "if a firm quotes NIL charges/ consideration, the bid shall be treated as unresponsive and will not be considered". (ii) Any other information which the procuring entity considers necessary for the bidders to submit their bids. (iii) Modification to bidding document: (a) In case any modification is made to the 29 bidding document or any clarification is issued which materially affects the terms contained in the bidding document, the procuring entity shall publish or communicate such notification or clarification in the same manner as the publication or communication of the initial bidding document was made. (b) In case a clarification or modification is issued to the bidding document, the procuring entity shall, before the last date for submission of bids, extend such time limit, if, in its opinion more time is required by bidders to take into account the clarification or modification, as the case may be, while submitting their bids. (c) Any bidder who has submitted his bid in response to the original invitation shall have the opportunity to modify or resubmit it, as the case may be, or withdraw such bid in case the modification to bidding document materially affect the essential terms of the procurement, within the period initially allotted or such extended time as may be allowed for submission of bids, after the modifications are made to the bidding document by the procuring entity: Provided that the bid last submitted or the bid as modified by the bidder shall be considered for evaluation (iv) Suitable provision should be kept in the bidding document to enable a bidder to question the bidding conditions, bidding process and/ or rejection of its bid. The reasons for rejecting a tender or non-issuing a tender document to a prospective bidder must be disclosed where enquiries are made by the bidder. (v) Suitable provision for settlement of disputes, if any, emanating from the resultant contract, should be kept in the bidding document. (vi) The bidding document 30 should indicate clearly that the resultant contract will be interpreted under Indian Laws. (vii) The bidders should be given reasonable time to prepare and send their bids.
(viii) The bids should be opened in public and authorised representatives of the bidders should be permitted to attend the bid opening. (ix) The specifications of the required goods should be clearly stated without any ambiguity so that the prospective bidders can send meaningful bids. In order to attract sufficient number of bidders, the specification should be broad based to the extent feasible (x) Pre-bid conference: In case of turnkey contract(s) or contract(s) of special nature for procurement of sophisticated and costly equipment or wherever felt necessary, a suitable provision is to be kept in the bidding documents for one or more rounds of pre-bid conference for clarifying issues and clearing doubts, if any, about the specifications and other allied technical details of the plant, equipment and machinery etc. projected in the bidding document. The date, time and place of pre-bid conference should be indicated in the bidding document. This date should be sufficiently ahead of bid opening date. The records of such conference shall be intimated to all bidders and, shall also be exhibited on the website(s) where tender was published. (xi) Criteria for determining responsiveness are to be taken into account for evaluating the bids such as: (a) time of delivery. (b) Performance/ efficiency/ environmental characteristics. (c) the terms of payment and of guarantees in respect of the subject matter of procurement (d) price. (e) cost of operating, maintaining 31 and repairing etc. (xii) Bids received should be evaluated in terms of the conditions already incorporated in the bidding documents; No new condition which was not incorporated in the bidding documents should be brought in for evaluation of the bids. Determination of bid's responsiveness should be based on the contents of the bid itself without recourse to extrinsic evidence. (xiii) Bidders should not be permitted to alter or modify their bids after expiry of the deadline for receipt of bids. (xiv) Negotiation with bidders after bid opening must be severely discouraged. However, in exceptional circumstances where price negotiation against an ad-hoc procurement is necessary due to some unavoidable circumstances, the same may be resorted to only with the lowest evaluated responsive bidder. (xv) In the Rate Contract system, where a number of firms are brought on Rate Contract for the same item, negotiation as well as counter offering of rates are permitted to the bidders and for this purpose special permission has been given to the Directorate General of Supplies and Disposals (DGS&D). (xvi) Contract should ordinarily be awarded to the lowest evaluated bidder whose bid has been found to be responsive and who is eligible and qualified to perform the contract satisfactorily as per the terms and conditions incorporated in the corresponding bidding document.
However, where the lowest acceptable bidder against ad- hoc requirement is not in a position to supply the full quantity required, the remaining quantity, as far as possible, be ordered from the next higher responsive bidder at the rates offered by the lowest responsive 32 bidder. (xvii) Procurement of Energy Efficient Electrical Appliances: Ministries/ Departments while procuring electrical appliances notified by Department of Expenditure shall ensure that they carry the notified threshold or higher Star Rating of Bureau of Energy Efficiency (BEE). (xviii) The name of the successful bidder awarded the contract should be mentioned in the CPPP, Ministries or Departments website and their notice board or bulletin. (xix) Rejection of all Bids is justified when
a)effective competition is lacking. b)all Bids and Proposals are not substantially responsive to the requirements of the Procurement Documents. c)the Bids'/Proposals' prices are substantially higher that the updated cost estimate or available budget; or d. none of the technical Proposals meets the minimum technical qualifying score. (xx) Lack of competition in rule 173(xix) shall not be determined solely on the basis of the number of Bidders. Even when only one Bid is submitted, the process may be considered valid provided following conditions are satisfied: a)the procurement was satisfactorily advertised and sufficient time was given for submission of bids. B) the qualification criteria were not unduly restrictive; and c) prices are reasonable in comparison to market values (xxi) When a limited or open tender results in only one effective offer, it shall be treated as a single tender contract. (xxii) In case a purchase Committee is constituted to purchase or recommend the procurement, no member of the purchase Committee should be reporting directly to any other 33 member of such Committee in case estimated value of procurement exceeds Rs. 25 lakhs."
Submissions of Respondents:
19. The Additional Advocate General appearing on behalf of the respondents while reiterating and justifying the stand taken by the respondent authorities refers to the counter affidavit of respondent No.2 and would submit that the technical bid of the petitioner is found to be qualified and the same was informed to the petitioner vide letter dated 04.10.2023 and also requested the petitioner to attend the opening of financial bids on 09.10.2023 at 04.00 PM in the office of respondent No.2. It is further stated that on 09.10.2023, the Financial Bid Committee has opened the financial bids for awarding MAF, Chengicherla Project and the minutes of the Financial Bid Committee have been forwarded to the Government for further orders and after receipt of the orders from the Government, further action shall be initiated by the Office of respondent No.2. The same was communicated to respondent No.2 vide letter dated 09.10.2023. The amount quoted by the petitioner was Rs.2,60,77,777/- and thereafter, the petitioner has addressed letters dated 15.04.2024 and 05.06.2024 to respondent Nos.1 and 2 to expedite the process of concluding the agreement which would categorically state that 34 respondent No.2 did not execute the license agreement as such the petitioner did not accrue any vested right to claim award of the tender to himself. It is also stated that the policy guidelines framed by Telangana Consultants Private Limited do not stop respondent No.2 from revising the policy guidelines and that the bidding entity shall have O&M experience of minimum 12 years in previous 25 years has led to only the petitioner being technically qualified and to further submit his price bid. It is further submitted that mere payment of bid security of Rs.50 lakhs does not confer any right over the petitioner for the award of work.
20. Learned Additional Advocate General, in support of his contentions, relied on the following judgments.
(i) State of Jharkhand & others v. CWE-SOMA Consortium 12 wherein the Hon'ble Supreme Court held as follows:
"14....
In terms of the above Clauses 24 of NIT and Clause 32.1 of SBD, though the Government has right to cancel the tender without assigning any reason, the appellant state did assign a cogent and acceptable reason of lack of adequate competition to cancel the tender and invite a 12 (2016) 14 SCC 172 35 fresh tender. The High Court, in our view, did not keep in view the above clauses and right of the Government to cancel the tender.
15. The state derives its power to enter into contract under article 298 of the Constitution of India and has the right to decide whether to enter into a contract with a person or not subject only to the requirement of reasonableness under article 14 of the Constitution of India. In the case in hand, in view of lack of real competition, the state found it advisable not to proceed with the tender with only one. responsive bid available before it. When there was only one tenderer, in order to make the tender more competitive, the Tender Committee decided to cancel the tender and invite a fresh tender and the decision of the appellant did not suffer from any arbitrariness or unreasonableness."
(ii) In R.K. Industries (Unit-II) LLP v. H.R. Commercials (P) Ltd., 13 the Hon'ble Supreme Court held as follows:
"73. Further, in CWE-SOMA Consortium [State of Jharkhand v. CWE-SOMA Consortium, (2016) 14 SCC 172] , this Court had held as under : (SCC p. 181, para
23) "23. The right to refuse the lowest or any other tender is always available to the Government. In the case in hand, the respondent has neither pleaded nor established mala fide exercise of power by the appellant.
While so, the decision of the Tender Committee ought not 13 (2024) 4 SCC 166 : (2022) 234 Comp Cas 638 : 2022 SCC OnLine SC 1124 at page 204 36 to have been interfered with by the High Court. In our considered view, the High Court erred inState of Jharkhand v. CWE-SOMA Consortium [State of Jharkhand v. CWE-SOMA Consortium, 2015 SCC OnLine Jhar 1415] in sitting in appeal over the decision of the appellant to cancel the tender and float a fresh tender. Equally, the High Court was not right in going into the financial implication of a fresh tender."
(iii) In PKF Sridhar and Santhanam Versus Airports Economic Regulatory Authority of India 14, the Hon'ble Supreme Court observed and held as follows:
11. Mr. Balasubramanian submits that the aforesaid stipulation in the RFP vests the lowest bidder with the right to be awarded the contract, and it was no longer open to the respondent to withdraw from the tendering process and re-tender the same. We have serious difficulty in accepting this submission of Mr. Balasubramanian. When an authority invites a tender, it does not make an offer. It merely invites offers. The issuance of a tender is nothing more than an invitation to offer. The bidders make their offers in response to the tender (NIT), and the mere making of the offer in response to the tender, or emergence as the highest/lowest qualified bidder (as the case may be), does not vest any enforceable right on such a bidder to be awarded the contract. The only right that such a bidder - and for that 14 2022 SCC OnLine Del 122 37 matter, all bidders have, is that their bids be considered in a reasonable and transparent manner, free from discrimination, arbitrariness and malafides.
12. The tender document is to be read as a whole, and no clause in it can be read in isolation. The respondent has expressly reserved to itself the right not to accept any bid, and the right to reject the same without assigning any reason therefor. Even if the clause relied upon by Mr. Balasubramanian were to be read literally, all that it provides is that the lowest qualified bidder "shall be considered" to be selected. It does not go so far as to state that the lowest bidder would stand selected.
The respondent reserved the right of consideration of the lowest qualified bidder, for selection. When read in conjunction with the clause quoted in paragraph 8 above, and also keeping in mind the principle that it is for the tender-issuing authority to interpret the terms of the tender, we cannot agree with the submission of Mr. Balasubramanian, that the respondent is bound to accept the rates quoted by the L-1 bidder.
14. No doubt, the tender-inviting authority cannot act arbitrarily or whimsically, or out of mala fides in the matter of awarding or cancelling the tendering process. Even the clause which stipulates that they may not assign reasons for not accepting any bid, or rejecting the bids, does not mean that they should not have any valid reasons to justify their conduct.
38
(iv) In Shminit Utsch India (P) Ltd., v. W.B.Transport Infrastructure Development Corporation Ltd., the Hon'ble Supreme Court held as follows:
"64. It is true that the State or its tendering authority is bound to give effect to essential conditions of eligibility stated in a tender document and is not entitled to waive such conditions but that does not take away its administrative discretion to cancel the entire tender process in public interest provided such action is not actuated with ulterior motive or is otherwise not vitiated by any vice of arbitrariness or irrationality or in violation of some statutory provisions. It is always open to the State to give effect to new policy which it wished to pursue keeping in view 'overriding public interest' and subject to principles of Wednesbury reasonableness."
Details of Tender Notification And Operational Project:
21. The tender notification dated 01.09.2023 vide No.684/T2/MAF/TSSGDCFL/2021, was issued for the work of Redevelopment of Modern Abattoir Facility (MAF) at Chengicherla on 'License Basis' under 'Redevelop, Operate, Maintain & Transfer' (ROMT) Format in Public Private Partnership (PPP) Mode and the tender is a Request for Proposal (RFP) inviting bids from reputed firms with the required financial and technical capabilities on license basis. The said MAF is spread in an extent of about Ac.35-00 gts., which needs to be 39 redeveloped with additional facilities with latest technologies with an estimated project cost of Rs.25 Crores to meet the present day requirements and operate the same for the specifications of RFP.
22. The relevant dates specified in the tender notification are as follows:
(i) RFP document can be downloaded from 03.09.2023 to 25.09.2023 from the Telangana State Government eProcurement Portal.
(ii) Pre-bid meeting to be held on 06.09.2023 at 11.00 hrs in the Office of respondent No.2.
(iii) Bidders shall upload their bids in the website on or before 26.09.2023 before 16.00 hrs.
(iv) The hard copies of technical bid shall be submitted on or before 29.09.2023 before 15.00 hrs in the Office of respondent No.2.
Project brief background and Bid Summary:
23. The Government of Telangana has initiated numerous measures to increase the production of Meat and Poultry related products for economical upliftment and employment generation of rural Telangana State and in order to augment the income of farmers and rural households, Telangana State Sheep and Goat 40 Development Cooperative Federation Limited (TSSGDCFL) came into operation and a policy was announced for the development of Fisheries and Sheep rearing. In order to achieve the goal, the authorities felt it necessary for construction and maintenance of 'Modern Slaughter House' with waste management system. In order to achieve this objective the then Government of Andhra Pradesh, Animal Husbandry Department, Andhra Pradesh Meat Development Corporation Ltd., established 'Modern Abattoir Facility' (MAF) at Chengicherla, Hyderabad in the year 2003. The project was established with a plant capacity of slaughtering 800 large animals, 5000 sheep and goat. The said MAF is located at Sy.No.33/4, Chengicherla Village, Medipally Mandal, Medchal -
Malkajgiri District.
24. Earlier the Operation and Maintenance (O&M) of the project was carried out by Andhra Pradesh Meat Development Corporation Limited upto 2008 and subsequently O&M and MAF was outsourced to an 'O&M Agency', to one M/s.Mohammed Saleem (the petitioner herein) in the year 2008 on 'Competitive Bidding' and it is operational for the last 14 years on 'Annual Lease' basis. After the formation of Telangana State, the MAF was moved to and under the control of newly formed TSSGDCFL. In that view of the matter for redevelopment of MAF, 41 the TSSGDCFL is carrying out the bidding process for selection of a private entity (Licensee) to whom the project shall be awarded. The scope of the work will include design, redevelop, finance, O&M and transfer of the project facilities to TSSGDCFL at the end of the license period. The indicative capital cost of the project is Rs.25 Crores, however, there is no restriction on higher investments based on the licensee's market assessment subject to applicable development controls and guidelines. In the said backdrop of these requirements, the authority invited RFP from eligible and interested parties/ Licensees/ investors/ operators of similar projects for redevelopment of the project on ROMT format under License basis in PPP mode for a period of 15 years initially which shall be extended for another 15 years based on the 'Performance Indicators' including redevelopment period.
25. In order to implement the project, the Government has appointed Telangana Project Consultants Private Limited (TPC) as the Project Advisor for the project structuring and bid process management for the selection of the licensee on the competitive bidding basis. The tender document prescribes the formats for bid submission; draft license agreement and Project Information Memorandum and also the procedure for participating in the 42 bid. One of the important condition in the said RFP is (xxii) Neither the Authority nor the project consultants shall be responsible for any costs or expenses or liabilities incurred by the Bidders in connection with the preparation and delivery of Bids, including costs and expenses related to the visits to the site. TSSGDCFL reserves all the rights to cancel, terminate, change or modify this procurement process and/or requirements of bidding stated in the RFP, at any time without assigning any reason or providing any notice and without accepting any liability for the same. It is also noted that the bidder whose bid is found most responsive to the requirements set out in the RFP would be selected as 'Preferred Bidder' for award of the Project and executing the License Agreement with the Authority. It is also clearly stated that TSSGDCFL reserves the right to accept or reject all or any of the bids without assigning any reason whatsoever and annul the bid process at any stage under intimation to the shortlisted bidders if any. The relevant clause xxv(ii) is extracted hereunder:
"Please note that the TSSGDCFL reserves the right to accept or reject all or any of the bids without assigning any reason whatsoever and annul the bid process at any stage under intimation to the shortlisted bidders if any."43
26. In the said tender conditions, a disclaimer clause has also been annexed where it is clarified that RFP is not an agreement and is neither an offer nor invitation by the Authority to the prospective Bidders or any other person. The purpose of the said RFP is to provide interested parties with information that may be useful to them in making their financial offers (Price Bids). It is also clarified that the Authority is bound to select a Bidder or to appoint the Preferred Bidder or Licensee, as the case may be, for the Project and the Authority reserves the right to reject all or any of the Bidders or Bids without assigning any reason whatsoever.
27. In the bid summary it is also clarified that O&M of the MAF was outsourced to an O&M Agency, M/s.Mohd.Saleem (the petitioner herein) in the year 2008 on competitive bidding basis and they are carrying out the O&M of the Project for the past 14 years on an Annual Lease basis. In one of the bid conditions, it is specified that the annual license fees shall be payable from the date of execution of the license agreement i.e., the 'license commencement date'. The ''Annual License Fee'' to be paid to the Grantor to be quoted over and above the 'Reserve Amount' of Rs.2.56 Crores for the 1st Year of License Period shall be the Bid Parameter. The 'Annual License Fee' shall be paid from 1st Year 44 to 15th Year / 30th Year of the License Period, incremented by 4.6% Per Annum, Year on Year basis. The 'Annual License Fee' shall be paid on Monthly basis in advance as per the terms stipulated in the RFP. The 'User Charges' for slaughtering and lairage are as per the clause 4.2.8 approved by GMC for their MAF in Hyderabad. The user charges along with trading and parking facilities may increase at 10% for every three (3) years basing on prevailing market conditions.
28. Clause 6.9 specifies 'Rejection of Bids' which is extracted hereunder for facility:
"6.9 REJECTION OF BIDS 6.9.1 The Authority reserves the right to accept or reject all or any of the Bids without assigning any reason whatsoever. It is not obligatory for the Authority to accept any Bid or to give any reasons for their decision.
6.9.2 The Authority reserves the right not to proceed with the Bidding Process at any time, without notice or liability, and to reject any Bid without assigning any reasons."
29. Clause 8 of the RFP deals with Award of Project/signing of Lease Agreement. The sub clauses 8.1 and 8.2 are extracted hereunder for the facility of ready reference: 45
8.1 AUTHORITY'S RIGHT TO REJECT ANY OR ALL BIDS The Authority reserves the right to accept or reject any bid, and to annul the bidding process and reject all bids, at any time prior to the award of License, without thereby incurring any liability to the affected Bidder or Bidders and /or any obligation to inform the affected Bidder or Bidders of the grounds for its action.
8.2 ISSUE OF LOI AFTER EVALUATION OF THE BIDS AND APPROVAL OF THE AUTHORITY Upon completion of the Bid evaluation process, acceptance of the Bid and intention of award of the Project/ License would be conveyed by the Authority to the Preferred Bidder, who satisfies all other compliance requirements. The Letter of Intent (LoI) would be issued by the Authority to the Preferred Bidder awarding the project subject to the fulfilment of the preconditions in terms of the RFP and as more particularly to be set forth in the LOI.
30. Clause 8.5 refers to Signing of License Agreement which is to be completed within 10 days of the issuance of LoI. In the Miscellaneous clauses i.e., in clause 11.2, it is stated that the authority in its sole discretion and without incurring any obligation or liability, reserves the right, at any time, to; (a) suspend and/ or cancel the Bidding Process and/ or amend and/ or supplement the Bidding Process or modify the dates or 46 other terms and conditions relating thereto; (b) consult with any Bidder in order to receive clarification or further information; (c) retain any information and/ or evidence submitted to the Authority by, on behalf of, and/ or in relation to any Bidder; and/ or (d) independently verify, disqualify, reject and/or accept any and all submissions or other information and/or evidence submitted by or on behalf of any Bidder. The bidders also need to submit a letter of undertaking for technical bid and a format for letter of undertaking for technical bid has also been annexed along with RFP. A copy of draft license agreement has also been enclosed.
Analysis and Conclusion:
31. In the case on hand, it is to be noted that vide letter dated 04.10.2023, the petitioner was informed that technical bid submitted by the petitioner for the redevelopment of MAF has passed/qualified the eligibility criteria of RFP and requested to attend to opening of financial bids. On 09.10.2023, the Financial Bid Committee opened the financial bids and forwarded the minutes to the Government for further orders and after receipt of the orders from the Government, necessary action will be initiated. It is pertinent to note that though the price bids has been opened, no LoI was issued and no license agreement has 47 been signed between the petitioner and respondent No.2 as on date. As such, no rights have been accrued to the petitioner for considering their offer. That apart, originally the lease agreement between the petitioner and respondent No.2 was entered on 21.07.2008 and was valid for 10 years. On 28.06.2018, a letter was issued by the Managing Director, respondent No.2 permitting the petitioner to continue his operation, which was decided in the 11th Board meeting held on 21.06.2018, so as to avoid the revenue loss to respondent No.2. The said extension period did not confer any rights on the petitioner in claiming any equities in the tender process as it was only a temporary arrangement and confined until passing of further orders. It is also pertinent to note that the letter addressed by General Administration (Vigilance and Enforcement), Animal Husbandry and Fisheries Department vide Alert No.11 dated 26.10.2021. In the said note, it was recommended to issue necessary instructions to incrase the lease amount from the present lessee, considering the market value of the land in which the facility is located and further collect the same from the present lessee from the date of expiry of the lease.
32. In the impugned letter dated 08.07.2024, the reasons for cancellation of the RFP were clarified that as per the tender 48 conditions, one of the Tender Conditions is that the bidding entity shall have O&M experience for a minimum period of 12 years in the last 25 years for any MAF for both cattle and sheep with minimum project cost of Rs.25 Crores, and the said condition appears to be onerous due to which several other bidders appears to have not participated in the tender as such there was no competition. Challenging the said decision, W.P.Nos.25466, 27046, 27104 and 34350 of 2023 have been filed. The respondent authorities have cancelled the entire tender notification as per clause xxv(ii) and clause 8.1 of the tender notification, which clauses have already been agreed by the petitioner. In view of the same, petitioner, at this point of time, cannot state that no notice has been issued to him. The said submission of the petitioner is unsustainable.
33. Since, no LoI was issued by respondent No.2 and also in the absence of License Agreement, respondent No.2 authority has taken a decision to cancel the tender and re-issue fresh tender notification by reviewing the tender conditions so as to ensure adequate competition in the interest of the State Exchequer. In view of the same the tender No.684/T2/MAF/ TSSGDCFL/2021 dated 01.09.2023 was cancelled. 49
34. It is to be noted that the condition stipulated in clause xxv(ii) of RFP viz., "please note that the TSSGDCFL reserves the right to accept or reject all or any bids without assigning any reason whatsoever and annul the bid process at any stage, under intimation to the shortlisted bidders", if any is clear and there is no ambiguity. Once the bidders have accepted to the terms of the RFP, and more particularly when the petitioner was aware with respect to the terms and conditions as specified in the RFP at the time of uploading the bid documents, petitioner is bound by those conditions and later cannot turn back and question the tender process. It is also to be noted that unless the proposal is accepted by respondent authorities, the contract is not binding on the respondents and the matter is only referred to the Government for further course of action and the acceptance is also not notified by the respondent authorities.
35. In the case of Delhi Development Authority v. Ravindra Mohan Aggarwal 15 it is stated by the Hon'ble Supreme Court that to make a binding contract, not only should the proposal be accepted, but the acceptance should be notified. In the case on hand, there is no acceptance as on date by the respondent authorities and unless the acceptance is complete 15 (1999) 3 SCC 172 50 and communicated/notified to the petitioner, it cannot be said that the project is allotted to the petitioner.
36. In the case of Kuldip Gandotra v. Union of India 16 a Division Bench of Delhi High Court held that acceptance is not complete and has no legal effect till it is communicated and mere intention to accept an offer does not create a valid and a binding contract.
37. In the case on hand, the contract is not concluded and no formal agreement is entered into between the petitioner and the respondent authorities. Moreover, the submission of tender or bid is in the nature of proposal / offer and unless the same is accepted by the competent authority and communicated to the tenderer or bidder, the contract cannot be said to be complete between the parties and the condition stipulated in Clause 11.2 of RFP that the authority, in its sole discretion can suspend and/or cancel the bidding process and/or amend and/or supplement the bidding process or modify the dates or other terms and conditions relating thereto has already been accepted by the petitioner at the time of participating in the tender process and till date no letter of acceptance is given to the petitioner. 16
(2005) 125 DLT 5 (DB) 51 Analysis on the cases relied on by the petitioner:
38. In Subodh Kumar Sing Rathour v. The Chief Executie Officer and others on which the petitioner has placed reliance, it is stated that once a contract has come into existence through a valid tendering process, its termination must adhere strictly to the terms of the contract, with executive powers to be exercised only in exceptional cases by the public authorities and that too in loathe. In the instant case, the contract has not been culminated into an agreement. As such the judgment relied on by the petitioner does not come to his aide.
39. In Nigar Nagam, Meerut v. Al Faheem Met Exports Pvt. Ltd., the Hon'ble Supreme Court held that law is well settled that contracts by the State, its corporations, instrumentalities and agencies must be normally granted through public auction/public tender by inviting tenders from eligible persons and the notification should be advertised in well known dailies. However, only in rare and exceptional cases, the contracts may be awarded through private negotiations. In the case on hand, as the lease period granted to the petitioner was expired, and by way of a temporary arrangement, the respondent authorities have extended the lease period which has already 52 been granted, until passing of further orders. Thereafter, in order to given an opportunity to all the interested and eligible persons, the said tender notification has been given and has also been notified in newspapers. The judgment relied on by the petitioner infact supports the case of respondents.
40. In the case of Mihan India Ltd., v. GMR Airports Ltd.; the Hon'ble Supreme Court held that the said case was applicable only in cases wherein the contracts have already been granted by the Government. In the case on hand, no such contract has been granted in favour of the petitioner and no contract has been come into existence as on the date of cancellation of the tender notification. In view of the same, the facts of the said case are not applicable to the present case.
41. The judgments relied on by the petitioner in Bharat Hotels Ltd., v. State of Haryana and Michigan Rubber (India) Ltd., v. State of Karnataka., were of no avail to the petitioner.
42. In the case of N.G.Projects Ltd., v. Vinod Kumar Jain the Hon'ble Supreme Court held that if the decision relating to award of contract is bonafide and is in public interest, Courts 53 will not interfere, in exercise of power of judicial review. This judgment relied on by the petitioner is also in favour of the respondents.
43. In Din Bandhu Dass v. Delhi Technological University, the High Court of Delhi observed that the tender has to be examined in the light of Rule 173 of General Financial Rules, 2017. The said Rule stipulates that there is no bar in accepting a tender even when there is only one bidder. In the present case on hand, the tender notification was issued in two newspapers and tender has also been notified in e-procurement site and certain objections were raised by respondent authorities with regard to six bidders. It is pertinent to note that issuance of tender notification itself signifies that respondent authority do not want to favour any bidder. In the present case, tenders were called for the first time after the expiry of lease period. In view of the same, the judgment relied on by the petitioner do not come to the aide of the petitioner owing to the facts and circumstances of the case. It is also to be noted that RFP merely invites an offer and the petitioner having signed price bid and letter, as per Appendix C1 is bound by all the terms and condition of RFP document.
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44. In the format for price bid and letter as per Appendix C1, the condition Nos.1, 2 and 5 viz., (1) with reference to your RFP document, we, having examined the bidding documents and understood their contents, hereby submit our bid for the aforesaid project. The bid is unconditional and unqualified. (2) We acknowledge the right of the Authority to reject our bid without assigning any reason or otherwise and hereby waive, to the fullest extent permitted by applicable law, our right to challenge the same on any account whatsoever. And (5) We agree to undertake to abide by all the terms and conditions of the RFP document. The petitioner having given letter to respondent No.2 stating that he would agree and undertake to abide all the terms and conditions of RFP cannot now turn back and question the rejection of the tender notification.
45. In such view of the matter and considering all the set of facts and circumstances of the case and in view of the preceding analysis and judicial pronouncements, this Court deems it appropriate that there no arbitrariness or malafide on the part of the tendering authorities with regard to cancellation of tender process. However, the said cancellation does not preclude the petitioner as well as other interested parties to 55 participate in the fresh tender notification that may be floated in the near future.
46. In view of the same, this Court do not find any reason to interfere with the tender process being revoked or cancelled. Accordingly, this writ petition in W.P.No.18543 of 2024 is devoid of merits and stands dismissed.
47. As far as W.P.Nos.25466, 27046, 27104 and 34350 of 2023 which are filed to quash the condition stipulated under Clause 4.5.8 of RFP and to direct respondent No.2 to allow even 'Consortiums' to participate in the bidding process are concerned, the respondent authorities in the counter affidavit filed in W.P.No.18543 of 2024 itself admitted that the condition imposed in clause 4.5.8 that bidders are required to have an "O&M" experience of 12 years in the last 25 years is an onerous condition as many of the bidders could not be able to participate in the tender due to imposition of said condition, as such the respondent authorities decided to cancel the tender notification dated 01.09.2023. Once, W.P.No.18543 of 2024 filed to declare the order dated 08.07.2024 canceling the tender notification dated 01.09.2023 is dismissed, neither the question of quashing the clause in the tender notification nor the question of allowing 56 the 'Consortiums' to participate in the bidding process arises. Accordingly, these writ petitions are disposed of granting liberty to the petitioners to participate in the new tender notification, if any, issued by the respondent authorities in the future.
48. In so far as W.P.Nos.27226 and 27225 of 2023, which are filed against the insisting on the submission of the tender bid mandatorily by online upload to the website is concerned, respondent authorities in their counter has already specified that e-procurement platforms offer several advantages making process more efficient, transparent and cost effective. It is also submitted that allowing offline application might create a perception of bias or favouritism. Once the tender notification itself is cancelled vide order dated 08.07.2024 and the same is confirmed in W.P.No.18543 of 2024, the question of accepting offline applications does not arise. It is made clear that interested parties are at liberty to participate in the new tender notification, if any, issued by the authorities and abide by the conditions thereof. Accordingly, these writ petitions are also disposed of.
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49. IN THE RESULT:
(i) W.P.No.18543 of 2024 is dismissed.
(ii) W.P.Nos.25466, 27046, 27104, 34350, 27225 and 27226 of 2023 are disposed of.
Miscellaneous applications, pending if any, shall stand closed. No order as to costs.
___________________________ N.V.SHRAVAN KUMAR.,J 03.10.2024 Note: L.R. copy to be marked.
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