M/S Sri Venkateswara Association vs The State Of Andhra Pradesh,
2021 Latest Caselaw 2711 AP

     IN THE HIGH COURT OF ANDHRA PRADESH : AMARAVATI

HON'BLE MR. JUSTICE ARUP KUMAR GOSWAMI, CHIEF JUSTICE
                                       &
             HON'BLE MR. JUSTICE NINALA JAYASURYA


                      WRIT APPEAL No. 86 of 2021
                      (Taken up through video conferencing)


M/s. Sri Venkateswara Association,
Rep.by its President K.Ravi Kumar
S/o. Venkat Rao, aged 44 years,
Diet Contractor, Government General
Hospital(RIMS), r/o.H.No.5-56B, II Lane,
Railpeta, Ongole, Prakasam District.                          .. Appellant

        Versus

The State of Andhra Pradesh,
Rep. by its Principal Secretary,
Health Medical & Family Welfare (M1)
Department, Secretariat Buildings,
Velagapudi, Guntur District
and others.                                                   .. Respondents

Counsel for the appellant : Ms. Kavitha Gottipati

Counsel for respondents : Mr. S.Appadhara Reddy Government Pleader

ORAL JUDGMENT Dt: 29.07.2021 (per Arup Kumar Goswami, CJ)

Heard Ms. Kavitha Gottipati, learned counsel for the appellant. Also

heard Mr.S.Appadhara Reddy, learned Government Pleader for Medical

Health and Family Welfare, appearing for the respondents.

2. This appeal is presented against the order dated 03.02.2021

passed in W.P.No.2157 of 2020, dismissing the writ petition filed by the

appellant and directing the respondents to re-initiate the entire tender

process.

3. The appellant/writ petitioner was awarded a contract for supply of

diet to in-patients and duty medical staff of Government General Hospital

(RIMS), Ongole under an agreement dated 01.02.2017 for a period of two

years. The appellant/writ petitioner was granted extension for another

year from 01.02.2019 to 01.02.2020.

4. On 10.01.2020, a notification was issued calling for tenders for

supply of diet to the aforesaid Hospital for two years, and the last date

for submission of the tenders was fixed as 24.01.2020. Opening of

tenders was also fixed on 24.01.2020 at 4.00 p.m.

5. The case of the appellant/writ petitioner is that the tender came to

be cancelled when there were only two eligible tenderers in the fray. It is

in that circumstance that the present writ petition came to be filed

challenging the order of the cancellation.

6. The learned single Judge held that the appropriate authority for

issuing tender notification would be the Chairperson of the District Level

Committee under G.O.Ms.No.325, Health, Medical and Family Welfare

(M1) Department, dated 01.11.2011 and in the present case, the

Superintendent of the Government Hospital had issued the tender

notification. The learned single Judge noted that though cancellation

order dated 24.01.2020 was passed on account of non-submission of

various documents, no details of the documents had been indicated.

7. In the counter-affidavit that was filed by respondent No.4 before

the learned single Judge, it was averred that tender notification was

issued with the prior approval of the Chairman/Joint Collector-I, District

Diet Management Committee (for short 'DDMC') in terms of

G.O.Ms.No.325 dated 01.11.2011 and, therefore, there was no infirmity

with the issuance of the tender notification. It is further pleaded that the

DDMC members evaluated the tender applications and after discussions

with the DDMC members, the tender was cancelled by the Chairman/Joint

Collector-I, DDMC, for want of required documents.

8. In the additional counter-affidavit filed by respondent No.4,

reliance was placed on clause-I(q)of the Tender Document to contend

that DDMC reserves the right to reject any or all of the bids submitted in

response to the tender notice at any stage without assigning any reasons

whatsoever, and, accordingly, the authority has power to cancel the

tender before finalization. It is also stated that decision was taken in the

presence of the appellant/writ petitioner.

9. It would be appropriate to take note of relevant provisions of

G.O.Ms.No.325 dated 01.11.2011. Clause 7 of the said G.O. provides that

the DDMC will be constituted in every district with Joint Collector as

Chairman, members as indicated therein and the District Coordinator for

Hospital Services/Superintendent of Teaching Hospital as Convener for

overall management and monitoring of diet supplied for all Government

Hospitals and Health Institutions in the State.

10. Clause 9 of the above said G.O. reads as under:

"9. The District Diet Management Committee (DDMC) will

be responsible for calling tenders and to select the most

competent diet contractor and also monitoring the quality of

food supplied to the inpatients/duty doctors. The

Superintendent of District Hospital/Teaching Hospital/Area

Hospital/Community Health Centres, will be responsible for

administering the Diet contract, without deviation of the

conditions."

11. The general tender conditions are incorporated in G.O.Ms.No.325

dated 01.11.2011, which are as follows:

"GENERAL TENDER CONDITIONS:

11. The following terms and conditions shall be followed in respect

of Diet Contract.

a) The Diet Contractor shall pay electricity and water

charges.

b) Hospital Development Society Funds will be utilised

for procurement and Maintenance of food trolleys, utensils

and other essentials.

c) The Diet contract period will be for 2 years and

extendable for one year if District Diet Management

Committee (DDMC), satisfied with the service of Diet

Contractor. Under any circumstances fresh tenders must be

called for the 4th year, well in advance.

d) The tenders will be called for by the District Diet

Management Committee (DDMC), Hospital wise.

e) District Diet Management Committee (DDMC) can

terminate the contract for irregularities or improper

functioning if any, by giving three months' notice."

12. In the counter-affidavit, categorical stand is taken by the

respondent No.4 to the effect that tender notification was issued with

prior approval of the Joint Collector. We are unable to concur with the

observation of the learned single Judge that Chairperson of the District

Level Committee would be the appropriate authority to issue the

notification, as respondent No.4, who issued the tender notification, is the

Convenor of DDMC. It is not stipulated in G.O.Ms.No.325 that the

Chairman of DDMC will have to issue the tender notification. All that

clause 9 of the said G.O. says is that DDMC will be responsible for calling

tenders. When the tender notification is issued by the Convenor after

obtaining approval of the Chairman, it cannot be said that tender

notification was issued by an unauthorized person.

13. In the application for vacating stay filed by the respondent No.4 in

the writ appeal, at paragraph No.3, it is stated as follows:

"3) In reply to the averments in Para Nos.3 & 4 of the

affidavit, it is submitted that 7 tenders were received in the

tender box including the petitioner's tender application. The

tender applications technical bid was opened on 24.01.2020.

The District Diet Management Committee (DDMC) members

evaluated the tender applications. After verifications of

tenders by the members of DDMC, out of 7 bids, 4 bids were

qualified for awarding marks in accordance with

G.O.Ms.No.325, dt:01.11.2011, HM&FW(M1) Dept. After

Awarding marks.

1. M/s.Y.Koteswara Rao, Vijayawada got highest marks - 98

2. M/s.Venkateswara Association,Ongole got 2nd highest marks -92

3. M/s.Welfare Association Rural Development got 3rd highest -79."

14. The aforesaid stand was not disclosed before the writ court.

15. Para 3 of the counter-affidavit filed in the writ appeal indicates that

four tenders were qualified for awarding marks. That itself suggests that

such tenderers were eligible for consideration. Though it is stated that

four were qualified, however, names of only three tenderers are listed

there.

16. We had, by an order dated 19.04.2021, called for the original

records. A perusal of the minutes of the meeting held on 24.01.2020

goes to show that it was observed by the Joint Collector as follows:

"As already tenders have been evaluated and found to be ineligible

for want of various documents, the present tender may be cancelled and

fresh notification may be issued immediately. Till the new contractor

comes in, extend the present supplier."

17. There is no date after the signature of the Joint Collector. The

tenderers, who had attended, had appended their signatures above the

note extracted in paragraph 16. Though in the affidavits filed by the

State/respondents, it was stated that after consultation with the DDMC

members, tenders were evaluated and decision was taken to cancel, page

20 of the Minutes book would go to show that the instructions of the Joint

Collector-I, Chairman, DDMC, were circulated for the information of all

the members and, thereafter, members of the DDMC appended their

signatures. It would appear that the decision to cancel the tender was an

individual decision of the Joint Collector and the decision was merely

communicated by circulation for the information of all members. It

cannot be said that there was a collective consideration of the members.

No comparative chart is prepared indicating what documents are found to

be wanting and only an observation is made that all the tenderers are

found to be ineligible.

18. No doubt, the authority inviting tender has got the right to cancel

the tender on good and sufficient grounds. The cancellation in the

instant case, appears to be done at the instance of the Joint Collector-I

and not by the DDMC. Out of seven tenderers, when four were found to

be qualified on verification of tenders and, accordingly, awarded marks,

we are of the opinion, the Joint Collector-I or for that matter DDMC could

not have cancelled the tender on the purported ground that the tenderers

had become ineligible for failure to furnish various documents.

19. In that view of the matter, we are of the opinion that the order of

the learned single Judge as well as the order of the cancellation cannot

be sustained in law. Accordingly, the same are set aside and the

respondents are directed to take the tender process to its logical

conclusion, within a period of two weeks from today.

20. Resultantly, the writ appeal is allowed. No costs. Pending

miscellaneous applications, if any, shall stand closed.

ARUP KUMAR GOSWAMI, CJ                            NINALA JAYASURYA, J

                                                                       GM

HON'BLE MR. JUSTICE ARUP KUMAR GOSWAMI, CHIEF JUSTICE

&

HON'BLE MR. JUSTICE NINALA JAYASURYA

WRIT APPEAL No. 86 of 2021 (per Arup Kumar Goswami, CJ)

Dt: 29.07.2021

GM