Andhra Pradesh High Court - Amravati
Asraya Caterers vs The State Of Andhra Pradesh on 15 February, 2022
Bench: R Raghunandan Rao
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P.Nos.26767 & 27354 of 2021
ORDER:
The petitioners in both these cases are aggrieved by the award of
contract for supply of diet etc., by letter date 11.11.2021, by the
Convenor of the 2nd respondent District Diet Management Committee,
Guntur, to the 7th respondent in W.P.No.26767 of 2021 and the 8th
respondent in W.P.No.27354 of 2021 by the official respondents for supply
of diet to in-patients and duty Doctors in Government General Hospital,
Guntur, (hereinafter referred to as the Hospital) whose superintendent
has been arrayed as the 4th Respondent in W.P.No. 27354 of 2021. They
pray for setting aside the same.
2. As both these writ petitions are essentially seeking to
challenge the same order, these writ petitions are being disposed of by
this common order.
3. The case of the petitioner in W.P.No.26767 of 2021 is that
he is a diet contractor, who was interested in participating in the tender
floated by the 2nd respondent vide Rc.No.1581/HDS/2020-21, dated
15.09.2021 for supply of diet in the Hospital. However, he had not
participated in the said tender as he was unable to file the VAT / GST
clearance certificate, which is a mandatory requirement under the terms
and conditions of the tender document. The petitioner contends that he is
aggrieved by the fact that the 7th respondent in the W. P. No. 26767 of
2021, who was similarly situated and had not furnished the latest VAT /
GST clearance certificate, had been awarded the contract by waiver of the
said conditions. The petitioner contends that the said waiver should have
been communicated to all the concerned and persons like him should
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have been given an opportunity to participate in the tender. He relies
upon the judgment of the Hon'ble Supreme Court in Ramana Dayaram
Shetty vs. International Airport Authority of India and Ors.,1.
4. The case of the petitioner in W.P.No.27354 of 2021 is as
follows:
a) The tender process to be followed under the above tender
notification was that the interested bidders had to submit their bid in two
separate covers. The first cover, termed technical bid, was to contain the
eligibility, technical and financial criteria and the second cover, termed
financial bid, was to contain the price quoted by the bidder. The tender
committee was to evaluate the technical bid to ascertain whether the
bidders had complied with all the mandatory requirements and were
qualified to participate in the tender. Thereafter, only the second covers of
the bidders, who had qualified in the technical bid, were to be opened and
considered for award of the contract.
b) The petitioner, who is said to have cleared the technical bid,
contends that the 8th respondent in the writ petition did not file VAT / GST
returns for the immediately preceding years and should have been
disqualified on that ground. The petitioner further contends that the 8 th
respondent did not have a GST licence, which was another ground for
disqualifying the 8th respondent. The petitioner further contends that
despite these difficulties, the bid of the 8th respondent was cleared and
the contract was awarded to the 8th respondent.
c) It is the further case of the petitioner that the 8th respondent
was earlier supplying diet to Niloufer Hospital, Hyderabad and the
Superintendent, Niloufer Hospital, Hyderabad, had requested the District
(1979) 3 SCC 489
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Collector, Ranga Reddy to recover an amount of Rs.1,13,28,320/- from
the 8th respondent for having claimed excess bills without supplying
proper and required diet. A Criminal Complaint being Cr.No.98 of 2021
was also registered against the 8th respondent in CCS, Hyderabad on
17.06.2021.
d) In the light of the above facts, it is the contention of the
petitioner that the official respondents modified the tender conditions
contrary to the terms laid down in G.O.Ms.No.325, MH&FW, dated
01.11.2011 and the award of such contract is clearly in violation of the
tender conditions as well as G.O.Ms.No.325, dated 01.11.2011.
5. The 4th respondent, who is the Superintendent of the
Hospital and the 8th respondent have filed their counter affidavits. The 4th
respondent stated that five bidders had participated in the tender and all
of them were found to be eligible to participate in the financial bid. As far
as the allegations relating to non-filing of GST returns is concerned, the
4th respondent at paragraph-11 of the counter affidavit states that the
tender committee unanimously decided not to consider GST complaints
due to pending diet bills in various institutions in the State and that the
committee kept aside the GST issue. Further, the 8th respondent in this
writ petition had submitted insufficient set of GST documents relating to
the State of A.P. but had filed a complete set of GST returns for the State
of Telangana and hence the committee considered the documents of
Telangana State and awarded marks in the technical bid.
6. The 4th respondent, in paragraph-12, also states that one of
the members of the committee had raised the issue of the 8 th
respondent's GST registration being cancelled and the same was
considered and essentially set aside on the ground that an official of the
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GST department had given an opinion that the GST registration number
can be retrieved on payment of all the taxes due along with penalties etc.
7. Paragraph-17 of the counter of the 4th respondent states
that certain grievances had been expressed by the patients in relation to
the quality and time of diet supplied in the Hospital, due to which
alternative arrangements had been made for supply of diet to the A.P.
Tourism Development Corporation from 23.06.2021 and the said
Corporation had supplied diet from 23.06.2021 to 30.09.2021 after which
the 8th respondent, who was the existing diet contractor had supplied diet
to the Covid-19 patients from 01.10.2021 onwards without any remarks
about the present quality and time of the diet supplied.
8. The 4th respondent, after justifying the acceptance of the
technical bid of the 8th respondent, further stated that all the bidders had
quoted a uniform minimum rate of Rs.36/- per patient. On account of this
uniform rate, the 2nd respondent committee, which was processing the
tenders, decided to verify the past supply of diet by the bidders as a
method of finalising the bidder and awarding of contract. In that process,
the hospitals to which the bidders had supplied diet were contacted and
the information obtained from those hospitals was placed before the
committee. In view of the favourable reports received in relation to the 8 th
respondent, it was decided to award the contract to the 8th respondent. It
is stated that the hospitals contacted by a Member of the Tender
Committee in relation to the performance of the 8th respondent were the
Government General Hospital, Vijayawada and the Chest and T.B.
Hospital, Hyderabad.
9. The 8th respondent filed a counter affidavit in which it was
stated that the complaints made against the 8th respondent in relation to
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the supply of diet in Niloufer Hospital, had been challenged by him before
the Hon'ble High Court and as such those issues are still pending before
the Hon'ble High Court and no finding of fact has been given against the
8th respondent. The 8th respondent also states that GST registrations in
the State of Telangana and the State of Andhra Pradesh had been
cancelled/suspended on account of non-payment of GST dues. He submits
that this occurred due to the non-payment of dues by the respective
States for the diet supply by the 8th respondent and as such the 8th
respondent was unable to pay the GST dues. He submits that non-
payment of GST dues was on account of conduct of the State of
Telangana and the State of Andhra Pradesh and as such the same cannot
be held against him.
10. The petitioner filed a reply in which the petitioner stated that
the requirement of filing of returns had not been complied with by the 8th
respondent as he had filed returns for only one year in the state of
Telangana as can be seen from the returns filed by him along with his
counter. Further, the petitioner also contended that the 8th respondent
was the supplier of diet in the Hospital itself, and the 8th respondent had
been warned that the quantity and quality of diet supplied by the 8th
respondent was below the standard by the 4th respondent on 22.05.2021
and that supply of diet by the 8th respondent was stopped and the A.P.
Tourism Development Corporation was called upon to supply diet from
19.06.2021 onwards by the 4th respondent by proceedings dated
19.06.2021. The proceedings bearing Rc.No.1581/HDS-II/2020-21, dated
22.05.2021 and the proceedings Rc.No.158/HDS-11/2020-21, dated
19.06.2021 were filed along with reply affidavit. These documents have
not been denied by either the 4th respondent or the 8th respondent. The
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petitioner had also filed the printouts from the website of the GST
authorities to show that the GST registration of the 8th respondent in the
State of Telangana had been cancelled with effect from 03.02.2021 and
suspended with effect from 02.09.2021 in the State of Andhra Pradesh.
These documents are also not disputed.
11. Heard Sri P. Sai Surya Teja, learned counsel appearing for
the petitioner in W.P.No.26767 of 2021, Sri Posani Venkateswarlu, learned
counsel appearing for the petitioner in W.P.No.27354 of 2021, learned
Government pleader for Medical and Health and Sri K.M. Krishna Reddy,
learned counsel appearing for the 8th respondent.
12. The terms and conditions of the tender had been formulated
in accordance with G.O.Ms.No.325, dated 01.11.2011. The documents
required to be submitted as per the terms of the tender, are :-
C. Documents to be submitted under 'A' above
(i) (a) Registration certificates of local authority/sales tax
authorities in case of a proprietorship firm along with the
latest Income Tax Return filed; (b) Registration certificate
under the Indian Partnership Act along with the partnership
deed and the latest Income Tax Return filed in case of
Partnership firm; (c) Incorporation certificate/certificate of
commencement of business under the Companies Act in
case of a company, as the case may be.
(ii) xxxxxxx
(iii) xxxxxxx
(iv) Xxxx
D. Documents to be submitted under 'B' above
(i) Experience Certificate/s issued by the concerned hospital
authorities or institutions, as the case may be, duly signed
by the authorised and competent official affixing the seal.
(ii) xxxx
(iii) Income Tax returns filed for the immediate preceding
3 years.
(iv) VAT returns filed for the immediate
preceding 3 years.
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Where the tender is for hospital of below 50 beds
and the Tenderer is not able to submit the IT & VAT
returns on valid and reasonable grounds, the
District Diet Management Committee being the
tender inviting authority, shall have the right to
accept the tender on such terms and conditions as it
may consider necessary and appropriate.
(v) xxxx
(vi) xxxx
13. Therefore the documents that need to be filed by the 8 th
respondent along with his tender documents are (1) sales tax registration
or the registration certificates of local authorities or the sales tax
authorities along with latest income tax returns; (2) experience certificate
issued by the concerned hospital authorities; (3) income tax returns filed
for the immediately preceding three years; and (4) VAT returns filed for
the immediately preceding three years.
14. Condition - C (i) extracted above sets out different
documents required from the bidders, depending upon the
business/organisation of the bidder. In the case of a partnership firm
registration certificate under the Indian Partnership Act is required. In the
case of Company, incorporation certificate of the company / certificate of
commencement of business of the company are required. In the case of
an individual, registration certificate of local authority/sales tax authority is
required. In the case of partnership firms and individuals, the latest
income tax return filed is also required. It would appear that the purpose
for which these documents are being sought is to ensure that the bidder
is a business entity, which is carrying on business.
15. Keeping in view the purpose for which these documents are
sought, non-filing of these documents would be fatal to the case of the
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bidder. In the present case, it is an admitted fact on both sides that the
8th respondent did not have a registration certificate issued by the GST
authorities nor did the 8th respondent produce any registration certificate
of a local authority such as a certificate under the Shops and
Establishments Act.
16. The petitioner contends that the 8th respondent had not
complied with the requirement of the filing of VAT returns for the
immediately preceding three years. It is true that the value Added Tax Act
in both the States of Telangana and Andhra Pradesh are now not in force
as far as the present contract is concerned. However, this provision would
have to be construed to mean that the GST returns as it is the GST Act,
which is in force in relation to sales tax.
17. It is the case of the 4th and 8th respondents that even
though the 8th respondent had not filed the GST returns for the
immediately preceding three years, as far as the State of Andhra Pradesh
is concerned, the GST returns filed by the 8th respondent pertaining to the
State of Telangana were taken into account as they were a complete set.
The 4th respondent had produced the file relating to the tender documents
filed by all the bidders and the process undertaken by the tender
committee for finalising the bids.
18. The papers placed before this Court contains a statement
showing the details of documents produced by the bidders in the technical
bid (cover-1). The documents submitted by the 8th respondent were
considered at Sl.No.3 of that statement. In the columns relating to VAT
returns for immediately preceding three years, (which was corrected with
pencil to 5) shows that the returns for the years 2017-2018 and 2020-
2021 were considered for the Sate of Telangana and the returns for the
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years 2017-2018 and 2019-2020 were considered for the State of Andhra
Pradesh.
19. The requirement of Clause-D (iv) is that the bidders are
required to file returns for the immediately preceding three years. The
tender was floated on 15.09.2021. The immediately preceding three years
would be 2018-2019, 2019-2020 and 2020-2021. The evaluation
statement, relating to the 8th respondent, shows that only two years each
were considered for each of the States. This would mean that the 2nd
respondent committee had not evaluated the GST returns for three years.
The file of the 8th respondent placed before this Court shows that the 8th
respondent had filed the GST returns, in the State of Telangana for the
years 2017-2018 to 2020-2021. However, the VAT returns for the year
2020-2021 is only for the months of April, May and June, 2020. The
returns for the remaining period have not been filed along with the tender
document.
20. The requirement of the tender document was filing of VAT /
GST returns for the immediately preceding three years of 2018-2019 to
2020-2021. The 8th respondent filed the GST returns of 2017-2018, 2018-
2019 and 2019-2020, and the returns for three months for the year 2020-
2021. The 2nd respondent committee did not consider all these returns
and appears to have evaluated only the returns for two years. Even
otherwise, the returns for the 3 immediately preceding years, can only be
taken into account and the returns for the year 2017-18 cannot be taken
into account. The returns available for consideration before 2nd
Respondent committee, are the returns for 2018-19, 2019-20 and the
returns for 3 months in the year 2020-21. Viewed from any angle, the
requirement of filing the VAT / GST returns for the immediately preceding
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three years has not been complied with. The question that would then
arise is whether, this requirement can be waived by the 2nd respondent
diet committee. The note appended after Instruction D (iv) stipulates that
the Diet Committee can waive that requirement in cases where the tender
relates to a hospital which has less than 50 beds. This would mean that
the power of the Diet Committee to waive such requirements is restricted
to tenders called for hospitals ,which have less than 50 beds, and such
power is not available for tenders called for bigger hospitals.
21. The 4th Respondent, in his counter, at paragraph No.2, has
set out the provisions of G.O.Ms.No. 325, which stipulates that I.T. and
VAT returns for 5 years need to be filed for tenders relating to
Teaching/District Hospitals. If these terms were to be applied, there would
be an even greater breach of the requirements.
22. A further issue that has come up, in the course of hearing of
the writ petition, is whether the contract could have been awarded to the
8th respondent on account of the feed back obtained about the superior
performance of the 8th respondent. This feed back is said to have been
obtained from the Government General Hospital, Vijayawada and Chest
and T.B. Hospital Hyderabad. However, the 4th respondent is absolutely
silent over the fact that the 8th respondent was supplying diet to the
Hospital itself and that the 4th respondent superintendent of the Hospital,
had issued a written caution to the 8th respondent in May, 2021 about the
quality of the diet and the delays in serving diet within time to the
patients. The 4th respondent is also silent about the fact that the supply of
diet by the 8th respondent had been suspended from June, 2021 and the
A.P. Tourism Development Corporation was called upon to supply diet to
the patients for the months of June to September, 2021.
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23. It is a peculiar and curious situation that the 4th respondent
refuses to look at the diet experience of the of the Hospital, relating to the
quality and performance of the 8th respondent and opinions are sought
from other hospitals as to the performance of the 8th respondent for
awarding the contract of supply of diet by the 8th respondent in the
Hospital.
24. A conspectus of the above facts would show that the 8th
respondent had not complied with the two requirements of furnishing the
registration certificate under the GST Act and the GST returns for the
immediately preceding three years. Further, the 4th respondent refuses to
look at the performance of the 8th respondent in his own hospital and
certifies the superior performance of the 8th respondent on the basis of
the feed back obtained from other hospitals.
25. Apart from the aforesaid lacunae, the fact also remains that
the 4th respondent in its counter affidavit, has specifically stated that the
issue of production of GST documents had been set aside in its entirety by
the committee. This was beyond the power of the 2nd respondent
committee and is fatal to the entire tender process. Further, even if such a
course of action was available, the judgment of the Hon'ble Supreme
Court in Ramana Dayaram Shetty vs. International Airport
Authority of India and Ors., would apply on all fours. The Hon'ble
Supreme Court in the above judgment had categorically held that where
there is a departure from the standard of eligibility laid down in the notice
for tenders, the said departure would have to be held to be a denial of
the equality of opportunity to those, who have not applied, considering
themselves ineligible.
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26. For all these reasons, it must be held that the qualification of
the 8th respondent as a person eligible to participate in the financial bid
and the award of contract to the 8th respondent would have to be set
aside on account of the violation of the tender conditions and on account
of the fact that the direct experience of the hospital in question was not
taken into account while evaluating the performance of the 8 th
respondent.
27. Accordingly, the writ petition is allowed and the award of
contract for supply of diet etc., by letter date 11.11.2021, by the
Convenor of the 2nd respondent District Diet Management Committee,
Guntur, to the 8th respondent, is set aside. It would be open to
respondents 1 to 4 to take such steps, as are necessary for issuing a fresh
notification for conduct of a fresh tender process for supply of diet to
patients in the Government General Hospital, Guntur. There shall be no
order as to costs.
As a sequel, pending miscellaneous petitions, if any, shall stand
closed.
_________________________
R. RAGHUNANDAN RAO, J.
15th February, 2022
Js.
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W.P.Nos.26767 & 27354 of 2021
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P.Nos.26767 & 27354 of 2021
15th February, 2022
Js.
