Telangana High Court
S. M. Associates vs The Commissioner Of Health And Family ... on 18 March, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
IN THE HIGH COURT OF TELANGANA AT HYDERABAD
W.P.No.36111 OF 2021
Between:
S.M.Associates
... Petitioner
And
The Commissioner of Health & Family Welfare
& Mission Director & others
... Respondents
JUDGMENT PRONOUNCED ON: 18.03.2024
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
1. Whether Reporters of Local newspapers : Yes
may be allowed to see the Judgment?
2. Whether the copies of judgment may be : Yes
marked to Law Reporters/Journals?
3. Whether Their Lordships wish to : Yes
see the fair copy of the Judgment?
________________________________
SUREPALLI NANDA, J
2
WP_36111_2021
SN,J
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P.No.36111 OF 2021
% 18.03.2024
Between:
# S.M.Associates
... Petitioner
And
$ The Commissioner of Health & Family Welfare
& Mission Director & others
... Respondents
< Gist:
> Head Note:
! Counsel for the Petitioner : Mr.A.Venkatesh,
learned Sr.Counsel,
representing
Mr.R.Anurag
^ Counsel for Respondents : Mrs.Vedula Chitralekha
? Cases Referred:
3
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HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P. No. 36111 of 2021
ORDER:
Heard the Learned Senior Counsel Mr. A.Venkatesh,
representing the learned counsel on record Mr. R.Anurag
appearing on behalf of the Petitioner and heard the
Learned Advocate General appearing on behalf of
Respondent Nos.1 to 4 and the learned counsel
Smt.Vedula Chitralekha on behalf of Respondent Nos.6
and 7.
2. The petitioner approached this Court seeking prayer
under a, b, c and d but the learned Senior Counsel for the
Petitioner fairly submits that the prayers in so far as a, b,
c are concerned are infructuous and the prayer at clause
'd' alone subsists and the same is extracted hereunder :
"(d) declaring the action of the respondents in not paying
the arrears of payment for the services rendered, around
Rs.5.5 Crores up to 18/11/2021 and for the services
provided from 18/11/2021 as per Clause No.2.17 of the
Agreement No.135/QA/NHM/P5/2018-19 dated 19/02/2018
issued by the 1st respondent, as equally arbitrary, illegal,
and unconstitutional, violating Articles 14, 19(1)(g) and 21
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of the Constitution of India and issue consequential
directions, restraining the respondents from proceeding
further in pursuance of the Notification
No.GEM/2021/B/1519384, 15191251, 1519335, 1519115,
1518637 dated 14/09/2021 and Notification
No.GEM/2021/B/1753650, 1753731 dated 10/12/2021,
more particularly in respect of the hospitals which were
allotted to the petitioner in pursuance of the Notification
Ref.135/QA/NHM/P5/2018-19 dated 18/11/2017 issued by
the 1st respondent and further direct the respondents to
forthwith extend the tenure of the petitioner's contract
beyond the period of 3 years for a further period of 2 years
in terms of Clause 1.1.8 and 2.16 of the Agreement
No.Notification Ref. 135/QA/NHM/P5/2018-19 dated
19/02/2018 and also further direct the respondents to
forthwith pay the arrears of service charges due to the
petitioner as per Clause No.2.37 of Agreement
No.135/QA/NHM/P5/2018-19 dated 19/02/2018 up to
18/11/2021 i.e., around Rs.5.5 Crores as well as charges
for the services rendered by the petitioner from
18/11/2018 and also direct the State to conduct an
independent enquiry with regard to irregularity and
illegality committed in the Notification
No.GEM/2021/B/1519384, 15191251, 1519335, 1519115,
1518637 dated 14/09/2021 and Notification
No.GEM/2021/B/1753650, 1753731 dated 10/12/2021 and
take appropriate action against the officers who are
responsible and who committed irregularities."
2. PERUSED THE RECORD :
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i) The interim orders of this Court dated 30.12.2021
passed in W.P.No.36111 of 2021 reads as under :
Learned Government Pleader for Medical and Health
takes notice for respondent Nos.1 and 4. Sri Kishore Rao,
learned, Standing Counsel takes notice for respondent
No.2. Ms. Rachana Waddepalli, learned Standing Counsel
takes notice for respondent No.3. Sri Namavarapu
Rajeshwar Rao, learned Assistant Solicitor General takes
notice for 5th respondent. All the counsel seeks time to the
counter in the
List on 10-02-2022.
Learned Counsel for the Writ Petitioner seeks time to Me
counter.
List on 10-02-2022.
Heard learned Counsel for petitioner and perused the
record.
Petitioner contends that the condition No.5.5 of the
tender conditions imposing restriction on participation by
the intending bidders beyond one zone at the bid stage
itself is violative of fundamental right to carry on business,
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Sri V.Srinivas, learned Senior Counsel for
implead respondents and Sri O.Manohar Reddy,
learned counsel appearing for the caveator would
submit that petitioner has filed this Writ Petition by
suppressing the fact of he having taken part in the
tender process and therefore he is not entitled for
grant of any relief having been unsuccessful therein.
Learned Senior counsel appearing for implead
respondents submits that his client has been declared as L1
in respect of Zone II and IV, while Sri O.Manohar Reddy,
learned counsel appearing for caveator submits that his
client has been declared as LI in respect of Zone-III in
terms of Notification dt.14-09-2021. It is also contended
that upon being declared as successful bidders, their clients
have furnished necessary Bank Guarantees in favour of
Official respondents and were issued with Letter of Intent
to commence work. Thus both the learned Senior Counsel
submit that this Court should not interdict them from
providing their services in terms of the agreement.
In so far as the tender Notification dt.10-12-2021, Sri
Kishore Rao, learned Standing Counsel submits that the
tender process has been completed. However, he does not
dispute that no letter of intent commence work has been
issued thereunder.
Having regard to the above, considering the fact that
the condition imposing restriction of participation of bidders
at the stage of bidding process prima facie appears to be in
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violation of fundamental rights, the respondents are
directed to maintain status quo in respect of Bid Number:
GEM/2021/B/1753731 dt.10.12.2021 only.
ii) The counter affidavit filed by Respondent No.2, in
particular, Paras 4, 6 and 7 read as under :
"4. Further it is to respectfully submit that as per
the request made by the 2nd Respondent's
Corporation, the 1st Respondent vide letter dated 17-
10-2022 informed the 2nd Respondent that a decision
has been taken to remove the Clause No: 5.5 in the
RFP and Tender Document for Zone I and V
honouring the directions of the Hon'ble High Court
and communicated the modified RPF. The same is
filed as Annexure-3.
6. Further it to respectfully submit that as per the
information received from the 1st Respondent's office, the
2nd Respondent, with due deference to orders of the
Hon'ble Court, has cancelled/ withdrawn both the Tenders
bearing No: GEM/2021/B/1753650, dt: 10.12.2021 (Zone-
I) and GEM/2021/B/1753731, dt: 10.12.2021 (Zone-V)
from the GeM Portal. The same are filed as Annexure- 5
and 6.
7. Further it is to respectfully submit that the actual
MoU was entered between the Petitioner and the
office of the 1st Respondent is valid till 18-11- 2021
only and all the payments due to the Petitioner till
18-11-2021 are paid to the Petitioner vide
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proceedings dated 02-01-2023 of the 1st Respondent.
The same is filed as Annexure -7."
3. The case of the Petitioner, in brief, as per the
averments made in the affidavit filed in support of the
present writ petition is as follows :
Petitioner's Firm was registered in the name of SM
Associates in the year 2012 to do business in Health Care by
providing Services in Hospitals whenever the hospitals require
such services from the Petitioner. The 1st Respondent issued a
Notification reference 135/QA/NHM/P5/2018-19, dated
18.11.2017 calling bids through e-procurement platform for
providing mechanised laundry services in the District and Area
hospitals. The successful laundry service contractor should
provide linen services as per Agreement executed by the
Competent Authority. In pursuance to the said notification the 1st
Respondent allotted 2 Zones i.e., Zone III and Zone IV consisting
of 16 hospitals i.e., 2300 beds. Apart from the aforesaid 2300
beds another 550 beds enhanced because of strengthening the
beds in the hospitals after allocating the services to the
Petitioner.
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It is further the case of the Petitioner that as per
Agreement the Petitioner installed all necessary infrastructure
i.e., equipment, civil work, plumbing, electrical, etc., and started
agreed services from April 2018 to August 2018 and the services
are being continued as on date pursuant to the orders passed by
this Court in Zone III and Zone IV including the hospitals which
have enhanced the bed capacity that are duly intimated to the
official respondents. It is further the case of the Petitioner that in
the Agreement at page No.8 clause No.1.1.8 it is clearly
mentioned that effectiveness and duration of contract was from
the date of commencement i.e., 36 months and with satisfactory
performance extendable for another 24 months. It is further the
specific plea of the Petitioner that since the Petitioner provided
satisfactory services during the tenure and therefore as per the
condition imposed at the time of awarding the contract to the
Petitioner the 1st Respondent ought to have extended the
contract tenure for another 2 years. Therefore the 1st Respondent
ought to have allowed the Petitioner to provide services till
18.02.2023 i.e., two years after lapse of three years i.e.,
18.02.2021. The Petitioner even after completing the afore said 3
years period and even without extending another 2 years as
agreed is providing services without putting any inconvenience
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either to the hospitals or the patients. Though the Respondent
Authority did not release the entire charges upto 18.11.2021 and
nearly Rs.5.5 crores are due to the Petitioner from the
Respondents, the Authority remains silent in the matter. Inspite
of the Petitioner's specific request for extension of Petitioner's
tenure beyond 3 years for a period of 2 years as per Agreement,
the 2nd Respondent proceeded and issued Tender Notifications
inviting fresh tenders by Notification No.GEM/2021/B/ 1519384,
15191251, 1519335, 151995, 1518637, dated 14.09.2021 and
Notification No.GEM/2021/B/1753650, 1753731, dated
10.12.2021. The said tender notification stipulated a condition
that one bidder shall participate in one zone only and he cannot
participate in other zones was not a fair and reasonable
condition. Aggrieved by the same the Petitioner approached by
filing the present writ petition contending that the Respondents
are bound to continue the Petitioner by extending the tenure of
the contract beyond 3 years as per Clause No.1.1.8 and 2.16 of
the Agreement dated 19.02.2018 duly considering the request
made by the Petitioner through the representations dated
03.02.2021, 15.11.2021 and 01.12.2021 and to release all the
arrears of service charges which are due to the Petitioner upto
18.11.2021 as per Clause No.2.37 of the Agreement dated
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19.02.2018 as well as towards the service rendered by the
Petitioner after 18.11.2021 and to set aside the condition of
Clause 5.5 of the Notification which stipulates that bidder should
participate in one zone only.
4. The Learned Senior Counsel appearing on behalf of
the Petitioner mainly put-forth the following submissions :
i) It is false to state that the Petitioner received all
payments due to the Petitioner till 18.11.2021 since the MOU
entered into between the Petitioner and the Office of the 1st
Respondent is valid till 18.11.2021 as averred in the counter
affidavit at para 7. The learned Senior counsel placing reliance on
the Memo dated06.03.2023 filed along with few material
documents contends that in pursuance to the orders passed by
this Court dated 30.12.2021 the Petitioner is still continuing to
provide services in Zone III and Zone IV including the hospitals
which have enhanced the bed capacity that are duly intimated to
the official Respondents and in fact Petitioner is entitled for dues
to a tune of Rs.9,33,43,758/- since July 2022 and the
Respondents are liable to compensate and release the same.
ii) The learned senior counsel placing reliance on the
proceedings of the Commissioner Telangana Vidya Vidahana
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Parishad the 3rd Respondent herein addressed to the 1st
Respondent herein RC No.135/QA(NHM)/TVVP/2017, dated 06th
August 2022 contends that it is not correct to state that the
petitioner received all the amounts due to the petitioner. In fact a
bare perusal of the said proceedings dated 06.08.2022 of the 3rd
Respondent addressed to the 1st Respondent indicates that as
borne on record the services of the mechanized laundry of the
Petitioner herein had been extended vide proceedings dated
20.03.2021 and 23.08.2021 of the 1st Respondent herein from
19.02.2021 to 18.11.2021. The relevant portion of the
proceedings dated 06.08.2022 of the 3rd Respondent
addressed to the 1st Respondent reads as under :
"All the bills are enclosed with performance
certificates issued by respective hospital
Superintendents as work done satisfactory providing
the Laundry Services.
It is also submitted that all the above firms have
furnished Performance Securities in the way of Bank
Guarantees as prescribed by the Mission Director, NHM &
CH&FW, TS, Hyderabad.
Hence, I am herewith submitting the Abstract of
pending requirement towards the Mechanized Laundry bills
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for release of budget to vendors of Zone I to IV is as
mentioned below.
S.No. Name of Vendor Zone Pending bill period Total amount
1. M/s.Chanakya Zone-I November,2021 To April, 2022 15400128
Enterprises
2. M/s.Eco Hospitality Zone-II November, 2021 To February, 17365905
Services 2022
3. M/s.SM Associates Zone-III November, 2021 To July, 2022 21323520
4. M/s.SM Associates Zone-IV November, 2021 To July, 2022 23025600
5. M/s.SM Associates Zone-III June, 2021 to October, 2021 15270750
Nalgonda & Suryapeta beds 16230185
wef.18th & 28th Sept.2019 till May,
Shortfall payment released for 500100
bills from Jan-Dec.2020
6. M/s. SM Associates Zone-IV June, 2021 to October, 2021 12109500
MCH Jangaon (150) beds shortfall 1579500
payment wef.Jan.2021 to May.21
Total Amount in Rs. 122805188.00
Since the bills have been received for payments duly
certified by the Medical Superintendents of Respective
Hospitals as mentioned above and also the said (3)
firms have commenced the Mechanized Laundry
Services in all the awarded TVVP hospitals it is
desired to make payments as per eligibility as
mentioned above.
In view of the details mentioned above, I request you
madam, kindly to sanction and release the sanctioned
budget of Rs.12,28,05,188/- (Rupees Twelve Crores Twenty
Eight Lakhs Five Thousand One Hundred and Eighty Eight
Only) under under FMR Code 1.1.7.7 towards Mechanized
Laundry Services for the Hospitals under TVVP for clearing
the payments to the above firms for payment of salaries to
the staff hired by the vendor and for the smooth
functioning of the Mechanized Laundry services at the
respective hospitals as per eligibility for the above period.
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The Learned counsel appearing on behalf of the
Petitioner placing reliance on the aforesaid submissions
contends that the writ petition in so far as Clause 'd' is
concerned should be allowed as prayed for.
5. The counter affidavit has been filed by the
Respondent No.2 and placing reliance on the averments
made in the counter affidavit filed on behalf of the 2nd
respondent, the counsel for the 2nd Respondent mainly
puts forth his submissions as under:
i) That in pursuance to the interim orders of this Court dated
30.12.2021, Clause No.5.5 had been deleted from the tender
document.
ii) As per the actual MOU entered into between the Petitioner
and the Office of the 1st Respondent the contract is valid till
18.11.2021 only and all the payments due to the Petitioner till
18.11.2021 are paid to the Petitioner vide proceedings dated
02.01.2023 of the 1st Respondent.
iii) Placing reliance on the aforesaid submissions the learned
counsel for the 2nd Respondent contends that the writ petition
may be dismissed and the 2nd Respondent may be permitted to
go for fresh tenders as per the modified tender document.
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iv) The Learned Senior Counsel Mr. Vedula Srinivas appearing
on behalf of Respondent Nos.6 and 7 mainly puts forth the
following submissions :
a) The plea of the petitioner that the action of the Respondent
Nos.1 to 4 in not extending the contract by 2 years though
the said period expired in 2021 is unreasonable and
arbitrary and without any substance.
b) In view of the fact that the nature of the service itself
underwent a change the petitioner cannot demand for
renewal of petitioner's contract.
c) The Respondents 6 and 7 are already issued with letter of
intent on 15.12.2021 at this stage the Petitioner cannot
question the tender process as the rule of estoppel acts
against it.
d) The Petitioner on an earlier occasion filed WP
No.33503/2021 seeking a direction to consider the
representation for extension of petitioner's contract but has
withdrawn the same with liberty to file a fresh writ petition
and hence the present writ petition is not maintainable.
DISCUSSION AND CONCLUSION :
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6. Clause 1.1.8 and 2.16 of the Agreement dated
19.02.2018 entered into between the 1st Respondent and
the Petitioner reads as under :
"1.1.8. Effectiveness and Duration of Contract
The contract shall come into effect on the date of
signing by both the parties. The contract shall be valid
for a period of 36 (Thirty Six) months from the date of
commencement of services. The contract can be
extended for another 24 months (Twenty Four) on the
same terms and conditions subject to satisfactory
performance.
2.16 The contract shall initially be valid for a period of
Three Years and can be extended further for another two
years on the same terms and conditions of the contract and
at the same rates. The rates quoted by the bidder shall
remain unchanged during the period of contract."
7. It is the specific case of the Petitioner that the
Respondents ought to have allowed the petitioner to
continue for another 2 years in view of the good and
excellent service provided by the Petitioner as per their
own orders issued by the concerned Authorities, in view of
the fact that Petitioners MOU though admittedly concluded
on 18.11.2021 yet the 1st Respondent issued extension
orders to the Petitioner's Firm to continue the services of
mechanized laundry in TVVP hospitals from 19.02.2021 to
18.11.2021 along with the listed hospitals in MOU, duly
considering Clause 1.1.8 of the Agreement dated
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19.02.2018 entered into by the Petitioner and 1st
Respondent and further the concerned authorities ought
to have strictly followed the payment procedure as per
2.37 of the Agreement dated 19.02.2018 entered into
between the Petitioner and the 1st Respondent, but
however, the same had not been followed in the present
case.
8. This court on perusal of the proceedings of the
Commissioner Telangana Vidya Vidahana Parishad i.e., 3rd
Respondent herein addressed to the 1st Respondent herein
RC No.135/QA (NHM)/TVVP/2017, dated 06th August
2022 opines that it is borne on record that the 1st
Respondent had given extension orders to the Petitioner
herein to continue the services of the mechanised laundry
in TVVP hospitals from 19.02.2021 till 18.11.2021 along
with the listed hospitals in MOU vide Proceedings dated
20.03.2021 and 23.08.2021 and further it is also borne on
record in the last 5 paragraphs of the said proceedings
dated 06.08.2022 of the 3rd Respondent addressed to the
1st Respondent (referred to and extracted above) that
there are pending bills to be cleared in favour of the
Petitioner herein which had been duly certified by the
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Medical Superintendents of respective hospitals giving full
details pertaining to 4 bills of the petitioner pertaining to
Zone III, Zone IV and the amounts due to be released to
the Petitioner by the 1st Respondent herein.
9. Taking into consideration the contents of the letter
RC No.135/QA(NHM)/TVVP /2017, dated 06th August
2022 of the 3rd Respondent addressed to the 1st
Respondent (referred to and extracted above) and also
duly considering Clause 1.1.8 and 2.16 of the Agreement
dated 19.02.2018 (referred to and extracted above)
entered into between the Petitioner and the 1st
Respondent, the Respondent No.1 herein is directed to
take appropriate steps in pursuance to the
letter/proceedings of the Commissioner Telangana Vidya
Vidahana Parishad i.e., the 3rd Respondent addressed to
the 1st Respondent RC No.135/QA(NHM)/TVVP/2017,
dated 06th August 2022, within a period of 3 weeks from
the date of receipt of the copy of the order as requested by
the 3rd Respondent in last paragraph of the said
proceedings dated 06.08.2022 of 3rd Respondent
addressed to the 1st Respondent, in accordance to law and
duly consider the request of the Petitioner for release of
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the payments due to the Petitioner as per Petitioner's
entitlement as per record as admitted in the proceedings
of the 3rd Respondent dated 06.08.2022 addressed to the
1st Respondent vide RC No.135/QA(NHM)/TVVP/2017.
10. In so far as the prayer of the Petitioner for
continuation of the tenure of the Petitioner by extending
the Petitioner's contract for further period of 2 years in
terms of Clause 1.1.8 and 2.16 of the Agreement dated
19.02.2018 entered into by the Petitioner and the 1st
Respondent herein is concerned, the Respondent No.1 is
directed to consider Petitioner's representation dated
30.11.2021 addressed to the 1st Respondent herein
seeking the said prayer which has even been
acknowledged by the office of the 1st Respondent on
01.12.2021 within a period of 2 weeks from the date of
receipt of the copy of the order as per Clause 1.1.8 and
2.16 of the Agreement No.135/QA/NHM/P5/2018-19,
dated 19.02.2018 and duly communicate the decision to
the Petitioner. The writ petition is accordingly disposed.
However there shall be no order as to costs.
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Miscellaneous petitions pending, if any, shall stand
closed.
_________________
SUREPALLI NANDA, J
Date: 18.03.2024
Note: L.R.Copy to be marked
(B/o) Yvkr
