Telangana High Court

Tangella Sudhir Kumar vs The State Of Telangana on 27 March, 2024

Author: Nagesh Bheemapaka

Bench: Nagesh Bheemapaka

       HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA

             WRIT PETITION No. 2723 OF 2024

ORDER:

This Writ Petition is filed seeking to declare the

inaction of the 2nd respondent in awarding tender to petitioner

through e-procurement Tender No

SSDC/ENGG/JEEDIMETLA/PB/202324 Tender ID.No.451955

dated 25.08.2023 for which he quoted the Lowest Quoted

Tenderer-L1 for a service provider to run the petrol bunk retail

outlet of the 2nd respondent in percentage of Revenue sharing

and further not considering acceptance letter dated 16.09.2023

and representations dated 04.12.2023 and 11.12.2023 of

petitioner and further awarding tender to the 3rd respondent on

19.01.2024 who quoted more than petitioner, as arbitrary,

illegal and in violation of the principles of natural justice.

Consequently, it is sought to set aside the tender awarded in

favour of the 3rd respondent on 19.01.2024 and simultaneously

direct the 2nd respondent to allot Tender to petitioner.

2. Initially, this Court granted interim suspension of

tender awarded to the 3rd respondent vide order dated

02.02.2024 while ordering notice before admission. However,

the 2nd respondent filed counter affidavit along with vacate

petition and at the instance of both the parties the present writ

petition is taken up for final disposal.

3. Heard Sri. J. Suresh Rao, learned counsel for

petitioner and Sri S. Rahul Reddy, learned Special Government

Pleader appearing on behalf of learned Additional Advocate

General for respondents 1 and 2. None appeared for the 3rd

respondent.

4. The conspectus of case is that the 2nd respondent

called for Tenders through e-Procurement Tender Notification

vide NIT No: SSDC/ENGG/JEEDIMETLA/PB/2023-24 dated

25.08.2023, for appointment of service provider to run petrol

bunk retail outlet of TSSDCL at Survey Nos.7 and 8, Jeedimetla

Village, Qutbullapur Mandal, Medchal-Malkajgiri District, for

dispensing fuel, other allied products, sales and maintenance of

fuel outlet by service provider in percentage of revenue sharing

between TSSDCL and service provider for a period of 30 (Thirty)

years. Pursuant to the said Notification, petitioner applied line

tender Application by complying with the terms and conditions

of the tender notification dated 25.08.2023. Further, petitioner

paid Rs.11,800/- towards Tender Document Cost and

Rs.5,000/- towards Transaction fee. Petitioner states that he

also paid E.M.D of Rs.5,00,000/- to the 2nd respondent and

uploaded all the relevant documents on line at the time of

submitting Application.

The said on line tender started on 26.08.2023 and

closed on 11.09.2023. Technical bids were opened on

11.09.2023 at 03-30 PM. According to petitioner, there were

only three applicants who filed on line application. One of the

applicants was disqualified at the time of Technical Bid opening

on 11.09.2023 as such there were only two applicants in the

fray.

Financial bids were opened on 13.09.2023 at 11.00

AM. Petitioner quoted Revenue Share as 50.48 (fifty point four

eight) in his Tender application. After opening Financial Bids, it

is observed that the 3rd respondent quoted Revenue Share as

58.88 (fifty eight point eight eight) in his Tender application.

Thus, petitioner quoted the Lowest Bid and he is L1 Bidder.

Petitioner further alleged that he had been informed by the 2nd

respondent that he will be communicated through e-mail or

letter of correspondence with regard to the successful bidder.

According to petitioner, the 2nd respondent sent

communication through e-mail and also through Letter

No.SSDC/ENGG/Jeedimetla/BPCL/2023-24 dated 13.09.2023

to petitioner and called to attend their office for negotiations in

person on 16.09.2023 at 11.00 AM. It is his case that as per the

communication of the 2nd respondent, petitioner attended their

office on 16.09.2023 at 11.00 AM and upon further discussions

and at the instance of the 2nd respondent, petitioner had given

acceptance of Revenue sharing of 56.06% to TSSDCL and

43.94% to petitioner. As per the Preamble of the Tender

Notification Clause No.33, it is clearly contemplated that "if

more than one qualified bidder quotes equal percentage on

margin then the TENDER COMMITTEE will negotiate/draw of

lots with the Bidders and make recommendations for the

allotment to the competent authority". There were only two

applicants in the fray for the Tender, petitioner quoted Revenue

Share as 50.48 whereas the 3rd respondent quoted Revenue

Share as 58.88, therefore, the fact of negotiations with regard to

"Bidders Quoting Equal Percentage on margin" will not arise for

any valid reason.

According to petitioner, he was kept in abeyance

with regard to the allotment of the TENDER AWARD and as he

had not received any further communication, he submitted

representations on 04.12.2023 and 11.12.2023 to the 2nd

respondent seeking allotment order at the earliest which were

duly acknowledged but the 2nd respondent has not replied.

Petitioner further states that after four months,

surprisingly, the 2nd respondent refunded EMD of Rs.5,00,000/-

on 19.01.2024 and instantaneously, the 2nd respondent

awarded tender to the 3rd respondent arbitrarily and unlawfully

which, according to petitioner, is highly indiscriminate and

improper. The 2nd respondent kept petitioner in uncertainty for

four months and finally allotted the tender to the 3rd respondent

without any valid and lawful reason. Further, the 2nd

respondent has not considered petitioner's acceptance letter

dated 16.09.2023 and representations dated 14.12.2023 and

11.12.2023.

5. Detailed counter affidavit has been filed by the 2nd

respondent, wherein it is stated that Writ Petition is not

maintainable on the ground that petitioner has suppressed the

true facts and trying to mislead the Court on facts. It is stated

that petitioner admitted that he quoted Revenue Share of 50.48

to the Corporation and the 3rd respondent quoted Revenue

Share of 58.88. Petitioner on the said figures claiming himself to

be the lowest bidder is highly misconceived and it is specifically

denied that petitioner is L-1 bidder. Even though there was no

necessity to call for negotiations as there was a clear successful

bidder, the Corporation with a view to see if there could be

further reduction in their service charges between the two,

called for negotiations. However, petitioner has not given better

quote of Revenue Share in favour of the corporation. It was

stated that petitioner at Para 8 of the affidavit reiterates that he

quoted only 50.48 Revenue Share in favour of Corporation

whereas the 3rd respondent had quoted 58.88, but surprisingly

claims himself to be L-1 bidder. As per conditions, 60% margin

of service charges were given to the bidder who quoted lowest

price of the said service charge on the current fixed margin,

until the total tenure of contract i.e. 30 years, shall be allotted

the contract.

Further, it was stated that on perusal of petitioner's

representation dated 16.09.2023 and letter of the 3rd

respondent dated 16.09.2023, it is very clear that petitioner is

not the lowest bidder in terms of the contract. Even, by his own

admission in affidavit, petitioner is offering only 56.06% of

Revenue Share to the Corporation and quoted 43.94% to be

paid by the Corporation as service charges, whereas the 3rd

respondent always maintained Revenue Sharing of 58.88% in

favour of the Corporation and has only quoted 41.12 as service

charges to be paid by the Corporation, therefore according to

the 2nd respondent, petitioner failed to make out that he is L-1

bidder under tender conditions.

Respondent No.2 had submitted that in matters of

tenders, unless there is alleged mala fide or violation of Article

14 or any public law, Writ Petition is not maintainable as held

by the Hon'ble Supreme Court in Jagdish Mandal Vs. State of

Orissa 1 . In the entire affidavit, there is no pleading on any of

the grounds referred to above nor any mala fide attributed

against the Corporation except a misconceived notion of being

lowest bidder. Therefore according to the respondent, writ

petition is highly misconceived and is not maintainable and is

liable to be dismissed.

6. Having taken into consideration the rival

submissions, this Court deals with the issue as under:

The 2nd respondent called for tenders through e-

Procurement Tender Notification dated 25.08.2023 for

appointment of service provider to run petrol bunk retail outlet

of the Telangana State Seeds Development Corporation Ltd at

Survey Nos.7 and 8, Jeedimetla village, Qutubullapur Mandal,

Medchal-Malkajgiri District for dispensing fuel, other allied

products, sales and maintenance of fuel outlet by service

provider in percentage of revenue sharing between Respondent

No.2 and Service Provider for a period of 30 years.

2007 (14) SCC 517

It is the case of petitioner that bid for the said

notification was between the qualified bidders after Technical

bid was opened on 11.09.2023. It is the specific case of

petitioner that he quoted revenue share of 50.48% in his tender

application and the 3rd respondent quoted 58.88% and that he

is the lowest bidder. Petitioner states that he was called for

negotiations on 16.09.2023 and he gave acceptance of Revenue

sharing of 56.06% to the Corporation and 43.94% to himself,

and that he is the L1 Bidder but he was not given Tender award.

Petitioner submitted representations seeking allotment on

04.12.2023 and 11.12.2023, but the same were not considered

and the 3rd respondent was awarded Tender. Petitioner by way

of the present Writ Petition sought cancellation of the tender

award in favour of the 3rd respondent and allotment of same to

him.

The Corporation in its counter stated that petitioner

filed the Writ Petition on a misconceived notion that he is the

lowest bidder. In fact from the averments of petitioner itself, it is

clear that the 3rd respondent is the lowest bidder who is

claiming only 41.12% to himself and giving 58.55% revenue

share to the Corporation as against petitioner who is claiming

43.94% to himself and giving only 56.06% revenue share in

favour of the Corporation. The table in para 8 of the counter

affidavit is as under:

Sl.No Name of Revenue Revenue Revenue Revenue . the sharing in sharing service Sharing sharing Tenderer favour of provider(servic after after corporatio e charge) negotiation negotiatio n in favour of n service corporation provider . (service charge)

1. Sri 50.48% 49.52% 56.06% 43.94% Sudheer Kumar Tangella

2. Singireddy 58.88% 41.12% 58.88% 41.12% Shashidha r Reddy

Further, as per Condition No. 42.4 of Tender

conditions, contract shall be allotted to the tenderer who quoted

lowest service charge accepted to be paid by the Corporation.

Admittedly, petitioner quoted 43.94% service charge to be paid

by the Corporation whereas the 3rd respondent quoted only

41.12% service charge. Therefore, Petitioner is not the lowest

bidder as claimed by him. As per condition No.42.4, contract

shall be allotted to the tenderer who quoted lowest service

charge accepted to be paid by the Corporation. For the sake of

understanding the Clause in better sense, the same is extracted

hereunder.

" 42.4. The contract shall be allotted to the tenderer who quotes the lowest service charges expected to be paid by the TSSDCL on the Current margin per liter in HSD and MS. If more than one qualified

Service Provider quotes equal percentage, the tender committee will negotiate with the bidders and make recommendations for the allotment to the competent authority".

In the instant case, petitioner quoted initially,

49.52 service charge to be paid by the Corporation and after

negotiations, quoted 43.94 to be paid by the Corporation,

whereas, the 3rd respondent in the initial and final quoted 41.12

service charges to be paid by the Corporation. Therefore,

petitioner is nowhere nearer to the bid amount even after the

negotiations. Therefore according to the 2nd respondent, writ

petition is liable to be dismissed as petitioner is not the

successful bidder in terms of tender conditions.

In N.G.Projects Limited vs. Vinod Kumar Jain

[(2022) 6 SCC 127], wherein the Hon'ble Supreme Court at Para

16 to 23 held as under:

" [16] In Galaxy Transport Agencies v. New J.K. Roadways,2020SCCOnLineSC 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:

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 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 N.I.T. 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 N.I.T. 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, 2007 14 SCC 517, this Court noted:

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 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."

23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against

public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work."

7. From the above, it is evident that petitioner is not

the lowest bidder as per condition No.42.4 and quoted more

service charge to be paid by the Telangana State Seeds

Development Corporation Ltd than the 3rd respondent, therefore

no relief can be granted to petitioner. This Court also opines

that tender process adopted and awarding of work to the 3rd

respondent is not mala fide or intended to favour someone and

the decision made by official respondents is by acting

reasonably and in accordance with conditions stipulated in the

Tender Document.

8. In the result, the Writ Petition is dismissed. No

costs. Consequently, the miscellaneous Applications, if