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
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.
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.
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.
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
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
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
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
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:
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
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
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;
(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
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
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
AIR 2022 SC 2745
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.
2009 (1) RCR (Civil) 398
(2016) 14 SCC 172
(2012) 8 SCC 216
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
(2024) INSC 486
(2006) 13 SCC 382
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
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:
MANU/SC/0607/2022
MANU/PH/2117/2008
"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.
(2022) 6 SCC 127 : 2022 SCC OnLine SC 336 at page 141
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
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
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
(2012) 8 SCC 216 : 2012 SCC OnLine SC 614 at page 225
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,
2019 DHC 2829
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
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
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
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
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
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
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
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
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
(2016) 14 SCC 172
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
(2024) 4 SCC 166 : (2022) 234 Comp Cas 638 : 2022 SCC OnLine SC 1124 at page 204
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
2022 SCC OnLine Del 122
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.
(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
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
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,
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
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."
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
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:
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
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
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
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.
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
(1999) 3 SCC 172
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.
(2005) 125 DLT 5 (DB)
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
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
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.
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
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
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.
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.
Mrm
