Research › Search › Judgment

Telangana High Court · body

2020 DIGILAW 839 (TS)

A. M. Swamy v. State of Telangana

2020-12-07

A.RAJASEKHAR REDDY

body2020
ORDER : A. Rajasekhar Reddy, J. 1. Since the issue involved in all these writ petitions is one and the same, they are being disposed of by way of this Common Order. In all these writ petitions, the petitioners are basically challenging the tender process and award of contracts on the ground that the respondent Corporation has violated the tender conditions. 2. W.P. No. 17934 of 2020 This writ petition is filed declaring the action of the 3rd respondent-Additional Collector (Civil Supplies) at Nagarkurnool Nagarkurnool District, in opening financial bids prior to opening and scrutinizing of Technical bids in respect of E-tender issued by the 2nd respondent on 15.09.2020 vide No. Mktg/Paddy Tenders/2020 for appointment of Contractors for transportation of Paddy and Gunnies and declaring the lowest bidder in Financial Bids as successful bidder, as illegal and arbitrary and consequently to set aside the same. It is the case of the petitioner that pursuant to the impugned tender notification, the petitioner applied for tender work, but the respondent-Corporation without opening the technical bid, opened the financial bid and awarded the contract to L1, who does not have his own vehicles and the vehicles shown in his tender form are not owned by him and that L1 bidder is ineligible to get the contract, but he was awarded with the tender work. Counter affidavit is filed by the 3rd respondent denying the averments in the affidavit filed in support of the writ petition stating that unless the technical bid is opened, they will not open the financial bid and that they have opened the technical bid on 25.09.2020 at about 1.15 p.m and after completion of evaluation, financial bid was opened at 4.06 pm. The successful bidder filed a lease deed from its original owner, as such, any disputes between the owner and the successful bidder would workout in appropriate forum. It is stated that the petitioner quoted 79% and the lowest successful bidder quoted 49%. Reply affidavit is filed by the petitioner denying the averments in the counter affidavit filed by the 3rd respondent. Learned Standing Counsel for the respondent Corporation submits that the contract was awarded to the lowest tenderer i.e., L1 after opening of both the technical and financial bids. He submits that the person in whose favour contract was awarded has not been made party to the writ petition. 3. Learned Standing Counsel for the respondent Corporation submits that the contract was awarded to the lowest tenderer i.e., L1 after opening of both the technical and financial bids. He submits that the person in whose favour contract was awarded has not been made party to the writ petition. 3. W.P. No. 19708 of 2020 This writ petition is filed seeking writ of mandamus declaring the action of the respondent Nos. 2 and 3 in granting Contract Tender in favour of 5th respondent for transportation of paddy and gunnies as entrusted by the 2nd respondent under Paddy Procurement Operations from various paddy purchase centers for the period from 01.10.2020 to 30.09.2021, even though the 5th respondent has violated the rules and guidelines issued for Tenders, in violation of clause 7(e) of the tender conditions and for consequential directions. It is the case of the petitioner that in pursuance to the e-notification issued by the 3rd respondent dated 16.09.2020, the petitioner and 5th respondent applied to the same. The petitioner came to know that the representative of 5th respondent already filed tender for Stage-2, Hayathnagar on 22.09.2020 on behalf of 6th respondent, even though he is not eligible to file a tender as per Clause No. 7(e) of Annexure-V of terms and conditions of the Tender. Even though the petitioner filed representation dated 26.09.2020, the same has not been considered by the respondents 2 and 3. The 4th respondent filed counter denying the averments in the affidavit filed in support of the writ petition stating that they have followed the terms and conditions of the tender notification, in conducting the tender process. 4. W.P. Nos. 20820 of 2020 This writ petition is filed seeking writ of mandamus declaring the proceedings bearing Lr. No. Mktg/M2/336/PTC/KMC 2020-21, dated 31.10.2020 issued by the 3rd respondent rejecting the petitioner's representation dated 01.10.2020 and also for declaring the action of the respondent Nos. 2 to 4 in accepting the invalid technical bid of the 5th respondent and taking steps to appoint the 5th respondent as contractor of Chityal Block of Nalgonda District for transportation of Paddy & Gunnies under Tender Notice bearing Ref. No. Mktg/M2/336/PTC/KMS/2020-21, dated 16.09.2020 issued by the 3rd respondent as illegal and arbitrary and consequently to direct the respondent Nos. 2 to 4 to reject the tender of the 5th respondent and appoint the petitioner as the transport contractor of the said Chityal Block. No. Mktg/M2/336/PTC/KMS/2020-21, dated 16.09.2020 issued by the 3rd respondent as illegal and arbitrary and consequently to direct the respondent Nos. 2 to 4 to reject the tender of the 5th respondent and appoint the petitioner as the transport contractor of the said Chityal Block. It is the case of the petitioner that in pursuant to the tender notification issued by the 3rd respondent on 16.09.2020, the petitioner participated in the tender process along with 5th respondent. After completion of the process of opening financial bids, it came to that the 5th respondent's technical bid is invalid and it is in contravention of the tender conditions, as such, the technical bid of the 5th respondent is liable to be rejected. However, the respondents 2 to 4 illegally accepted the invalid technical bid of 5th respondent and are taking steps to appoint 5th respondent as Contractor of Chityal Block of Nalgonda District. Though the petitioner made representation dated 01.10.2020 informing the 3rd respondent about non submission of registration certificate by the 5th respondent, no action is being taken. The 3rd respondent issued impugned proceedings dated 31.10.2020 rejecting the petitioner's representation dated 01.10.2020. 5. W.P. No. 18676 of 2020 This writ petition is filed seeking writ of mandamus declaring the action of the respondent Nos. 2 to 4 in accepting the invalid technical bid of the 5th respondent and taking steps to appoint the 5th respondent as contractor of Chityal Block of Nalgonda District for transportation of Paddy & Gunnies under Tender Notice bearing Ref. No. Mktg/M2/336/PTC/KMS/2020-21, dated 16.09.2020 issued by the 3rd respondent as illegal and arbitrary and consequently to direct the respondents to reject the tender of the 5th respondent and appoint the petitioner as the transport contractor of the said Chityal Block. It is the case of the petitioner that in pursuance to the e-tender notice issued by the 3rd respondent dated 16.09.2020, for appointment of contractors for transportation of paddy & gunnies as entrusted by TSCSCL, the petitioner along with 5th respondent submitted bids. It is the case of the petitioner that in pursuance to the e-tender notice issued by the 3rd respondent dated 16.09.2020, for appointment of contractors for transportation of paddy & gunnies as entrusted by TSCSCL, the petitioner along with 5th respondent submitted bids. As per the tender schedule, the respondents 2 to 4 opened all the technical bids submitted by the bidders on 25.09.2020 at 12.00 and declared that all the bidders have qualified at the technical bid stage and that they have also opened financial bids on the same day at 8.00 p.m. Subsequently, the petitioner came to know that the technical bid submitted by the 5th respondent is invalid and the same is liable to be rejected. Though the petitioner made representation dated 01.10.2020 informing the 3rd respondent about non submission of registration certificate by the 5th respondent, no action is being taken. The 3rd respondent issued impugned proceedings dated 31.10.2020 rejecting the petitioner's representation dated 01.10.2020. Counter affidavit is filed by the 4th respondent denying the averments in the affidavit filed in support of the writ petition stating that the 5th respondent's firm had already been registered in the year 2019. The representation of the petitioner dated 01.10.2020 was considered and rejected the same on 31.10.2020 while answering the objections of the petitioner in detail. It is also clarified that Memorandum of acknowledging the receipt of documents can be treated as firm registration certificate. Since the 5th respondent has fulfilled all the tender conditions, the contract was rightly awarded in his favour. 6. W.P. No. 18773 of 2020 This writ petition is filed seeking writ of mandamus declaring the action of the respondent Nos. 2 to 4 in accepting the invalid technical bid of the respondents 5 & 6 and taking steps to appoint the respondents 5 & 6 as contractor of Nalgonda Block of Nalgonda District for transportation of Paddy & Gunnies under Tender Notice bearing Ref. No. Mktg/M2/336/PTC/KMS/2020-21, dated 16.09.2020 issued by the 3rd respondent as illegal and arbitrary and consequently to direct the respondents to reject the tender of the respondents 5 & 6 and appoint the petitioner as the transport contractor of the said Nalgonda Block of Nalgonda District. No. Mktg/M2/336/PTC/KMS/2020-21, dated 16.09.2020 issued by the 3rd respondent as illegal and arbitrary and consequently to direct the respondents to reject the tender of the respondents 5 & 6 and appoint the petitioner as the transport contractor of the said Nalgonda Block of Nalgonda District. It is the case of the petitioner that in pursuance to the e-tender notice issued by the 3rd respondent dated 16.09.2020, for appointment of contractors for transportation of paddy & gunnies as entrusted by TSCSCL, the petitioner along with 5th and 6th respondents submitted bids. As per the tender schedule, the respondents 2 to 4 opened all the technical bids submitted by the bidders on 25.09.2020 at 12.00 and declared that all the bidders have qualified at the technical bid stage and that they have also opened financial bids on the same day at 8.00 p.m. Subsequently, the petitioner came to know that the technical bid submitted by the respondents 5 & 6 are invalid and the same is liable to be rejected. Though the petitioner made representation dated 01.10.2020 informing the 3rd respondent about non submission of registration certificate by the 5th respondent, no action is being taken. The 5th respondent filed counter denying the averments in the affidavit filed in support of the writ petition stating that the objections raised by the petitioner have been considered by the tender committee and they have come to a conclusion that the said objections raised by the petitioner are without any merit and sought for dismissal of the writ petition. 7. W.P. No. 21456 of 2020 This writ petition is filed seeking writ of mandamus declaring (i) Letter No. Mktg/M2/336/PTC/KMS 2020-21, dated 31.10.2020 & (ii) Lr. No. RTO/NLG/Paddy Tender/2020, dated 07.10.2020 issued by the respondent Nos. 3 & 5 respectively and also declaring the action of the respondents 2 to 4 in accepting the invalid technical bids of respondent Nos. 6 & 7 and taking steps to appoint either of them as contractor of Nalgonda Block of Nalgonda District for transportation of Paddy & Gunnies under Tender Notice bearing Ref. No. Mktg/M2/336/PTC/KMS/2020-21, dated 16.09.2020 as illegal and arbitrary and consequently to set aside the impugned proceedings dated 31.10.2020 and 07.10.2020 and direct the respondent Nos. 2 to 4 to reject the tenders of respondent Nos. 6 & 7 and appoint the petitioner as the transport contractor of Nalgonda Block. No. Mktg/M2/336/PTC/KMS/2020-21, dated 16.09.2020 as illegal and arbitrary and consequently to set aside the impugned proceedings dated 31.10.2020 and 07.10.2020 and direct the respondent Nos. 2 to 4 to reject the tenders of respondent Nos. 6 & 7 and appoint the petitioner as the transport contractor of Nalgonda Block. It is the case of the petitioner that in pursuance to the e-tender notice issued by the 3rd respondent dated 16.09.2020, for appointment of contractors for transportation of paddy & gunnies as entrusted by TSCSCL, the petitioner along with respondents 6 & 7 submitted bids. As per the tender schedule, the respondents 2 to 4 opened all the technical bids submitted by the bidders on 25.09.2020 at 12.00 and declared that all the bidders have qualified at the technical bid stage and that they have also opened financial bids on the same day at 8.00 p.m. Subsequently, the petitioner came to know that the technical bid submitted by the 6th and 7th respondents are invalid and the same is liable to be rejected. Though the petitioner made representation dated 01.10.2020 informing the 3rd respondent about non submission of firm registration certificate by the respondents 6 & 7, no action is being taken. The 3rd respondent issued impugned proceedings dated 31.10.2020 rejecting the petitioner's representation dated 01.10.2020. 8. Heard Sri K. Raghuveer Reddy, Sri P. Mehar Srinivasa Rao, Sri Bobbili Srinivas, learned counsel for the petitioners, learned Government Pleader for Civil Supplies, Sri A. Jagan, learned Standing Counsel for the Telangana State Civil Supplies Corporation, Sri Ch. Ravinder, learned counsel for 5th respondent in W.P. Nos. 18676 & 20820 of 2020, Sri B. Vivekananda, learned counsel for respondent Nos. 5 & 6 in W.P. Nos. 18773 & 21456 of 2020. 9. In all these writ petitions, the petitioners are mainly challenging the award of tenders in favour of unofficial respondents on the allegations that the successful bidders have not fulfilled the eligibility criteria as per the terms and conditions laid down in the impugned tender notice. It is also alleged that even though some of the unofficial respondents have not produced the firm registration certificates, those who are ineligible and disqualified, have also participated in the tender process and that they have been awarded the contracts. 10. It is also alleged that even though some of the unofficial respondents have not produced the firm registration certificates, those who are ineligible and disqualified, have also participated in the tender process and that they have been awarded the contracts. 10. The grievance of the petitioner in W.P. No. 17934 of 2020 is that the 3rd respondent opened the financial bids without opening and scrutinizing the technical bid in pursuant to E-tender issued by the 2nd respondent on 15.09.2020. In W.P. Nos. 18676, 18773, 19708, 20820 & 21456 of 2020, the petitioners challenged action of the respondents in accepting invalid tenders of the unofficial respondents and also granting tenders in their favour, even though they do not fulfill the tender conditions, which is in violation of tender conditions, particularly contrary to Clause No. 7(e) of the tender conditions. It is also alleged that existing contractors have also participated in the tender process, who are also one of the partners of the firm, which is a disqualification as per the terms and conditions of tender notice. Alleging various violations by the respondent Corporation in accepting the bids of ineligible and persons, who were disqualified under tender conditions, these writ petitions have been filed before this Court. 11. As already observed supra, Counter affidavits are filed by the respondent Corporation as well as unofficial respondents, who have been awarded the contract disputing the objections of the writ petitioners, justifying the award of contracts in their favour. 12. Though learned counsel appearing on behalf of the parties have elaborately argued with reference to the pleadings in the affidavits filed in support of the writ petitions and also counter affidavits on disputed questions of facts, the details of which may not be required in the present case, since there exists an arbitration Clause i.e., Clause No. 47 in the tender notification at page 35, which reads as follows: "47. Arbitration: Any dispute arising out of this tender shall be resolved as per the Arbitration and Conciliation Act, 1996, duly nominated Arbitrator by the VC & Managing Director, TSCSCL." 13. Arbitration: Any dispute arising out of this tender shall be resolved as per the Arbitration and Conciliation Act, 1996, duly nominated Arbitrator by the VC & Managing Director, TSCSCL." 13. No doubt, counsel appearing for the petitioners submits that existence of arbitration clause will not come in the way of this Court's inherent extraordinary jurisdiction in entertaining the writ petitions under Article 226 of the Constitution of India, but the question is why this Court should entertain the writ petitions, when there is efficacious alternate remedy is available to the writ petitioners by way of arbitration clause contained in the tender notification. It is well settled law that there is no bar in entertaining the writ petitions, even when there exists arbitration clause in the tender notification. However, it is the prerogative jurisdiction of this Court under Article 226 of the Constitution of India to entertain or not to entertain writ petition, when effective efficacious alternate remedy is available. For the sake of convenience, Article 226 of the Constitution of India reads as follows: 226. However, it is the prerogative jurisdiction of this Court under Article 226 of the Constitution of India to entertain or not to entertain writ petition, when effective efficacious alternate remedy is available. For the sake of convenience, Article 226 of the Constitution of India reads as follows: 226. Power of High Courts to issue certain writs (1) Notwithstanding anything in Article 32 every High Court shall have powers, throughout the territories in relation to which it exercise jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose (2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories (3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause (1), without (a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and (b) giving such party an opportunity of being heard, makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose favour such order has been made or the counsel of such party, the High Court shall dispose of the application within a period of two weeks from the date on which it is received or from the date on which the copy of such application is so furnished, whichever is later, or where the High Court is closed on the last day of that period, before the expiry of the next day afterwards on which the High Court is open; and if the application is not so disposed of, the interim order shall, on the expiry of that period, or, as the case may be, the expiry of the aid next day, stand vacated (4) The power conferred on a High Court by this article shall not be in derogation of the power conferred on the Supreme court by clause (2) of Article 32 14. It is not the case of the petitioners that the disputes arising out of the tender process is not amenable to jurisdiction of arbitrator, but however some of the learned counsel for the petitioners submitted that there is no concluded contract, as such, there is no agreement for referring the matter to arbitration. It is also alleged that unless the tender process concludes and agreement is entered awarding the contract in favour of a particular individual, the question of coming into existence of arbitration clause does not arise. However, a reading of the arbitration clause, which is extracted supra goes to show that any dispute arising out of the tender, shall be resolved as per Arbitration and Conciliation Act, 1996 duly nominated Arbitrator by the Vice Chairman and Managing Director of the respondent Corporation, as per clause 46 of the tender conditions, which reads as follows: "46. Laws Governing the Contract & Dispute Resolution: (i) The contract will be governed by the laws of India for the time being in force. (ii) In case of any dispute arising out of and touching upon the contract, the decision of the VC & Managing Director, TSCSCL will be final and binding on the Tenderers. If any disputes remain thereafter, the same will be settled in the Court of Law having competent jurisdiction." 15. A reading of the said clause goes to show that any dispute touching upon the contract, the decision of the Vice Chairman & Managing Director, will be final and binding on the tenderers and if still any dispute remains thereafter, the same will be settled in the court of law having competent jurisdiction. The said clause comes into existence after contract is concluded. Since Clause 46 does not in any way affect Clause 47, which deals with disputes arising out of its tender, as such, it cannot be said that disputes arising out of its tender process cannot be adjudicated by the arbitrator by virtue of Clause 47 of the tender conditions. The format of the agreement to be entered into after tender process is concluded is also filed in some of the writ petitions and referred to by the counsel for the petitioners, which also contained arbitration clause. Therefore, it goes without saying that even after agreement is executed and any disputes arise out of the agreement, the same can also be referred to arbitration. Therefore, it goes without saying that even after agreement is executed and any disputes arise out of the agreement, the same can also be referred to arbitration. As such, it can be concluded that arbitration clause is available to the parties to the tender notification, before the contract is entered into and also after the contract is concluded. 16. Section 2(b) of the Arbitration and Conciliation Act, 1996 reads as follows: "arbitration agreement" means an agreement referred to in Section 7. Section 7 of the Act reads as follows: 7. Arbitration agreement. -- (1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in-- (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. 17. A perusal of Section 2(g) and read with Section 7 of the Arbitration and Conciliation Act, goes to show that arbitration agreement means arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement, but the same should be in writing, signed by the parties or an exchange of letters, telex, telegrams or other means of telecommunication, which provide a record of the agreement. A reference in document in a contract also states arbitration clause. Arbitration agreement need not be in concluded contract as words used in Section 7 of the Act are very clear whether contractual or not. A reference in document in a contract also states arbitration clause. Arbitration agreement need not be in concluded contract as words used in Section 7 of the Act are very clear whether contractual or not. In the present case, the tender notification has been issued by the respondent Corporation inviting tenders and it is implied on the part of the petitioners and unofficial respondents that they have accepted all the documents and tender conditions and it is also presumed that they are well aware of the Clause 47 of the tender conditions. Being aware of Clause 47, they have offered their bids in response to the tender notification, as such, any dispute arising out of tender process, whether it is before the awarding of contract or after conclusion of the same, the same can be referred to arbitrator, as per the said clause. 18. Now, it is to be seen whether this Court can entertain the writ petitions and grant relief, when there exists arbitration clause in the tender documents. It is well settled law that existence of alternate remedy cannot be a bar for entertaining the writ petition. There is no gainsaying that in a given case, the High Court may not entertain a writ petition under Article 226 of the Constitution on the ground of availability of an alternative remedy, but the said rule cannot be said to be of universal application. The rule of exclusion of writ jurisdiction due to availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of the availability of an alternative remedy, a writ court may still exercise its discretionary jurisdiction of judicial review, in at least three contingencies, namely, (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. In these circumstances, an alternative remedy does not operate as a bar. (See M.P. State Agro Industries Development Corporation Limited v. Jahan Khan (2007) 10 Supreme Court Cases 88). It is always discretion of this Court to entertain or not to entertain writ petition, which is in the nature of self imposed restriction. In these circumstances, an alternative remedy does not operate as a bar. (See M.P. State Agro Industries Development Corporation Limited v. Jahan Khan (2007) 10 Supreme Court Cases 88). It is always discretion of this Court to entertain or not to entertain writ petition, which is in the nature of self imposed restriction. In the present case whether Court is of the opinion that factual matrix is required to be adjudicated by proper forum, as disputed questions of fact, which are to be resolved in the process, after hearing parties, after considering the nature of allegations made, this Court is of the considered opinion that the petitioners have to be relegated to alternate remedy by way of arbitration in terms of clause 47 of the tender conditions. 19. Though the learned counsel for the petitioners have relied on the judgments reported in Tulip I.T. Services Limited v. Punjab National Bank reported in [ 2004 (2) ARBLR 447 Delhi] and Managing Director, West Bengal Dairy and Poultry Development Corporation Limited v. Jayanti Bose (LAWS (CAL) 2018 4 31] of Calcutta High Court. The Delhi High Court has not dealt with the definition of arbitration agreement contained in Section 2(g) r/w Section 7 of the Act, as such, I am not in agreement with the same, with great respect. Similarly, judgment of Hon'ble Supreme in reported in M/s. PSA Mumbai Investments PTE Limited v. The Board of Trustees of the Jawaharlal Nehru Port Trust and another (Civil Appeal No. 9352 of 2018) and West Bengal Dairy and Poultry Development Corporation Limited v. Jayanti Bose (supra) have not dealt with similar arbitration clause, as in the present case, as such, the same are not applicable to the facts and circumstances of the present case on hand. In view of above facts and circumstances, I do not see any merit in the writ petitions and accordingly, the same are dismissed. There shall be no order as to costs. As a sequel thereto, miscellaneous petitions, if any, pending shall stand dismissed.