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2020 DIGILAW 864 (TS)

P. Kalavathi v. State of Telangana

2020-12-18

A.ABHISHEK REDDY

body2020
JUDGMENT 1. This Writ Petition is filed by the petitioner aggrieved by the action of the respondent No.5 in issuing the impugned Notice dtd. 29/10/2020 vide No.02/122 (105)/2019-RM:N whereby the petitioner was informed that the tender issued in favour of the petitioner was cancelled by the Tender Committee due to administrative grounds/reasons, in terms of item No.14 of the tender notification, and also that it was decided to go for fresh tenders. 2. The case of the petitioner, in brief, is that pursuant to the Manual Tenders dtd. 12/2/2020 issued by the respondent Corporation inviting tenders for licensing popcorn business at Stall No.1/shop No.1, Suryapet Bus Station, for a period of five years duly quoting the licence fee @ Rs.31, 116.00 per month, the petitioner participated and after due negotiations with the Tender Committee the petitioner agreed to pay the licence fee @ Rs.40, 116.00 per month excluding the electricity, maintenance charges, GST and other local taxes for running the business. Accordingly, the petitioner paid the Earnest Money Deposit of Rs.3, 45, 000.00 to the Corporation. Thereafter, the matter has been referred to respondent No.2 for finalization. However, without assigning any reasons, respondent No.5 issued the impugned letter to the petitioner informing about the cancellation of the tender, after a lapse of more than 10 months, which is illegal and arbitrary. Hence, left with no other option, the petitioner has approached this Court Hon'ble High Court under Article 226 of the Constitution of India. 3. On 19/11/2020, this Court has directed the respondents not to finalize the fresh tenders to the extent of stall No.1/shop No.1. 4. The Corporation-2nd respondent filed counter affidavit along with the vacate stay petition mainly contending that the offer made by the petitioner towards licence fee was found to be very less. Therefore, the Tender Committee has taken a decision to cancel the tender and go for a fresh one and sent referred the case to the Corporate Office for necessary approval of the competent authority. Therefore, the Tender Committee has taken a decision to cancel the tender and go for a fresh one and sent referred the case to the Corporate Office for necessary approval of the competent authority. The Tender Committee also observed that after emerging successful bidder for stall No.1 for doing popcorn business, the petitioner who is also the licensee of Stall No.17 at Hi-Tech bus station, Suryapet, for doing popcorn and ice cream business on a monthly licence fee of Rs.1, 65, 000.00 for a period of five years w.e.f. 11/5/2016 to 7/2/2021 intentionally submitted a representation on 11/5/2020 i.e., before expiry of the existing contract, requesting for closure of business voluntarily to avoid payment of hefty licence fee of Rs.1, 65, 000.00 for doing the very same business in Stall No.17. A complaint was also lodged to the Financial Advisor, TSRTC, Hyderabad, by one N.Ravinder Rao bringing to the notice of the authorities the tactics played by the petitioner. In those circumstances, the Corporation, in order to avoid the huge financial loss, has invoked clause No.14 of the tender notification and issued the impugned letter cancelling the tender issued in favour of the petitioner. That, there was no concluded agreement with the petitioner and therefore, no rights have accrued to the petitioner, which can be enforced. That, there are no merits in the present writ petition and the same is liable to be dismissed. 5. Heard Ms.Vladameer Khatoon, the learned counsel for the petitioner and Sri A.Ravi Babu, the learned Standing Counsel for TSRTC. With the consent of both the parties, the present writ petition is disposed of. 6. The learned counsel for the petitioner has vehemently argued that the authorities having called for an open tender and after negotiations with the petitioner, the Tender Committee has decided to award the contract to the petitioner, cannot turn back after a lapse of 10 months and cancel the tender and go for fresh tender. Learned counsel has stated that after the negotiations were concluded, the file was sent to the Managing Director for approval and the approval was also given. Once the approval has been given by the Managing Director, the Regional Manager has no jurisdiction to cancel the tender and call for fresh ones. Learned counsel has stated that after the negotiations were concluded, the file was sent to the Managing Director for approval and the approval was also given. Once the approval has been given by the Managing Director, the Regional Manager has no jurisdiction to cancel the tender and call for fresh ones. That the petitioner had paid an amount of Rs.3, 45, 000.00 as EMD, which amount had to be borrowed at huge interest, and cancellation of the tender will ruin the petitioner financially as she is paying huge interest for the last 10 months without any fault of her. That the surrender of another stall by the petitioner cannot be a ground for cancelling the present tender. Learned counsel has taken this Court through the Note file of the Corporation which has been filed along with the counter, to contend that the cancellation of the tender was done with a malafide intention by the Regional Manager, based on a false complaint made by a third party who had nothing to do with the entire tender process. The learned counsel has argued that the impugned order has to be set aside as the same is not only contrary to the law but opposed to principles of natural justice and equity. 7. Per contra, the learned Standing Counsel has vehemently argued that the decision to cancel the tender was taken at the highest level and only after the approval of the Managing Director the impugned order was issued. The Corporation has every right to cancel the tender at any time before the 'agreement of contract' is entered between the parties. The Corporation had come to the conclusion that awarding the contract to the petitioner would result in huge loss to the Corporation and therefore a decision was taken to cancel the present tender and call for fresh ones. That the petitioner does not have any vested right for allotment of the stall on the ground that she has participated in the tender process or that the Tender Committee had recommended the tender in her favour, in the absence of any agreement being entered. Learned Standing Counsel has taken this Court to the note file in respect of the decision taken to cancel the tender and go for a fresh one, to substantiate that the said decision to cancel the tender has been approved by the Managing Director. Learned Standing Counsel has taken this Court to the note file in respect of the decision taken to cancel the tender and go for a fresh one, to substantiate that the said decision to cancel the tender has been approved by the Managing Director. The contention of the petitioner that the decision to cancel the tender was taken by the Regional Manager is not correct. That the petitioner is free to participate in the fresh tender that is likely to be called afresh. The learned Standing Counsel has taken this Court to Clause 14 of the Terms and Conditions of the Tender Notification, which reads as under: "The Corporation reserves the right to reject any tender/tenders or cancel the tenders or postpone the tenders at any stage without assigning any reasons. For any further information/clarification please contract RM's Office, Nalgonda." So also clauses 61 and 62 of the Tender Form, which read as under: "61. If any dispute arises between the Licensee and TSRTC, the Courts at HYD and Secunderabad shall have jurisdiction. 62. The Corporation reserves the right to reject any one or all the Tenders received without assigning any reasons. No correspondence in respect of the decisions arrived at by the Committee will be entertained." and in view of the same prayed that the writ petition may be dismissed. 8. Before adverting to the various rival contentions, it is pertinent to extract the ratio laid down by the Hon'ble Supreme Court with regard to tenders. 9. In South Delhi Municipal Corporation vs. Ravinder Kumar and another, (2015) 15 SCC 545 . the Hon'ble Supreme Court has held as follows: "18.3.... the High Court has conveniently ignored the very relevant aspect of the case, namely, that the appellant Corporation, before issuance of a particular tender notice, is required to satisfy itself about the reasonableness of the rates quoted by the bidders keeping in view the prevalent market rates in the Corporation area. The internal system for financial check by the department concerned of the appellant Corporation justifies the reasonableness of the rates offered by the bidders by comparing them with the rates at which other similar works were awarded by the appellant Corporation in the recent past in favour of successful bidders. The internal system for financial check by the department concerned of the appellant Corporation justifies the reasonableness of the rates offered by the bidders by comparing them with the rates at which other similar works were awarded by the appellant Corporation in the recent past in favour of successful bidders. For the aforesaid valid reason, the appellant Corporation being the custodian of public money, with bona fide intention to get the best price, has cancelled its earlier tender notice referred to supra and invited fresh bids by issuing another tender notice dtd. 13/12/2012." 10. In Maa Binda Express Carrier and another vs. North-East Frontier Railway and others, (2014) 3 SCC 760 . the Hon'ble Supreme Court has held as under: "8. The scope of judicial review in matters relating to award of contracts by the State and its instrumentalities is settled by a long line of decisions of this Court. While these decisions clearly recognize that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders. It is also fairly well-settled that award of a contract is essentially a commercial transaction which must be determined on the basis of consideration that are relevant to such commercial decision." 11. As can be seen from the record, the tenders were called on 12/2/2020 and the petitioner was the bidder who offered to pay Rs.31, 116.00 per month as Licence Fee. The Tender Committee after due negotiations with the petitioner has put up the offer of Rs.40, 116.00 per month for approval of the Managing Director and sent a note vide No.C3/437(37)/2020-OPD (M&C), dtd. 7/9/2020. The Managing Director has accorded his approval on 5/10/2020. The Tender Committee after due negotiations with the petitioner has put up the offer of Rs.40, 116.00 per month for approval of the Managing Director and sent a note vide No.C3/437(37)/2020-OPD (M&C), dtd. 7/9/2020. The Managing Director has accorded his approval on 5/10/2020. Thereafter, basing on a complaint made by one N.Ravinder Rao to the effect that the petitioner had cancelled the stall for running of popcorn and ice cream on a monthly licence fee of Rs.2, 00, 000.00 after allotment of the present shop, a report was called from the Tender Committee and thereafter, basing on the recommendation of the Tender Committee a decision was taken to cancel the tender and go for fresh tender vide Case No.02/122(105) 2019-RM.N., dtd. 29/10/2020. The said decision was approved by the Managing Director on 18/11/2020. 12. Admittedly, in this case, there is no concluded agreement of contract between the parties which could had bound the parties to the terms of the agreement. The law on tenders is well settled that as long as the agreement of contract is not signed and concluded, the participant does not get any vested right to contend that shop should be allotted to her only just because she is the highest bidder. The tenderer has every right to cancel the tender and go for fresh tender if they come to the conclusion that entering into an agreement with the petitioner will result in financial loss to the Corporation. 13. Even though the learned Counsel has vehemently contended that the petitioner will suffer huge financial loss due to the lapses committed by the Corporation for not concluding the contract immediately and also in paying the interest on EMD amount paid to the Corporation, which amount she had to borrow. This Court is not inclined to grant any relief on that count as they are all disputed questions of fact which have to be established in a Civil Court and this Court under Article 226 of the Constitution of India cannot quantify the exact amount. 14. In view of the above discussion, this Court does not find any merit in the present writ petition and the same is accordingly dismissed. However, this order does not, in any manner, preclude the petitioner from participating in any future tender if she so desires. 14. In view of the above discussion, this Court does not find any merit in the present writ petition and the same is accordingly dismissed. However, this order does not, in any manner, preclude the petitioner from participating in any future tender if she so desires. The petitioner is free to approach the Civil Court seeking damages/interest for the loss sustained by her due to the loss of business or the interest on the deposit of the EMD for the 10 months. Miscellaneous petitions pending in this writ petition, if any, shall stand closed.