ORDER : 1. The facts of these two writ petitions and the issue involved in both the writ petitions are overlapping each other and consequential to each other. Hence, both the writ petitions are heard together and disposed of by this common order. 2. The petitioner in both these writ petitions is a man power supplying agency and contractor. Relief in both the writ petitions is sought against the 2nd respondent only. 3. The case of the petitioner is that the 2nd respondent issued a tender notice vide No.APMDC/HRD/OS-TENDER/2019 dated 09.08.2019 inviting tenders for empanelment of Outsourcing Agencies for providing various kinds of personnel to the 2nd respondent – Andhra Pradesh Mineral Development Corporation Limited [for short, ‘APMDC’] on outsource basis. The petitioner had participated in the e-tender process. It’s tender was accepted by the 2nd respondent. Accordingly, a letter of Award dated 31.08.2019 was issued to the petitioner. The petitioner had submitted a performance bank guarantee bearing No.0505519BG0002805 dated 04.09.2019 for an amount of Rs.64.56 lakhs as per the terms and conditions of the tender document. Thereafter, an agreement dated 05.09.2019 has been entered between the parties. As per the agreement, the duration of the agreement is for a period of six months. However, upon satisfactory performance, the agreement can be extended for a further period of six months at the discretion of the APMDC. The performance of the petitioner was found highly satisfactory by the 2nd respondent and the same is evident from the letter dated 28.09.2020 issued in that regard. From 05.09.2019, the date of agreement, the petitioner has been discharging its contractual duties at 400 sand reaches and stock yards by engaging nearly 2000 persons. During the agreement period, with mutual consent of both the parties, the agreement dated 05.09.2019 has been amended on 23.11.2019 whereby clause Nos.3(a) and (b) have been amended and the initial tenure of the agreement has been extended to one year from six months and the further extension has been modified to a minimum period of one year from six months and maximum period of three years, upon satisfactory performance of the contractor. The necessary infrastructure like huts at the work site, uniforms etcetera are being provided to the personnel by the petitioner at huge cost. The petitioner is entitled to the reimbursement of the expenditure incurred by providing infrastructure at the work site. The necessary infrastructure like huts at the work site, uniforms etcetera are being provided to the personnel by the petitioner at huge cost. The petitioner is entitled to the reimbursement of the expenditure incurred by providing infrastructure at the work site. In fact the District Sand Officers of the 2nd respondent have recommended for payment of additional allowance towards the infrastructure provided by the petitioner. The petitioner raised a claim towards the same amounting to Rs.7.22 Crores and submitted the same to the 2nd respondent. After the expiry of the initial period of one year, as per the terms of the amended clause 3(b) of the agreement, the petitioner has a right for extension of contract period by one to three years. The initial period of one year came to an end by 04.09.2020. As no decision is taken by the 2nd respondent for renewal of the contract beyond 04.09.2020, the petitioner was constrained to address a letter dated 25.09.2020 to the 2nd respondent seeking return of the bank guarantee. However, due to contractual obligations, the petitioner continued to provide services at the sand reaches and stock yards through its personnel. The 2nd respondent has accepted for the same, which could be construed that the contract period has been impliedly extended. The petitioner recently came to know that the 2nd respondent is proceeding with awarding the contract in favour of a third party. 4. Questioning the inaction on the part of the 2nd respondent in extending the tenure of the contract of the petitioner in terms of amended clause 3(b) of the Agreement dated 05.09.2019 as arbitrary, unreasonable and unconstitutional and for a consequential direction to the 2nd respondent to consider and extend the tenure of the contract of the petitioner, W.P.No.23012 of 2020 is filed. 5. While ordering notice before admission, the writ petition was directed to be posted on 18.12.2020. 6. Meanwhile, as the 2nd respondent issued a Letter of Intent dated 03.12.2020 in favour of M/s. Reddy Enterprises, Vijayawada, for deployment of outsourcing manpower, in the place of the petitioner, for a period of six months, on nomination basis, the petitioner being affected filed W.P.No.24101 of 2020 questioning the action of the 2nd respondent in awarding the contract of deployment of man power at the sand reaches and stock yards in favour of Reddy Enterprises (3rd respondent), without calling for tenders and on nomination basis. 7. 7. Heard Sri Vedula Srinivas, learned counsel for the petitioner, Sri V.R.N. Prashanth, learned standing counsel appearing for the 2nd respondent – Andhra Pradesh Mineral Development Corporation Limited and Sri Enakollu Venkateswarlu, learned counsel for the 3rd respondent. 8. Learned counsel for the petitioner submits that the man power supplying contract was entrusted to the petitioner by way of an agreement, dated 05.09.2019, with 0.01% fixed service charges including statutory payments and GST for a period of six months and upon satisfactory performance, agreement can be extended for a period of six more months at the discretion of the 2nd respondent. Thereafter, with mutual consent, clauses 3(a)&(b) were amended by amendment to the agreement dated 23.11.2019. In view of clause 3(b) of the amended agreement, the agreement may be extended for a minimum of one year and for a maximum period of three years instead of six months, upon satisfactory performance of the contract. The 1st respondent – Government has issued new guidelines for enrolment of outsourcing personnel through the Andhra Pradesh Corporation for Outsource Services [for short, ‘APCOS’] portal for taking necessary action at their end. The 2nd respondent, by letter dated 29.02.2020, requested the petitioner to give details of the outsourced personnel working through the petitioner agency. But the 2nd respondent neither extended the petitioner’s contract beyond 04.09.2020 on which the date the term of the contract was expired nor the outsourced personnel were taken into the APCOS portal. The 2nd respondent again reminded the petitioner on 18.08.2020 for uploading the data of all the outsourcing personnel engaged through the petitioner agency in the prescribed proforma. The petitioner has already uploaded the data with regard to the personnel engaged by it in the sand reaches and stock yards of the 2nd respondent. As no decision is taken by the 2nd respondent for renewal of the contract beyond 04.09.2020, the petitioner addressed a letter dated 25.09.2020 seeking return of the bank guarantee. Even though the petitioner’s contract is not extended it continued its man power under the contractual obligation at the sand reaches and stock yards through its personnel. Even though the petitioner supplied the outsourced personnel to man the sand reaches and stock yards beyond contract period, no service charges to the petitioner and wages to the employees were paid. Even though the petitioner’s contract is not extended it continued its man power under the contractual obligation at the sand reaches and stock yards through its personnel. Even though the petitioner supplied the outsourced personnel to man the sand reaches and stock yards beyond contract period, no service charges to the petitioner and wages to the employees were paid. The petitioner requested the 2nd respondent to pay the wages to the outsourced man power supplied by the petitioner agency and service charges of 0.01% but the 2nd respondent dodged the matter. Meanwhile, the 2nd respondent entrusted the contract of deployment of outsourced employees to the 3rd respondent in W.P.No.24101 of 2021 on nomination basis upon entering into agreement dated 09.12.2020 for a period of six months. The settled position of law is that the State is bound to award the contracts only by way of tenders but not on nomination basis except in exceptional circumstances like natural calamities, the supplies being available with one person only or when successive tenders have failed for some reasons. Further, though as per the Letter of Intent, dated 03.12.2020, the 3rd respondent has to furnish a bank guarantee for Rs.3.50 Crores and entitled for service charges at 0.01%, however, subsequently, it appears the bank guarantee to be furnished has been brought down to around Rs.64 lakhs and the service charge has been increased to 0.5%, which is 500 times more than what was initially agreed on par with the petitioner, which is prejudicial to the interest of the public exchequer. Though the tenure of the petitioner has expired on 04.09.2020, and there is no renewal of the same, as the petitioner has been supplying man power at the sand reaches and stock yards due to the contractual obligations, 2nd respondent ought to have considered for extension of the contract period in favour of the petitioner for some more time till the sand policy is formulated by the State, as the same is permissible in view of amended clause 3(b) of the agreement. The petitioner was awarded with the work on competitive basis at the lowest rates and it is prepared to execute the work during the renewed period also on the same terms. There is no justification on the part of the 2nd respondent in awarding the work to the 3rd respondent. The petitioner was awarded with the work on competitive basis at the lowest rates and it is prepared to execute the work during the renewed period also on the same terms. There is no justification on the part of the 2nd respondent in awarding the work to the 3rd respondent. The action of the 2nd respondent in awarding the contract in favour of the 3rd respondent without calling for any tenders and on nomination basis is highly illegal, violative of Article 14 of the Constitution of India and contrary to the settled principles of law. 9. In support of his contentions, learned counsel for the petitioner placed reliance on the decision of the Hon’ble Supreme Court in Joshi Technologies International v. Union of India and others [ (2015) 7 SCC 728 ] and the decision of the erstwhile High Court of Andhra Pradesh in P. Narayana Reddy and others v. Government of AP and others [ 2010 (3) ALD 505 ]. 10. On the other hand, Sri V.R.N. Prashanth, learned standing counsel, while reiterating the averments in the counter affidavit filed in W.P. No. 24101 of 2020 by the 2nd respondent, contends that the Government of Andhra Pradesh issued G.O.Ms.No.126 dated 18.10.2019 and has accorded approval for incorporating APCOS as a non profit organization. Consequently, G.O.Ms.No.136 dated 04.11.2019 was issued incorporating APCOS. APCOS will directly outsource manpower to various departments/organisations in the State as per their requirements. APCOS has been established to effectively cater to the outsourcing requirements to the Government and ensure maximum possible benefits to the outsourced manpower by adopting effective processes, procedures and technologies. None of the Corporations or State agencies can directly outsource the manpower on their own and all such outsourcing contracts shall be necessarily routed through APCOS. Due to procedural reasons, the same could not take place. Meanwhile, the outsourcing employees who were deployed in various reaches have been making the demands for payment of wages and as there was no contractor manning them, no wages were paid for the period during September to November, 2020 and the unrest among them lead to doing hunger strikes. The Government of Andhra Pradesh proposed for transition of the policy on sand, vide GOMs.No.78, dated 12.11.2020. The Government of Andhra Pradesh proposed for transition of the policy on sand, vide GOMs.No.78, dated 12.11.2020. The same is being looked after by the 2nd respondent in the capacity of agent, to a new system where it is expected that there would not be any role of 2nd respondent. It is anticipated that the same would take place within a month or two. As such, going for tender process would only be uneconomical for such a short term. Under these circumstances to meet the exigencies, the 3rd respondent, which was already providing outsourcing services at Head Office, the Board of Directors at the 405th meeting held on 12.11.2020, has taken a decision to award the contract to the 3rd respondent only for a period of six months with a precondition that the contract shall be co-terminated along with the upgraded sand policy-2019, which is under transition under the aegis of the Government of Andhra Pradesh. Therefore, there is no arbitrariness or illegality or favouritism in awarding work in favour of the 3rd respondent. Mere entrustment of work on nomination basis cannot raise a presumption of arbitrary exercise of power. Nomination of work can be made for justifiable reasons. After deciding to entrust the subject work to the 3rd respondent, the 2nd respondent issued letter dated 03.12.2020 in favour of the 3rd respondent fixing the service charge @ 0.01% with a condition to pay bank guarantee for Rs.3,57,82,624/-. The 3rd respondent by its letter dated 03.12.2020 requested to enhance the service charges @ 2.7% as they are being asked to pay huge amounts towards bank guarantee and also on the ground that they are operating at APBCL at the same rates. After due deliberations, the 2nd respondent, taking into account the prevailing circumstances, issued letter dated 07.12.2020 with certain modifications and calling upon the 3rd respondent to furnish the bank guarantee for Rs.64,56,000/- along with the bank guarantee of Rs.45 lakhs which was already lying with the 2nd respondent towards bank guarantee and fixed the service charges @ 0.5%. After due deliberations, the 2nd respondent, taking into account the prevailing circumstances, issued letter dated 07.12.2020 with certain modifications and calling upon the 3rd respondent to furnish the bank guarantee for Rs.64,56,000/- along with the bank guarantee of Rs.45 lakhs which was already lying with the 2nd respondent towards bank guarantee and fixed the service charges @ 0.5%. The contentions of the petitioner that the petitioner has been discharging its contractual duties at 400 sand reaches and stock yards by engaging nearly 2000 persons and that the necessary infrastructure like huts at the worksite, uniforms etc., were provided by the petitioner at huge costs to the persons engaged by it have no bearing to the lisinvolved in the present writ petition. The petitioner is required to execute the subject agreement as per the terms and conditions mentioned therein and they have been paid as per their entitlement and no extra amounts are required to be paid by the 2nd respondent. After expiry of the agreement on 05.09.2020, the petitioner through letter dated 25.09.2020 sought refund of the bank guarantee furnished by it at the time of entering into the agreement. The claims raised by the petitioner by letter dated 23.06.2020 was rejected by the 2nd respondent through letter dated 25.08.2020 categorically stating that the petitioner is not entitled for the amounts over and above the contractual rates. The petitioner addressed another letter dated 13.10.2020 reiterating his claim and to review the decision of the 2nd respondent dated 25.08.2020. The petitioner has never expressed its intention to get the subject agreement extended and instead they were making claims contrary to the terms and conditions contained in the subject agreement. In the absence of any request for extension and in view of the pre-emptory stand that the contract stood expired on 05.09.2020 thereby seeking refund of the bank guarantee, the question of considering the petitioner’s request for extension does not arise. After 05.09.2020 the petitioner stopped execution of the work and is only making claims against the 2nd respondent for amounts contrary to the agreement conditions. The award of the work in favour of the 3rd respondent is proper and valid. The writ petition is liable to be dismissed. 11. After 05.09.2020 the petitioner stopped execution of the work and is only making claims against the 2nd respondent for amounts contrary to the agreement conditions. The award of the work in favour of the 3rd respondent is proper and valid. The writ petition is liable to be dismissed. 11. In support of his contention, learned standing counsel relied on the decision of the Hon’ble Supreme Court in the case of Villianur Iyarkkai Padukappu Maiyam v. Union of India and others [ (2009) 7 SCC 561 ] wherein it is held that in the exigencies and the requirements of the State, the State can resort to award the contract on nomination basis and insisting the State in all circumstances to award the contract on tender basis cannot be said to be exercise of the executive power in an arbitrary manner and wisdom and advisability of economic policy are ordinarily not amenable to judicial review. 12. Sri Enakollu Venkateswarlu, learned counsel for the 3rd respondent, while adopting the arguments and contentions of the learned counsel for the 2nd respondent, would contend that the 3rd respondent is the existing man power supply contractor and the work was awarded for short period of six months on nomination basis, during the transition period of sand policy and pending .... of APCOS, same could not be said to be unjustifiable. He would further contend that payment of service charges at 0.5% to the 3rd respondent and reduction of amount of bank guarantee to be paid by the 3rd respondent for short duration of the contract period could not be said to be illegal and arbitrary. 13. I have gone through the material available on record and the decisions relied upon by both the counsel. 14. Admittedly, the petitioner was awarded the work of supply of man power by the 2nd respondent to provide man power at sand reaches and stock yards by way of tender process. As per the tender conditions, the petitioner has submitted a performance bank guarantee on 04.09.2019 for an amount of Rs.64.56 lakhs. An agreement was entered into on 05.09.2019. As per the agreement it has provided all the facilities to the workmen like huts and uniforms to the workmen and it engaged nearly about 2000 persons on payment of service charges of 0.01%. The initial contract period is six months. An agreement was entered into on 05.09.2019. As per the agreement it has provided all the facilities to the workmen like huts and uniforms to the workmen and it engaged nearly about 2000 persons on payment of service charges of 0.01%. The initial contract period is six months. However, as per clause 3(b) of the amended agreement entered into between the petitioner and the 2nd respondent on 23.11.2019 the petitioner is entitled for extension of contract to a minimum period of one year and maximum period of three years. After expiry of the contract period on 05.09.2020, and pending decision of the 2nd respondent for extension of the agreement period, in view of the contractual obligation the petitioner continued to supply the man power at the sand reaches and stock yards on payment of same charges of 0.01%. The contention of learned standing counsel that in view of offing of change of sand policy, which is now being looked after by the 2nd respondent in the capacity of agent, to a new sand policy where it is expected that there would not be any role of 2nd respondent, as such, going for tender process for such a short term would only be uneconomical and hence to meet the exigencies it was decided on the 405th meeting held on 12.11.2020 to award the contract to the 3rd respondent cannot be countenanced. Further contention of the counsel that in the facts and circumstances of the case, the award of contract to the 3rd respondent on nomination basis could not be said to be illegal and arbitrary is untenable. He would further contend that the petitioner has asked for return of the bank guarantee and never asked for extension of the contract period and in those circumstances the 2nd respondent is constrained to engage the services of the 3rd respondent. The said contention is unsustainable for the reason that the petitioner is under contractual obligation to supply personnel, as per the existing rate until the contract work is entrusted to another agency. The petitioner has done the same by continuing the personnel at the sand reaches and stock yards, even beyond the period of the contract and this Court found that the award of supply of man power to the 3rd respondent on nomination basis is illegal. The petitioner has done the same by continuing the personnel at the sand reaches and stock yards, even beyond the period of the contract and this Court found that the award of supply of man power to the 3rd respondent on nomination basis is illegal. The 2nd respondent ought to have utilised the services of the petitioner as per clause 3(b) of the amended agreement entered into between the parties on 05.09.2019 as per the existing terms and conditions by paying service charges of 0.01%. This Court could not able to understand as to why the 2nd respondent entrusted the work of supply of man power to the 3rd respondent on nomination basis for a period of six months on payment of service charges of 0.5% which is 500 times more than the service charges paid to the petitioner @ 0.01%, which is obviously loss to the State exchequer. The decision of entrustment of contract to the 3rd respondent on nomination basis is not in the public interest. The entrustment of the work to the 3rd respondent on nomination basis is contrary to the Government guidelines and circular instructions and decision of the erstwhile High Court of A.P in P. Narayana Reddy case (supra). In the said case, the erstwhile High Court, while dealing with the question ‘is the contract for execution of the diversion road a supplemental item of work required to be executed by the very same contractor who was awarded the original contract of construction of the Gandikota Dam?’, after elaborate discussion, held that ‘as the impugned contract is not a work which is a supplemental item of the original contract, the administrative instructions in Memo, dated 19.01.1980, do not require the said work to be awarded to the original contractor. The Government was, therefore, not obligated to have the road work executed only through the original contract, i.e., the 4th respondent, on a nomination basis without resorting to the tender process. Award of the impugned work to the 4th respondent on nomination basis cannot, therefore, be justified on this ground.” 15. The Government was, therefore, not obligated to have the road work executed only through the original contract, i.e., the 4th respondent, on a nomination basis without resorting to the tender process. Award of the impugned work to the 4th respondent on nomination basis cannot, therefore, be justified on this ground.” 15. In the instant case, if the 2nd respondent is of the opinion that going for tender process would only be uneconomical for such a short term, it ought to have utilised the services of the petitioner, as per amended clause 3(b) of the agreement, on the same terms instead of awarding the contract to the 3rd respondent without calling for tenders and on nomination basis, on the terms and conditions which are prejudicial to the interest of the public exchequer. When the decision of the 2nd respondent suffers from arbitrariness, the said action is subject to judicial review. Hence, the contra contention of learned standing counsel that the work of supply of outsourcing contract is entrusted to the 3rd respondent by way of nomination basis for a short period as the 2nd respondent thought that it is uneconomical for short period to call for tenders and in the exigencies of the state in all circumstances the state cannot resort for entrustment of the work on tender basis merits no consideration and reliance placed on the decision in Villianur’s case (supra) does not support the contention of the learned standing counsel, as fact situation therein is different to that of the present case. 16. In the considered view of this Court, the entrustment of the work of supply of man power to the 3rd respondent by way of nomination basis for a period of 6 months, even though with the condition that the contract shall be co-terminated along with the upgraded sand policy-2019, on payment of service charges @ 0.5% on the huge amounts payable to the employees is highly illegal and arbitrary. Accordingly, the awarding of contract to the 3rd respondent is set aside and the respondents 1 & 2 are directed to forthwith take steps to call for tenders to award the subject contract and conclude the tender process as per law. 17. Accordingly, W.P.No.24101 of 2020 is allowed. 18. Accordingly, the awarding of contract to the 3rd respondent is set aside and the respondents 1 & 2 are directed to forthwith take steps to call for tenders to award the subject contract and conclude the tender process as per law. 17. Accordingly, W.P.No.24101 of 2020 is allowed. 18. As the petitioner admittedly has not requested for extension of the contract period and in-fact requested the 2nd respondent by letter dated 25.09.2020 for return of the bank guarantee, and the 2nd respondent has not chosen to exercise his power under clause 3(b) of the amended agreement dated 25.11.2019, the petitioner is not entitled for extension of contract for further period. However, the petitioner is given liberty to make a representation to the 2nd respondent for payment of dues, if any, payable to the petitioner, within a period of two weeks from the date of receipt of a copy of this order. On such submission of the representation, the 2nd respondent is directed to consider the same objectively in its proper perspective as per law and pass reasoned orders and communicate the same to the petitioner as expeditiously as possible and not later than a period of four weeks from the date of receipt of representation from the petitioner. 19. Accordingly, W.P.No.23012 of 2020 is disposed of. 20. There shall be no order as to costs. 21. As a sequel, pending miscellaneous applications, if any, shall stand closed.