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Telangana High Court · body

2022 DIGILAW 605 (TS)

K. Chandrasekhar Rao v. State of Telangana

2022-09-20

K.LAKSHMAN

body2022
ORDER : 1. Writ Petition is filed to declare the action of the official respondents in not stopping the illegal sand mining in Ayyavaripally Village, Midjil Mandal, Mahabubnagar District, by 6th respondent and also declare the proceedings of the District Collector vide No. 4515/ Sand, 2009 dated 09.04.2022 and the consequential Letter of Intent (LOI) TSMDC/GM(S&M)/SAND/exc/Ayyavaripally/2022/67, dated 19.04.2022 and further consequential agreement entered by 2nd respondent in favour of 6th respondent dated 30.04.2022, without issuing any Tender Notification with reference to Ayyavaripally Village area of Midjil Mandal, Mahabubnagar District, as illegal and contrary to the Telangana State Sand Mining Rules, 2015 ( for short, ‘the Rules’) and detrimental to the rights of the petitioner to do the agricultural operations, and set aside the said orders dated 09.04.2022, LOI and agreement and issue consequential direction to the respondents not to allow any sand mining by 6th respondent or any other person at Ayyavaripalli Village reach (Dundubhi Vagu) of Midjil Mandal, Mahabubnagar District. 2. Heard Sri Rohan Aloor, learned counsel, representing Sri Palle Srinivasa Reddy, learned counsel for the petitioner and learned Govt. Pleader for Mines and Geology, appearing for respondent Nos. 1 to 5 and Sri Y. Balaji, learned counsel for the 6th respondent. Perused the record. 3. The petitioner is a resident of Ayyavaripalli Village, Midjil Mandal, Mahabubnagar District, and he is an agriculturist. 2nd respondent had issued tender notification dated 06.03.2021 calling tenders from tenderers for excavation and transportation including loading and unloading of sand to the stockyards from Allipur/Kurumurthy Villages, Chinna Chinthakunta Mandal. In the said tenders, 6th respondent stood as highest bidder. Therefore, both 2nd and 6th respondents have entered into contract on 20.04.2021 on the specific terms and conditions mentioned therein for a period of one year w.e.f. 20.04.2021 to 19.04.2022. 4. 2nd and 6th respondents have also entered into an agreement on 30.04.2022 with regard to excavation of sand from Ayyavaripalli Village, Midjil Mandal, Mahaboobnagar District in lieu of the aforesaid Allipur/Kurumurthy of CC Kunta Mandal, contrary to the terms and conditions of the tender notification dated 06.03.2022, pursuant to the said agreement, dated 30.04.2022. According to the petitioner, 6th respondent hiring large number of vehicles, lorries/tippers and by using proclainers extracting the sand to a depth of more than 10 feet and thereby causing severe loss to the farmers including the petitioner herein. According to the petitioner, 6th respondent hiring large number of vehicles, lorries/tippers and by using proclainers extracting the sand to a depth of more than 10 feet and thereby causing severe loss to the farmers including the petitioner herein. Therefore, according to him, he has locus to file the present petition. The said agreement dated 30.04.2021 entered between 2nd and 6th respondent is illegal and also contrary to the tender notification dated 06.03.2021. Therefore, the present writ petition. 5. The respondent Nos. 2 and 3 filed separate counters contending that the petitioner has no locus to file the present writ petition and he is not an aggrieved party. 6. According to the 2nd respondent, decentralization of sand from the check dam of Allipur/Kurumurthy Villages of Chinna Chinthakunta Mandal by 2nd respondent herein/Telangana State Mineral Development Corporation Limited (TSMDCL) was not taken up due to opposition by the villagers of Kurumurthy Village for excavation of sand apprehending that if the sand is lifted, the ground water level will fall down. The same was represented by 2nd respondent to the District Collector, vide letter dated 13.05.2021 requesting to issue instructions to concerned authorities for smooth excavation of Sand without any hindrance from Villagers. Despite necessary instructions to the revenue officials and police officials, 6th respondent could not proceed with the excavation of sand pursuant to the agreement dated 20.04.2021 in respect of Allipur/Kurumurthy Villages. Therefore, 2nd respondent had requested the District Collector to issue necessary instructions and to desilt the sand from Allipur/Kurumurthy check Dam and provide more sand reaches to 2nd respondent to cater the needs of Government and commercial works in the district. However, the desiltation of sand from Allipur/Kurumurthy Check Dam was not carried out due to unforeseen circumstances. 7. It is further contended that vide letter dated 14.02.2022, 2nd respondent requested the District Collector stating that the Irrigation Department is constructing series of check dams across Dhandhubi Vagu and Pedda Vagu in Mahabubnagar District, and that there is lot of silt deposited at the location of construction of these check dams and to store the designed water, desiltation in the full storage level of these check dams is essential. The Mahabubnagar District is facing sand shortage for private, Government and commercial works and the sand is supplied from Jayashankar Bhupalapally District which is almost 800 kms, and requested the District Collector, to allot the check dams namely Ayyavaripally and Velugomula of Midjil Mandal and Rachala and Ponnakal of Addakal Mandal of Mahaboobnagar District to 2nd respondent. Considering the same, 3rd respondent ordered for joint inspection. A team consisting of ground water, Irrigation, Revenue and Mines and Geology Departments conducted joint inspection on 22.03.2022 and recommended for desiltation of sand from the check dam at Ayyavaripally Village, Midjil Mandal of Mahabubnagar District for a quantity of 1,29,000 M3. The said proposals were discussed with 3rd respondent in the meeting held on 01.04.2022. The 3rd respondent agreed to accord permission for desiltation of 1,29,000M3 of sand from the check dam at Ayyavaripally Village, Midjil Mandal, alternate to earlier allocated desiltation area at Allipur/Kurumurthy check dam along with another two de-silting areas as earmarked with geo-coordinates and recommended by the joint inspection team by canceling the allotment of sand from Alipur/Kurumurthy Villages, and has issued proceedings No. 4515/ Sand/2009, dated 09.04.2022 in favour of 2nd respondent. It is further contended that the respondent No. 6 had deposited EMD and was prevented from de-silting of sand from the villages and therefore, 2nd respondent to avoid the rigors claiming fresh tender interested to work pertaining to de-silting of sand from Ayyavaripalli Village to 2nd respondent. Work was entrusted to 6th respondent for excavation of sand and transportation to the nearby stock yards and again loading of sand into the lorries at stockyard. For that the 6th respondent collected 90.01 cubic meter. There is no loss to anybody. Therefore, there is no irregularity or illegality committed by 2nd respondent in entering into agreement dated 30.04.2022 with the 6th respondent. Though the petitioner is not an aggrieved party and having no locus, he has filed the present writ petition. With the said submissions, he sought to dismiss the present Writ petition. 8. 3rd and 6th respondents filed counter affidavits with the similar contentions. 9. Learned counsel for the petitioner would submit that the petitioner herein is a resident of Ayyavaripalli Village and he is an agriculturist. Therefore, he is an aggrieved party. With the said submissions, he sought to dismiss the present Writ petition. 8. 3rd and 6th respondents filed counter affidavits with the similar contentions. 9. Learned counsel for the petitioner would submit that the petitioner herein is a resident of Ayyavaripalli Village and he is an agriculturist. Therefore, he is an aggrieved party. Rule 4 (3) of the Rules, specifies complaint adjudication and the same is as follows: (3) Complaint Adjudicating Mechanism: The following complaint adjudicating mechanism is evolved to entertain the grievances/complaints by any citizen/NGO's in an effective and time bound manner: (I) Complaint Adjudicating Committee comprises of the following: (i) Collector and District Magistrate concerned - Chairman. (ii) Superintendent of Police of concerned District - Member. (iii) Deputy Director of Mines and Geology of the Region - Member. (II) Enquiry Team comprises of: (i) Revenue Divisional Officer concerned. (ii) Deputy Superintendent of Police concerned. (iii) Assistant Director of Mines and Geology, Vigilance/Assistant Director of Mines and Geology concerned wherever the Assistant Director of Mines and Geology, Vigilance post do not exist. (III) The Procedure of the Complaint Adjudicating Committee (CAC) is as follows: (a) Any person/Non-Governmental Organization/party shall nie complaint regarding legal sand mining and transportation to the Collector and District Magistrate with material evidence either through online or otherwise. Each such complaint will be uniquely numbered. (b) The Collector and District Magistrate shall forward the complaint to the enquiry team to conduct enquiry by duly causing inspection in presence of complainant and the other party if any and submit enquiry report within fifteen days from the date of receipt of complaint from the Collector and District Magistrate. (c) On receipt of enquiry report, the complaint adjudicating committee shall hear the matter attended by enquiry team in presence of the complainant and other party if any, and pass speaking orders within seven days. (d) If aggrieved by the orders passed by the complaint adjudicating committee, the complainant may prefer an appeal before the State Level Committee comprising of Director of Mines and Geology and Additional Director General (Law and order), office of the Director General of Police, Hyderabad and headed/chaired by the Prl. Secretary/Secretary, Industries and Commerce Department. (e) State Level Committee after due hearing shall dispose the appeal and pass speaking orders within thirty days from the date of filing appeal. Therefore, according to the petitioner, the present writ petition is maintainable. 10. Secretary/Secretary, Industries and Commerce Department. (e) State Level Committee after due hearing shall dispose the appeal and pass speaking orders within thirty days from the date of filing appeal. Therefore, according to the petitioner, the present writ petition is maintainable. 10. There is no dispute that the petitioner herein is resident of Ayyavaripally Village. He is an agriculturist. As per the aforesaid Rules, any citizen can make a complaint. In view of the same, the petitioner has locus and therefore, the present writ petition is maintainable. 11. As stated above, the subject tender notification dated 06.03.2021 was issued calling tenders for excavation, transportation, loading and unloading of sand to the stock yard from the Villages of Allipur/Kurumurthy Village In the said tender process, 6th respondent stood as highest bidder/L1. Therefore, the agreement dated 20.04.2021 was entered between the respondent Nos. 2 and 6 on the specific terms and conditions therein for a period of one year w.e.f. 20.04.2021 and 19.04.2022. However, according to the respondents, 6th respondent failed to execute the said contract due to the aforesaid problems explained by the respondents. Therefore, basing on the joint inspection report, after taking orders from 3rd respondent, 2nd respondent had entered into agreement dated 30.04.2022 with 6th respondent with regard to excavation of sand, transportation, loading and unloading from Ayyavaripally Village. 12. Admittedly, before entering into the said agreement dated 30.04.2022 with 6th respondent, 2nd respondent had not issued any tender. According to him, it is a supplementary agreement and is independent from the tender pertaining to Allipur/Kurumurthy Villages. It is the contention of 2nd respondent that only to avoid rigor of claiming fresh tender, entrusted work pertaining to the check dam of Allipur/ Kurumurthy Villages to 6th respondent. Therefore, there will not be any grievance to the petitioner herein. The said approach of the 2nd respondent is illegal and contrary to the principle laid down by the Hon’ble Apex Court in Tata Cellular vs. Union of India, (1994) 6 SCC 651 wherein it was held as follows: 94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible. (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala-fides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. 13. Further, in Michigan Rubber vs. State of Karnataka, (2012) 8 SCC 216 the Supreme Court relying on its previous decisions held that: 23. From the above decisions, the following principles emerge: (a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities. (b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. (b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited. (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted. (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work. (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government. 14. In Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corporation Ltd. (2016) 16 SCC 818 it was observed that: 11. Recently, in Central Coalfields Ltd. vs. SLL-SML (Joint Venture Consortium), 2016 (8) SCALE 99 it was held by this Court, relying on a host of decisions that the decision making process of the employer or owner of the project in accepting or rejecting the bid of a tenderer should not be interfered with. Interference is permissible only if the decision making process is mala-fide or is intended to favour someone. Similarly, the decision should not be interfered with unless the decision is so arbitrary or irrational that the Court could say that the decision is one which no responsible authority acting reasonably and in accordance with law could have reached. In other words, the decision making process or the decision should be perverse and not merely faulty or incorrect or erroneous. No such extreme case was made out by GYT-TPL JV in the High Court or before us. 13. In other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. No such extreme case was made out by GYT-TPL JV in the High Court or before us. 13. In other words, a mere disagreement with the decision making process or the decision of the administrative authority is no reason for a constitutional Court to interfere. The threshold of mala-fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional Court interferes with the decision making process or the decision. 15. In Uflex Ltd. vs. Govt. of Tamil Nadu, 2021 SCC Online SC 738 the Supreme Court expressed its concern over increase in the “tender jurisdiction.” The relevant paragraphs are reproduced below: 1. The enlarged role of the Government in economic activity and its corresponding ability to give economic ‘largesse’ was the bedrock of creating what is commonly called the “tender jurisdiction.” The objective was to have greater transparency and the consequent right of an aggrieved party to invoke the jurisdiction of the High Court under Article 226 of the Constitution of India (hereinafter referred to as the ‘Constitution’) beyond the issue of strict enforcement of contractual rights under the civil jurisdiction. However, the ground reality today is that almost no tender remains unchallenged. Unsuccessful parties or parties not even participating in the tender seek to invoke the jurisdiction of the High Court under Article 226 of the Constitution. The Public Interest Litigation (‘PIL’) jurisdiction is also invoked towards the same objective, an aspect normally deterred by the Court because this causes proxy litigation in purely contractual matters. 2. The judicial review of such contractual matters has its own limitations. It is in this context of judicial review of administrative actions that this Court has opined that it is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala-fide. The purpose is to check whether the choice of decision is made lawfully and not to check whether the choice of decision is sound. In evaluating tenders and awarding contracts, the parties are to be governed by principles of commercial prudence. To that extent, principles of equity and natural justice have to stay at a distance. 6. The burgeoning litigation in this field and the same being carried to this Court in most matters was the cause we set forth an epilogue in Caretel Infotech Ltd. vs. Hindustan Petroleum Corporation Limited. To that extent, principles of equity and natural justice have to stay at a distance. 6. The burgeoning litigation in this field and the same being carried to this Court in most matters was the cause we set forth an epilogue in Caretel Infotech Ltd. vs. Hindustan Petroleum Corporation Limited. Even if it amounts to repetition, we believe that it needs to be emphasized in view of the controversy arising in the present case to appreciate the contours within which the factual matrix of the present case has to be analysed and tested. 37. We consider it appropriate to make certain observations in the context of the nature of dispute which is before us. Normally parties would be governed by their contracts and the tender terms, and really no writ would be maintainable under Article 226 of the Constitution of India. In view of Government and public sector enterprises venturing into economic activities, this Court found it appropriate to build in certain checks and balances of fairness in procedure. It is this approach which has given rise to scrutiny of tenders in writ proceedings under Article 226 of the Constitution of India. It, however, appears that the window has been opened too wide as almost every small or big tender is now sought to be challenged in writ proceedings almost as a matter of routine. This in turn, affects the efficacy of commercial activities of the public sectors, which may be in competition with the private sector. This could hardly have been the objective in mind. An unnecessary, close scrutiny of minute details, contrary to the view of the tendering authority, makes awarding of contracts by Government and Public Sectors a cumbersome exercise, with long drawn out litigation at the threshold. The private sector is competing often in the same field. Promptness and efficiency levels in private contracts, thus, often tend to make the tenders of the public sector a non-competitive exercise. This works to a great disadvantage to the Government and the public sector. 16. Further, in a recent decision of N.G. Projects Limited vs. Vinod Kumar Jain, AIR 2022 SC 1531 dealing with its previous decisions held that the role of the courts in interpreting the terms of the tender is limited. The authorities inviting tenders is the best judge of interpreting the terms of the tender. 16. Further, in a recent decision of N.G. Projects Limited vs. Vinod Kumar Jain, AIR 2022 SC 1531 dealing with its previous decisions held that the role of the courts in interpreting the terms of the tender is limited. The authorities inviting tenders is the best judge of interpreting the terms of the tender. Further, the question whether a term is essential or not is to be decided by the tendering authority. The relevant paragraphs are extracted below: 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 No. 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 No. 1 was singled out. The said contention has found favour with the Courts below. xxx xxx xxx 22. The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance. In the tender in question, there were 15 bidders. Bids of 13 tenderers were found to be unresponsive i.e., not satisfying the tender conditions. The writ Petitioner was one of them. It is not the case of the writ Petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was mala-fide. Therefore, on the same set of facts, different conclusions can be arrived at in a bona-fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ Petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder. 23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a mala-fide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work. 26. A word of caution ought to be mentioned herein that any contract of public service should not be interfered with lightly and in any case, there should not be any interim order derailing the entire process of the services meant for larger public good. The grant of interim injunction by the learned Single Bench of the High Court has helped no-one except a contractor who lost a contract bid and has only caused loss to the State with no corresponding gain to anyone. 17. Therefore, 2nd respondent, being State Authority, cannot contend that issuing fresh tender in respect of Ayyavaripally Village is a rigor. 18. 2nd respondent had entered into agreement dated 30.04.2022 with 6th respondent for excavation of sand from Ayyavaripally Village, Medjil Mandal, in violation of tender notification dated 06.03.2021 and also contrary to the principle laid down by the Hon’ble Apex Court. The respondent Nos. 2 and 3 failed to show any provision to substitute the Village i.e. Ayyavaripally instead of Allipur/Kurumurthy, in the agreement, dated 30.04.2022. 19. The respondent Nos. 2 and 3 failed to show any provision to substitute the Village i.e. Ayyavaripally instead of Allipur/Kurumurthy, in the agreement, dated 30.04.2022. 19. As discussed supra, tender notification dated 06.03.2021 was issued in respect of Allipur/Kurumurthy Villages of Chinna Chintakunta Mandal and the agreement dated 30.04.2022 was executed with 6th respondent by 2nd respondent without issuing any fresh tender and without following due process of law in respect of Ayyavaripally Village. Therefore, the said agreement dated 30.04.2022 is illegal and contrary to the procedure laid down under law and also violation of the principles laid down by the Hon’ble Apex Court in the aforesaid judgments. 20. It is also relevant to note that vide proceedings, dated 09.04.2022, 3rd respondent accorded permission for desiltation of sand, in favour of 2nd respondent by de-silting of sand at check dam of Ayyavaripally and Velugomula Villages of Midjil Mandal, Rachala and Ponnakal Villages of Addakal Mandal, Mahaboobnagar District. The said permission is illegal. In the said order, though 3rd respondent had mentioned about the unforeseen circumstances, he failed to explain the said unforeseen circumstances. However, as stated above, the respondents being ‘State Authority’ have to act in a transparent manner while awarding work and in entering into an agreement. In the present case, the respondents have not followed the said procedure. 21. In view of the above discussion, this writ petition is allowed. The proceedings dated 09.04.2022 issued by the District Collector, Mahabubnagar and consequential Letter of Intent (LOI) dated 19.04.2022 and the agreement dated 30.04.2022 entered into between 2nd and 6th respondent are set aside. However, liberty is granted to the respondents to issue fresh tender with regard to excavation and transportation of sand from the check dam at Ayyavaripally, Midjil Mandal of Mahabubnagar District. 22. Miscellaneous Petitions, if any, pending, shall also stand closed.