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2023 DIGILAW 1176 (AP)

Durai Enterprises v. State of Andhra Pradesh

2023-08-08

SUBBA REDDY SATTI

body2023
ORDER : 1. The above writ petition is filed seeking the following relief, which is amended as per order dated 10.07.2023 passed in I.A. No. 2 of 2023: “...to issue Writ, order or other direction more particularly in the nature of Writ of Mandamus declaring the action of 3rd respondent in including new clause about solvency in the notification is dated 10.05.2023 in R.C. No. C1/451038/2023, on 24.05.2023, for license to procure of Human Hair from 3rd respondent Temple for a period of Two years, as illegal, arbitrary, violative of principles of natural justice and violative of Articles 14 & 19 of the Constitution of India and consequently direct 3rd respondent to cancel the Tender-cum-public auction held on 24.05.2023 and conduct Tender-cum-re-auction by deleting the said clause and further direct to permit the petitioner to participate in the said Tender-cum-re -auction and pass such other further orders...” 2. In the affidavit, it was contended, inter alia, that petitioner is doing business in the name of ‘Durai Enterprises’ in human hair collection and selling the same. On 10.05.2023, E-Procurement/Tender-cum- Public Auction notification in R.C. No. C1/451038/2023 was issued by respondent No. 3 for collection of human hair from respondent No. 3 Temple, for a period of two years. Public auction was scheduled to be held on 24.05.2023 at respondent No. 3-Temple. As per terms and conditions of the notification, to participate in public auction, one has to pay a challan for Rs.1,180/- and Rs. 15,00,000/- as primary deposit. After finalizing the bid, one has to deposit the amount of one year contract within stipulated time and shall execute necessary documents giving affidavit as stipulated in the regulations. With a view to participate in the public auction, petitioner paid Rs.1,180/- to the credit of respondent No. 3 on 23.05.2023 and got demand draft of Indian Bank, Karaikudi EAB Branch, Tamil Nadu for Rs.15,00,000/- in favour of respondent No. 3. Petitioner took tender schedule form from respondent No. 3 by submitting challan. Petitioner attended the public auction along with demand draft for Rs.15,00,000/- and expressed intention to participate in the public auction. 3. Respondent Nos.4 and 5 also attended public auction. Respondent Nos.4 and 5 quoted bid for Rs.1,35,00,000/-and Rs.1,34,50,000/- respectively and petitioner quoted the bid for Rs.1,50,00,000/-. Petitioner took tender schedule form from respondent No. 3 by submitting challan. Petitioner attended the public auction along with demand draft for Rs.15,00,000/- and expressed intention to participate in the public auction. 3. Respondent Nos.4 and 5 also attended public auction. Respondent Nos.4 and 5 quoted bid for Rs.1,35,00,000/-and Rs.1,34,50,000/- respectively and petitioner quoted the bid for Rs.1,50,00,000/-. Respondent No. 3 and his sub-ordinates, in collusion with respondent Nos.4 and 5, did not receive demand draft for Rs.15,00,000/- from the petitioner and necked out him from the Temple and later claimed completion of auction. Impugning the action of respondent No. 3 in not allowing petitioner to participate in public auction, this writ petition is filed. 4. Respondent No. 3 filed counter affidavit. It was contended, inter alia, that petitioner without availing remedy under Section 92 of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 (for short ‘the Act’), approached this Court and on that ground alone, writ petition is liable to be dismissed. Respondent No. 3 is a public religious Temple published under Section 6(a)(ii) and registered under Section 43 of the Act. All leases and licenses relating to the religious and charitable institutions other than agricultural lands are governed by the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Immovable Properties and other Rights (other than agricultural lands) Leases and Licenses Rules, 2003 (G.O.Ms. No. 866 Revenue (Endowments-I) Department dated 08.08.2003) (hereinafter referred to the ‘Rules’). As per Rule 3(1) of the Rules, all licenses shall be made by way of Tender-cum-auction on annual advance rental basis. The executive authorities shall also call for tender or auction electronically if the value of the transaction exceeds Rs.10,00,000/-. As per Rule 4(2)(c), in case of licensing of collection of human hair, license period shall not exceed two years. The fee amount shall be enhanced by 10% in the second year over the first year’s fees. As per Rule 9 of the Rules, when a notice of auction specifies that any earnest money shall be deposited as security by the bidders, the deposit shall be made before the commencement of auction. Any person, who fails to make such deposit, shall not be permitted to bid the auction. The existing license period is going to expiry by 31.07.2023. As per the Rules, the Executive Officer shall conduct tender-cum-auction before three months of expiry of existing lease period. Any person, who fails to make such deposit, shall not be permitted to bid the auction. The existing license period is going to expiry by 31.07.2023. As per the Rules, the Executive Officer shall conduct tender-cum-auction before three months of expiry of existing lease period. Accordingly, Executive Officer of respondent No. 3 issued tender-cum-auction notice for the period from 01.08.2023 to 31.07.2025, by following the procedure. Tender notice was published in daily newspaper on 13.05.2023. As license amount exceeds Rs.10,00,000/- e- procurement-cum-public auction was also conducted on 24.05.2023. Two bidders i.e. Jai Enterprises, Madepalli and K.V. Enterprises, Prodduturu participated in the auction by submitting EMD and Solvency Certificate as notified in the tender. Except said two persons, no other person participated in e-procurement/e-platform and no one dropped tender schedule in the tender box. Auction was started at an upset price of Rs.1,20,00,000/- per annum, the rate fetched during previous bid i.e. Rs.1,16,00,000/- per annum. Auction was knocked down in favour of Jai Enterprises, Madepalli for Rs.1,35,00,000/-. Petitioner has not submitted solvency certificate of Rs.1,00,00,000/- which is a condition precedent to participate in the auction as per condition No. 14. Public auction was conducted by strictly following the Rules. After seeing contents of the writ affidavit, Executive Officer of respondent No. 3 issued notice to the petitioner informing that if petitioner deposits Rs.1,50,00,000/- within three days from the date of receipt of the notice, the authority is ready to conduct fresh auction. Petitioner without depositing the amount replied about pendency of writ petition and hence amount cannot be deposited. 5. In the additional counter, it was contended that public notice was published vide Rc. No. C1/461038/2023, dated 10.05.2023. Another person filed W.P. No. 14238 of 2003 and the same was listed and dismissed on 10.07.2023. Respondent No. 4, the highest bidder belongs to “Settibalija” BC-B and he is having full faith in religion and follows Hinduism. Eventually, prayed to dismiss the writ petition. 6. The successful bidder also filed counter affidavit. It was contended that auction was confirmed by the Commissioner of Endowments on 07.07.2023. Petitioner having failed to participate in the auction by submitting solvency certificate filed the above writ petition with ulterior motive. 7. Heard learned counsels appearing for petitioner as well as respondents. 8. Learned counsel for the petitioner would contend that auction notice was not published in wide circulated newspaper. Petitioner having failed to participate in the auction by submitting solvency certificate filed the above writ petition with ulterior motive. 7. Heard learned counsels appearing for petitioner as well as respondents. 8. Learned counsel for the petitioner would contend that auction notice was not published in wide circulated newspaper. He would also submit that incorporating condition, requiring the participants to submit solvency certificate for Rs.1,00,00,000/-, is arbitrary and illegal and it is only to benefit respondent Nos. 4 and 5. Learned counsel for the petitioner relied upon the decision reported in Haryana Financial Corporation and another v. Jagdamba Oil Mills and another, 2002 (3) SCC 496 . 9. Learned standing counsel for respondent No. 3 would submit that in the terms and conditions of the tender, it was specifically mentioned to get demand draft for Rs.15,00,000/- and solvency certificate for Rs.1,00,00,000/-. He submits that petitioner failed to submit solvency certificate for Rs.1,00,00,000/- and hence, he could not participate in the public auction. After auction was completed petitioner approached this Court by filing the above writ petition. 10. Learned counsel for respondent No. 4 would submit that respondent No. 4 became the highest bidder for Rs.1,35,00,000/- and the same was confirmed by respondent No. 2. 11. The prayer sought by the petitioner by way of amendment is that, inclusive of new clause about solvency in the notification is illegal, arbitrary and violative of principles of natural justice and Articles 14 and 19 of the Constitution of India. 12. The affidavit or additional affidavit filed in support of the writ petition does not contain any pleading in that regard. There is no averment in the affidavit as to why inclusive of such clause is arbitrary and illegal. For the first time, during the arguments, learned counsel appearing for the petitioner pleaded the same. 13. Learned counsel for the petitioner, for the first time, during the course of arguments, raised contention regarding publication. As seen from the affidavit, such ground was not even pleaded. Without there being pleading in the affidavit, learned counsel wants to impress upon the Court that very notification, itself, is bad in law and hence, the auction is liable to be set aside. 14. It is to be noted here that had the petitioner pleaded about publication or incorporation of solvency clause in the affidavit, the official respondents would have answered by meeting such allegation. 14. It is to be noted here that had the petitioner pleaded about publication or incorporation of solvency clause in the affidavit, the official respondents would have answered by meeting such allegation. Further, in the affidavit, it was contended that petitioner attended the auction. However, respondent No. 3, in collusion with respondent Nos. 4 and 5 did not receive demand draft for Rs.15,00,000/-. Petitioner having secured tender document, now cannot turn around and complain about publication. 15. Petitioner, along with writ petition, filed e-procurement tender-cum-auction conditions vide R.C. No. C1/E-461038/2023, dated 19.05.2023. As seen from the auction conditions, condition No. 14 mandates that persons intending to participate in the e-tender open auction/sealed tender must handover EMD for Rs.15,00,000/- by way of demand draft; PAN card/Aadhaar card; Firm Registration Certificate/Registered Office Certificate; Income tax returns of previous year and notarized affidavit or declaration declaring that they belong to Hindu Religion and original solvency for Rs.1,00,00,000/-. For the persons, who are qualified in technical field, price bid will be opened. 16. Petitioner having filed terms and conditions along with the writ petition, did not plead in the affidavit about his getting solvency for Rs.1,00,00,000/-. Petitioner did not even challenge the clause initially. However by way of amendment petitioner challenged the same without supporting pleading. If inclusion of clause qua solvency is arbitrary, petitioner could have challenged the same at the earliest point of time. However, the petitioner kept quite till the auction was conducted and later approached this court by alleging that petitioner was necked out and that there was collusion between officials and other participants. 17. Petitioner filed I.A. No. 2 of 2023 seeking amendment of the prayer, incorporating that inclusive of new clause to produce solvency for Rs.1,00,00,000/- in the notification is illegal, arbitrary and violative of principles of natural justice and Articles 14 and 19 of the Constitution of India. As pointed out supra, there is no pleading in the affidavit that it is violative of Articles 14 and 19 of the Constitution of India. 18. Pleadings, even in the writ petition, plays vital role. As pointed out supra, there is no pleading in the affidavit that it is violative of Articles 14 and 19 of the Constitution of India. 18. Pleadings, even in the writ petition, plays vital role. While pointing out importance of pleadings, Hon’ble Apex Court in Bharat Singh and others v. State of Haryana and others, AIR 1988 SC 2181 observed as follows: 13......where a point which is ostensibly a point of law is required to be substantiated by facts, the party raising the point, if he is the writ petitioner, must plead and prove such facts by evidence which must appear from the writ petition and if he is the respondent, from the counter affidavit. If the facts are not pleaded or the evidence in support of such facts is not annexed to the writ petition or to the counter affidavit as the case may be, the Court will not entertain the point. There is a distinction between a pleading under the Civil procedure code and a writ petition of a counter affidavit. While in a pleading, that a point or a written statement, the facts and no evidence are required to be pleaded, in a writ petition or in the counter affidavit not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it. 19. In Narmada Bachao Andolan v. State of M.P. and another, AIR 2011 SC 1989 the Hon’ble Apex Court observed importance of pleadings as follows: “9.......pleading in particulars are required to enable the court to decide the rights of parties in the trial. Thus, the pleadings are more to help the court in narrowing the controversy involved and to inform the parties concerned to the questions in issue, so that the parties may adduce appropriate evidence on said issue. It is settled legal proposition that “as a rule relief not founded on the pleadings should not be granted.” Therefore, a decision of a case cannot be based on grounds outside the pleadings of parties. The object and purpose of pleadings and issues is to ensure that the litigants come to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. The object and purpose of pleadings and issues is to ensure that the litigants come to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. If any factual or legal issues, despite having merit, has not been raised by the parties, the court should not decide the same as the opposite counsel does not have a fair opportunity to answer the line of reasoning adopted in that regard. Such a judgment may be violative of principles of natural justice.” 20. Thus, as pointed out supra, petitioner without any proper pleadings in the affidavit contended that incorporation of clause qua solvency is bad in law as also wide circulation. 21. In Haryana Financial Corporation’s case (referred to supra), the Hon’ble Apex Court observed that public auction must be given adequate publicity. Where bid prices in public auction are depressed by bidders getting together, tenders may be invited after proper publicity. 22. In the case on hand, tender notice was published in a leading newspaper and also by way of e-procurement. Petitioner, Proprietary concern from the State of Tamil Nadu intended to participate in the auction and in fact, according to the affidavit, petitioner got demand draft for Rs.15,00,000/- and came to the auction place. This instance makes the thing more than discern able that petitioner, resident of Tamil Nadu State intended to participate in tender process, however could not submit solvency certificate for Rs.1,00,00,000/- as per condition No. 14. 23. In Jespar I. Slong v. State of Meghalaya and others, AIR 2004 SC 3533 , the Hon’ble Apex Court observed as under: “17....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. ........ 19....The awarding of contracts by inviting tenders is considered to be one of the fair methods.” 24. Petitioner having failed to participate in the tender, since petitioner could not submit original solvency certificate for Rs.1,00,00,000/-, cannot now contend that such clause is not valid. Petitioner has to challenge said clause if the petitioner is aggrieved, before petitioner’s participation in the tender. 25. Petitioner having failed to participate in the tender, since petitioner could not submit original solvency certificate for Rs.1,00,00,000/-, cannot now contend that such clause is not valid. Petitioner has to challenge said clause if the petitioner is aggrieved, before petitioner’s participation in the tender. 25. In Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited and another, 2016 (16) SCC 818 , the Hon’ble Apex Court observed as under: “15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.” 26. In the case on hand, a condition was incorporated in the tender notification, itself, regarding production of solvency certificate. Except stating that it is arbitrary, petitioner could not canvass the ground as to its arbitrariness. 27. It is pertinent to mention here that in fact, Executive Officer of respondent No. 3 issued notice to the petitioner vide R.C. No. C1/461038/2023 dated 05.06.2023, asking the petitioner to deposit Rs.1,50,00,000/- by way of demand draft within three days from the date of receipt of said notice, to re-conduct auction of licensee rights to collect human hair. However, petitioner replied that the matter is sub-judice and petitioner will abide by the decision of the High Court. It is strange on the part of the petitioner that when the Executive Officer of respondent No. 3 intended to conduct re-auction on petitioner depositing Rs.1,50,00,000/-, petitioner’s response pleading sub-judice, itself emphasis that petitioner approached the Court with ulterior motive. 28. In view of the discussion supra, this Court does not find any merits in the writ petition. Hence, the same is liable to be dismissed. 29. In the result, the writ petition is dismissed. No costs. 30. As a sequel, pending miscellaneous petitions, if any, shall stand closed.