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2023 DIGILAW 407 (TS)

T. Y. G. Outsourcing Agency v. State of Telangana

2023-06-05

SUREPALLI NANDA

body2023
ORDER : Heard the learned counsel for the Petitioner, learned Government Pleader for Employment and Training, the learned Government Pleader for Medical Health and Family Welfare, learned Government Pleader for Revenue and also the learned counsel representing the unofficial Respondents. 2. This Writ Petition is filed to issue a Writ of Mandamus declaring the action of the Official respondents in declaring the 7th respondent M/s. TVT Contractors LLP agency as qualified one in technical Bid in the Tender N.02.02/IHFMS/DHH/ SDPT/2022-2023 dated 25.05.2022 for the years 2022 to 2025 is illegal, arbitrary and in violation of Article 14 of the Constitution of India. 3. The case of the Petitioner, in brief, is as follows: a) Central Government vide G.O.Ms.No.32, HM & FW (C2) Dept, dated 12.03.2022, decided to provide opportunities to entrepreneurs from Schedule Community (referred to as SC hereby) by way of providing reservation for agencies belonging to persons from SC Community in contracts related to Diet and Integrated Hospital Facility Management Services. b) The Government of Telangana issued G.O.Ms.No.59, dated 21.05.2018 for reservation of works to SC/ST Contractors in Public Works in Irrigation & CAD Department in which a team of SC/ST contractors which includes the individual SC/ST contractors in Proprietorship firm, Partnership Firm and Private Limited Companies should be 100%. c) The 7th Respondent, TVT Contractors LLP, a partnership firm (will be referred to as respondent firm herein) uploaded an unregistered document which showed that the 7th respondent herein have entered into a supplement agreement, according to which Suman Yalakacharla had been added as a partner having 10% share in a view to obtain a contract to fulfil the modalities in G.O.Ms.No.32, HM & FW (C2) Dept, dated 12.03.2022. d) By circumventing the said G.O, the respondent firm had obtained an E-Tender in Dubbaka Area Hospital, Siddipet District and created an agreement showing the person belonging to SC as an incoming partner having a 10% share. The Supplementary Agreement entered into is an unregistered deed, and had not been certified by the central & state governments and is only created for the purpose of Obtaining Tender. e) Moreover, the name of Suman Yelakacharla, person brought in as Partner, had not been mentioned either in the respondent firm’s registration or in any of the documents and hence the respondent firm should be disqualified from the tender. e) Moreover, the name of Suman Yelakacharla, person brought in as Partner, had not been mentioned either in the respondent firm’s registration or in any of the documents and hence the respondent firm should be disqualified from the tender. f) As per the tender rules, all the license documents should be in the name of the Agency but in this case, all the documents are in the name of Mr. T. Venkateshwarlu (8th respondent herien) including that of Labour registration, ESI registration, EPF registration, Turnover & IT. g) Mr. T. Venkateswarlu had obtained the contract by misleading the government officials and District Government Employment Officer, TSRTC Regional Manager, Nalgonda had conducted an enquiry on numerous complaints and 8th respondent agency was blacklisted and the 8th respondent agency is participating in the tenders by suppressing the fact that the agency is blacklisted. h) The 8th respondent agency has done Hospital Sweeping and Sanitation Work in more than 40 Hospitals in Telangana and Andhra Pradesh for the past 10 years and the said agency does not belong to SC community but the E-Tender for Sweeping, Sanitation in Siddipet Area Hospital in Siddipet had been reserved for SC category. i) 7th respondent firm with an ill-intention to grab tenders under SC reservation had admitted Suman Yelakacharla as an employee in their agency and having participated in the E-Tender for Dubbaka Area Hospital in Siddipet, 2nd& 5th respondents have declared the 7th respondent firm as L1 and the same has been challenged by the petitioner in W.P. No. 35701 of 2022 and the same is pending consideration. j) Petitioner had been making representations to official respondents vide representation dated 21.11.2022 requested to re-verify the tender documents of 7th respondent firm and to disqualify the firm in the technical valuation, as the firm had violated the conditions of E-Tender. k) Petitioner has fulfilled all the conditions, rules and regulations of G.O. and submitted all the required documents as specified in E-Tender. l) On 22.11.2022, official respondents have issued a reply through mail stating that Evaluation of PQ & Technical Stage for Tender ID:346800 is completed on 19.11.2022. The 7th respondent firm had been evaluated and further in the financial bid, by quoting the lowest management service charges, the firm had become L1. Hence the Writ Petition. 4. l) On 22.11.2022, official respondents have issued a reply through mail stating that Evaluation of PQ & Technical Stage for Tender ID:346800 is completed on 19.11.2022. The 7th respondent firm had been evaluated and further in the financial bid, by quoting the lowest management service charges, the firm had become L1. Hence the Writ Petition. 4. The Counter Affidavit filed on behalf of Respondents No.7 to 9, in particular, paras 5 and 6 read as under : “5. In reply to the averments made in para 8 of the affidavit, the contention that interim orders was granted by this Hon'ble Court on the ground that this respondent violated the tender conditions mentioned in clause No.8.3.4 of E tender document is not correct. This ground is not at all taken by the writ petitioner at the time of filing of writ petition. The averment in para 9 to 11 of the affidavit that the GOMs No.32 dated 12.3.2022 is not applicable to the present works. As per tender condition 4.2.3 Managing Director/Proprietors/ Partners are also entitled to participate in the tenders. The further averment that this respondent blacklisted for illegal acts by the District Collector, Nalgonda is not correct. 6. In reply to the averments made in para 12 to 16 of the affidavit is not applicable to the present case. In fact works with regard to 1) AH Vanasthalipuram 2) Armor Area Hospital, Nizamabad and 3) Area Hospital Dubbaka, Siddipet District one Sri.Yalakula Suman applied in the firms name ie., TVT Contractors LLP, Yalakula Suman Also submitted community certificate issued by the Tahsildar. In the firm Yalakula Suman was given 10% share and the same was incorporated in the certificate issued by the authorities. It is submitted that judgment of this Hon'ble Court in WP.No.42094/2022 is squarely applies to the facts of present case. The contentions raised in this writ petition was already considered by this Hon'ble Court. 5. In the firm Yalakula Suman was given 10% share and the same was incorporated in the certificate issued by the authorities. It is submitted that judgment of this Hon'ble Court in WP.No.42094/2022 is squarely applies to the facts of present case. The contentions raised in this writ petition was already considered by this Hon'ble Court. 5. The Counter affidavit filed by Respondents 2 and 5, in particular, paras 8, 12 and 24 read as under: Para 8: With regard to para No.5, it is incorrect to state that the 7th Respondent uploaded an unregistered document showing that TVT contractors LLP entered into a supplement agreement on admission cum retirement of partners as supplement to the original LLP agreement in which one Suman Yelkacherla added as a partner 9.10% share to document with a view to obtain contracts to fulfill the modalities mentioned in the G.O.Ms.No.32, HM & FW (C-2) Dept., dt. 12.03.2022, but nowhere it is stated the agencies must be owned by persons from the SC community. Para 12 : With regard to para No.7, that the Respondent No.7 had produced a Schedule Caste Certificate issued by Tahsildar pertaining to its partner Suman Yelkacherla, para No.4.2.3(m) of Tender Notification states that, if the work is reserved for SC category, community certificate from competent authority (Tahsildar) of the proprietors/director of the firm shall be submitted, their need not be all the partners belonging to SC community. The Respondent No.7 had produced the required documents. Hence qualified in the tender bid. Para 24 : With regard to para 20, the tender passed was two bid system i.e., technical bid and financial bid. (1) The Technical bid will be opened, those who are qualified in technical bid have to qualify in financial bid. As per the financial bid TVT contracts and TVG outsourcing agency quoted 0.01%. As per other tender conditions, last three years annual turnover of Respondent No.7 is more than the Petitioner’s agency, then the Respondent No.7 awarded IHFMS contract. Hence the allegations leveled by the Petitioner in the Writ Petition is baseless. 6. As per the financial bid TVT contracts and TVG outsourcing agency quoted 0.01%. As per other tender conditions, last three years annual turnover of Respondent No.7 is more than the Petitioner’s agency, then the Respondent No.7 awarded IHFMS contract. Hence the allegations leveled by the Petitioner in the Writ Petition is baseless. 6. PERUSED THE RECORD : a. Relevant conditions of the e-tender document No. 02-02/IHFMS/DHSH/SDPT/2022-23, dated 25.05.2022 for the years 2022-2025 issued by the 2nd Respondent herein in so far as the present case is concerned are as follows: “1.1.6 Bidder should submit attested copies of documents related to the instruments such as constitution of the company/firm; Memorandum of Articles of Association, partnership deed, power of attorney, resolution of board etc. The merger/amalgamation/transfer of business/ transfer of assets/share in sister concern/share in joint venture/spin off etc., of a firm which affect the bid condition relating to ‘turnover’ in preceding years. The eligibility of a bidder in such cases shall be ascertained by the Technical Evaluation Committee on the basis of the above stated agreement/BOD resolution/CA Certificate or any other supportive document(s) annexed with the tender documents and the Decision of the Technical evaluation Committee shall be final. 1.1.14. The tender document operates within the scope of G.O.Ms.No.9, dated 30.01.2017, G.O.Ms.No.31, dated 12.03.2022 and G.O.Ms.No.32, dated 12.03.2022 of HM & FW Department, Government of Telangana. 2.1.9. L1 rate – means the lowest percentage of management service charges quoted by the bidders for the services mentioned in this Tender Document. 2.1.10. Matched L1 rate – means the lowest percentage of management service charges of the bidder who have consented, in writing, to match with the L1 rate and agreed to abide by the terms and conditions of the tender document. 4.2.3. Other valid supportive documents Eligibility for Technical qualification. (m) If the work is reserved for SC category, Community certificate from competent authority (TAHASILDHAR) of the proprietor/partners/ Directors of the firm shall be submitted as proof of SC category. 8.3 Financial Bid Evaluation : 8.3.3 Subject to technical bid qualification and satisfying other conditions stipulated in the tender schedule, L1 (who quotes lowest management service charges up to 5%) will be considered as successful bidder. b) G.O.Ms.No.32, dt. 12.03.2022 – Clause 2, Clause 3 and Clause 3(i) read as under : 2. 8.3 Financial Bid Evaluation : 8.3.3 Subject to technical bid qualification and satisfying other conditions stipulated in the tender schedule, L1 (who quotes lowest management service charges up to 5%) will be considered as successful bidder. b) G.O.Ms.No.32, dt. 12.03.2022 – Clause 2, Clause 3 and Clause 3(i) read as under : 2. In the reference 2nd read above, government has introduced ‘Integrated Hospital Facility Management Services (IHFMS) which envisages provision of patient care, sanitation, security and pest control services by an agency as amended in the reference 3rd read above. 3. To provide opportunities to entrepreneurs from Scheduled Caste (SC) community, it has been decided to provide reservation for agencies belonging to persons from Scheduled Caste community, to contracts related to provision of diet and Integrated Hospital Facility Management Services (IHFMS) in government hospitals with following modalities: i. 16% reservation shall be provided for agencies owned by persons from SC community.” c) R.C.No.Plg/263/1/HFMS/2022, dt. 08.07.2022 of the Superintendent District Head Quarters Hospital, Bodhan, Nizamabad District in response to a representation of one Sri Thallamalla Yadagiri, Proprietor of TYC Outsourcing Agency, Nalgonda with a request to evaluate once again the qualifications of the 7th Respondent herein who submitted its bid for Area Hospital, Armoor, Nizamabad District, to provide IHFMS Services reads as under : With reference to the subject cited Sri. Thallamalla Yadagiri, Prop. Of TYG Outsourcing Agency, Nalgonda has submitted the representation to evaluate once again the qualifications of TVT Contractors LLP which submitted its bid for Area Hospital, Armoor, Nizamabad Dist. to provide IHFMS Services. In this regard it is to Inform that, as per the certificate issued by Ministry of Corporate affairs (Govt. of Ind.) vide LLP reg. No. AAK-9715, The M/s TVT Contractors LLP is incorporated on 27.10.2017 under the section 12(1) of the Limited Liability Partnership Act (LLP) 2008 with the following two partners. 1. First Party Mr. Venkateshwarlu Thalla with 99% proportion. 2. Whereas the second party is Mr. Sukumar Talla with 1% proportion. As per the Rule 6 (iv) of LLP Deed/Agreement the business of M/s TVT Contractors LLP shall be of to acquire or take over the existing business known as Thalla Venkateswara, a proprietary concern of Mr. 1. First Party Mr. Venkateshwarlu Thalla with 99% proportion. 2. Whereas the second party is Mr. Sukumar Talla with 1% proportion. As per the Rule 6 (iv) of LLP Deed/Agreement the business of M/s TVT Contractors LLP shall be of to acquire or take over the existing business known as Thalla Venkateswara, a proprietary concern of Mr. Talla Verkatewarlu, who is also a managing partner of the LLP, having its office at R/o. 18-104, Shanti nagar, Miryalguda, Nalgonda, Telangana - 50807, with all necessary required assets and liabilities of the said business used in connection therewith or belonging there to, together with pending contracts, business rights, obligations, service personnel and the lite from time to time. According to this Rule, the Labour Dept. Registration Certificate, ESI, EPF registrations of Thalla Venkateshwarlu. Contractor (A proprietary concern) are here be considered as registrations of M/s TVT Contractors LLP and Solvency Certificate, Turnover Certificate, Income Tax returns of Thalla Venkateshwarlu, the Managing partner of TVT Contractors LLP are also hereby considered for M/s TVT Contractors LLP. Further according to the Rule 14 & 15 of LLP Deed/Agreement, it is agreed by and between the parties that, No person or Body corporate may be Introduced as a new partner without the consent of all the existing Partners and such Incoming Partner shall give his prior consent to act as Partner of the LLP and consequent to admission of a new partner the LLP Agreement shall be suitably modified with the consent of all the partners. There after it is to inform that. M/s TVT Contractors LLP made supplemental LLP agreement on 02.05.2022. B/W TVT Contractors LLP and Existing Partners (Venkateshwarlu Talla, Sukumar Tella), Incoming Partner (Suman Yalachrala) as the existing partners and incoming partner of M/s TVT Contractors LLP mutually decided to amend the LLP Original Agreement Dr. 30.10.2017. And consequently the LLP agreement shall be amended on 02.05.2022 & the clause 2 of the LLP agreement (Dt. 30.10.2017) is substituted with the following contributions of the TVT Contractors LLP. 1 Talla Venkateshwarlu 89% 2 Talla Sukumar 1% 3 Yalakacharla Suman 10% These modifications to the original LLP agreement are came into full force from 02.05.2022. Further Sri. Y. Suman S/o Sri. Y. Prasad (who belongs to Scheduled Caste) the partner of TVT Contractors LLP submitted Bid for Area Hospital, Armoor, Nizamabad Dist. 1 Talla Venkateshwarlu 89% 2 Talla Sukumar 1% 3 Yalakacharla Suman 10% These modifications to the original LLP agreement are came into full force from 02.05.2022. Further Sri. Y. Suman S/o Sri. Y. Prasad (who belongs to Scheduled Caste) the partner of TVT Contractors LLP submitted Bid for Area Hospital, Armoor, Nizamabad Dist. to provide IHFMS Services and authorized Signatory (as per Annexure 2) in this regard I am herewith informing that, no information has been given which pertains to the percentage of Partnership of Schedule castes in the guidelines and government Orders Communicated by the Commissioner, TVVP. Hyd. to process the IHFMS tenders. Therefore the Technical Bid of M/s TVT Contractors LLP is evaluated as per the guidelines communicated and it is qualified in the evaluation, further in the Financial Bid the concerned firm has become L1 by quoting Lowest Management service charges. This is for your information. DISCUSSION AND CONCLUSION : 7. The Petitioner in the present Writ Petition questions the action of the official Respondents in declaring the 7th Respondent as qualified in technical bid in the Tender No.02.02/IHFMS/DHH/SPDT/2022- 2023, dt. 25.05.2022 for the years 2022-2025 as illegal, arbitrary, discriminatory, capricious and in violation of Article 14 of the Constitution of India and principles of natural justice. The Petitioner points out specifically that the 7th Respondent is not qualified mainly alleging the following grounds : i. That, one Suman Yalakacharla belongs to schedule caste community of the 7th Respondent having only 10% share and that P.Venkateswarlu, the partner of the 7th Respondent herein does not belong to S.C. community. ii. As per the tender rules all the licence documents should be in the name of Agency as per check list provided in the E-Tender Notice but in the present case it is not so and further the 7th and 8th Respondent Agencies are not a single entity. iii. The 7th Respondent Company uploaded the documents belonging to their company turnover which are prior to admission of partner belonging to S.C. community. iv. The 7th Respondent Company is not in conformity with the conditions specified in Clause 4.2.3 (m). 8. iii. The 7th Respondent Company uploaded the documents belonging to their company turnover which are prior to admission of partner belonging to S.C. community. iv. The 7th Respondent Company is not in conformity with the conditions specified in Clause 4.2.3 (m). 8. This Court opines that the Petitioner is not entitled for the relief prayed for by the Petitioner herein in view of the fact that the 7th Respondent herein complied with Clause 4.2.3 (m) and a bare perusal of the said clause extracted above clearly indicates the words as ‘Proprietary/Partners/Directors of the Firm’ that means either of them and not all of them as interpreted by the Learned Counsel for the Petitioner and further the plea of the Petitioner that the 7th Respondent Company should have 100% share holders of the SC/STs is untenable, since the relevant clause does not stipulate or indicate so. 9. As per Clause 1.1.14 of the Tender document dt. 25.05.2022 the Tender document operates within the scope of G.O.Ms.No.9, dt. 30.01.2017, G.O.Ms.No.31, dt. 12.03.2022 and G.O.Ms.No.32, dt. 12.03.2022 of HM&FW Department. 10. A bare perusal of tender condition 1.1.6 clearly indicates that turnover is also significant and the 7th Respondent was selected as successful bidder since the 3-years annual turnover of Respondent No.7 is more than the Petitioner’s Agency. A bare perusal of paras 8, 12 and 24 of the counter affidavit filed by the Respondents No.2 and 5 and the detailed contents of letter dated 08.07.2022 in Rc.No.Plg/263/1/1HFMS/ 2022 of the Superintendent District Head Quarters Hospital, Bodhan, Nizamabad District, (referred to and indicated above) clearly indicates that the specific pleas raised by the Petitioner in paras 6 to 9 of the affidavit filed by the Petitioner in support of the present writ petition are without any basis and hence rejected. 11. This Court opines that the Petitioner herein after having participated in the tender process and having adhered to all the conditions as laid in G.O.Ms.No.32, Health, Medical and Family Welfare (C2) Department, dated 12.03.2022, simply because the Petitioner had been unsuccessful in procuring the works, approached the Court on certain baseless allegations against the 7th Respondent herein and the same are unsustainable and untenable. 12. 12. The Apex Court in Afcons Infrastructure Limited vs. Nagpur Metro Rail Corporation Limited reported in (2016) 16 SCC 818 held that the author of Tender Document is the best person to understand and appreciate its requirements, and that the Courts must defer to such understanding and appreciation of Tender Documents by the tender inviting authority, unless there be any allegation of malafide or perversity. At Para 13 of the said Judgment the Apex Court observed as follows: "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”. 13. The Apex Court in Jagdish Mandal vs. State of Orissa reported in (2007) 14 SCC 517 at Para 22 held as follows: "Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides: Its purpose is to check whether choice or decision is made lawfully and not to check whether choice or decision is sound. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, 28 and persuade courts to interfere by exercising power of Judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for or delay relief and succour to thousands and millions and may increase the project cost manifold." 14. Such interferences, either interim or final, may hold up public works for or delay relief and succour to thousands and millions and may increase the project cost manifold." 14. In Uflex Ltd. Vs. Government of Tamilnadu, reported in (2022) 1 SCC 165 the Apex Court held that 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, 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. 15. The Apex Court held at Para 2 of the said Judgment as follows: "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”. 16. Taking into consideration all the above referred facts and circumstances and the law laid down by the Apex Court in the Judgments Afcons Infrastructure Limited vs. Nagpur Metro Rail Corporation Limited reported in (2016) 16 SCC 818 , Jagdish Mandal vs. State of Orissa reported in (2007) 14 SCC 517 , Uflex Ltd. Vs. 16. Taking into consideration all the above referred facts and circumstances and the law laid down by the Apex Court in the Judgments Afcons Infrastructure Limited vs. Nagpur Metro Rail Corporation Limited reported in (2016) 16 SCC 818 , Jagdish Mandal vs. State of Orissa reported in (2007) 14 SCC 517 , Uflex Ltd. Vs. Government of Tamilnadu, reported in (2022) 1 SCC 165 referred to and discussed above, duly considering the specific averments made by the respondents No.2 and 5 in the counter affidavit filed by them at paras 8, 12 and 24 (referred to and extracted above) and duly considering the contents of the detailed letter dated 08.07.2022 in R.C.No.Plg/263/1/HFMS/2022, this Court opines that in the absence of any specific malafides against the Respondents herein, the Petitioner herein is not entitled for any relief prayed for in the present Writ Petition and the same is accordingly dismissed since it is devoid of merits. However, there shall be no order as to costs. 17. The interim orders of this Court dated 29.11.2022 passed in W.P.No.43184 of 2022 stand vacated. Miscellaneous petitions, if any, pending shall stand closed.