G. S. Security and Man Power Services v. State of Telangana
2025-11-14
NAGESH BHEEMAPAKA
body2025
DigiLaw.ai
ORDER : Nagesh Bheemapaka, J. Petitioner questions the action of the 3 rd respondent in issuing proceedings dated 20.08.2025, whereby outsourcing work for the Government Medical College, Suryapet, was allotted to the 6th respondent for the financial year 2025-2026 pursuant to Tender Notification dated 06.06.2025. They pray for the said proceedings to be declared illegal, arbitrary and contrary to the tender conditions and the principles of transparency and fairness in government contracts. 2. Petitioner asserts that it is a registered manpower and security services agency under Registration No. SEA/NAL/ALO/NG/56575/2017, renewed periodically, and has been providing outsourcing and security services to various government departments including Government Medical College, Suryapet, for several years without any adverse remarks. Petitioner had successfully executed the outsourcing work for the Government Medical College during the financial year 2024-25 to the satisfaction of the authorities concerned and was even issued a certificate of appreciation by the Principal, Government Medical College, Suryapet, vide Rc. No. 428/E3/GMC-SRPT/2025 dated 15.05.2025. Despite such record, petitioner was ignored for allotment of the subsequent year's work. 2.1. Petitioner states that the 3 rd respondent issued Tender Notification dated 06.06.2025 inviting tenders for empanelment of outsourcing agencies for various departments for the financial year 2025-26. The last date for submission of tenders was 18.06.2025, and tenders were opened on 20.06.2025. Petitioner participated and submitted all the required documents as per the tender form, including turnover certificate, EPF, ESI, GST and Labour registrations along with six months' payment receipts. It is contended that as per Condition No. 6 of the tender, each agency was required to have a minimum turnover of Rs. 30 lakhs in any one of the last three financial years and failure to submit proof of turnover would result in rejection of the bid. The 6 th respondent did not satisfy this condition, as its turnover for 2024-25 was only Rs. 3,62,830 as per information obtained under the Right to Information Act, 2005. Petitioner further alleges that the 3rd respondent improperly accepted a bank guarantee of Rs. 30 lakhs furnished by the 6 th respondent in lieu of the mandatory turnover certificate. Such substitution, according to petitioner, is impermissible as tender conditions did not provide for any alternative form of proof for financial eligibility.
Petitioner further alleges that the 3rd respondent improperly accepted a bank guarantee of Rs. 30 lakhs furnished by the 6 th respondent in lieu of the mandatory turnover certificate. Such substitution, according to petitioner, is impermissible as tender conditions did not provide for any alternative form of proof for financial eligibility. Acceptance of the 6th respondent's bid, despite its failure to meet the tender criteria, is contended to be arbitrary, discriminatory and violative of G.O.Rt.No. 4459 dated 27.12.2006, which mandates transparency in empanelment of outsourcing agencies. 2.2. Petitioner also submits that several representations dated 15.05.2025, 26.07.2025, and 04.08.2025 were addressed to official respondents seeking extension of previous contract until completion of the fresh tender process, but the same were ignored. It is therefore, contended that proceedings dated 20.08.2025 are illegal and liable to be set aside. 3. By order dated 25.08.2025, this Court granted interim suspension of the proceedings dated 20.08.2025 till the next date of hearing and the said order was extended from time to time. 4. The 3 rd respondent - District Collector, Suryapet filed a counter affidavit and an additional counter stating that tender notification dated 13.06.2025 was issued strictly in accordance with G.O.Rt.No. 4459 dated 27.12.2006 for empanelment of outsourcing agencies for 2025-26. Thirty-four agencies applied, and twenty-seven were found eligible after scrutiny by the District Level Selection Committee. It is stated that the Committee, while evaluating the Applications, noted that certain agencies were unable to produce turnover proof of Rs. 30 lakhs but were financially sound. To ensure fair participation and adequate competition, the Committee permitted such agencies, including the 6 th respondent, to furnish a bank guarantee of Rs. 30 lakhs in lieu of turnover certificate. The 6 th respondent furnished such bank guarantee on 14.07.2025, prior to finalization of empanelment, which was duly verified and accepted. 5. It is asserted that this relaxation was not granted exclusively to the 6 th respondent but extended to eight agencies facing similar circumstances. The process was transparent and consistent with the administrative discretion vested in the District Collector under G.O.Rt.No. 4459 dated 27.12.2006. Petitioner's previous contract expired on 31.03.2025, and there is no provision for automatic renewal. Once the contract period ended, petitioner ceased to have any right to continue and fresh selection had to be made through open tender. 6.
The process was transparent and consistent with the administrative discretion vested in the District Collector under G.O.Rt.No. 4459 dated 27.12.2006. Petitioner's previous contract expired on 31.03.2025, and there is no provision for automatic renewal. Once the contract period ended, petitioner ceased to have any right to continue and fresh selection had to be made through open tender. 6. The 6 th respondent filed a separate counter stating that it complied with all the tender requirements. It furnished a turnover certificate showing Rs. 31,21,695/- for 2024-25, along with valid EPF registration under Code No. 10000839498HYD dated 04.01.2022, ESI registration dated 05.01.2022, GST registration dated 17.06.2022, and Labour licence valid up to 31.12.2025. It is further stated that under the EPF and ESI Acts, submission of contribution receipts is not mandatory where employees draw above the prescribed limits. 6.1. reliance is placed upon the judgments of the Hon'ble Supreme Court in Tata Cellular v. Union of India , (1994) 6 SCC 651 and Monte Carlo Ltd. v. NTPC Ltd. , (2016) 15 SCC 272 to argue that judicial review in tender matters is limited to the decision-making process and not the merits of the decision itself. In Tata Cellular’s case, the Hon’ble Supreme Court held that "the court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract." It was further held that "judicial review is concerned with reviewing not the merits of the decision in terms of whether it was correct, but the decision- making process itself." In Monte Carlo Ltd. ’s case (supra), the Hon’ble Supreme Court reiterated that "evaluation of tenders and award of contract are essentially commercial functions best left to the discretion of the executive authorities. Courts should refrain from interfering unless the process adopted is malafide or intended to favour someone." 7. Petitioner filed a reply denying the averments in counter and additional counter. It is reiterated that acceptance of bank guarantee in lieu of the mandatory turnover requirement is contrary to the tender conditions and vitiates the selection process. It is asserted that G.O.Rt.No. 4459 does not authorize the District Collector to relax essential eligibility criteria specified in the tender.
Petitioner filed a reply denying the averments in counter and additional counter. It is reiterated that acceptance of bank guarantee in lieu of the mandatory turnover requirement is contrary to the tender conditions and vitiates the selection process. It is asserted that G.O.Rt.No. 4459 does not authorize the District Collector to relax essential eligibility criteria specified in the tender. Petitioner further contends that respondents' claim that similar relaxation was granted to other agencies is unsubstantiated, as no record showing such uniform relaxation was furnished. They maintain that relaxation in favour of the 6th respondent alone demonstrates a clear case of arbitrariness and favoritism. It is argued that reliance on the Hon’ble Supreme Court precedents by respondents is misplaced, as the decisions in the above two judgments do not permit relaxation of essential eligibility conditions, particularly those forming the foundation of financial competency. 8. Heard Smt. NVR. Rajyalakshmi, learned counsel for petitioner, learned Government Pleader for Labour for Respondents 1 and 2, learned Government Pleader for Revenue for Respondents 3 and 4, learned Government Pleader for Medical and Health for Respondent No.5 and Sri S. Manichander Raj, learned Counsel on behalf of the 6th respondent. 9. This Court has carefully considered the submissions of both the sides and examined the record. The core issue for determination is whether acceptance of a bank guarantee of Rs. 30 lakhs in place of a turnover certificate amounts to a material relaxation of tender conditions, rendering the empanelment process arbitrary or illegal. 10. From the material on record, it is evident that tender process was undertaken pursuant to G.O.Rt.No. 4459 dated 27.12.2006, which empowers the District Collector, as Chairman of the District Outsourcing Committee, to modify or relax tender conditions in the interest of administrative efficiency. The record further indicates that the 6th respondent furnished a bank guarantee of Rs. 30 lakhs on 14.07.2025 prior to empanelment, which was accepted by the Committee as sufficient proof of financial capability. The relaxation was uniformly extended to similarly-placed agencies, and petitioner has not adduced evidence to show that the 6th respondent was singled out for favourable treatment. Petitioner's grievance, therefore, rests on mere apprehension rather than demonstrable arbitrariness. 11. The principle laid down by the Hon'ble Supreme Court in Tata Cellular ’s case (supra) squarely applies to this case.
The relaxation was uniformly extended to similarly-placed agencies, and petitioner has not adduced evidence to show that the 6th respondent was singled out for favourable treatment. Petitioner's grievance, therefore, rests on mere apprehension rather than demonstrable arbitrariness. 11. The principle laid down by the Hon'ble Supreme Court in Tata Cellular ’s case (supra) squarely applies to this case. The Court held that scope of judicial review is limited to examining whether there has been illegality, irrationality, or procedural impropriety in the decision-making process, and not to substitute its own decision for that of the competent authority. The Supreme Court observed that "the Government must have freedom of contract; in administrative decisions, the role of the court is to ensure fairness, not to assess the commercial wisdom of the authority." Similarly, the decision in Monte Carlo Ltd. ’s case (supra) reinforces the principle that courts should not intervene in tender evaluation unless there is clear proof of mala fides, bias, or violation of statutory provisions. The Court held that "mere disagreement with the evaluation of the tendering authority or the view that another interpretation was possible is no ground for interference under Article 226." 12. Applying these settled principles, this Court finds that acceptance of a bank guarantee as equivalent proof of financial strength falls within the permissible bounds of administrative discretion. The process was neither arbitrary nor discriminatory, and no violation of natural justice or mala fide intention is established. 13. In view of the foregoing discussion, this Court finds no infirmity in the proceedings of the 3rd respondent dated 20.08.2025 allotting outsourcing work for the Government Medical College, Suryapet, to the 6 th respondent. The impugned action is consistent with the tender conditions, G.O.Rt.No. 4459 dated 27.12.2006, and the law laid down by the Hon'ble Supreme Court. 14. Accordingly, the Writ Petition is dismissed. No costs. 15. Miscellaneous petitions, if any, pending shall stand closed.