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2025 DIGILAW 1502 (TS)

Sangeeta Manpower and Security Solutions v. State of Telangana

2025-11-14

NAGESH BHEEMAPAKA

body2025
ORDER : Nagesh Bheemapaka, J. Petitioners approached this Court aggrieved by the action of the 2 nd respondent in empanelling Respondents 12 to 17 in Proceedings dated 23.07.2025 pursuant to Tender Notification dated 13.06.2025 thereby issuing work order in Proceedings dated 20.08.2025, without having mandatory requisite qualifications as per terms and conditions of Tender Notice dated 13.06.2025, as illegal, arbitrary and violation of guidelines framed under G.O.Rt.No.4459, dated 27.12.2006 as well as G.O.Rt.No.4271, dated 01.11.2008 and violation of Articles 14, 19 and 21 of the Constitution of India. Consequently, to set aside Proceedings dated 23.07.2025 as well as Proceedings dated 20.08.2025 of the 2 nd respondent issued in favour of Respondents 12 to 17 forthwith, thereby to continue the services of petitioners. 2. Petitioners state that they are established and registered outsourcing agencies, each holding valid and subsisting licenses issued by the competent authorities under the relevant labour, employment and establishment enactments. They have been engaged in the business of providing outsourcing and manpower services to various Government Departments within Suryapet District for several years and have been discharging their obligations strictly in accordance with law and to the satisfaction of the concerned authorities. 2.1. It is stated, petitioners’ firms are fully compliant with all applicable statutory requirements and hold valid registrations, particulars of which are as follows: (1) M/s. Sangeeta Manpower & Security Solutions Registration No. SEA/SUR/ALO/SP/0330905/2021; (2) M/s. Bhargavi Graphics - Registration No. SEA/SUR/ALO/SP/53293/2017; (3) M/s. Sri Sai Ram Infra Projects Registration No. SEA/SUR/ACL/SP/0316206/2021; and (4) M/s. Leena Manpower Services 0159747/2019. Registration No. SEA/SUR/ALO/SP/ 2.2. Petitioners further state that they have been continuously providing outsourcing manpower to various Government Departments, including Medical and Health, Irrigation, Education, and Administrative sectors, within Suryapet District. Their work has been consistently satisfactory, appreciated by the authorities concerned and free from any adverse remarks or complaints. Their registrations and licenses have been periodically renewed and are valid as on date. 2.3. The 2nd Respondent - District Collector and Chairman, District Outsourcing Committee, Suryapet District issued Tender Notification dated 13.06.2025, inviting Applications from qualified outsourcing agencies for empanelment for the financial year 2025-26. Their registrations and licenses have been periodically renewed and are valid as on date. 2.3. The 2nd Respondent - District Collector and Chairman, District Outsourcing Committee, Suryapet District issued Tender Notification dated 13.06.2025, inviting Applications from qualified outsourcing agencies for empanelment for the financial year 2025-26. The said notification prescribed certain mandatory and essential eligibility conditions that every participating agency was required to fulfil, namely: (a) the agency must possess a minimum annual turnover of 30 lakhs in any one of the last three financial years; (b) it must hold valid registration with the Employees Provident Fund (EPF), Employees State Insurance (ESI), Labour Department, and Goods and Services Tax (GST) authorities; and (c) it must submit documentary proof of payment of statutory contributions for at least six months prior to the date of the tender notification. 2.4. Petitioners also state that they fully satisfied all the above-stated conditions and produced the required documents in proof thereof, including turnover certificates, EPF and ESI payment statements, GST returns and valid labour licenses. Upon due scrutiny and verification of these records, the District Level Selection Committee found Petitioners eligible and accordingly empanelled them through Proceedings dated 23.07.2025. They further state that, the 3 rd Respondent - District Employment Officer, Suryapet subsequently published a list of 27 empanelled agencies wherein, apart from Petitioners' firms, certain ineligible and unqualified agencies, namely Respondents 12 to 17, were also included. These respondents were placed at Serial Nos. 20, 21, 22, 25, 27, and 1 (pending list), despite their failure to meet the mandatory eligibility criteria prescribed under the tender notification. 2.5. Petitioners contend that Respondents 12 to 17 neither possess requisite financial turnover of 30 lakhs in any of the last three financial years, as reflected in their GST filings for 2022-23, 2023-24, and 2024-25, nor have they maintained valid or continuous compliance under the EPF and ESI Acts. Their inclusion in the final empanelment list is, therefore, a blatant deviation from the tender conditions and violates fundamental tenets of transparency, fairness and equal opportunity in public procurement. Petitioners also state that the 3 rd Respondent thereafter, issued Proceedings dated 20.08.2025, whereby outsourcing work was allotted to Respondents 12 to 17 for the period 01.04.2025 to 31.03.2026, and the said proceedings were given retrospective effect from 01.04.2025. Petitioners also state that the 3 rd Respondent thereafter, issued Proceedings dated 20.08.2025, whereby outsourcing work was allotted to Respondents 12 to 17 for the period 01.04.2025 to 31.03.2026, and the said proceedings were given retrospective effect from 01.04.2025. Petitioners assert that such retrospective allocation of work is legally-impermissible, arbitrary and contrary to the established principles of administrative law, especially when their own contracts were valid and subsisting till 31.03.2025 and had not been lawfully terminated or cancelled. 2.6. Petitioners further state that prior to issuance of the impugned proceedings, they had addressed several representations to Respondents 2 and 3, including a detailed representation dated 26.07.2025, seeking extension of their existing service contracts beyond 31.03.2025. These representations, however, were not even considered or disposed of by the respondents. Instead, the authorities, acting in undue haste and under apparent extraneous influence, proceeded to allot the work to the unqualified private respondents, thereby ousting Petitioners in a wholly arbitrary and discriminatory manner. 2.7. Petitioners contend that the impugned action of the official respondents is in direct contravention of Clause 6 and Clause IV of the tender document as well as the policy guidelines contained in G.O.Rt.No.4459, dated 27.12.2006 and G.O.Rt.No.4271, dated 01.11.2008, which clearly stipulate that empanelment must be restricted to agencies satisfying all prescribed eligibility norms and possessing proven financial and statutory compliance. Any deviation from these mandatory conditions vitiates the entire process and renders the selection invalid. Inclusion of unqualified agencies in the empanelment list amounts to an arbitrary and unreasonable exercise of power, violating the principles of equality and non- discrimination enshrined under Articles 14, 19(1)(g), and 21 of the Constitution of India. Petitioners maintain that tender process, being a matter of public interest, must be transparent and objective and any dilution of eligibility criteria undermines both administrative fairness and public accountability. 2.8. Petitioners also state that despite issuance of impugned proceedings, the official respondents have continued to avail the services of Petitioners' staff in various departments, thereby acknowledging continuous necessity of their engagement. However, while the services of their deployed manpower are being utilized, respondents have failed to release Petitioners' legitimate dues and pending bills, thereby causing grave financial distress and operational difficulties. They finally state that in the totality of the circumstances, the impugned Proceedings are wholly illegal, arbitrary and contrary to the governing statutory provisions, tender terms, and constitutional safeguards. 3. However, while the services of their deployed manpower are being utilized, respondents have failed to release Petitioners' legitimate dues and pending bills, thereby causing grave financial distress and operational difficulties. They finally state that in the totality of the circumstances, the impugned Proceedings are wholly illegal, arbitrary and contrary to the governing statutory provisions, tender terms, and constitutional safeguards. 3. On 01.09.2025, this Court suspended the proceedings dated 23.07.2025 as well as 20.08.2025 issued by the 2 nd respondent till the next date of hearing. 4. The 2 nd Respondent - District Collector and Chairman, District Outsourcing Committee, Suryapet District filed counter specifically denying each and every allegation made by Petitioners and contending that the present Writ Petition is devoid of merits, misconceived in law and not maintainable under Article 226 of the Constitution of India. 4.1. This Respondent states that the process of empanelment of outsourcing agencies for the financial year 2025-26 was undertaken strictly in accordance with G.O.Rt.No.4459, dated 27.12.2006, which prescribes the procedure for empanelment and allocation of outsourcing agencies, and G.O.Rt.No.4271, dated 01.11.2008, which lays down the framework and guidelines for outsourcing manpower to various departments. These Government Orders collectively govern the functioning of the District Outsourcing Committees and empower the District Collector as the Chairman of the said Committee, to modify the tender terms, relax or insist upon conditions as deemed necessary, accept or reject Applications, or even cancel the entire empanelment process in the interest of administrative exigency. 4.2. It is further stated that contract period for the financial year 2024-25 expired by efflux of time on 31.03.2025, therefore, there was no subsisting right in favour of Petitioners to claim continuation or extension of their contracts beyond the said date. The empanelment of outsourcing agencies is not a permanent arrangement but an annual administrative exercise undertaken afresh each financial year. Petitioners, being aware of this, participated in the subsequent tender process and are therefore estopped from questioning its outcome merely because the result did not favour them. In accordance with the above Government Orders, a fresh tender notification dated 13.06.2025 was issued by the 2nd Respondent inviting Applications from eligible outsourcing agencies for empanelment for the financial year 2025-26. Tender notification was duly published and made accessible to the public, thereby ensuring a transparent and competitive process. 4.3. Respondents also state that in response to the said notification, 34 Applications were received. Tender notification was duly published and made accessible to the public, thereby ensuring a transparent and competitive process. 4.3. Respondents also state that in response to the said notification, 34 Applications were received. Upon scrutiny, 19 agencies, including Petitioners, were found fully eligible in terms of turnover, statutory registration and compliance requirements. Three Applications were rejected outright for failure to submit essential documents. The remaining eight agencies were found to possess valid registrations under the EPF, ESI, Labour Department, and GST laws, but had not furnished documentary proof of the minimum annual turnover of 30 lakhs as stipulated under the tender conditions. It is further stated, in order to ensure fairness and to provide a reasonable opportunity to all participants, the District Level Selection Committee resolved to allow such agencies to furnish either proof of turnover or a bank guarantee for 30 lakhs prior to finalization of empanelment. This discretionary relaxation was made uniformly applicable to all similarly situated applicants and was duly recorded in the minutes of the Selection Committee meeting, thereby maintaining transparency and administrative propriety. 4.4. It is also stated, in compliance with the said decision, Respondents 12, 14, 16 and 17 furnished bank guarantees for 30 lakhs each, while Respondents 13 and 15 produced GST turnover certificates establishing the requisite financial capacity. These documents were received and verified prior to 23.07.2025, the date on which final empanelment list was approved. After comprehensive scrutiny of all the records and material, the District Level Selection Committee finalized and empanelled 27 agencies for the year 2025-26 through Proceedings dated 23.07.2025. Subsequent to finalization of empanelment list, departmental allocation of work was undertaken by the Committee in accordance with the established procedure and formal allotments were issued through Proceedings dated 20.08.2025 for the financial year 2025-26. The said proceedings were given retrospective effect from 01.04.2025 only to align the contract period with the financial year, and the same was a mere administrative adjustment having no bearing on the validity or legality of the empanelment itself. The retrospective clause was not intended to confer any undue advantage upon any particular agency, nor did it cause prejudice to Petitioners. 4.5. It is also stated, the entire process from issuance of tender notification to final empanelment and subsequent allotment was carried out in a transparent, fair and lawful manner, fully compliant with the tender terms and Government Orders governing such processes. 4.5. It is also stated, the entire process from issuance of tender notification to final empanelment and subsequent allotment was carried out in a transparent, fair and lawful manner, fully compliant with the tender terms and Government Orders governing such processes. The empanelment was finalized only after proper verification of documents and objective evaluation by the competent District Level Selection Committee. Respondents further assert that allegations of arbitrariness, favouritism or extraneous influence made by Petitioners are baseless, unfounded and unsupported by any credible evidence. Petitioners failed to produce any material demonstrating bias or mala fides on the part of any official. The administrative discretion exercised by the Committee in allowing submission of turnover proof or bank guarantees was uniformly extended to all the applicants and cannot be termed arbitrary or discriminatory. 4.6. Respondents also contend that since Petitioners' earlier contracts expired on 31.03.2025, their representations seeking continuation or extension of those contracts are infructuous and unsustainable in law. The right to continue as an outsourcing agency ceases upon expiry of the empanelment period and no legitimate expectation of renewal arises therefrom. Petitioners, having voluntarily participated in the subsequent tender process, are estopped from challenging the same. It is maintained that there has been no violation of any tender condition, statutory provision, or constitutional safeguard in the present case. Empanelment and allocation orders were issued in the ordinary course of administrative procedure and are neither arbitrary nor illegal. It is therefore, stated that Writ Petition, being devoid of any substantive grounds or legal infirmity, is liable to be dismissed. 5. Heard Sri Kadaru Prabhakar Rao, learned counsel for petitioners, learned Government Pleader for Medical, Health and Family Welfare for Respondents 1, 5, 7 to 9, learned Government Pleader for Labour on behalf of Respondents 2 to 4, learned Government Pleader for Irrigation on behalf of the 6 th respondent, learned Government Pleader for Animal Husbandry on behalf of Respondent No.10, learned Government Plaeder for Social Welfare on behalf of Respondent No.11. 6. This Court has carefully considered the rival submissions advanced by learned counsel appearing on either side and has meticulously examined the material placed on record. 6. This Court has carefully considered the rival submissions advanced by learned counsel appearing on either side and has meticulously examined the material placed on record. It is an admitted fact that empanelment of outsourcing agencies for the financial year 2024-25 came to an end by efflux of time on 31.03.2025 and that the 2nd Respondent thereafter issued a fresh Tender Notification dated 13.06.2025, inviting Applications for empanelment of outsourcing agencies for the succeeding financial year 2025-26. 7. It is also not in dispute that Petitioners participated in the said tender process, they were found eligible upon scrutiny of their documents and that they were accordingly included in the empanelled list under Proceedings dated 23.07.2025. The grievance of Petitioners, however, is confined to inclusion of Respondents 12 to 17 in the same empanelment list, whom they allege to be ineligible for want of requisite financial turnover and statutory compliance. 8. On a careful perusal of the record, it emerges that the District Level Selection Committee permitted the said respondents to furnish alternative proof of their financial capacity, either by producing bank guarantees for 30 lakhs or by submitting GST turnover certificates, in lieu of conventional turnover certificates from auditors. The documents so furnished were duly received, verified and considered by the Committee before finalization of the empanelment list. The power to allow such a course of action is traceable to G.O.Rt.No.4459, dated 27.12.2006, which vests the District Outsourcing Committee with limited administrative discretion to grant relaxation in procedural matters, provided the Committee is satisfied as to the financial soundness and operational capability of the applicant agency. 9. This Court is satisfied that such discretion was exercised uniformly in good faith and for the purpose of ensuring a fair opportunity to all the applicants. No material has been placed before this Court to suggest that the said relaxation was extended selectively or with any mala fide intent. Insofar as the retrospective operation of Proceedings dated 20.08.2025, effective from 01.04.2025, is concerned, this Court finds that the same was only an administrative measure intended to synchronize the empanelment period with the financial year, thereby maintaining continuity of services. Such retrospective alignment, being procedural in nature, does not confer any undue benefit upon any agency nor does it vitiate the validity of the selection process. 10. Such retrospective alignment, being procedural in nature, does not confer any undue benefit upon any agency nor does it vitiate the validity of the selection process. 10. Upon overall consideration, this Court is of the considered opinion that Petitioners failed to establish any element of arbitrariness, illegality, procedural impropriety, or mala fides in the conduct of empanelment or the subsequent departmental allocation of outsourcing work. The material placed on record demonstrates that the process was carried out transparently and in consonance with the tender terms, G.O.Rt.No.4459, dated 27.12.2006, G.O.Rt.No.4271, dated 01.11.2008 and other applicable administrative guidelines. 11. Petitioners' contracts for the year 2024-25 having expired on 31.03.2025, no vested or enforceable right survives in their favour to seek continuation or renewal as a matter of course. The doctrine of legitimate expectation cannot be invoked in the absence of any statutory or contractual obligation on the part of respondents to renew such engagements. Petitioners' challenge to inclusion of other agencies, therefore, lacks any sustainable foundation in law. This Court thus finds no reason to interfere with the impugned proceedings dated 23.07.2025 and 20.08.2025. The procedure adopted by the 2 nd Respondent appears to be fair, reasonable and in accordance with the applicable Government Orders, tender notification and established administrative practice. 12. In view of the foregoing discussion, this Court concludes that Petitioners have not made out any case warranting interference under Article 226 of the Constitution of India. The writ petition is, therefore, devoid of merit and is liable to be dismissed. 13. The Writ Petition is therefore, dismissed. No costs. 14. Miscellaneous petitions, if any, pending shall stand closed.