ORDER : B. VIJAYSEN REDDY, J. This writ petition is filed seeking a direction from this Court to declare the action of the respondents No.1 and 4 in allotting Work/Purchase Orders for manufacturing of Hospital Furniture to the respondent No.3 who inturn entering into MOUs with Private Parties without calling any tenders by depriving the object of Government for Prisoners to Learn and Earn by manufacturing of Hospital Furniture, as illegal, arbitrary and violative of Articles 14, 16, 21 and 300-A of the Constitution of India . 2. It is submitted that the petitioner is proprietor of M/s.Vardhini Industries, a MSME unit registered with Industries Department of Telangana State and NSIC of Central Government and having registered office at Sithaphalmandi, Secunderabad. The petitioner is engaged in manufacturing steel furniture for offices and hospitals, mostly, supplying furniture to the Government offices and Government undertaking Institutions apart from Private Institutions. Petitioner's industry is running since 27 years. Petitioner had been participating in the tenders issued by the Health Department, Government of Telangana, for supplying steel furniture to Government Hospitals. The petitioner had been declared successful bidder in several tenders as she quoted lowest bid amount for preparing steel furniture with good quality. 3. It is submitted that without following the procedure laid down by law, the respondent No.4 issued Purchase Orders to the respondent No.3 and requested to supply Hospital furniture item worth of Rs.2,33,83,690/- vide (1) P.O.No.705/382/TSMSIDC/ EQU dated 04.03.2021, (2) P.O.No.701/276/TSMSIDC/GMC/ NAL dated 25.02.2021, (3) P.O.No.687/275/TSMSIDC/GMC/ Suryapet dated 15.02.2021, (4) P.O.NO.601/437/TSMSIDC/ dated 08.09.2021, (5) P.O.No.233/437/TSMSIDC/EQU dated 11.08.2021, (6) P.O.No.163/55/TSMSIDC/EQU dated 26.06.2021, (7) P.O.No.162/386/TSMSIDC/EQU dated 25.06.2021 and (8) P.O.No.100/382/TSMSIDC/EQU dated 20.05.2021. The Jail Prisoners are not preparing any hospital furniture and the respondent No.2 without following any norms and procedure is allotting the work to one M/s S.S. Industries Proprietor by entering into Memorandum of understanding for the reasons best known to the authorities. 4. It is submitted that the Health Department has been placing orders with the Jail Department since 2018 by quoting higher price than the price quoted by the petitioner. As per the understanding of the petitioner, the work allotted by the Health Department to the Jails is to encourage the business in various skills including manufacturing of furniture.
4. It is submitted that the Health Department has been placing orders with the Jail Department since 2018 by quoting higher price than the price quoted by the petitioner. As per the understanding of the petitioner, the work allotted by the Health Department to the Jails is to encourage the business in various skills including manufacturing of furniture. The said object is defeated as the health department is allotting work to Jails and inturn the Jailors are entering into the MOUs with private parties, which is against law. The respondent No.4, a nodal agency for procuring the medical equipments required by the Government hospitals in the State of Telangana, never followed the Guidelines issued by the Government for extending the benefits to MSMEs which says that 20% of the total requirement should be purchased from MSMES vide Government of India Gazette No.503 dated 26.03.2012 and the hospital furniture is reserved to MSMEs vide Government of India Gazette No.31 dated 16.06.2006. 5. It is submitted that instead of encouraging medium and small-scale industries like the petitioner, the respondent No.4 is allotting the work to jail department, in turn, the Jailors are allotting the work only to the persons known to them without calling for tenders. Recently, the Central Government adopted a method of purchasing the required equipment as well as the furniture through Portal called as "Government E-Market Place (GEM)", but such process is not followed by the respondents. The petitioner has given representation dated 01.11.2021 to the respondent authorities but the same was not considered, as such, the instant writ petition. 6. Initially counter affidavit was filed by one T. Kalasagar, Superintendent of Prisons, Prisoner’s Agricultural Colony, Cherlapalli (Open Air Jail) on 23.11.2021 on behalf of respondent No.3. Subsequently, another counter affidavit was filed on behalf of the respondents No.1 and 4 on 10.12.2021. Later, One Mr. Santosh Kumar Roy, Superintendent of Jails, Central Prison, Cherlapalli, filed counter on behalf of the respondent Nos.2 and 3 on 10.06.2022. The said T. Kalasagar, filed additional counter affidavit on 30.10.2023 on behalf of the respondents No.2 and 3. 7. In the counter affidavit filed by the respondent No.4, it was stated that the World Health Organization declared Covid-19 as Pandemic on 11.03.2020 due to spread of the disease in many countries across the world.
The said T. Kalasagar, filed additional counter affidavit on 30.10.2023 on behalf of the respondents No.2 and 3. 7. In the counter affidavit filed by the respondent No.4, it was stated that the World Health Organization declared Covid-19 as Pandemic on 11.03.2020 due to spread of the disease in many countries across the world. Sensing the seriousness of the issue and future conditions of health emergency, which require immediate procurement of certain Diagnostic, Surgical and other medical equipment, Drugs and Pharmaceutical and other essential services and related supplies on priority for undertaking COVID-19 relief operations, the Government have issued several orders permitting the respondent No.4 to procure and supply all the required items/equipment to the Health Institutions to manage & control COVID - 19 effectively. Lockdown has been imposed throughout the country and demand for Medical/Covid items has increased drastically. The market has become "sellers market" and the same has been opined by the Government of India vide its Office Memorandum No: F6/18/2019 PPD, Department of Expenditure, Ministry of Finance, dated 27.03.2020. 8. It is stated that the Government of Telangana vide G.O.Ms.No.29 Finance (TFR) Department dated 04.04.2020, permitted relaxation of the provisions of Article 125 of Telangana State Financial Code and related further government orders on the subject in respect of procurement of certain Diagnostic, Surgical and other medical equipment, Drugs and Pharmaceutical and other essential services and related supplies. In view of the Covid-19 emergency, when the demand for additional beds in the designated Covid hospital increased drastically, the respondent No.4 issued purchase orders to several firms for supply of Hospital Furniture to create additional beds. The Purchase Orders have been issued as per the conditions laid down under Tender Notice No.01B/TSMSIDC/ EQU/Procurement/2018-19 dated 18.04.2018. Unfortunately, the petitioner's firm wrongly construed the same as Purchase Orders issued under the 2019 tender. The prices quoted by the firm in the fresh tenders are considered only for emergency purchase in terms of G.O.Ms.No.29 Finance (TFR) Department dated 04.04.2020. 9. It is stated that the purchase orders worth Rs.2,93,60,846/- issued by the respondent No.4 were issued under emergency in terms of G.O.Ms.No.29 with the tender conditions laid under Tender Notice No.01B/TSMSIDC/EQU/Procurement/2018-19 dated 18.04.2018. It is submitted that the prices offered by the Central Prison, Cherlapalli are less than L1 prices quoted in the Tender Notice No.01B/TSMSIDC/EQU/Procurement/2019-20 dated 10.05.2019. This has resulted in saving the public exchequer. 10.
It is submitted that the prices offered by the Central Prison, Cherlapalli are less than L1 prices quoted in the Tender Notice No.01B/TSMSIDC/EQU/Procurement/2019-20 dated 10.05.2019. This has resulted in saving the public exchequer. 10. It is submitted that in terms of Article 122, 123 and Rule VII of Article 125 of the Telangana State Finance Code and further instructions issued under this Code, a purchasing officer should buy the articles from a Government institution viz. Jail, Forest Department or the Public Works Workshops etc. when such institution is able to supply articles of the quality. Further, the purchasing officers should invariably buy all standardized articles of furniture which he requires from the Jail Department. As regards articles of furniture which have not been standardised, the purchasing officer should first ask the Superintendent of the nearest Jail at what prices he can supply the articles and whether he can supply them within the time fixed. When the articles can be supplied within fixed time and the jail price together with freight charges does not exceed by 5 per cent of the market price at the place where the article is required, the order should be placed with the Jail Department. 11. It is stated that in the present case the rates offered by the petitioner firm is higher than the rate quoted by the Central Prison, Charlapalli. The respondent No.4 was regularly making procurement of Medical Equipment, Surgical Consumables, etc. through GeM portal only. So far the respondent No.4 has floated 415 numbers of tenders in GeM portal in the last 18 months. As per the tender conditions all the bidders have to undergo technical evaluation and demonstration of products being offered by them and the tender inviting authority cannot be held responsible for procurement of the items from the bidders when the Prisons Department is offering the same for much lesser prices. 12. In the counter affidavit dated 23.11.2021, filed by the respondents No.2 and 3, it is stated that Memorandam of Understanding (MoU) with entered with S.S. Industries for wooden and steel furniture manufacturing and assembling unit to provide employment and skill development for inmates of Prisoners Agricultural Colony Cherlapalli, Hyderabad, with approval of Government of Telangana.
12. In the counter affidavit dated 23.11.2021, filed by the respondents No.2 and 3, it is stated that Memorandam of Understanding (MoU) with entered with S.S. Industries for wooden and steel furniture manufacturing and assembling unit to provide employment and skill development for inmates of Prisoners Agricultural Colony Cherlapalli, Hyderabad, with approval of Government of Telangana. The Prison Department has approved S.S. Industries for Memorandam of Understanding (MoU) through Three Bid system i.e. "Pre-qualification bid", "Technical bid" and "Commercial/Financial Bid" on e-procurement system tender process vide Rc.No.156/Inds2/2018-1 dated 22.04.2018. 13. It is stated that soon after receiving purchase orders from various Government and private sector entities, the Public Private Partnership (PPP) unit manufactures articles by engaging inmates of the Prisoners Agricultural Colony. For this purpose they are getting royalty to department and wages to inmates. The royalty accrued is deposited to prison development fund immediately. The prices are fixed by the committee comprising senior Prison Officers, Deputy Director of Industries, Deputy Engineer of Police Housing Corporation and expert in industry. The committee will pursue local Market rates and Government E-Marketing (GeM) rates of raw material and goods and finalise the rates of articles every year. After manufacturing articles, the quality of articles will be checked by the same committee members and the respondents No.2 and 3 are assuring quality with seven years warranty. As per MoU, the Public Private Partnership (PPP) unit is established in Jail campus i.e. Prisoners Agricultural Colony, Cherlapalli. The jail is having 128 acres land out of which one acre land is allocated to M/s. S.S. Industries for establishment of industry and they are paying monthly rent of Rs.50.000/- to the Prison Department in addition to royalty and wages. The same is transferred to Prison Development Fund. 14. It is stated that the respondents No.2 and 3 are manufacturing wooden and steel articles and furniture after receiving work order from various departments duly following codal procedures laid by Prison Department and MoU with Public Private Partnership (PPP) unit. 15. In the counter affidavit dated 13.06.2022, filed by the respondent No.3, deposed by Mr. Santosh Kumar Roy, Superintendent of Jails, Central Prison, Cherlapalli, it is stated that the 3 respondent is not having any MOU for manufacuring Hospital Furniture work and the adjacent Prison namely Prisoners Agricultural Colony, Cherlapalli is undertaking such works. As such, the respondent No.3 is not a necessary party to the writ Petition.
Santosh Kumar Roy, Superintendent of Jails, Central Prison, Cherlapalli, it is stated that the 3 respondent is not having any MOU for manufacuring Hospital Furniture work and the adjacent Prison namely Prisoners Agricultural Colony, Cherlapalli is undertaking such works. As such, the respondent No.3 is not a necessary party to the writ Petition. The Purchase Orders of the respondent No.1 made to the Superintendent, Prisoners Agricultural Colony, Cherlapalli, Medchal Malkajgiri District (subject matter of the Writ Petition) was cancelled by the respondent No.1 vide Proceedings F.No.443/TSMSIDC/PO-cancel/2021-22 dated 25.11.2021 and the same has been awarded to the Superintendent, Prisoners Agricultural Colony, Cherlapalli, Medchal Malkajgiri district and the said work is being executed by them, for which there is no MOU with any private parties and the said work is purely being executed by the respondent No.3. 16. In the additional counter affidavit, it was stated by the respondents No.2 and 3 that the prisoners are human resource and with proper skill and productive engagement it can open a new chapter in their lives. There is huge scope for further growth in the skill of inmates of the Prison Industries and the role of corporate partners who can bring in cutting edge solutions will be crucial. They can bring advanced technology and latest manufacturing equipment to up skill the inmates of the Prisoner's Agricultural Colony, Cherlapalli, in turn, they can earn and support their families. After their release, they can get meaningful employment and mingle in the society as good citizens. 17. It is stated that the Head of the Department i.e. Prisons Department has primarily issued Paper Notification & Tender Notice vide Letter No.Ind.2/156/2018-I-Tenders dated 22.04.2018 for the establishment of Industries under Public Private Partnership (PPP) in Steel Furniture Unit and published on 25.04.2018 in all leading news papers i.e. Eenadu, Sakshi and The Hindu etc. The Prison Department has received three tenders from various firms i.e. Rajadhani Engineering Works, S.S. Industries and Confra Furn System Pvt. Ltd. who have participated in the tender process. But Vardhini Industries – petitioner firm has not participated in this tender process. After receiving the tenders within the stipulated period, the Head Of the Department has constituted a Tenders Committee vide Lr.No.Ind.2/156/2018-1 dated 08.05.2018 to examine and verify the documents and finalize the Price Bid. A meeting was convened on 15.05.2018 as per the specifications laid in the Notification.
But Vardhini Industries – petitioner firm has not participated in this tender process. After receiving the tenders within the stipulated period, the Head Of the Department has constituted a Tenders Committee vide Lr.No.Ind.2/156/2018-1 dated 08.05.2018 to examine and verify the documents and finalize the Price Bid. A meeting was convened on 15.05.2018 as per the specifications laid in the Notification. The tender committee finalized M/s. S.S. Industries where they have offered highest royalty and fulfilled all conditions as per the specifications mentioned in the Notification. It is stated that before entering into MoU between the S.S. Industries and Prisoner's Agricultural Colony, Cherlapalli, Medchal District, the HOD i.e., Prisons Department has taken legal opinion from the concerned Government Pleader. The department has followed due procedure to finalize tender process by following rules and regulations, terms and conditions properly contemplated in the Notification 18. In the reply filed to the counters it was stated that the method adopted by the respondent No.2 is against public policy and public money is being misused. The respondent No.1 has no authority to say that the Central Prison offered lesser price. There are no details furnished by the Jail authorities that they have offered lesser price than the price quoted by L1 pursuant to the tender notification. There is collusion between the official respondents and the work worth crores of rupees is allotted to one individual without there being any accountability to the respondent No.3 as well as respondent No.1. 19. As seen from the averments in the writ petition and the relief sought, the petitioner has not challenged any tender notification or the work order/purchase order issued by the official respondents in favour of M/s. S.S. Industries, which is not made a party to the writ petition. The entire case of the petitioner is that the respondents have colluded with M/s. S.S. Industries and are extending favour to them. That instead of going for public tenders, MOU is entered with M/s. S.S. Industries by the Jail Department and there is no transparency as to the quality, quantity and price for which the Jail authorities/S.S. Industries are offering the furniture/equipment to the respondent No.4. 20. Learned Government Pleader for Home and learned standing counsel for the respondent No.4 submitted that due to Covid-19 situation and emergency, the hospital equipment, furniture etc. were procured by entering into MoU’s with third parties as per G.O.Ms.No.29 dated 04.04.2020. 21.
20. Learned Government Pleader for Home and learned standing counsel for the respondent No.4 submitted that due to Covid-19 situation and emergency, the hospital equipment, furniture etc. were procured by entering into MoU’s with third parties as per G.O.Ms.No.29 dated 04.04.2020. 21. The main contention of the learned counsel for the petitioner is that there is loss to the State exchequer. Further the petitioner is willing to supply the articles/equipment on a lesser rate. The MoU dated 30.07.2018 entered by the Telangana Prisons Department with M/s. S.S. Industries is placed on record, which reveals that M/s. S.S. Industries shall establish a Wooden and Steel Furniture unit at Prisoners’ Agricultural Colony, Cherlapalli and provide work to the prisoners. They shall arrange training to the prisoners and supply raw materials. M/s. S.S. Industries agreed to pay Rs.50,000/- per month towards rent to the Prison Department for allotting land of 4000 sq. yards with enhancement of 5% every two years. Apart from that, M/s. S.S. Industries has to pay royalty at 5.5% on overall sale turnover excluding GST on the articles manufactured in the Prisoners’ Agricultural Colony, Cherlapalli. 22. Learned counsel for the petitioner contended that there is no clarity on the policy followed by the Jail authorities with regard to manufacturing and supplying furniture and equipment to the respondent No.4 and other departments. 23. According to the respondent authorities, under PPP, MoU was entered by the Jail Department with M/s. S.S. Industries for the benefit of prisoners so that they can get trained and upgrade their skills to manufacture furniture and other equipment. Clause 11 of the MoU dated 30.07.2018 states that the Deed of MoU will be in operation for a period of five years. It is not known whether the contract of M/s. S.S. Industries is extended beyond five years. 24. In the above circumstances, considering that MoU is stated to have been entered by the Jail Department for the benefit of prisoners and admittedly, manufacturing unit was set upon by M/s. S.S. Industries, which is not a party to this lis, this Court is not inclined to conduct a roving enquiry in this writ petition.
24. In the above circumstances, considering that MoU is stated to have been entered by the Jail Department for the benefit of prisoners and admittedly, manufacturing unit was set upon by M/s. S.S. Industries, which is not a party to this lis, this Court is not inclined to conduct a roving enquiry in this writ petition. As regards loss being, allegedly, caused to the State exchequer and no transparent policy being followed by the respondent authorities, it would suffice if directions are issued to the respondents No.1 and 2 to issue necessary guidelines to the respondents No.3 and 4 to follow a transparent policy and ensure that no scope is given in future for challenging the contracts and work/purchase orders issued to the contractors. 25. Accordingly, the writ petition is disposed of directing the respondents No.1 and 2 to consider the representation of the petitioner dated 01.11.2021 for encouraging the local MSME Units located in the State of Telangana in placing orders for various furniture items to the Jail Department, by giving opportunity of hearing to the petitioner and pass orders, in accordance with law, within a period of six (6) weeks from the date of receipt of a copy of this order. The miscellaneous petitions pending, if any, shall stand closed. There shall be no order as to costs.