Telangana High Court
Boinapalli Srinivasa Rao vs The State Of Telangana And 2 Others on 28 September, 2020
Author: K. Lakshman
Bench: K. Lakshman
THE HON'BLE SRI JUSTICE K. LAKSHMAN WRIT PETITION Nos.6595, 8622, 6869 AND 14280 OF 2020 COMMON ORDER:
The lis involved in these writ petitions and parties thereof are common, all these writ petitions are being disposed of by way of a common order.
2. Writ Petition Nos.6595 and 8622 of 2020 are filed by Mr. Dugyala Devender Rao, to declare the action of respondent Nos.2 and 3 in cancelling tender Nos.36/2019-20 and 39/2019-20 vide I.D. Nos.162886 and 163080 to an estimated contract values of Rs.3,76,32,750/- and Rs.1,95,69,559/- for the works of construction of Check dam across Moranchavagu near Chelpur and Nagarampally villages of Mulugu - Ghanpur Mandal in Jayashankar - Bhupalapally District, respectively, without any notice and consequential action of respondent No.3 in issuing fresh tender notification No.111/2019-20, dated 30.03.2020, ID No.171452 by adding five other works to an estimated cost of Rs.19,87,06,893/- as illegal. Consequential direction is sought a direction to respondent No.3 to open the aforesaid tenders and allot the work to the eligible tenderer.
3. Whereas, W.P. Nos.6869 and 14280 of 2020 are filed by Mr. Boinapalli Srinivasa Rao to declare the action of respondent Nos.2 and 3 in cancelling tender Nos.37/2019-20 and 31/2019-20 vide ID Nos.162941 and 136873 to an estimated contract values of Rs.5,40,72,363/- and Rs.5,09,34,118/-, respectively, for the works of KL,J W.P. No.6595 of 2020 & batch 2 construction of Check dam across Peddavagu near Issipet Village and Salivagu at Confluence point of Pedda Vagu respectively of Mogullapally Mandal in Jayashankar - Bhupalapally District, without any notice and consequential action of respondent No.3 in issuing fresh tender notification No.111/2019-20, dated 30.03.2020, ID No.171452 by adding five other works to an estimated cost of Rs.19,87,06,893/- as illegal. Consequential direction is sought a direction to respondent No.3 to open the aforesaid Tenders and allot the work to the eligible tenderer.
4. Heard Mr. A. Sudarshan Reddy, learned Senior Counsel representing Mr. Tera Rajinikanth Reddy, learned counsel for the petitioners in all the writ petitions, learned Government Pleader for Irrigation and Command Area Development representing respondent Nos.1 to 3 in all the writ petitions and Mr. L. Aravind Reddy, learned counsel for respondent No.4 in W.P. Nos.6869 and 14280 of 2020.
5. Respondents' Authorities have issued tender notification calling for tenders in respect of eight (08) works i.e., construction of check dams vide Tender Notice Nos.31, 33, 34, 35, 36, 37, 38 and 39, which includes the subject tenders viz., 36, 39, 37 and 31 respectively. Out of the said eight tenders, four tenders were processed and price bids were opened.
6. Mr. A. Sudarshan Reddy, learned senior counsel, would submit that the respondents' authorities have processed the four tenders and cancelled other four tenders wherein the petitioners herein KL,J W.P. No.6595 of 2020 & batch 3 have participated. No valid reasons were assigned for cancelling the said tenders, and the reasons assigned by the respondents' authorities are not germane. He would further submit that the petitioners in all four tenders have submitted lowest amount. The respondents' authorities in order to entrust the construction of check dam work to their blue-eyed contractors, cancelled the tenders and issued fresh tenders by including two other works with estimated cost of Rs.19,87,06,893/- to avoid the petitioners in participating in fresh tenders. Due to the said illegal action of the respondents' authorities in cancelling the tenders, much loss caused to the public exchequer. There is discrimination on the part of the respondents' authorities in processing only four tenders and cancelling the four tenders where the petitioners have participated and, therefore, it amounts to discrimination and violation of Article 14 of the Constitution of India.
7. The learned senior counsel would further submit that the eight tender notices in respect of eight works i.e., construction of check dams stand on the very same footing including the vicinity, distance and time frame etc. He would further submit that there is no dispute with regard to the distance and administrative difficulty in executing the works by the petitioners. The respondents have not disputed the contention of the petitioners as to the distance in respect of execution of work viz., construction of check dams as mentioned in the tabular form furnished by the petitioners, and monetary loss and so also in eight works. Therefore, the action of respondents' authorities KL,J W.P. No.6595 of 2020 & batch 4 in cancelling the four tender notices only on the ground that efficiency of the contractor in tackling the works is poor and he could not complete the works on time schedule is baseless and illegal. It is further contended by the learned senior counsel that the contention of the respondents' authorities that Mr. Dugyala Devender Rao, Contractor was earlier allotted nine (09) works in the same Circle under Mission Kakatiya and he has not even completed a single work in spite of lapse of two (02) years beyond the agreement period. The said grounds on which the tenders were cancelled are baseless and discriminatory.
8. The learned senior counsel also would submit that after cancellation of the said four tenders, the respondents' authorities have issued fresh tenders dated 30.03.2020 by including two other works for an estimated cost of Rs.19,87,06,893/- only to avoid the petitioners in participating the tenders. Since as per Class - I Contractor's License, the petitioners cannot participate in the work estimate of more than Rs.10.00 Crore. Thus, the action of the respondents' authorities is arbitrary and illegal. There is no transparency and fairness in cancelling the tenders and issuing fresh tenders. The learned senior counsel has placed reliance on the principles held in Ramana Dayaram Shetty v. International Airport Authority of India1, State of Jharkhand v. M/s. CWE - Soma Consortium2 and 1 . (1979) 3 SCC 489 2 . AIR 2016 SC 3366 KL,J W.P. No.6595 of 2020 & batch 5 Sate of Arunachal Pradesh v. Nezone Law House, Assam3, wherein it was held by the Hon'ble Supreme Court the authorities have to act fairly and there should not be discrimination or unreasonableness in the matters of tenders.
9. Respondent No.3 filed counter denying the allegations made by the petitioners. The learned Government Pleader for I & CAD appearing on behalf of respondent Nos.1 to 3 would submit that respondent No.1 Government has taken a policy for construction of 1200 check dams in the entire State of Telangana. Pursuant to the said decision, the respondents have issued tender notification for construction of eight (08) check dams vide Tender Notice Nos.31, 33, 34, 35, 36, 37, 38 and 39. Out of the said eight tender notices, four tenders were processed and price bids were obtained, proposals were submitted to respondent No.2 for necessary approvals. The said four (04) tenders were approved and necessary agreements were concluded and the works are in progress. For other four (04) works, in order to speed up the construction of works and to meet the demand for the summer season and to meet the irrigation needs of ayacutdars for the current season, a decision was taken to club the said four (04) works cancelled with the new two (02) works totalling six (06) in number and a single tender was called vide Tender No.111/2019-20, dated 30.03.2020. The details of the said six (06) check dams were specifically mentioned.
3 . (2008) 5 SCC 609 KL,J W.P. No.6595 of 2020 & batch 6
10. It is further contended by the learned Government Pleader that Mr. Dugyala Devender Rao, the petitioner in the first two writ petitions, was earlier allotted nine (09) works in the said Circle under Mission Kakatiya works and that he has not completed even a single work, in spite of lapse of two (02) years beyond the agreement period and that the efficiency of the contractor in tackling the works is poor. He has not completed the works on time schedule.
11. He would further contend that as per Clause 27.2 of Tender Notification, the Tender Accepting Authority reserves right to accept or reject any tender or all tenders, and to cancel the tendering process, at any time prior to the award of contract, without thereby incurring any liability to the affected bidder or bidders or any obligation to inform the affected bidder or bidders of the reasons for such action. He would also submit that the four (04) works to which tenders were cancelled were clubbed with the fresh two works located within the vicinity being similar in nature and called for a single tender. The said process of clubbing of works is a common phenomenon adopted by the State in the other Circles and also State Level depending upon the feasibility. Therefore, there is no irregularity or illegality in cancelling the above said four (04) tenders and in issuing fresh tender dated 30.03.2020 by clubbing two more works with the said four cancelled works.
12. The learned Government Pleader further submits that the technical bid in respect of four (04) works was opened on 17.02.2020 KL,J W.P. No.6595 of 2020 & batch 7 and three (03) more bidders i.e., Mr. Dugyala Devender Rao, Samaiah & Company and Sai Manikanta, have also submitted bids. At that particular stage, before evaluating the tenders as per the instruction of the Chief Engineer, the tenders were cancelled on 30.03.2020 i.e., within a period of 45 days which is within the bid validity period of 90 days. The respondents' authorities have not opened the financial bid. Therefore, the petitioners cannot claim that they have suffered huge loss and they would be successful bidders in case of opening financial bid. He would also contend that there is no irregularity or illegality in cancelling the earlier tenders and in issuing fresh tenders. Further, the scope of judicial review under Article - 226 of the Constitution of India is very limited and there is no ground or circumstance that warrants interference by this Court by exercising its powers under judicial review in cancelling the earlier tenders and in issuing fresh tender notification. The petitioners instead of participating in the fresh tenders filed the present writ petitions and sought interim orders with a mala fide intention to stall the entire work. He has placed reliance on the principles held by the Hon'ble Apex Court in Tata Cellular v. Union of India4, M/s. CWE - Soma Consortium2 and Maa Binda Express Carrier v. North-east Frontier Railway5.
4 . (1994) 6 SCC 651 5 . (2014) 3 SCC 760 KL,J W.P. No.6595 of 2020 & batch 8
13. Respondent No.4, who got impleaded itself, filed counter denying the allegations made by the petitioners. Mr. L. Aravind Reddy, learned counsel for respondent No.4 would contend that respondent No.4 is the successful bidder in respect of the said four works. He has adopted the contentions of the learned Government Pleader for I & CAD on all other aspects. He would further supplement that the Government has issued tender notification in respect of 1200 check dams. Several tender notices were cancelled. None of the parties participated in the tenders, which were cancelled, have approached this Court by way of filing writ petitions. There is no loss, much less financial loss to the public exchequer in cancelling the earlier four tenders and clubbing two more works and issuing fresh tender notices for six works on 30.03.2020. The competent authority has considered various aspects, including the distance, similarity, vicinity and cost estimate achieved by the Government, and issued fresh tender on 30.03.2020 clubbing two more works to the four works which were cancelled. The petitioners instead of participating in the fresh tenders, filed these writ petitions with a mala fide intention to stall the work. Respondent No.4 is the successful bidder in respect of six works and by virtue of the interim order, the tenders were not finalized. Therefore, respondent No.4 is suffering financial loss and hardship.
14. The learned counsel for respondent No.4 would further submit that due to the interim orders granted by this Court, the entire KL,J W.P. No.6595 of 2020 & batch 9 construction of check dams is stalled and the ayacutdars would suffer. He has also placed reliance on the principle held in an unreported judgment rendered by a Single Judge of High Court of Judicature for the States of Telangana and the Andhra Pradesh in M/s. Sai Ram Constructions v. The State of Telangana6, which was confirmed by a Division in W.A. No.1595 of 2018, dated 06.12.2018; M/s. CWE - Soma Consortium2 and Maa Binda Express Carrier5.
15. With the said contentions, the learned counsel for respondent No.4 sought to dismiss the writ petitions.
16. On perusal of the above said pleadings, it would reveal that the respondents' authorities have issued tender notification dated 28.01.2020 calling tenders for construction of eight (08) check dams vide tender Notice Nos.31, 33, 34, 35, 36, 37, 38 and 39. Out of the said eight tenders, four tenders were processed, price bids were opened, proposals were submitted to respondent No.2 for necessary approvals. The remaining four (04) tenders viz., Tender Nos.36, 39, 37 and 31 were cancelled. In the said four (04) tenders, which were cancelled, the petitioners, Mr. Dugyala Devender Rao and Mr. Boinapalli Srinivasa Rao have participated. It is also not in dispute that the respondents authorities have issued fresh tender notice dated 30.03.2020 by clubbing two more works in respect of works six (06) works which includes the works covered under four (04) cancelled 6 . W.P. No.39813 of 2018, dated 20.11.2018 KL,J W.P. No.6595 of 2020 & batch 10 tenders. Respondent No.4 is claiming that it is the successful bidder in respect of six (06) works.
17. According to the petitioners, the respondents' authorities have cancelled the said four (04) tenders without assigning any reasons and the reasons assigned in the counter are also germane. Respondent No.3 has contended that as per Clause - 27.2 of the Tender Notification, the Tender Accepting Authority has right to accept or reject any tender without assigning any reasons at any time prior to award of work. It is further contended that the Contractor - Mr. Dugyala Devender Rao was earlier allotted nine (09) works in the very same Circle under Mission Kakatiya and that he has not even completed a single work in spite of lapse of two (02) years beyond the agreement period. The efficiency of the contractor in tackling the works is poor and he could not complete the works on time schedule. Therefore, the Tender Accepting Authority has decided to cancel the four (04) works, in which the present petitioners have participated.
18. It is relevant to note that respondent No.3 in the counter except stating that efficiency of the contractor in tackling the works is poor and he could not complete the works on time schedule, has not filed any document in proof of the same. Respondent No.3 has annexed a copy of computer generated statement in tabular form about the non-performance of works entrusted to Mr. Dugyala Devender Rao in time to the counter filed in W.P.No.6595 of 2020. The said statement was prepared by respondent No.3. There is no supporting KL,J W.P. No.6595 of 2020 & batch 11 document. Except the said statement, respondent No.3 has not filed any other document. The petitioner in the said writ petitioner, Mr. Dugyala Devender Rao, has filed reply affidavit and additional reply affidavit to the counter filed by the respondents specifically disputing the allegations made by respondent No.3 that he has not completed the nine (09) works allotted to him within the stipulated time and his efficiency in tackling the works is poor and he could not complete the works on time schedule. Despite specific denial, respondent No.3 has not filed any document to show that the petitioner has not completed the nine (09) works within the scheduled time. Respondent No.3 has also not filed any proof about the action taken against Mr. Dugyala Devender Rao for not completing the nine (09) works within the stipulated time. In every agreement, there would be a penal clause. During the course of arguments, the learned Government Pleader has agreed that there is a penal clause in the agreement in respect of nine (09) works allotted to Mr. Dugyala Devender Rao. Even then, respondent No.3 has not filed any document to show as to any action was taken against him for non-compliance of works within the stipulated time. But, the official respondents have cancelled the tenders only on the ground that the efficiency of the contractor in tackling the works is poor and he could not complete the works on time schedule. Respondent No.3 has filed cancellation proposal dated 28.03.2020. In the said cancellation proposal, it is mentioned that tender is cancelled based on the Superintending Engineer recommendation. But, the said recommendation was not placed before KL,J W.P. No.6595 of 2020 & batch 12 this Court. The petitioners have specifically contended that they were discriminated in cancelling the tenders and issuing fresh tenders and it also amounts to violation of Article - 14 of the Constitution of India. Therefore, it is the duty of respondents' authorities to produce entire material including the recommendation of S.E. in cancelling the tenders and also the documents to show the efficiency of the contractor in tackling the works is poor in respect of earlier works. Mere pleading which is disputed by the petitioners in the counter is not sufficient. It should be supported by documentary evidence. In the present case, respondent No.3 has not filed any document to show that efficiency of the contractor i.e., the petitioner in W.P. No.6595 of 2020 and 8622 of 2020 was poor.
19. With regard to cancellation of tenders submitted by Mr. Boinapalli Srinivasa Rao, the petitioner in W.P.Nos.6869 of 2020 and 14280 of 2020, there is no reason mentioned by the respondent No.3 for cancellation of the said tender. The respondent No.3 has filed counter affidavit and also additional counter affidavit. In the counter affidavit, it is mentioned that the technical bid was opened on 13.02.2020 and six bidders are found i.e., GAR Constructions, Samaiah & Company, Boinapalli Srinivas Rao, K. Narsinga Rao, Jarpula Srinivas and Sai Manikanta Infra Ready Mix Concrete. At that stage, before evaluating the tenders, as per the instruction of the Chief Engineer, the tenders were cancelled on 30.03.2020 i.e., within 45 days only which is within the bid validity period of 90 days.
KL,J W.P. No.6595 of 2020 & batch 13 Except the same, the respondent No.3 did not mention any reason for cancelling the bid submitted by Mr. Boinapalli Srinivasa Rao, the petitioner in W.P. Nos. 6869 of 2020 and 14280 of 2020. The respondent No.3 has not filed any instruction said to have been issued by the Chief Engineer for cancellation of tenders. Except stating that on the instruction of the Chief Engineer, tenders were cancelled, respondent No.3 did not file any document in support of the same. No reasons were assigned in the counter affidavit and additional counter affidavit. Respondent No.3 has referred to Clause 27.2 of the Tender Notification and would contend that Tender Accepting Authority reserves right to accept or reject the tender. The Tendering Authority has to maintain transparency and fairness in the entire tender process. The Tendering Authority has to exercise the power under Clause 27.2 of the Tender Notificationdocument in a fair and reasoned manner and it cannot be on an arbitrary manner. Thus, the cancellation of tenders on the instructions of the Chief Engineer lacks transparency and fairness.
20. There is no dispute that Tender Accepting Authority has every right to accept or reject any tender and to cancel tender process at any time prior to award of contract, but the said right has to be exercised in a fair manner and should not be exercised arbitrarily. In all the decisions relied upon by the respective counsel supra, it is settled principle of law that Tendering Authority has to act in a fair and reasonable manner. In Tata Cellular4, the Hon'ble Supreme KL,J W.P. No.6595 of 2020 & batch 14 Court has examined various aspects of tender including the scope of judicial review, the duty of Court to confine itself to the question of legality and the considerations, laid down certain principles, which are as follows:
"The principles deducible from the above are:
(1) The modem trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure." The aforesaid principles were reiterated in almost all other decisions mentioned supra. In Maa Binda Express Carrier5 the Hon'ble Apex KL,J W.P. No.6595 of 2020 & batch 15 Court relied on the principle laid down by it in Tata Cellular4, and held that the Courts are having power under judicial review to examine the power exercised by the State and its Instrumentalities with regard to allotment of contracts at the instance of aggrieved party. It was further held that award of contract is essentially a commercial transaction, which must be determined on the basis of consideration that are relevant to such commercial decision. This implies that the terms subject to which tenders are invited are not open to the judicial scrutiny unless it is found that the same have been tailor-made to benefit any particular tenderer or class of tenderers. If the State or its Instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government. In the said decision, the Hon'ble Apex Court has referred to paragraph No.20 of its earlier judgment in Michigan Rubber (India) Ltd. v. State of Karnataka7, which is as follows:
"20. Therefore, a Court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting 7 . (2012) 8 SCC 216 KL,J W.P. No.6595 of 2020 & batch 16 reasonably and in accordance with relevant law could have reached"; and
(ii) (ii) Whether the public interest is affected. If the answers to the above questions are in negative, then there should be no interference under Article."
As discussed supra, there is arbitrariness and irrationality in cancelling the tenders by the respondents' authorities.
21. The Hon'ble Apex Court in Ramana Dayaram Shetty1 relied upon several other judgments rendered by it and held that the power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licenses etc., must be confined and structured by rational, relevant and non- discriminatory standard or norm and if the Government departs standards or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.
22. In CWE - Soma Consortium2, the Apex Court held that the High Court shall not interfere with the decision of the State in issuing tender notice to cancel the tender and invite fresh tenders, unless found to be mala fide or arbitrary. It was further held that while exercising power of judicial review, Court does not sit as Appellate KL,J W.P. No.6595 of 2020 & batch 17 Court over the decision of the Government but merely reviews the manner in which the decision was made.
23. In Master Marine Services Pvt. Ltd., v. Metcalfe and hodgkinson Pvt. Ltd.8, the Hon'ble Apex Court held that the State, its Corporations, Instrumentalities and Agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process, the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should interfere.
24. The Hon'ble Apex Court in Directorate of Education v. Educomp Datamatics Ltd.9 by relying on its earlier judgment in Tata Cellular4 held that the Courts can scrutinize the award of the contractors by the Government or its Agencies in exercise of its powers of judicial review to prevent arbitrariness or favoritism. However, there are inherent limitations in the exercise of the power of judicial review in such matters.
25. Thus, the decision of the Tendering Authority in cancelling the tenders in the present case must not only be tested by the 8 . (2005) 6 SCC 138 9 . AIR 2004 SC 1962 KL,J W.P. No.6595 of 2020 & batch 18 application of principle of reasonableness, but must be free from arbitrariness not affected by bias or actuated by mala fides. This Court under Article 226 of the Constitution of India, while exercising its power of judicial review can scrutinize the award of contracts by the Government or its Agencies.
26. In view of the above said settled principle of law, coming to the case on hand, as discussed supra, the respondents' authorities in respect of tenders submitted by Mr. Dugyala Devender Rao, petitioner in W.P.Nos. 6595 and 8622 of 2020, the same were cancelled on the ground that efficiency of the contractor in completing the earlier works allotted to him is poor. Except a copy of computer generated statement, respondent No.3 has not filed any document in support of the same. In respect of tenders submitted by Mr. Boinapalli Srinivasa Rao, the petitioner in W.P. Nos.6869 and 14280 of 2020, there is no reason mentioned by respondent No.3. The only reason mentioned in the counter filed by respondent No.3 is that the Chief Engineer has instructed to cancel the tenders. Respondent No.3 has relied upon the power of Tendering Authority under Clause 27.2. Thus, the decision of the Tendering Authority to cancel the subject tenders is arbitrary and not reasonable. As discussed supra, the respondents' authorities have not filed the recommendation of the Superintending Engineer in the case of tenders submitted by Mr. Dugyala Devender Rao and the instructions of the Chief Engineer in the case of tenders submitted by Mr. Boinapalli Srinivasa Rao. The respondents have not filed any KL,J W.P. No.6595 of 2020 & batch 19 document to show that efficiency of contractor in tackling the work is poor and he could not complete the works on time schedule. In the absence of the same, it can safely be concluded that the action of the respondents in cancelling the tenders in respect of four (04) works on the ground of efficiency of the contractor in tackling the works is poor, the Superintending Engineer recommended for cancellation of the tenders and the Superintending Engineer instructed to cancel the two tenders is arbitrary, unfair and in violation of Article 14 of the Constitution of India.
27. It is specifically contended by the petitioners that the respondents have clubbed two more works along with the four cancelled tenders for the estimated cost of Rs.19,87,06,893/- only to avoid the petitioners in participating in fresh tender notification since the petitioners in all the writ petitions are Class - I Contractors and are eligible to participate in the tenders up to Rs.10.00 Crores. By clubbing two more works to the four (04) cancelled tenders, the estimated cost was increased to Rs.19,87,06,893/-. The respondents have tried to justify its action in clubbing six (06) works for issuing fresh tender notification dated 30.03.2020 on the grounds of vicinity, administrative convenience, similarity in the nature of work etc., and, therefore, they have clubbed the said six works together and issued fresh tender. It is also further contended by the respondents that the decision of clubbing was taken for speed up the construction of work to meet the demand for the summer season and to meet the irrigation KL,J W.P. No.6595 of 2020 & batch 20 needs of the ayacutdars for the current season. It is relevant to note that as per the Tender Notification dated 28.01.2020, the date of opening of technical bid was 07.02.2020 and on evaluation of technical bids, the Tendering Authority has to open the financial bid. Without completing the said tender process, the respondents' authorities have cancelled the tenders on 30.03.2020 and issued fresh tender by clubbing two more works on the very same day. In the event of approving all the said tenders and entering of contracts with successful bidders, they would have commenced the work and tried to complete the same within the stipulated time.
28. As stated supra, the respondents having cancelled the tenders in respect of four (04) works cannot claim that a decision was taken to club the work to meet the demand of ayacutdars. The said contention of the respondents is unsustainable and arbitrary. In the additional reply affidavit, the petitioners have specifically mentioned the distances of the works both under cancelled tenders and fresh tenders in a tabular form. By referring to the said tabular form, the learned senior counsel for the petitioners would submit that there is more than 50 kilometers. Therefore, the contention of the respondents that the location between the said works, vicinity is near is absolutely false. Thus, the decision of the respondents' authorities in cancelling the tender notification and issuing impugned tender notification by adding two more other works is absolute irrational. There is no explanation or serious denial with regard to the said information KL,J W.P. No.6595 of 2020 & batch 21 furnished by the petitioners in tabular form by the official respondents.
29. The petitioners have also mentioned estimated cost of cancelled tenders in a tabular form and would contend that respondent No.4 has quoted at 4.3% excess, whereas Mr. Dugyala Devender Rao has quoted 2.11% less in respect of two works and Mr. Boinapalli Srinivas Rao has quoted 5% less in respect of other two (02) works. By referring to the same, the learned senior counsel would contend that the decision of cancellation of earlier tenders and calling for fresh tenders by clubbing two more works is unjustifiable, and the same is nothing but illegal, arbitrary and violation of Article - 14 of the Constitution of India. There is also financial loss to the public exchequer. Though an additional counter affidavit was filed by respondent No.3 to the reply affidavit and additional reply affidavit of the petitioners, no serious contentions were raised by respondent No.3. It is contended by respondent No.3 that only technical bid was opened but price bid was not opened. Tenders were cancelled on administrative grounds by exercising the powers delegated under Clause - 27.2 of the Tender Notification. Since financial bid was not opened, the petitioners cannot claim that they have quoted less and respondent No.4 quoted excess.
30. It is true that the financial bids were not opened in respect of earlier tenders. The technical bids were opened only on 17.02.2020. At that stage, four tenders were cancelled. Therefore, the contention KL,J W.P. No.6595 of 2020 & batch 22 of the petitioners that they have quoted less and respondent No.4 has quoted excess cannot be accepted.
31. As discussed above, the grounds mentioned by respondent No.3 in cancelling the tenders are un-reasonable, arbitrary and only on assumptions and presumptions. There is no basis for the contention of respondent No.3 that the contractor is not having efficiency and he has not completed the earlier works in time. The respondents have not filed any document in proof of the same. Even the respondents have not filed the recommendations of Superintending Engineer, on which the tenders were cancelled. Viewed from any angle, the action of the respondents' authorities in canceling the tender Nos.36, 39, 37 and 31 in respect of check dams and issuing fresh tender notification No.111/2019-20, dated 30.03.2020, I.D. No.171452 by adding two other works to an estimated cost of Rs.19,87,06,893/- is arbitrary and illegal.
32. On perusal of the certificates filed by the petitioners, it would show that they are Class - I Contractors and they can participate in the tender with cost up to Rs.10.00 Crores. The respondents have not given any explanation, much less plausible explanation for clubbing of two more works to an estimated cost of Rs.19,87,06,893/-. In the event of non-clubbing of said two works, the estimated cost would be below Rs.10.00 Crores, in which event, the petitioners would have an opportunity to participate in the fresh tenders dated 30.03.2020. As rightly contended by the learned senior KL,J W.P. No.6595 of 2020 & batch 23 counsel, the respondents have denied the opportunity of participation by the petitioners in the tenders by clubbing two more works to the cancelled works with an estimated cost of Rs.19,87,06,893/-. However, respondent No.3 in the counter stated that the tender process is totally centralized in the State on line system which is fair and transparent. A decision was taken to improve the quality and efficiency in execution of work at the earliest. It is also contended by respondent No.3 that as a Special Class Contractor, the petitioner is eligible to participate in tenders, which are valued more than Rs.10.00 Crores. In view of the tender which was also invited online on e- procurement system, any Class - I and above Contractor can participate. As per the online tender process, the Department cannot avoid any contractor to participate in the tender and thereby cannot favour anybody. But, respondent No.3 failed to give any explanation much less plausible explanation for cancellation of earlier tenders. As stated above, at the cost of repetition, the only ground on which the Tendering Authority cancelled the tenders is that on the instructions of the Superintending Engineer in case of two tenders and on the instructions of the Chief Engineer in case of other two tenders and also by invoking Clause 27.2. The official respondents have not filed the said instructions issued by the Superintending Engineer and the Chief Engineer. Therefore, the action of the official respondents in canceling four tenders issued earlier and issuing fresh tenders by clubbing two more works on the very same day is arbitrary, unfair, illegal and non-transparent. Thus, it is a fit case to interfere by KL,J W.P. No.6595 of 2020 & batch 24 invoking its power of judicial review under Article 226 of the Constitution of India with the decision of the official respondents in canceling its earlier tenders and issuing fresh tenders on the very same day i.e., 30.03.2020 by adding two more works.
33. In view of the above discussion, all these Writ Petitions are allowed, and cancellation of Tender Nos.36/2019-20 and 39/2019-20 vide ID Nos.162886 and 163080 to an estimated contract values of Rs.3,76,32,750/- and Rs.1,95,69,559/- for the works of construction of Check dam across Moranchavagu near Chelpur and Nagarampally villages of Mulugu - Ghanpur Mandal in Jayashankar - Bhupalapally District, respectively, and Tender Nos.37/2019-20 and 31/2019-20 vide ID Nos.162941 and 136873 to an estimated contract values of Rs.5,40,72,363/- and Rs.5,09,34,118/-, respectively, for the works of construction of Check dam across Peddavagu near Issipet Village and Salivagu at Confluence point of Pedda Vagu respectively of Mogullapally Mandal in Jayashankar - Bhupalapally District, are hereby set aside. The action of Tendering Authority in issuing fresh tenders on the very same day i.e., 30.03.2020 by adding two more works is also declared as arbitrary and illegal. Respondent No.3 is directed to re-open tender notice No.36/2019-20, 39/2019-20, 37/2019-20 and 31/2019-20, dated 28.01.2020 and allot the work to the eligible tenderers after completion of evaluation of technical bids and opening of financial bids. Respondent No.3 shall complete the KL,J W.P. No.6595 of 2020 & batch 25 said exercise within two (02) weeks from the date of receipt of a copy of this order. However, there shall be no order as to costs.
As a sequel, miscellaneous petitions, if any, pending in the writ petitions shall stand closed.
_____________________ K. LAKSHMAN, J 28th September, 2020 Mgr