Telangana High Court
V3 Enterprises Pvt. Ltd. vs State Of Telangana on 24 June, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
HON'BLE MRS JUSTICE SUREPALLI NANDA
WRIT PETITION No.15095 OF 2024
ORDER:
Heard Sri Ashok Anand Kumar, learned Senior Designate counsel representing learned counsel appearing on behalf of the petitioner on record Sri L. Aravind Reddy, learned Government Pleader for School Education Sri Rahul Reddy appearing on behalf of respondent No.1 and Sri A.Yadava Reddy, learned standing counsel appearing on behalf of respondent Nos. 2 to 4.
2. The petitioner approached the Court seeking prayer as under:
".... to issue a writ or order or direction more particularly one in the nature of Writ of Mandamus declaring the action of the Respondent No.3 in issuing the Proceedings vide No.T1/AE-I/3255/MD/TSEWIDC/MOMB/CPM/violation of tender conditions/Action on Bidders/2022 dated 30.05.2024 i) forfeiting the security deposit i.e., 1% EMD deposited online in e-procurement platform of the petitioner amounting to Rs.3.60 Crores for the bids of NIT No.SE/TSEWIDC/NIT/696/2022-23 dated 22.09.2022 clause 2.1 (vii) (a) under Section-2 of the bid conditions and ii) Suspension of the business of the Petitioner for a period of one year with TSEWIDC; as being illegal, 2 SN, J WP_15095_2024 arbitrary and in violation of Articles 14 and 16 of the Constitution of India more specifically when the subject matter is pending consideration b this Hon'ble Court and pass such other order or orders..."
3. The case of the petitioners, in brief, is as under:
(a) It is the case of the petitioner that the petitioner and M/s.Zenith Metaplast (P) Limited are two different entities having two of the Board of Directors in common. They are separately registered with the Registrar of Companies having different trade licenses, different manufacturing facilities and altogether different operational as well as organizational structures dealing with their own individual business. Except for the two of the Board of Directors, nothing is common in between the petitioner herein and M/s. Zenith Metaplast (P) Limited.
(b) The Respondent No. 3, a body corporate under the aegis of Government of Telangana had issued notice inviting tenders vide NIT No. SE/TSEWIDC/NIT/12/2022-23 dated 20.04.2022 for the procurement of dual desks for the students studying in various identified government/local body schools under 'Mana Vuru Mana Badi/Mana Basthi Mana Badi 3 SN, J WP_15095_2024 program. It is further pertinent to mention that under the said scheme, the Government had proposed for upgrading infrastructure of Government schools and as an initiative had called for tenders for procurement of desks for the students and other allied furniture item from the Original Equipment Manufacturers (hereinafter called as OEM) under rate contract valid for a period for three years. It is further stated that number of schools as identified under the scheme was 9,123 during April 2022 and it has been subsequently extended to 26,065 schools since May 2022. As such the requirement of the procurement had also multiplied and accordingly tender conditions were modified.
(c) It is further case of the petitioner that the respondent authorities had called for tenders vide Tender Notice SE/TSEWIDC/NIT/12/2022-23 dated 22.04.2022 specifically mentioning the eligibility criteria as only OEM and the Estimated Contract Value (hereinafter referred to as ECV) has been fixed at Rs.219.00 crores for the supply of desks quantity of 2,08,031 for the supply to 9,123 schools. 4
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(d) As per condition as put forth in the notice inviting tenders, a pre-bid meeting was to be held on 26.04.2022 and the samples were to be displayed for finalization on 05.05.2022, the final bids were supposed to be submitted by 05.05.022 by 3.00 PM and technical bids were to be opened on 05.05.2022 at 4.00 PM. The financial bid of the technically qualified bidder was to be opened on 09.05.2022. It is pertinent to mention that absolute turnover of the events, after due participation of the petitioner in the alleged tender by duly paying the requisite bid process fee of Rs.2.00 lakh, the said tender was called off stating administrative reasons as the ground for cancellation of the said tender. Immediately new tenders were called for vide NIT No. SE/TSEWIDC/NIT/43/2022-23 dated 09.05.2022, with increase in number of identified schools to 26,065 and quantity of desks to be supplied of 3,41,265. Also, the ECV had been modified to Rs. 360.00 crores. It is pertinent to mention that the specific eligibility has been modified as "OEM or joint venture with OEM". As such any non-manufacturer with a joint venture agreement with OEM became eligible to participate in the said tenders.
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(e) It is further the case of the petitioner that the bid process fee for the alleged tender was fixed @ Rs.3.00 lakhs and pre- bid meeting was proposed to be held on 17.05.2022 and the last date for submission of bid was fixed on 25.05.2022 at 3.00 PM. The technical bids were to be opened on 25.05.2022 at 4.00 PM. The financial bid was proposed to be opened on 30.05.2022. To the utter surprise and dismay of the Petitioner herein, the Petitioner having participated through their joint venture partner M/s Kendriya Bhandar have been disqualified and technically stating the reasons "has not fulfilled".
(f) Having aggrieved by the alleged disqualification of the Petitioner, the Petitioner joint venture partner by the respondent authorities, a writ petition viz., W.P. No. 27987 of 2022 had been preferred by M/s Kendriya Bhandar challenging the said disqualification as being illegal, arbitrary and unconstitutional. It is pertinent to mention that this Hon'ble Court while considering the contentions of the said writ petition, had specifically issued interim orders by recording the finding as to the fulfillment of requisite eligibility 6 SN, J WP_15095_2024 criteria by M/s Kendriya Bhandar and posted the matter for receiving instructions by the Government Pleaders appearing on its behalf. The relevant portion of the said Orders is herewith extracted as under:
"Prima facie, this Court is of the opinion that as per the certificate dated 24.05.2022 issued by M/s Kalantri & Associates, Chartered Accountants, the Petitioner has satisfied condition No. 2.2.1.5 of the subject tender. Hence, the respondents may go ahead with the tender process. However, the same shall not be finalized."
(g) On the next date of hearing, the government pleader had reported to this Hon'ble Court that the said tender has been disapproved by the Commissioner of Tender and that the Government would take steps to issue fresh tender and as such the cause in the said writ petition does not survive. Recording the same, this Hon'ble Court was pleased to dispose off the said proceedings.
(h) It is further the case of the petitioner that the technical bids were opened on 01.10.2022 and the results were to be declared. In a complete overturn of the events, on 7 SN, J WP_15095_2024 04.10.2022 the petitioner herein who have participated through JV partner i.e., M/s Mafatlal Industries Limited and M/s Zenith Metaplast (P) Limited with M/s Kendriya Bhandar, were disqualified stating the reason as "conflict of interest". It is further pertinent to mention that the financial bids which were supposed to be opened on 12.10.2022 were opened on 04.10.2022 without any intimation to the participants much less in the form of a corrigendum or an addendum to the tender notification.
(i) It is only after the opening of the Technical bids and the Authorities being satisfied with the eligibility criteria of the bidders, that the Financial Bids of the technically qualified bidders would be opened. In absolute deviation of the same, it is only after the opening of the Financial Bids of the Petitioner that they were disqualified stating the reason as "conflict of interest".
(j) It is further the case of the petitioner that the respondent authorities having disqualified the petitioner herein under unscrupulous grounds, had failed to provide an opportunity of hearing to the petitioner in complete contravention of the 8 SN, J WP_15095_2024 principles of natural justice thereby depriving the right of the petitioner as guaranteed under Article 14, 16 and 300A of the Constitution of India.
(k) The petitioner herein had been very much qualified as per the finding of this Hon'ble Court in W.P. No. 27987 of 2022 and the subsequent tender called for by the very same authorities dated 30.07.2022. It is further pertinent to mention that the Petitioner has also been qualified specifically for the tender called for and it is for the best of the reasons known to the Respondent Authorities as to giving the specific reasons as to the disqualification of the Petitioner by merely stating "conflict of interest".
(l) As per the specific conditions put forth by the tendering Authority as to the formation of JV, the JV Agreement was to be registered as a separate entity with specific conditions of separate GST Registration and PAN Number and Bank Account. As such the Petitioner have executed the said JV Agreements in complete consonance with the terms as per the Tender Document. It is pertinent to mention that as per the JV Agreement, the Petitioner have specifically agreed only for 9 SN, J WP_15095_2024 the manufacture and supply of the items related tender and mentioned in the work order issued by the Lead Partner i.e, the JV Partner on specific pre-fixed price which does not in any way concern with the price quoted by the Lead JV Partner. Therefore, the conflict of interest as termed by the Respondent Authorities in trying to disqualify the Petitioner herein does not arise. The Petitioner had specifically agreed with the JV partners that, the JV Partner shall be the Lead Partner and the Petitioner shall not be having any say as to the bids submitted by the JV partners for the participation in the tender. As such it is only a mere assumption of the respondent authorities as to "conflict of interest" between the bidders.
(m) It is further the case of the petitioner that the general practice adopted for tender process is that if a bidder is disqualified on technical grounds, his financial bid would not be opened. The respondent authorities having disqualified the Petitioner herein, had opened their financial bid prematurely without following due process of law and against the principles of tendering which have been duly contemplated under the 10 SN, J WP_15095_2024 Central Vigilance Commission (CVC) guidelines and the General Financial Rules, 2017 (GFR). The respondent authorities working under the aegis of Government of Telangana for the welfare of the students studying in the Government Schools is expected to maintain fairness while dealing with the procurement procedure. The action of the respondent authorities in issuing of tender in a hurried manner without adopting of following the procedure as contemplated under the CVC guidelines and GFR is an absolute contravention of the public interest at large.
(n) The acts of the Respondent Authorities in cancelling the tenders multiple times and calling for fresh tenders by modifying the tender conditions specifically reflects the intention of the Authorities in trying to accommodate a class of bidders and to disqualify the Petitioner by any cost.
(o) It would not be out of place to mention that being aggrieved by the said action of the Respondent Authorities in rejecting the bids filed by the Petitioner along with their JV partners based on 'conflict of interest', the Petitioner have 11 SN, J WP_15095_2024 approached this Hon'ble Court vide W.P. No. 40402 of 2022 which is pending consideration.
(p) While the things stood thus, the Petitioner have received communication/show cause notices dated 10.04.2023 from the Respondent No. 4 seeking reply against the proposed action of suspension of business with the corporation (TSEWIDC) for period of 1 year and forfeiture of security deposit as per the bid conditions for the fraudulent practice committed by the firms. Accordingly, the Petitioner have replied to the said notices vide replies dated 28.04.2023 duly apprising the facts and circumstances more specifically the pendency of the Writ Petition vide W.P. No. 40402 of 2022 before this Hon'ble Court on the same subject matter. Yet, the Authorities, without considering the same, had issued the impugned communication dated 30.05.2024 forfeiting the security deposit i.e., 1% EMD deposited online in e-procurement platform of the Petitioner amounting to Rs.3.60 Crores for the bids of NIT No. SE/TSEWIDC/NIT/696/2022-23 dated 22.09.2022 clause 2.1(vii)(a) under Section 2 of the bid conditions and 12 SN, J WP_15095_2024 Suspension of the business of the Petitioner for a period of one year with TSEWIDC.
(q) It is further case of the petitioner that as per terms and conditions of the tender document more specifically under Annexure IV, 'Integrity Pact', the Article 3 deals with the 'disqualification from tender process and exclusion from future contracts' specifically mentions the rightful authority being Government/Chief Engineer, TSEWIDC i.e., the Respondent No. 4 to take any action as regards the disqualification in lieu of transgression of any of the conditions as mentioned in Article 2 of the said 'Integrity Pact'. As such the Respondent No. 3 is not the rightful authority to pass the impugned order and hence, the petitioner approached this Court by filing the present Writ Petition.
DISCUSSION AND CONCLUSION:-
4. Though the impugned proceedings issued by respondent No.3 vide No.T1/AE-I/3255/MD/TSEWIDC/MOMB/CPM/ violation of Tender conditions/Action on Bidders/2022, dated 30.05.2024 had been challenged on several grounds, this 13 SN, J WP_15095_2024 Court without going into the merits of the said submissions put-forth in the present writ petition duly considering the fair submission of learned Government Pleader Sri Rahul Reddy that the writ petition could be allowed and the matter remanded to the competent Authority i.e., the 4th respondent herein i.e., Government/Chief Engineer, TSEWIDC for reconsideration of entire issue in accordance to law in conformity with principles of natural justice, opines that it is appropriate to remand the matter to the 4th respondent herein.
5. Taking into consideration the aforesaid facts and circumstances of the case and duly considering the submissions put-forth by both the learned Senior Designate counsel appearing on behalf of the petitioner and the learned Government Pleader appearing on behalf of respondent No.1, the Writ Petition is allowed as prayed for and the impugned proceedings issued by the 3rd respondent vide No.T1/AE-
I/3255/MD/TSEWIDC/MOMB/CPM/ violation of Tender 14 SN, J WP_15095_2024 conditions/Action on Bidders/2022, dated 30.05.2024 is set aside.
6. The competent Authority i.e., respondent No.4 is directed to reconsider the replies of the petitioner, dated 24.04.2023 and 28.04.2023 received from the petitioner, which had been submitted by the petitioner in response to the show-cause notice No.T1/AE- I/3255/MD/TSEWIDC/MOMB/CPM/ violation of Tender conditions/Action on Bidders/2022/Mafatlal-III, dated 10.04.2023 issued to the petitioner herein in accordance to law in conformity with principles of natural justice by providing a reasonable opportunity of personal hearing to the petitioner within a period of four (04) weeks from the date of receipt of the copy of the order and duly communicate the decision to the petitioner.
7. It is further observed that it is open to the petitioner to put-forth all the pleas in support of petitioner's case before the 4th respondent in addition 15 SN, J WP_15095_2024 to all the pleas specifically pleaded in the present Writ Petition. However, there shall be no order as to costs.
Miscellaneous petitions, if any, pending in this Writ Petition, shall stand closed.
___________________________ MRS. JUSTICE SUREPALLI NANDA Date: 24.06.2024 ktm