Telangana High Court
M/S.Taaza International Limited vs The State Of Telangana And 2 Others on 7 April, 2022
Author: B. Vijaysen Reddy
Bench: B. Vijaysen Reddy
HONOURABLE SRI JUSTICE B. VIJAYSEN REDDY
WRIT PETITION No.307 OF 2020
ORDER :
This writ petition is filed with the following prayer:
"... ... to issue a Writ of Mandamus, or any other appropriate writ, order or direction, declaring the action of the 2nd respondent in declaring the 3rd respondent as preferred bidder pursuant to the Tender Notification published in Economic Times on 6.11.2019 in relation to setting up of International Food Courts along with other branded retail outlets at Night Bazar Annexe, Shilparamam, Hitech City, Hyderabad, though the 3rd respondent does not fulfil the eligibility criteria contained in Clause-4.5.3 of the Request for Proposal (RFP) November 2019 as illegal and arbitrary and further direct the 2nd respondent to accept the bid of the Petitioner ... ..."
2. The facts of the case, in brief, are as under:
(i) Respondent No.2 - Shilparamam Arts, Crafts & Cultural Society (SACCS), Shilparamam, Hitech City, Madhapur, Hyderabad, issued tender notification inviting tenders for setting up 2 International Food Courts along with other branded retail outlets at Night Bazar Annexe, Shilparamam, Hitech City, Hyderabad. The tender notification was published in the Economic Times Newspaper on 06.11.2019. Pursuant to the notification, seven (7) bidders including the petitioner company participated. The pre-bid meeting was conducted on 15.11.2019 and the due date for bid submission was 27.11.2019. The date of opening of Technical Bid was 27.11.2019 and the date of price bid opening was 04.12.2019.
The lease period is for a period of ten + five years.
(ii) That out of seven bids received, only five bids were qualified. Respondent No.3 - M/s. People Combined Hospitality LLP., 7 Restaurant, National Highway 65, Suryapet, Telangana, has been shown as preferred bidder and the petitioner is stated to be second highest bidder. It is submitted that the petitioner owns a constructed area of around 16,000 square feet retail space. As per the technical eligibility required under Clause - 4.5.3 of the Request for Proposal (for short 'RFP'), the applicant shall possess technical qualification as under:
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"a) Developed / operated air conditioned restaurants with minimum combined seating capacity of 500 PAX, which are operational as on bid due date or
b) Developed or constructed or operating retail space of minimum 11500 Sq.feet (in one or two projects) which are operational as on the due date."
It is submitted that the aforesaid qualifications relate to the whole project. The RFP document permits the participants to bid for any of the zones within the whole project i.e., slight modification in respect of the eligibility criteria, instead of 500 PAX, if an applicant is participating in relation to a specific zone, it has been reduced to 150 PAX and instead of 11500 square feet, it has been reduced to 3000 square feet in relation to retail space criteria.
(iii) Respondent No.3 is running a restaurant on highway i.e., from Hyderabad to Vijayawada, but it has less than 200 PAX, however, trying to take into account the total constructed area which is not being utilized for any other purpose and trying to claim benefit under the retail space criteria under Clause - 4.5.3(b). Respondent No.3 cannot take into account the entire constructed 4 area for running a restaurant i.e., open lobbies etc., wherein only food items like ice cream etc., are sold and call it as a retail space. Once a restaurant is being run by an applicant, it falls under the category of Clause - 4.5.3(a) and it cannot be considered in the category of Clause - 4.5.3(b). To be more clear, in a "retail space", multiple sub-retail spaces would be existing. Merely because some extra food outlets are provided which are ancillary to the main restaurant, it cannot be treated as a retail space. The petitioner has quoted more amount, but it was not selected. Respondent No.3 is wrongly selected though it does not fall within the said category.
(iv) The petitioner is associated with another private limited company and formed a consortium, and submitted the bid which is allowed as per the RFP. The petitioner company is a lead member of the consortium. Respondent No.3 is a firm with limited liability registered as "LLP" which does not fit into any of the three categories specified in Clause - 4.5.1(a). The petitioner enquired with regard to the permission granted to respondent No.3 in relation to the property to the extent of Acs.5-00 in Survey No.729, Pillamarri Village, Rayanagudem Gram Panchayat, Suryapet 5 Mandal. The petitioner was informed that permissions were granted in favour of M/s. Plus Hostilities (Pvt.) Limited. It is not known as to how respondent No.3 is claiming minimum eligibility criteria based on the said permission.
3. In the counter affidavit filed by respondent No.2, it is stated that for promotion of International Food Courts and Retail Spaces to be utilized by reputed brands of products for augmenting income and for further upkeep as well as development of Shilparamam. The then Government of Andhra Pradesh allotted land for setting up Craft Village, Amphitheatre, Village Museum etc. About 300 Handicraft artisans and Handloom Weavers coming from all over the country have set up their stalls for their crafts. Cultural programmes, craft bazaars, melas, art exhibitions are organized regularly in Shilparamam. Apart from craft village and night bazaar, annexe was constructed in the premises to set up food courts and retails shops.
(i) It is proposed to lease out the Night Bazar Annexe area for promotion of International Food Courts and Retail Space to be 6 utilized by reputed brands of products for augmenting income for further upkeep as well as development of Shilparamam. Pursuant to the same, notification was issued inviting Request for Proposal. Out of seven bids received by them, 5 bids were technically qualified. The annual lease rent amounts quoted (exclusive of taxes) per annum for the whole project are as under:
"i) M/s. SKY Inn Services - Rs.2,52,00,000/-
ii) M/s. Ambica Agarbathies Ltd. - Rs.2,42,00,000/-
iii) M/s. Taaza International Ltd. - Rs.3,02,00,000/-
iv) M/s. People Combine Hospitality LLP - Rs.3,33,33,333/-
v) M/s. Jubilee Hill Resorts Pvt. Ltd. - Rs.2,16,00,000/-"
As shown above, respondent No.3 quoted highest annual lease rent amount of Rs.3,33,33,333/- whereas the petitioner has quoted Rs.3,02,00,000/- only, as such, respondent No.3 was declared as successful bidder. Documentary evidence has been submitted by respondent No.3 in Appendix B3 of the Technical Bid showing retail space experience having developed, constructed and operating 40000 square feet retail space and food court at 7 Food Court, Suryapet, Telangana State. Thus, respondent No.3 has 7 satisfied the conditions laid down for getting qualified for the whole project as per Clause - 4.5.3(1)(b).
(ii) It is submitted that the petitioner has misread and misinterpreted Clause 4.5.3. which stipulates eligibility criteria for bidding for the whole project consists of two sub-clauses (a) and
(b) which are independent clauses and the bidder can qualify if the bidder satisfies any of the sub-clauses but not both the sub-clauses. Respondent No.3 is not only running restaurant but also has 40,000 square feet retail space and independent of running the restaurant. The word 'Public Limited Company or Private Limited Company' used in the RFP under Clause 4.5.1(a) also includes the Limited Liability Partnership Act 2008 and respondent No.3 satisfied the eligibility of the said clause and also the Limited Liability Partnership Act 2008 read with Section 2(d) "Body Corporate" as defined under Section 3 of the Companies Act 1956.
4. In the counter affidavit filed by respondent No.3, it is stated that they are having Food Court and retail space of 40,000 square feet for the last ten years which is South India's first and the 8 largest Highway Food Court viz., '7 - Food Court' situated on National Highway No.65 on Hyderabad to Vijayawada Road, Rayani Gudem Village, a few kilometres from Suryapet. The Food Court and retail space is spread over in Acs.5-00 of land with 40,000/- square feet built-up area. Around 200 workers and employees are working in it. The Government of Telangana has awarded 'Best Way-side Amenities" for two times and 'Best Restaurant' award for two times for the years 2014, 2016, 2017 and 2018. Further, TV5 has given the award "Leader in Hospitality Business" in 2018. Respondent No.3 apart from running the Food Court also managing renowned multiple retail outlets i.e., KFC, Dominoes, Coffee Day, Cream Stone, Karachi Bakery, Thick Shake Factory, Pochampally Handlooms, Amla Amruth, Manthani Fashions, Gadgets 360, S.R. Toys & Gifts, Pan House, Candy Shop, Book Shop, Imported Chocolates, HDFC ATM, Sub-Way etc., in the said 40,000 square feet space at Suryapet. Respondent No.3 is a Limited Liability Partnership Firm. Respondent No.3 was a group of Private Limited companies wherein it is one among them.
9It was converted into LLP vide proceedings dated 27.12.2018 by the Registrar of Companies. Respondent No.3 amalgamated into one company by the orders of this Court in Company Petition Nos.83, 84 and 85 of 2012 dated 11.12.2012.
(i) By using the word 'retail space' and 'restaurant' interchangeably, the petitioner is trying to create confusion in order to justify its claim that respondent No.3 does not fit into Clause - 4.5.3(b) of the Request for Proposal.
5. In the reply affidavit filed by the petitioner to the counter affidavit of respondent No.3, if was denied that respondent No.3 is operating 40,000 square feet retail space. Respondent No.3 is running only a food court of 200 PAX and very few pan shop, ice-cream and coffee shops. . The entire 40,000 square feet cannot be treated as a retail space since the entire area is not covered by shops. Only about three coffee and ice-cream shops are there and two pan shops with gift articles and toys. The alleged shops are small shops of pan shop containing popcorn and other gifts which cannot be treated as retail outlets. Respondent No.3 has not 10 fulfilled the requirements under Clause 4.5.3(a) and Clause 4.5.3(b).
6. Heard Mr. C. Raghu, learned counsel for the petitioner; learned Government Pleader for Tourism appearing for respondent No.1; Mr. Badri Premnath, learned counsel, representing Mr. U. Suresh Babu, learned counsel for respondent No.2; and Ms. Mamatha, learned counsel, representing Mr. Challa Gunaranjan, learned counsel for respondent No.3; and perused the material on record.
7. It is contended by the learned counsel for the petitioner that '7 - Food Court' owned by respondent No.3 is only a restaurant and it has no retail space as stipulated under Clause - 4.5.3 and permission is granted only for running restaurant. Be it noted, the learned counsel confined his submissions to the above point and did not seriously argue on the point of legal status of respondent No.3 entity, though such point was raised in the writ petition.
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8. As per technical eligibility under Clause - 4.5.3, bidder is required to satisfy either criteria prescribed under the sub-clause (a) or (b) thereof. The case of respondent No.3 is that it is running restaurant with a retail space of 40,000 square feet and thus satisfies eligibility criteria specified under sub-clause (b) of Clause
- 4.5.3.
9. In the counter affidavit of respondent No.3, it is specifically asserted that documentary evidence is submitted by it in Appendix - B of the technical bid showing retail space experience having developed, constructed and operating 40,000 square feet retail space and food court at '7 Food Court, Suryapet, Telangana State.' Respondent No.3 is qualified for the whole project satisfying Clause - 4.5.3(b). It has been held in catena of decisions that the Courts do not have expertise in the technical matters and the same should be left to the decision of the employer. The Courts are only concerned with the decision making process. 12
10. In a recent decision of the Hon'ble Supreme Court in M/s. N.G. Projects Limited v. M/s. Vinod Kumar Jain (Civil Appeal No.1846 of 2022 arising out SLP (Civil) No.2103 of 2022), it was held as under:
22. The satisfaction whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. Such authority is aware of expectations from the tenderers while evaluating the consequences of non-performance.
In the tender in question, there were 15 bidders.
Bids of 13 tenderers were found to be unresponsive i.e., not satisfying the tender conditions. The writ petitioner was one of them. It is not the case of the writ petitioner that action of the Technical Evaluation Committee was actuated by extraneous considerations or was malafide.
Therefore, on the same set of facts, different conclusions can be arrived at in a bona-fide manner by the Technical Evaluation Committee. Since the view of the Technical Evaluation Committee was not to the liking of the writ petitioner, such decision does not warrant for interference in a grant of contract to a successful bidder.
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23. In view of the above judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interfering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fault with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure 14 for which the present-day Governments are expected to work."
11. As held above, it is not within the purview of this Court, exercising jurisdiction under Article 226 of the Constitution of India to interpret clauses in the tender notification in the manner understood by the petitioner. The instant tender is issued for establishment of a night bazaar which include organizing stalls, food courts etc. Thus, contention of the learned counsel for the petitioner that respondent No.3 should be considered as failing under Clause - 4.5.3.(a) and (b) could not have been considered under sub-clause (b) of Clause - 4.5.3 cannot be sustained. Respondent No.2 is the competent authority to decide eligibility of the tenderers and knowing its requirements, was satisfied with the eligibility of respondent No.3. This Court cannot sit over the decision of respondent No.2. In view of the same, this Court does not find any merits in this writ petition.
12. Therefore, the writ petition is dismissed. No order as to costs.
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As a sequel thereto, miscellaneous petitions, if any, pending in the writ petition stand closed.
______________________ B. VIJAYSEN REDDY, J April 7, 2022.
PV