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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P. MADHAVI DEVI, J.
M/s I Scientific Techsolutions Labs – Appellant
Versus
State Of Telangana – Respondent
Writ Petition No.19967 of 2021
Decided on : 07-03-2022
Mandamus - Rejection of Technical Bids - Energy Conservation Act, 2001 - G.O.Ms.No.8, ITE&C Department, Telangana - The court discussed the provisions of the Energy Conservation Act, 2001 and G.O.Ms.No.8, ITE&C Department, Telangana, which outlined the benefits and eligibility criteria for startups in government procurement processes of technology-based solutions through TSTS. The interpretation of these provisions influenced the court's decision to dismiss the Writ Petition.
Fact of the Case:
The petitioner, a registered startup firm, filed a Writ Petition seeking a Writ of Mandamus to declare the rejection of its technical bids for supply, installation, and commission of Centralised Control Monitoring System (CCMS) in Gram Panchayats of Telangana as illegal and arbitrary. The petitioner claimed that it had complied with all the terms and conditions applicable to startup companies and should not have been disqualified.
Finding of the Court:
The court found that the petitioner failed to submit the necessary details as required under G.O.Ms.No.8, ITE&C Department, Telangana, to be eligible for exemptions as a startup in the state. As a result, the court dismissed the Writ Petition, upholding the disqualification of the petitioner.
Issues: The issues revolved around the eligibility of the petitioner as a startup under the startup policy of Telangana, the requirements for claiming exemptions in government procurement processes, and the disqualification of the petitioner's technical bids.
Ratio Decidendi: The court's decision was based on the petitioner's failure to submit the required details under G.O.Ms.No.8, ITE&C Department, Telangana, to qualify for exemptions as a startup in the state, leading to the dismissal of the Writ Petition.
Final Decision: The Writ Petition was dismissed, and no costs were awarded. Pending miscellaneous petitions in the Writ Petition were also dismissed.
ORDER :
This Writ Petition is filed under Article 226 of the Constitution of India seeking a Writ of Mandamus declaring the action of the 2nd respondent in rejecting/disqualifying the technical bids of the petitioner pertaining to supply, installation and Commission of Centralised Control Monitoring System (CCMS) in all the Gram Panchayats of the State of Telangana in Tender Notification Nos.
(a) Tender No.TSREDCO/EC/E-Tender- CCMS/Cluster -1/2020-21 dt.05.03.2021,
(b) Tender No.TSREDCO/EC/E-Tender- CCMS/Cluster -2/2020-21 dt.05.03.2021,
(c) Tender No.TSREDCO/EC/E-Tender- CCMS/Cluster -3/2020-21 dt.05.03.2021, and
(d) Tender No.TSREDCO/EC/E-Tender- CCMS/Cluster -4/2020-21 dated 05.03.2021, as bad in law, illegal, arbitrary and in violation of Article 14 of the Constitution of India and consequently direct the respondent No.2 to qualify the technical bids of the petitioner and pass such other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case.
2. Brief facts leading to the filing of this Writ Petition are that the petitioner is a registered partnership firm, primarily engaged in the business of providing remote data acquisition systems and cloud-based Internet of Things (“IoT”) platforms. It is recognized as a ‘Startup’ by the Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India under the ‘Startup India’ Scheme.
3. Government of Telangana had nominated respondent No.2, which is a State owned company that is responsible for planning and implementation of policies for promoting renewable energy and energy conservation activities and to import, upgrade and adapt upcoming technologies in the areas of renewable energy and energy conservation, as State Designated Agency to coordinate, regulate and enforce the provisions of the Energy Conservation Act, 2001 within the State of Telangana vide G.O.Ms.No.19 dt.03.07.2015. In the year 2020, a company by name M/s. Energy Efficiency Services Limited had entered into an agreement to convert all the streetlights in the Gram Panchayats of Telangana to LED lights. In order to ensure smooth implementation of the transformation, M/s. Energy Efficiency Services Limited had entered into an agreement with respondent No.2 to act as the PMC for the programme and to encourage local manufacturers, vendors and suppliers for procurement of the necessary materials. Accordingly, respondent No.2 floated an E-Tender dt.05.03.2021 for supply, installation and commission of Centralised Control Monitoring System (CCMS) in all the Gram Panchayats of the State of Telangana in four clusters as
(a) Tender No.TSREDCO/EC/E-Tender- CCMS/Cluster -1/2020-21 dt.05.03.2021,
(b) Tender No.TSREDCO/EC/E-Tender- CCMS/Cluster -2/2020-21 dt.05.03.2021,
(c) Tender No.TSREDCO/EC/E-Tender- CCMS/Cluster -3/2020-21 dt.05.03.2021, and
(d) Tender No.TSREDCO/EC/E-Tender- CCMS/Cluster -4/2020-21 dated 05.03.2021.
As per the terms of the tender documents released by respondent No.2, the bidders claiming any kind of relaxations/exemptions under the ‘startup’ clause would be awarded maximum of 25% of the work in connection with the above project.
4. The petitioner had decided to place its bid for the four proposed tenders that had been called for by respondent No.2. The tenders were open to all sorts of companies, irrespective of they being a startup company or not. However, in view of the fact that some qualifications like prior experience of having worked on a project of a certain value, completion certificates, etc., could not be made applicable for a startup company, many of the requisite conditions and qualifications were relaxed for companies falling under the category of ‘Startup’ companies and in order to give boost to the ‘Make in India’ policy of the Central Government, these kinds of relaxations were put in force. The petitioner being a startup firm registered under the ‘Startup India’ Scheme, collated all the necessary documents as mandated
AI
The central legal point established in the judgment is that startups claiming exemptions in government procurement processes must comply with the specific requirements outlined by the state's startup....
The court upheld the rejection of the petitioner's technical bid due to failure to meet registration requirements, emphasizing limited grounds for judicial review.
Judicial review in tenders limited to mala fides, arbitrariness, irrationality impacting public interest; courts defer to authority's interpretation of eligibility unless perverse.
The court affirmed that stringent eligibility criteria in public tender processes cannot violate statutory relaxations for Start-ups, emphasizing limited grounds for judicial review.
The court affirmed that executive decisions in tendering must be devoid of arbitrariness, while confirming that non-compliance with technical criteria justifies rejection of a bid.
Discretion in tender qualifications rests with the authority unless proven arbitrary; no mandatory relaxation for qualified start-ups.
Public authorities must ensure fairness and non-arbitrariness in tender processes, adhering to established eligibility criteria.
Judicial review in tender matters is limited; rejection based on non-compliance with tender conditions is not arbitrary.
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