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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
SUREPALLI NANDA, J.
M/s Sri Venkata Ramana Medical and General Stores – Appellant
Versus
Employees State Insurance Corporation and another – Respondents
W.P. No. 34167 of 2023
Decided on : 26-02-2024
(A) Tender Enquiry No. 799-U-16/A/Local Chemist/2023-24 - Bid No.GEM/2023/B/3902528 - Writ of Mandamus sought to declare actions of the 1st Respondent in qualifying the 2nd Respondent as illegal and arbitrary. The Petitioner, a registered firm, contended that the 2nd Respondent was disqualified in the technical evaluation but later qualified, violating tender conditions. The Court emphasized the necessity of strict compliance with tender requirements and the principle of fairness in administrative actions. (Paras 8, 10, 12, 16)
(B) Judicial review in tender matters - The Court reiterated that the process must not be arbitrary or irrational, and any deviation from tender conditions warrants judicial intervention. (Paras 12, 18)
Facts of the case:
The Petitioner challenged the 1st Respondent's decision to qualify the 2nd Respondent despite prior disqualification, alleging favoritism and procedural irregularities.
Findings of Court:
The Court found the 1st Respondent's actions irrational and intended to favor the 2nd Respondent, thus allowing the writ petition.
Issues: The main issues were the legality of the 1st Respondent's actions in qualifying the 2nd Respondent and adherence to tender conditions.
Ratio Decidendi: The Court ruled that strict compliance with tender conditions is essential, and any arbitrary action undermines the rule of law.
Result: Writ petition allowed.
ORDER :
Heard Learned Counsel Mr. N. Sridhar Reddy appearing on behalf of the Petitioner, Mr. Muppu Ravinder Reddy appearing on behalf of 1st Respondent and Mrs. P. Vijayalakshmi on behalf of Respondent No.2.
2. The Petitioner approached the Court seeking prayer as under :
3. The case of the Petitioner as per the averments made in the affidavit filed in support of the present writ petition is as follows :
a) The Petitioner herein is a registered Propriety Firm and conducts Wholesale and Retail business in supply of Medical, Surgical and Consumables, established in the year 2007 and has been doing business in the said field since then. The 1st Respondent had called for bids for supply of non-anti cancer drugs, anti cancer drugs, Vaccines, Inj, Immunoglobulins Inj, Human Albumin and for local chemist empanelment vide Proceedings No. Tender Enquiry No. 799-U-16/A/Local Chemist/2023-24, dated 24.08.2023. As per the tender conditions the bid has to be filed Online in the Government eMarket place (GEM Portal) Bid No.GEM/2023/B/3902528, dated 04.09.2023 according to which the last date for filing of the Bid was 14.09.2023 at 16.00 hours. The date of opening of the Bid was also 14.09.2023 at 16.30 hours. In so far as the prerequisite criteria is concerned as per the Bid document, the minimum average annual turnover of the bidder for the last 3 (three) years shall be Rs.200 lakhs and the Original Equipment Manufacturer (OEM) average annual turnover for the last 3 years shall be Rs.800 lakhs and the bidder shall have minimum experience of 3 years. The Petitioner and the 2nd Respondent participated in the said tender notification. The details of the Technical Evaluation undertaken by the 1st Respondent declared the Petitioner as Qualified and 2nd Respondent as disqualified. Later on, the 2nd respondent was made qualified in the technical bid and was placed as L3. It is the specific case of the Petitioner that the 2nd Respondent had not submitted all the documents in time and was disqualified in the technical evaluation and had submitted the documents at a later stage which were considered by the 1st Respondent and the Petitioner was later declared as successful bidder considering the documents submitted by the 2nd Respondent at a later date.
b) Thereafter, as per the GEM web portal the petitioner was placed as L1 and the 2nd respondent as L3. Thus, the petitioner has approached the first respondent to invite the petitioner for entering into the agreement as per the tender result. However, the 2nd respondent was invited to sign the contract. Hence, the process of entering into contract with the 2nd respondent, who has been qualified in the technical bid as L3, by the 1st respondent is wholly illegal. Thus, aggrieved by action of the 1st respondent, the present writ petition is filed.
4. The learned Counsel appearing on behalf of the Petitioner mainly puts forth the following submissions :
a) On 18-12-2023 when the present writ petition came up for admission the Learned Counsel appearing on behalf of the 1st Respondent on instructions from 1st Respondent has specifically informed the Court that the 2nd Respondent has been disqualified in the subject tender and also black listed. The said statement is in fact part of the doc
The court emphasized the necessity of strict compliance with tender conditions and ruled against arbitrary actions by administrative authorities.
The main legal point established in the judgment is that the conduct of the tendering authority, including the introduction of substantive terms through corrigendum and biased disqualification proces....
The main legal point established in the judgment is that the disqualification of a bidder must be justified, and an unsuccessful bidder cannot challenge the qualification of other bidders.
Judicial review in tender matters is limited; rejection based on non-compliance with tender conditions is not arbitrary.
The court emphasized that strict compliance with tender conditions is essential and that arbitrary qualification despite disqualifications undermines the fairness required in the contracting process.
Tender authorities must adhere to statutory criteria and act transparently; courts will not interfere unless clear evidence of arbitrariness or malafide conduct is presented.
The court upheld the authority's discretion in evaluating tender bids, emphasizing the need for compliance with mandatory conditions and the absence of arbitrariness in disqualification decisions.
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