IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY SIXTH DAY OF JUNE TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION NO : 5473 of 2009 Between: Sri Lakshmi Narasimha Transport, Rep by Mr. M.Lava Kumar, S/o. Vittalaiah, R/o. H.No.12-1-144, Pinnavari Street, Warangal. ..... PETITIONER AND 1 The Andhra Pradesh State Civil Supplies Corporation, Rep by Vice Chairman and Managing Director, Civil Supplies Bhavan, Somajiguda, Hyderabad. 2 The District Manager, A.P. State Civil Suppies Corporation, Warangal. 3 M/s Bhuvaneshwari Transport, Rep by P.Dayakar Rao, R/o. H.No.15-11-190, ramannapet, Warangal. .....RESPONDENTS Counsel for the Petitioner: MR.D.LINGA RAO Counsel for respondent Nos.1 and 2: MR.T.S.PRAVEEN KUMAR Counsel for respondent No.3: ----- The Court made the following: ORDER: At the interlocutory stage, the Writ Petition is taken up for hearing and disposal with the consent of the learned Counsel for the parties. This Writ Petition is filed for a Mandamus to declare the action of respondent No.1, in not finalizing the award of contract pursuant to tender notice, dated 15-01-2009, and issuing proceedings, dated 13-03-2009, as illegal and arbitrary. The petitioner is a transport Contractor, who filed its tender in pursuance of notification, dated 15-01-2009. Respondent No.3 was an existing transport Contractor in respect of the work in question. Its contract expired on 31- 03-2009, and the fresh tender notification, referred to above, was issued for the period from April, 2009 to March, 2010. On the eve of expiry of the period of contract, respondent No.3 approached respondent No.1 with representation, dated 05-01-2009, for extension of its contract. The said representation was recommended by the Hon’ble Minister for Tribal Welfare (Remote and Exterior areas), Government of A.P, as evident from proceedings, dated 02-02-2009, of the Vice-Chairman and Managing Director of respondent No.1-Corporation. By the said proceedings, while declining the request of respondent No.3 to extend the contract period, the Vice-Chairman and Managing Director stated that the said request may be examined and appropriate decision will be taken depending on the rates received in pursuance of the fresh tender notification and the circumstances existing then. The tenders filed in pursuance of the fresh tender notification were opened and it is not in dispute that respondent No.3 again emerged as the lowest tenderer. However, the Vice- Chairman and Managing Director of respondent No.1- Corporation issued proceedings, dated 13-03-2009, wherein it is stated that even after negotiations were held on 19-02-2009, it was found that the rates finally offered therein were on high side and therefore, he accepted the earlier request of respondent No.3 for extending the contract for one more year on the same rates and terms and conditions, on which the contract for the year 2008-09 was awarded. The petitioner, who is one of the tenderers, filed this Writ Petition questioning the said proceedings. Separate counter-affidavits were filed on behalf of respondent Nos.1 and 2 and respondent No.3. While respondent Nos.1 and 2 sought to justify the award of contract in favour of respondent No.3 at the old rates on the ground that it was in public interest, curiously, respondent No.3 opposed the decision of respondent Nos.1 and 2 by stating that equity demands that its lowest tender should be accepted and contract be awarded in terms of the said tender. The facts narrated above, thus, clearly indicate that both the petitioner and respondent No.3 are aggrieved by the impugned proceedings. In my considered view, the impugned proceedings cannot be sustained for the same reasons, which were mentioned in letter, dated 02-02-2009, of the Vice-Chairman and Managing Director of respondent No.1-Corporation. In the said letter, he categorically stated that as per the standing guidelines of the Corporation and also the policy decision, it shall call for tenders every year invariably and appoint transport contractors for food grains for each district and that in pursuance of the said policy, the tenders were called for the year 2009-10. He also spelt out that as per Clause 3 (i) of the standard Contract Agreement, the contract period will be in force upto 31st March or till the quantity of food grains entrusted to the contractor during the contract period are completely transported and that the contract can be extended by the Vice-Chairman and Managing Director at his sole discretion on the same rates, terms and conditions for a further period of two months only. This being the settled policy of respondent No.1- Corporation, the basis, on which the contract of respondent No.3 was extended for a period of one year, is not disclosed in the impugned order. The Vice-Chairman and Managing Director is not vested with the power to extend the contract in the absence of any statutory provision or executive guidelines vesting such a power in him. Even if the Corporation found that the rates quoted by the tenders in pursuance of the fresh notification are not workable, it can only call for a fresh tender or explore any other possibility to award the work of transport contract. Though respondent No.3 appeared to have taken a chance by making a representation in January, 2009, providentially its bid appeared to be the lowest and understandably it is not willing to execute the work at the same rates, at which it was awarded the contract for the previous year. The Corporation cannot, therefore, thrust the contract on respondent No.3 when it is unwilling to execute the same at the old rates and its request for extension had already been turned down as far back as 02-02-2009. The unwillingness of the Corporation, to accept the rates offered by any of the tenderers including respondent No.3 in pursuance of the fresh tender notification, would not lend legitimacy to the action of its Vice-Chairman and Managing Director to extend the contract in favour of respondent No.3 contrary to the standing guidelines and established policy of the Corporation. In this view of the matter, the Writ Petition is allowed and Order, dated 13-03-2009, passed by respondent No.1 is set aside. Liberty is given to respondent No1 to take a decision on the offers made by the parties in pursuance of the fresh tender notification, in accordance with the Corporation’s policy guidelines. ______________________ (C.V.Nagarjuna Reddy, J) 26th June, 2009 lur