The Hon'ble Sri Justice C.V.Nagarjuna Reddy Writ Petition No.23672 of 2011 Date: 15.09.2011 Between: M/s.Rao Engineering Wroks, Hanamkonda, rep. by its Proprietor V.Someshwar Rao. ..... Petitioner AND Warangal Municipal Corporation, Rep. by its Commissioner, Warangal, Warangal District. .....Respondent Counsel for the Petitioner: Sri Subba Rao Korrapati Counsel for the respondent: Sri C.V.Bhaskar Reddy, Standing Counsel for Warangal Municpal Corporation The Court made the following: Order: This Writ Petition is filed for a Mandamus to set aside tender Notice bearing No.EE/WMC/CTN/ 20/2011-12, dated 16-08-2011, and the consequential Corrigendum, dated 19-08-2011. The petitioner sought for a consequential direction to the respondent to continue the agreement, dated 12-07-2011, entered into by the petitioner with the respondent. I have heard Sri Korrapati Subba Rao, learned Counsel for the petitioner, and Sri C.V.Bhaskar Reddy, learned Standing Counsel for the respondent- Warangal Municipal Corporation. In pursuance of a tender notification, issued by the respondent for supply of electrical items for street lighting purpose, the petitioner has submitted its tender for supply of electrical items of OSRAM Company. Having accepted the petitioner’s tender, the respondent has entered into an agreement with it on 12-07-2011. However, a fresh tender notification was issued, on 16-08-2011, for supply of the electrical items, for which the respondent had entered into agreement with the petitioner. Assailing this action, the petitioner filed the present Writ Petition. The petitioner pleaded that when the agreement, duly entered with it by the respondent, is in force, it is not permissible for the respondent to issue a fresh tender notification in respect of the very same work covered by the said agreement. In the counter-affidavit, filed on behalf of the respondent, it is inter alia stated that by letter, dated 19-06- 2011, M/s.Osram India Private Limited through their Area Manager has informed that they will supply their products through the petitioner for the year 2011-12; that in pursuance thereof, the respondent entered into an agreement with the petitioner for procurement of street light materials and new street light fixtures for maintenance of the street lighting in the city for the year 2011-12; that after entering into agreement, the respondent found that the procedure followed by them was contrary to the tender conditions, as the agreement shall be entered into with the manufacturing companies alone and not with the dealers. It is further averred that the agreement with the petitioner was cancelled and a fresh notification was issued on 16- 08-2011 and a corrigendum was issued on 19-08-2011. While stating that a press statement was issued by them on 09-08-2011, regarding the cancellation of the agreement, the respondent conceded that no notice was issued to the petitioner. In my opinion, having entered into an agreement with the petitioner, the respondent is bound to follow the fair procedure before seeking to nullify the same. On entering into the agreement, a right came to be vested in the petitioner, which cannot be taken away without following the due process of law. If the respondent felt that entering into agreement with the petitioner was contrary to the tender conditions, it is bound to issue a notice to the petitioner and call for the objections, if any, to the proposed action of cancellation. But, no such procedure is followed. The respondent has not even stated, as to the date, on which the agreement has been cancelled. Be that as it may, in purporting to cancel the agreement already entered with the petitioner, the respondent has failed to act in a fair and proper manner. Such an action on the part of the respondent, which takes away the vested rights of the petitioner, constitutes patent arbitrariness. Therefore, the action of the respondent, in cancelling the agreement and issuing notification calling for fresh tenders, cannot be sustained in law. The Writ Petition is, accordingly, allowed. Liberty is, however, left to the respondent to initiate fresh action, according to law, in the light of the observations made herein above. As a sequel, WPMP.No.29010 of 2011 is disposed of. ______________________ (C.V.Nagarjuna Reddy, J) 15th September, 2011 LUR