*THE HON’BLE Ms. JUSTICE G. ROHINI +WRIT PETITION No.9838 OF 2011 & BATCH % 05/11/2011 # 1.Indian Hair Industries (P) Limited, 9 & 10, Industrial Estate, Tetali, Tanuku, W.G. District, rep. by its Resident Director R. Veeranna; and 3 others. … Petitioners Vs. $ 1.Tirumala Tirupati Devasthanams, Tirupati, Rep. by its Executive Officer, Tirupati And 6 others. … Respondents < Gist > Head Note: !Counsel for the petitioners : Sri E. Manohar, Senior Counsel Sri P. Kamalakar ^Counsel for the respondent No.1 : Sri Y.V. Ravi Prasad, Standing Counsel for TTD Counsel for the respondent No.2 : Sri A.V. Sesha Sai Counsel for the respondents 3 & 5 : Sri A.V. Sivaiah Counsel for the respondent No.4 : Sri Ravi Kondaveeti Counsel for the respondent No.6 : Sri Challa Sitharamaiah Sri Hari Sreedhar Counsel for the respondent No.7 : Sri P. Rajagopala Rao ?Cases referred : [1] AIR 1979 SC 1628 2 AIR 1996 SC 11 3 (1997) 1 SCC 738 4 AIR 1999 SC 393 5 (2008) 3 SCC 512 6 (2011) 3 SCC 436 7 (1990) 2 SCC 488 THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION No.9838 OF 2011, WRIT PETITION No.9668 OF 2011, WRIT PETITION No.9860 OF 2011, WRIT PETITION No.10198 OF 2011, WRIT PETITION No.11094 OF 2011, AND WRIT PETITION No.11100 OF 2011. DATED: 05-11-2011 In Writ Petition No.9838 of 2011: Between: 1. Indian Hair Industries (P) Limited, 9 & 10, Industrial Estate, Tetali, Tanuku, W.G. District, rep. by its Resident Director R. Veeranna; and 3 others. … Petitioners And 1. Tirumala Tirupati Devasthanams, Tirupati, Rep. by its Executive Officer, Tirupati And 6 others. … Respondents In Writ Petition No.9668 of 2011: Between: Gupta Enterprises, Kristhurajapuram, Venkatapuram Panchayat, Eluru Mandal, W.G. District, rep. by its Managing Partner Madupalli Mohana Gupta … Petitioner And 1. Tirumala Tirupati Devasthanams, Tirupati, Rep. by its Executive Officer, Tirupati And 3 others. … Respondents In Writ Petition No.9860 of 2011: Between: T. Rajendram, S/o. M. Thulakkanam, D.No.57/35, 3rd Street, SWamy Nagar, Madhavaram, Chennai-60. … Petitioner And 1. Tirumala Tirupati Devasthanams, Tirupati, Rep. by its Executive Officer, Tirupati And 9 others. … Respondents In Writ Petition No.10198 of 2011: Between: 1. Gupta Hair Products (P) Limited, No.279, Sydenhams Road, Choolai,Chennai, Rep. by its Managing Partner Madhupalli Mohana Gupta and another. … Petitioners And 1. Tirumala Tirupati Devasthanams, Tirupati, Rep. by its Executive Officer, Tirupati And 2 others. … Respondents In Writ Petition No.11094 of 2011: Between: 1. Vikas Hair Enterprises, 6-1-132/133/1, Plot Nos.32 & 33, Savarala Colony, Parsigutta Road, Sethapahal Mandi post, Secunderabad-500061 Rep. by its Managing partner P. Shankar And another. … Petitioners And 1. Tirumala Tirupati Devasthanams, Tirupati, Rep. by its Executive Officer, Tirupati And 4 others. … Respondents In Writ Petition No.11100 of 2011: Between: M/s. Sri Manikandan Enterprises, No.5, Devaraja Mudali Street, Chennai-600 003, Tamil Nadu, India, rep. by its Proprietor S. Sarangapani … Petitioner And Tirumala Tirupati Devasthanams, Tirupati, Marketing Department,ep. by its Executive Officer, Hare Krishna Road, Alipiri, Tirupati. … Respondent THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION No.9838 OF 2011, WRIT PETITION No.9668 OF 2011, WRIT PETITION No.9860 OF 2011, WRIT PETITION No.10198 OF 2011, WRIT PETITION No.11094 OF 2011, AND WRIT PETITION No.11100 OF 2011. COMMON ORDER: The action of Tirumala Tirupati Devasthanams (for short, ‘T.T.D.’), Tirupati, in issuing Short Tender Notice, dated 23.03.2011 for disposal of six varieties of human hair and allotting tender quantities as well as additional quantities to the successful bidders is under challenge in all these writ petitions. Under the impugned Short Tender Notice, dated 23.03.2011, sealed tenders were invited by T.T.D. for disposal of six (6) varieties of human hair specifying the minimum quantity to be quoted for each variety. The upset price for each variety was also specified and 2.5% of the respective upset prices was fixed as minimum deposit to be paid for each variety. As per Condition No.11 of the Tender Notice, the T.T.D. is entitled to allot the remaining tender quantity of all varieties of human hair to the tenderers that have taken part in the tender on a written request made by them for the said quantity at the rates approved by T.T.D. As per Condition No.12, the bidder/tenderer has to pay 20% cost of the additional quantity allotted under Condition No.11 as deposit on the price quoted by him within seven days from the date of his requisition, failing which the request for such allotment will be cancelled and the bidder will be blacklisted for a period of five years. Condition No.12 further provided that the balance 80% cost for the additional quantity shall be paid within 30 days from the date of confirmation orders and the delivery shall be taken failing which 20% amount paid as deposit for additional quantities would be forfeited. Pursuant to the impugned Short Tender Notice, dated 23.03.2011, thirteen (13) tenderers have participated. The tenders were opened on 31.03.2011 and after finalizing the same, allotment letters, dated 7.4.2011 were issued to the successful bidders communicating the tender quantities as well as the additional quantities allotted to them and calling upon them to pay the balance amount within 30 days from the date of the said orders. So far as additional quantity is concerned, it was made clear that in the event of failure to pay the balance amount within 30 days, the deposit amount of 2.5% paid by them would be forfeited. At that stage, the present writ petitions came to be filed. In W.P.NOs.9668, 9860, 10198, 11094 of 2011 and 11100 of 2011 the petitioners sought a declaration that the action of T.T.D. in issuing Short Tender Notice dated 23.03.2011 in contravention of the statutory Rules and without finalizing the tenders pursuant to the earlier tender notice dated 31.01.2011 is arbitrary and illegal. In W.P.No.9860 of 2011 the petitioner sought a further declaration that the action of T.T.D. in not blacklisting the respondents 5 to 10 therein in terms of Condition No.12 of the Tender Notice is arbitrary and illegal. So far as W.P.No.9838 of 2011 is concerned, the tender notice is not challenged but a Mandamus is sought directing T.T.D. to cancel the requisition of the respondents 2 to 7 therein (respondents 5 to 10 in W.P.No.9860 of 2011) for allotment of additional quantities and to blacklist them for a period of five years on the ground that they failed to pay 20% cost of the additional quantities as deposit on the price quoted by them within the time prescribed under Condition No.12 of the Short Tender Notice, dated 23.03.2011. It is not in dispute that T.T.D. had earlier issued tender notice dated 31.01.2011 inviting sealed tenders for the very same purpose of disposal of six varieties of human hair. As per the said tender notice, the bidders were required to submit 20% of the upset price fixed for each variety as Earnest Money Deposit (EMD). In response to the said notice dated 31.01.2011, the petitioners herein had submitted their tenders. However it was found that except one tenderer, all others had quoted less than the upset price fixed. Therefore negotiations were held with the tenderers on 17.02.2011 and they were requested to increase the prices quoted by them. It is alleged by the petitioners that though they had participated in the negotiations and offered increased rates, T.T.D. failed to finalize the tenders and on the other hand issued the impugned Short Tender Notice, dated 23.03.2011 for the very same purpose. According to the petitioners, the sale under the Tender Notice, dated 31.01.2011 should be deemed to have been confirmed in terms of Rule 118-A (2) of the Rules issued under G.O.Ms.No.311, Revenue (Endowments-I) Department, dated 9.4.1990 and therefore the action of T.T.D. in issuing the impugned tender notice is arbitrary and illegal. It is also contended that Condition Nos.11 & 12 of impugned Tender Notice which empowered T.T.D. for sale of additional quantities to the tenderers whose bids were accepted at the rate which they had quoted for the tender quantity are arbitrary and illegal. In W.P.No.9838 of 2011 and W.P.No.9860 of 2011, it is further contended that as the successful bidders had failed to pay the 20% cost of the additional quantity within seven days from the date of requisition as required under Condition No.12 of the impugned Short Tender Notice, the allotment of additional quantity in their favour should be cancelled apart from black-listing them for a period of five years. In the counter-affidavits filed on behalf of T.T.D., it is stated as under: In response to the earlier tender notice, dated 31.01.2011, altogether 46 tenders were received. When the tenders were opened on 17.2.2011, it was found that except for 2nd variety of human hair, for all other varieties all the tenderers, including the petitioners, had quoted prices less than the upset price fixed. Hence on the same day i.e., 17.02.2011 negotiations were held with the tenderers by the Negotiation Committee requesting to increase the price quoted by them. However neither the petitioners nor other tenderers came forward to increase the rates quoted by them. Hence the Negotiation Committee placed the matter before the Executive Officer for further course of action. Having regard to Condition No.4 of the Tender Conditions which provided that the tender shall become invalid if the rates quoted by the tenderers is less than the upset price fixed, it was decided by T.T.D. to go for fresh tendering process. On 18.03.2011 a meeting was held under the Chairmanship of V. Nagi Reddy, Member of the Specified Authority, to discuss about certain modifications in the tender conditions to facilitate more public participation and it was decided to reduce the EMD from 20% to 2.5%. Accordingly, the impugned Short Tender Notice, dated 23.03.2011 was issued for sale of human hair. The 13 tenders received in response to the said tender notice were opened on 31.03.2011. During the course of negotiations held by Negotiations Committee on 31.3.2011, the tenderers made a request for reduction of EMD amount on the cost of the additional quantity also from 20% to 2.5% as was done in the case of tender quantities. The said request was considered and the Negotiations Committee agreed to reduce the EMD on the additional quantity subject to approval by the competent authority. Pursuant thereto, allotment letters were issued by T.T.D. to the successful bidders on 7.4.2011 allotting tender quantities as well as additional quantities. Thereafter the decisions taken by the Negotiations Committee were placed before the Specified Authority and the same were ratified vide Resolution No.384, dated 13.04.2011. On 7.4.2011 it was also decided to forfeit the EMDs of the petitioners along with other tenderers as per Condition No.23 by declaring the tenders submitted by them as invalid for violation of Condition No.4 of Tender Notice, dated 31.01.2011. The said decision of T.T.D. was communicated to the petitioners vide proceedings dated 15.04.2011. In view of the decision taken by the Specified Authority to reduce the EMD on additional quantity from 20% to 2.5% and since the EMD was paid by the successful tenderers within the stipulated time, the question of cancelling their tenders and blacklisting them for five years did not arise. Apart from merits, it is also contended that as the petitioners did not participate in the tender process pursuant to the impugned Short Tender Notice dated 23.03.2011 they are not aggrieved persons and they have no locus to file the writ petitions. It is also explained that the practice of allotting additional quantities over and above the tender quantities is in vogue since several years and the said benefit was availed by the petitioners also on several occasions and therefore the petitioners are estopped from contending that the tender conditions relating to allotment of additional quantity to the successful bidders are arbitrary and illegal. The successful bidders who are arrayed as respondents 2 to 7 in W.P.No.9838 of 2011 and respondents 5 to 10 in W.P.No.9860 of 2011 filed separate counter-affidavits denying all the allegations made by the petitioners and contending that the procedure adopted by TTD in accepting their tenders and allotting tender quantities as well as additional quantities is in accordance with law. I have heard Sri E. Manohar, the learned Senior Counsel appearing for the petitioners in W.P.No.9838 of 2011; Sri N.Guru Gopal, the learned counsel appearing for the petitioners in W.P.No.9668 of 2011, Sri W.B. Srinivas, the learned counsel appearing for the petitioners in W.P.Nos.9860, 10198 & 11094 of 2011 and Sri Vivek Reddy, the learned counsel appearing for the petitioner in W.P.No.11100 of 2011. I have also heard Sri Challa Sitharamaiah, the learned Senior Counsel representing Sri Hari Sridhar, the learned counsel appearing for the respondent No.6 in W.P.No.9838 of 201 and respondent No.7 in W.P.No.9860 of 2011; Sri P. Rajagopala Rao, the learned counsel appearing for the respondent No.7 in W.P.No.9838 of 2011, and respondent No.6 in W.P.No.9860 of 2011; Sri A.V. Sivaiah, the learned counsel appearing for the respondent Nos.3 & 5 in W.P.No.9838 of 2011, and respondent Nos.8 & 10 in W.P.No.9860 of 2011; Sri Ravi Kondaveeti, appearing for the respondent No.4 in W.P.No.9838 of 2011, and respondent No.9 in W.P.No.9860 of 2011, as well as Sri Y.V. Ravi Prasad, the learned Standing Counsel appearing for the T.T.D. In the light of the rival submissions made on behalf of parties, the following questions arise for consideration by this Court. (1) Whether the petitioners who did not submit their tenders pursuant to the impugned tender notice dated 23.03.2011 have locus to maintain the writ petitions challenging the tender process? (2) Whether the action of T.T.D. in issuing the impugned Short Tender Notice, dated 23.03.2011 without rejecting the tenders submitted by the petitioners in response to the earlier tender notice dated 31.01.2011 is arbitrary and illegal? (3) Whether Conditions 11 & 12 of the impugned Short Tender Notice, dated 23.03.2011 providing for allotment of additional quantities on the requisition of the bidders are valid? (4) Whether the acceptance of the bids of the successful bidders and allotment of tender quantities to them pursuant to the impugned short tender notice dated 23.03.2011 is vitiated by any legal infirmity? (5) Whether the allotment of additional quantities made in favour of respondents 2 to 7 in W.P.No.9838 of 2011, who are also arrayed as respondents 5 to 10 in W.P.No.9860 of 2011, is liable to be cancelled for non-compliance with Condition No.12 of the Tender Notice, dated 23.03.2011, and whether they are liable to be blacklisted for a period of five years? Question No.1: A preliminary objection has been raised on behalf of the respondents as to the maintainability of the writ petitions on the ground that none of the writ petitioners submitted their tenders in response to the impugned short tender notice dated 23.03.2011. It is contended that as the petitioners did not participate in the tender process, they are in no way prejudiced or concerned with the sale under impugned tender notice and therefore they have no locus standi to maintain the writ petitions. This contention as to the maintainability of the writ petitions on the ground of locus, in my considered opinion, is wholly untenable. As noticed above, the grievance of the petitioners in this batch of writ petitions is that the very issuance of the impugned short tender notice without finalizing the tenders submitted by the petitioners pursuant to the earlier tender notice dated 31.01.2011 is illegal. They are also questioning the action of T.T.D. in reducing the EMD for additional quantity from 20% to 2.5% by relaxing the Condition No.12 after opening the tenders contending that if it were known that the EMD for additional quantity would be only 2.5%, but not 20% of the upset price, they would have participated in the tender process and would have become eligible to seek allotment of additional quantities. The grievance of the petitioners is that in view of the relaxation of Condition No.12 after opening the tenders, they were denied an equal opportunity with the successful bidders to seek allotment of additional quantities. As held in RAMANA DAYARAM SHETTY v. THE INTERNATIONAL AIRPORT AUTHORITY OF INDIA AND OTHERS[1], such contention cannot be rejected at the threshold on the mere ground that they did not submit their tenders and it is necessary for this Court to proceed to consider whether the grievance of the petitioners is justified in law. Question No.2: It is contended on behalf of the petitioners that the action of T.T.D. in issuing the Short Tender Notice dated 23.03.2011 without finalizing the tenders received pursuant to the earlier tender notice dated 31.01.2011 is arbitrary and illegal since as per the deeming provision under Rule 118-A (2) of the statutory Rules made under G.O.Ms.No.311, dated 9.4.1990 the sale under tender notice dated 31.01.2011 should be deemed to have been confirmed. On the other hand, it is contended on behalf of the respondents that all the tenders received pursuant to the tender notice dated 31.01.2011 including the tenders of the petitioners being invalid, the deeming clause under Rule 118-A(2) is not attracted and therefore the action of T.T.D. in proceeding to issue the impugned tender notice inviting fresh tenders for the very same purpose cannot be held to be illegal on any ground whatsoever. Admittedly the tender notice dated 31.01.2011 contained a specific clause as under: “Condition No.4: The tender shall become invalid if the rate quoted by the tenderer is less than the upset price fixed by T.T.D.” The specific case of T.T.D. that all the tenderers that had participated in response to the tender notice dated 31.01.2011, including the writ petitioners, had quoted less than the upset price could not be disputed by the petitioner. That being so, the tenders of the petitioners as well as the other tenderers were invalid. It is true that Rule 118-A(2) of the Rules made under G.O.Ms.No.311, dated 09.04.1990, contained a deeming clause and as per the said Rule the sale shall be deemed to have been confirmed if the confirmation order is not received by the purchaser within one month from the date of the sale. However this is a case where the tenders of all the tenderers were admittedly invalid. All the petitioners had participated in the negotiations held on 17.02.2011 and all of them were aware that the prices quoted by them were less than the upset price. Though it is contended by some of the petitioners that in the negotiations held on 17.02.2011 they had expressed their willingness to quote higher prices, the said plea has been categorically denied by the T.T.D. and no other material could be placed before this Court to substantiate the claim of the petitioners that they expressed their willingness to quote higher prices. Hence this Court has to go by the admitted fact that all the participants had quoted less than the upset price fixed. In the absence of valid tenders the entire proceedings pursuant to the tender notice dated 31.01.2011 became redundant and therefore the question of deemed confirmation of sale under Rule 118-A(2) did not arise at all. In view of the finding that Rule 118-A(2) has no application, the action of T.T.D. in issuing the impugned Short Tender Notice dated 23.03.2011 for the very same purpose cannot be held to be illegal on the ground that the tenders received pursuant to the earlier tender notice dated 31.01.2011 were not finalized. Question No.3: Conditions 11 & 12 of the impugned tender notice providing for allotment of additional quantities apart from tender quantities to the bidders on a written request made by them read as under: “11. The TTD reserves the right to allot the remaining tender quantity of all varieties of Human Hair to the Tenderers/Companies/Persons whoever taken part in the tender. On the written request made by the Company/Person/Tenderer for the said quantity at the rates approved by TTD, confirmation orders will be placed on them. 12. The bidder/tenderer has to pay 20% cost of the additional quantity as deposit on the price quoted by him within (7) seven days from the date of requisition of the tenderer concerned failing which the request for such allotment will be cancelled and the firm will be blacklisted for a period of (5) five years. The balance 80% cost for such additional quantity has to be paid within 30 days from the date of confirmation order and to take delivery, failing which 20% amount so paid for allotment of remaining quantities will be forfeited.” The contention of the petitioners is that the said conditions which enabled T.T.D. to sell additional quantities much more than the tender quantities, particularly at the same rate offered for the tender quantities are arbitrary and irrational. The law is well-settled that unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, the tender conditions are unassailable. The tender conditions cannot normally be subjected to judicial scrutiny unless they are so arbitrary or irrational or ex facie in violation of Article 14 of the Constitution of India. It is also relevant to note that there are inherent limitations in exercise of the power of judicial review of contractual transactions by Government bodies. As held in TATA CELLULAR v. UNION OF INDIA[2] the principles of judicial review would apply to the exercise of contractual powers by Government bodies primarily in order to prevent arbitrariness or favouritism. It was reiterated in ASIA FOUNDATION AND CONSTRUCTION LIMITED v. TRAFALGAR HOUSE CONSTRUCTION LIMITED[3] that the judicial review of contractual transactions by Government bodies is permissible to prevent arbitrariness, favouritism or use of power of collateral purposes. It was further made clear in RAUNAQ INTERNATIONAL LIMITED v. IVR CONSTRUCTION LIMITED AND OTHERS[4] that the Court must be satisfied that there is some element of public interest involved in entertaining a writ petition challenging the award of a contract by a public authority. In TATA CELLULAR’S case (2 supra) while enumerating the principles with regard to scope of judicial review of administrative decisions and exercise of contractual powers by Government bodies, it was held that the terms of the Invitation to Tender cannot be open to judicial scrutiny because the Invitation to Tender is in the realm of the contract. It was also observed that the State or its instrumentalities can choose their own terms of invitation to tender and that the right to choose cannot be considered as an arbitrary power. In the light of the settled legal position noticed above, I do not find any substance in the contention of the petitioners that Conditions 11 & 12 of the impugned tender notice are arbitrary and irrational. At the outset, it is to be noticed that the benefit under Conditions 11 & 12 is available to all intending tenderers alike and it is not as if the petitioners are denied of the said benefit. It is also relevant to note that the additional quantities are allotted by T.T.D. at the highest quoted rate by the tenderers and therefore no prejudice can be said to have been caused either to T.T.D. or to the petitioners or any other intending bidder. In fact the same procedure was followed in the previous tenders and some of the writ petitioners had admittedly participated and availed the benefit of additional quantities. Hence Conditions 11 & 12 which cannot be held to be arbitrary or irrational or without any nexus with the object sought to be achieved, particularly in the absence of any material to infer any mala fide design on the part of T.T.D. to eliminate the petitioners herein do not warrant judicial interference. Question No.4: It is to be noticed that in exercise of the powers conferred by Section 97 read with Section 153 of the A.P. Charitable and Hindu Religious Institutions and Endowments Act, 1987 (for short, ‘Endowments Act, 1987’), Rules were made under G.O.Ms.No.311, Revenue (Endowments-I) Department, dated 9.4.1990, providing for the powers and functions of T.T.D. Board. Chapter-XVI of the said Rules deals with sale of movable properties. Rules 116 to 118-A which are relevant