HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.9775 of 2009 Date: November 12, 2009 Between: M/s. P. Chandra Reddy & Company, Rep. by its Managing Partner P. Chandra Reddy. …Petitioner And 1. Tirumala Tirupati Devastanam, Rep. by its Executive Officer, Tirupati, Chittoor District and 3 others. …Respondents * * * ORDER: This Court issued Rule Nisi on 01.5.2009 and in W.P.M.P.No.12709 of 2009 an order of status quo until further orders had been granted. W.V.M.P.No.2514 of 2009 is filed by respondents to vacate the said order of status quo. W.V.M.P.No.1513 of 2009 is filed by respondent No.4 to vacate the interim order of status quo aforesaid. A reply-affidavit also had been filed. 2. The counsel on record, when the vacate applications came up for hearing, made a request for disposal of the writ petition itself and, hence, the writ petition is being disposed of finally by this Court. 3. The writ petitioner filed the present writ petition for a writ of Mandamus declaring the action of the respondents in finalizing the tender bearing IFB No.49/SE(Elec.)/TTD/TPT/2008-09 with regard to the work of providing 33 KV HT OH line with double circuit on “M” type towers from 33/11 KV sub-station of APSPDCL Limited, at G.N.C. area to VQC-II at Tirumala in favour of the 4th respondent though he is not eligible, as he failed to comply with the mandatory requirements of the said tender, as illegal, arbitrary, unconstitutional and consequently direct the respondents to accept the tender of the petitioner company and to entrust the work to the petitioner and pass such other suitable orders. 4. Smt. K. Aruna, learned counsel representing the writ petitioner would maintain that the petitioner company is an A-Grade electrical contractor having carried on various works in various departments, including the APSPDCL etc., to the utmost satisfaction of the concerned authorities. The counsel also pointed out that the petitioner submitted tenders along with respondent No.4 and others and though the 4th respondent had not complied with the mandatory requirements of the terms and conditions of the tender schedule, respondents 1 to 3 erroneously accepted and finalized the same. The learned counsel also pointed out to relevant material placed before this Court, copy of t h e e-procurement tender details, the documents furnished by respondent No.4, the copies of letters of APSPDCL, the copies of documents furnished by the petitioner, copy of the objections filed by the petitioner, copies of the letters as well. Ultimately, the learned counsel would conclude that though it may be a contractual matter, inasmuch as the action of respondents 1 to 3 being arbitrary, the same can be challenged under Article 14 of the Constitution of India and, hence, the writ petition to be allowed. 5. Sri Y.V. Ravi Prasad, learned Standing Counsel representing R-1 to R-3 had taken this Court through the contents of the counter-affidavit and would maintain that in the light of the material papers which are placed before this Court, the letter dated 28.12.2008, Pan Card of R-4, profit and loss account of respondent No.4, experience certificate of R- 4, equipment and machinery details of R-4 and the other material and also in the light of the clear stand taken in the counter-affidavit as well inasmuch as this Court to be slow in interfering with such contractual matters, this is not a fit matter to be interfered with under Article 226 of the Constitution of India. 6. Sri K. Sankaraiah, learned counsel representing R-4 had taken this Court through the contents of the counter-affidavit filed by R-4 and further pointed out to the copy of the details of e-procurement approved by R-4 in respect of the tender, copy of the electrical contractor’s license Grade-A issued by the Secretary, A.P. Electrical Licensing Board with regulations, copy of Wiremen Permits issued by the Secretary A.P. Electrical Licensing Board, copy of supervisor’s permit issued by Secretary, A.P. Electrical Licensing Board, copy of Account Payee Cheque No.555362 issued to the Executive Officer, TTD, copy of the details of A-Existing Commitments of on going works statement, copy of the statement showing the values for the period from 2003-04 to 2007-08 with the approval of Chartered Accountants, copy of the details of B-work for which tenders were submitted (awarded/likely to be awarded) even in future, copy of the statement of works executed by R-4 in respect of M/s. Reddy’s Polymers Processing Ltd., copy of the proceedings issued by Chief General manager, O & M, Central Power Distribution Company of A.P. Ltd., copies of the VAT registration issued by Commercial Taxes Department, copy of certificate of registration issued by Commercial Taxes Department, copy of Permanent Account Number (PAN) card issued to V.G. Shanker Rao, proprietor of R-4 by the Commercial Taxes Department, copy of the acknowledgement issued by the Income Tax Department, copy of tax-payers counterfoil for Rs.2,997/- of V.G. Sankara Rao, Proprietor of R-4, copy of profit and loss account for the year ending 31.3.2008 of the 4th respondent, copies of the balance sheets of different periods, copy of solvency certificate of R-4, copy of statement of owned critical equipment and machinery of R-4, copy of experience certificate, copy of completion certificate, copy of details of Key Personnel, copy of works contract agreement, copies of different statements, copy of list of Testing Equipment and copies of details of works executed by respondent No.4 at Tirumala. The learned Counsel also would maintain that at the pre-qualification stage, no objection had been raised, though R-4 is a proprietary concerned, a misleading statement is made at a later point of time that R-4 is a firm. The learned Counsel also would maintain that nothing had been pointed out in the decision making process and even otherwise this being a contractual matter, the writ courts to be slow in interfering with such matters, especially, in the light of the historical background of this litigation. 7. Heard the counsel. 8. The relief prayed for in the writ petition already had been specified supra. Apart from the affidavit filed in support of the writ petition, the respective counter-affidavits and the reply-affidavit as well several material papers also had been placed before this Court by the respective parties. 9. In Siemons Public Communication Pvt. Ltd., and another v. Union of India and others[1] the Apex Court at paras 33 and 34 observed as hereunder: “As was noted in the case of Asia Foundation and Construction ltd. (supra) though the principle of judicial review cannot be denied so far as exercise of contractual powers of government bodies are concerned, but it is intended to prevent arbitrariness or favouritism and it is exercised in the larger public interest or if it is brought to the notice of the Court that in the matter of award of a contract power has been exercised for any collateral purpose. On examining the facts and circumstances of the present case, we are of the view that none of the criteria has been satisfied justifying Court's interference in the grant of contract in favour of the appellants. When the power of judicial review is invoked in the matters relating to tenders or award of contracts, certain special features have to be considered. A contract is a commercial transaction and evaluating tenders and awarding contracts are essentially commercial functions. In such cases principles of equity and natural justice stay at a distance. If the decision relating to award of contracts is bona fide and is in public interest, Courts will not exercise the power of judicial review and interfere even if it is accepted for the sake of argument that there is a procedural lacuna.” 10. In M.D., H.S.I.D.C. and others v. M/s. Hari Om Enterprises and another[2] the Apex Court at para 41 observed as hereunder: “It may be true that ordinarily in a matter of enforcement of a contract qua contract, a writ court shall not exercise its jurisdiction under Article 226 of the Constitution of India. But, it is also trite that where the action of a State is violative of Article 14 of the Constitution of India as being wholly unfair and unreasonable, the writ court would not hesitate to grant relief in favour of a person, where both law and equity demands that such relief should be granted.” 11. In Reliance Energy Ltd., and another v. Maharashtra State Road Development Corporation Ltd., and others[3] the Apex Court held at para 39 as hereunder: “In Reliance Airport Developers (P) Ltd. v. Airports Authority of India and others1, the Division Bench of this court has held that in matters of judicial review the basic test is to see whether there is any infirmity in the decision-making process and not in the decision itself. This means that the decision-maker must understand correctly the law that regulates his decision- making power and he must give effect to it otherwise it may result in illegality. The principle of "judicial review" cannot be denied even in contractual matters or matters in which the Government exercises its contractual powers, but judicial review is intended to prevent arbitrariness and it must be exercised in larger public interest. Expression of different views and opinions in exercise of contractual powers may be there, however, such difference of opinion must be based on specified norms. Those norms may be legal norms or accounting norms. As long as the norms are clear and properly understood by the decision- maker and the bidders and other stakeholders, uncertainty and thereby breach of rule of law will not arise. The grounds upon which administrative action is subjected to control by judicial review are classifiable broadly under three heads, namely, illegality, irrationality and procedural impropriety. In the said judgment it has been held that all errors of law are jurisdictional errors. One of the important principles laid down in the aforesaid judgment is that whenever a norm/benchmark is prescribed in the tender process in order to provide certainty that norm/standard should be clear.” 12. It is the case of the writ petitioner that the petitioner company is an A-Grade Electrical Contractor, having carried on various works in various departments including the A.P.S.P.D.C.L. etc. Respondent No.3 issued a tender notification inviting bids with regard to the works of providing 33 KV HT OH Line with double circuit on “M” type towers from 33/11 KV sub-station of APSPDCL Limited, at G.N.C. area to VQC-II at Tirumala. 13. It is also averred that initially the respondents, during the year 2008, had invited bids with regard to the above said works and the petitioner approached the respondent authorities for the purpose of issuance of tender schedules, but the respondent authorities refused to issue the tender schedules to the petitioner and issued to the 4th respondent only who offered an estimated cost of Rs.4.76 crores. At that stage, since the irregularities committed by the respondent authorities brought to light by the media, the respondent authorities cancelled the said bid and against issued another tender notification with regard to the same work. In pursuance of the same, the petitioner, respondent No.4 and two others had submitted tenders and from out of the said tenders, the tenders of the two others had disqualified at the pre-qualification/technical bid stage and as the petitioner company had offered lowest bid and the petitioner was under the bona fide impression that his tender would be finalized in his favour, the respondents, only to finalize the said tenders in favour of the 4th respondent, had cancelled the said tender without assigning any reason. 14. Further it is stated in para 5 of the affidavit filed in support of the writ petition that subsequently respondent No.3 invited tenders through e-procurement in the month of March 2009 with regard to the same work and the petitioner along with respondent No.4 and others had submitted their tenders. It is also stated that the 4th respondent had not complied with the condition Nos.5, 6, 8 and 9 of the terms and conditions of the Tender Notification, as he had not shown any experience certificate from the TTD/A.P. TRANSCO or any other State Electricity Board. Respondent No.4 being a firm, had not submitted income tax Pan Card of the company, but he submitted the Pan Card in the personal capacity. Respondent No.4 had not submitted any details of similar work done. 15. Further it is stated that the bid documents were to be down loaded from 05.3.2009 and the last date was 19.3.2009. The pre- qualification/technical bid was to be opened on 19.3.2009 itself, but the authorities had opened the said bids on 21.3.2009. The price bid though was to be opened on 21.3.2009 by 4.00 p.m. but the respondents opened the same on 16.4.2009, where the petitioner and respondent No.4 had offered the bid amount with minor variations of 6.3 – 6.8. Since the 4th respondent had failed to comply with the mandatory requirement of the tender, the petitioner tender had to be accepted. But, the respondents had finalized the tender in favour of the 4th respondent. 16. Further it is stated that now the respondent authorities in a hurried manner are proposing to handover the work order to respondent No.4 without considering the objections of the petitioner though the 4th respondent is not eligible. The respondents had invited the tenders three times with regard to the same work. At the first instance, the 4th respondent only was given the tender schedule; in the second instance, though the petitioner had offered lowest bid amount, the said tender was withdrawn on flimsy grounds and in the third instance, the third respondent had given the tender through e- procurement without any publication only to favour and benefit the 4th respondent. At this stage, if the said work is entrusted to the 4th respondent, the petitioner company will be deprived of its legitimate right to get the tender work. 17. In the counter-affidavit filed by respondents 1 to 3 the allegations had been specifically denied. The counter-affidavit was sworn to by the first respondent. Specific stand had been taken that the allegations in the writ affidavit that the first respondent herein refused to issue tender schedules to the petitioner, but issued to the 4th respondent. Respondents 1 to 3 committed irregularity and as such they had cancelled the tender. The second tender notification got published by the T.T.D. again was cancelled to favour the 4th respondent and when the tender notice issued for the third time, the 4th respondent submitted his tender without complying with condition Nos.5, 6, 8 and 9. The 4th respondent failed to submit the experience certificate, Pan Card and details of works done. The technical bid was not opened as per the schedule. The T.T.D. called for the tenders through e-procurement without any publication only to favour the 4th respondent and for his wrongful gain. 18. Further it is stated that the writ petition itself is not maintainable, since this is only hypothetical litigation. The first respondent issued tender notification, published in the Deccan Chronicle and Andhra Jyothi inviting tenders from the eligible Class-I registered electrical contractors in TTD/A.P. TRANSCO or from other State Electricity Boards to provide 33 KV HT OH line with double circuit in “M” type towers from 33/11 KV sub-station of APSPDCL at G.N.C. area to VQC-II at Tirumala and for other connected electrical works. Responding to the said notification, the 4th respondent submitted his tender to attend the work. Since a single tender was received, the first respondent took a decision to go ahead with fresh tender notification and accordingly another tender notification was issued in Hindu and Vaartha newspapers on 19.12.2008 for the very same nature of work. Out of the four tenders received by the first respondent, the tenders submitted by the writ petitioner and two others were disqualified, as they did not fulfill the terms and conditions prescribed in the tender schedule. The writ petitioner failed to furnish Class-I registration certificate and works completion certificates showing his experience. Since the petitioner failed to oblige the request for furnishing the above said certificates within the stipulated time, the Technical Advisers of T.T.D. advised to cancel the tender, since steel rates are outstandingly reduced from Rs.40,000/- per M.T. to Rs.31,000/- per M.T. and advised to prepare a fresh estimation to call for the tenders again. 19. Further it is stated that after preparing the estimation, the first respondent again invited tenders for the very same nature of work through e-procurement in the month of March, 2009 and also by publishing in Hindu and Eenadu newspapers dated 06.3.2009. Five tenderers were participated including the petitioner and 4th respondent. The technical bid was opened on 21.3.2009 in the presence of tenderers and found the petitioner and 4th respondent qualified to proceed further. Later on the price bid (financial bid) was opened in the presence of tenderers on 16.4.2009 and found that the petitioner had quoted (-) 6.3%, whereas 4th respondent had quoted (-) 6.8% and accordingly it was declared that the 4th respondent was the lowest tenderer with all eligibilities. However, the petitioner never raised any objection and accepted the proceedings. 20. It is also stated that the other allegations that the 4th respondent failed to comply with condition Nos.5, 6, 8 and 9 are totally incorrect. As per condition No.5 of the Tender Notification, respondent No.4 furnished Pan Card details in his name. He also furnished the profit and loss account certified by the Chartered Accountant evidencing that he is the sole proprietor of M/s.Srinivasa Enterprises, Hyderabad. As per condition No.6, the 4th respondent furnished solvency certificate dated 06.3.2009 for Rs.1,14,00,000/- obtained from Canara Bank, Hyderabad. As per condition No.8, the 4th respondent enclosed the experience certificate evidencing his execution of similar nature of works for a value of Rs.5,49,84,029/- for M/s. Reddy Polymers Processing Limited, Hyderabad. As per condition No.9, respondent No.4 furnished the copy of declaration on the critical equipment owned by him. Hence, his technical bid was accepted. Since the technical bid was opened in the presence of the petitioner as well as the 4th respondent, the petitioner is estopped from raising such frivolous objections at later point of time. 21. Further, it is stated that the petitioner is conscious of the fact that the 4th respondent had submitted lowest tender with all eligibilities and, hence, the same was accepted. The entire tender process was conducted in a transparent manner without mala fides or bias. The petitioner failed to prove any arbitrary action on the part of the first respondent in finalizing the tenders. By taking into all relevant circumstances, including the rates quoted by the 4th respondent, his tender was accepted by the first respondent. 22. It is also stated that the order of status quo granted is causing lot of prejudice and, hence, the same to be vacated. 23. In the counter-affidavit filed by R-4, it is stated that the 4th respondent is a Class-I and A-Grade Electrical Contractor and executed several electrical works including erection of 33/11 KV HT Power Lines etc. The 4th respondent had undertaken several electrical works with the first respondent (TTD) and also with M/s. Reddy’s Polymers Processing Ltd., etc., and gained sufficient experience in the field. On the tender notification issued by the official respondents for the above said work, the 4th respondent submitted the tender quoting Rs.4.40 crores against Rs.3.96 crores while complying with all the required formalities and he was the sole tenderer. In fact, on the oral instructions of the first respondent office, the 4th respondent carried on survey of the said project work for a period of six months and spent a sum of Rs.12,37,475/-, but the tender notification was cancelled by the official respondents and repaid earnest money deposit (EMD) amount after eight months on 15.12.2008. 24. Further it is averred that subsequently, the official respondents again issued another Tender Notification TR No.38/SE(Elec.)/TTD/TPT/2008-09, dated 16.12.2008, for the same works of providing 33 KV HT OH Line with double circuit on “M” type towers from 33/11 KV sub-station of APSPDC Ltd., at G.N.C. area to VQC-II at Tirumala, for which the 4th respondent submitted sealed tender along with all relevant documents and paid EMD of Rs.3.00 lakhs. The writ petitioner and two others also submitted their sealed tenders and out of which two tenders were rejected and the tender submitted by the 4th respondent and the writ petitioner were qualified. But, without assigning any reasons, this tender was also cancelled. 25. Thereafter, the third respondent invited tenders through e-procurement in the month of March, 2009 vide Tender Notification IFB No.49/SE(Elec.)/TTD/TPT/2008-09 with an estimated contract value of Rs.2,26,49,189/- for the same work. In pursuance of the said tender notification, the 4th respondent submitted tender on behalf of the 4th respondent with all necessary documents as required. The pre- qualification/technical bid was opened on 21.3.2009 in the presence of tenderers. The 4th respondent and the writ petitioner had been declared as qualified and the writ petitioner did not raise any objection against the 4th respondent’s qualification. 26. Subsequently, the price bids of the writ petitioner and the 4th respondent were opened on 16.4.2009 and the tender of the 4th respondent was accepted, as it was the lowest at -6.8% and the tender of the writ petitioner at -6.3% was rejected. 27. Further it is stated that the finalization of the tender in favour of 4th respondent with regard to the works under Tender Notification IFB No.49/SE(Elec.)/TTD/TPT/2008-09 is legal and valid. Further, it is stated that the 4th respondent is not aware of the petitioner company is an A-Grade electrical contractor having carried on various works in various departments including the A.P. State Power Distribution Corporation Ltd., (APSPDCL). 28. It is also stated that it is true that the respondents had invited bids with regard to the aforesaid works during the year 2008. The 4th respondent denied several other allegations made in the affidavit filed in support of the writ petition inter alia contended that the 4th respondent submitted all the required documents at serial Nos.5, 6, 8 and 9. The documents required under serial No.5 is Class-I electrical contract with A-Grade Licence up to 33 KV registered in TTD/AP TRANSCO/any other State Electricity Board having experience in execution of 33 KV HT OH Line on “M” type towers. The 4th respondent also had submitted the proceedings No. CGM/(O&M) /SE(O&M)/DE(O&M)/37/08, dated 08.4.2008, registered as V.G. Sankara Rao, proprietor of M/s. Srinivasa Enterprises as Class-I for the civil works and erection of 33/11 KV sub-station and the number is assigned is 1134. The 4th respondent also submitted Electrical Contract Licence Grade-A issued by the Secretary, A.P. Electrical Licensing Board, Hyderabad, Government of A.P. The writ petitioner had also filed similar proceedings of APSPDCL and the A-Grade License issued by A.P. Electrical Licensing Board, Hyderabad in favour of P. Chandra Reddy. 29. Further it is stated that S.No.6 requires copy of income tax/PAN card. It is also stated that the 4th respondent uploaded the PAN card and Assessment order for the Assessment Year 2008-2009. The 4th respondent also had submitted by registered post all the documents and the same were received by the third respondent. The petitioner had filed in the writ material papers the profit and loss account and balance sheet only for one year i.e., 01.4.2007 to 31.3.2008. Inasmuch as 4th respondent is the sole proprietor, he had submitted the PAN card. No prejudice is caused by not submitting the PAN number of M/s. Srinivasa Enterprises. The 4th respondent submitted the tender, the license was also issued in his name under the name and style of M/s. Srinivasa Enterprises and the TTD will be dealing with him only in respect of instant contract. The petitioner had not chosen to file a copy of either income tax or the PAN card. 30. Serial No.8 requires details of similar works completed as prime contractor and 2AN-B as per NIT. As per the certificate given by Reddy’s Polymers Processing Ltd., which was filed by the petitioner, the 4th respondent was entrusted the work of erection of 33 KV HT power line to