* The Hon'ble Mr Justice C.V.Nagarjuna Reddy + Writ Petition No.11153 of 2011 % DT.03.11.2011 Between: # M/s.Adarsh Welfare Society, Nalgonda District and another …Petitioner Vs. $ 1.The Andhra Pradesh State Road Transport Corporation, Hyderabad, rep. by its Vice Chairman and Managing Director and 4 others. … Respondents ^ Counsel for the Petitioner: Sri O.Manoher Reddy ! Counsel for respondent Nos.1 to 4: Sri C.Sunil Kumar Reddy Counsel for respondent No.5: Sri N.Sridhar Reddy < Gist: > Head note: ? Cases referred: The Hon'ble Sri Justice C.V.Nagarjuna Reddy Writ Petition No.11153 of 2011 Date: 3rd November, 2011 Between: 1.M/s.Adarsh Welfare Society, having its office at House No.18-104, Shantinagar, Miryalguda, Nalgonda District and another. ..... Petitioners and 1.The Andhra Pradesh State Road Transport Corporation, Musheerabad, Hdyerabad, rep. by its Vice chairman And Managing Director and 4 others. .....Respondents Counsel for the Petitioners: Mr.O.Manoher Reddy Counsel for respondent Nos.1 to 4: Sri C.Sunil Kumar Reddy Counsel for respondent No.5: Sri N.Sridhar Reddy The Court made the following : O R D E R: Feeling aggrieved by award of as many as 10 contracts for maintenance of toilets at ‘A’ class and ‘B’ Class bus stations in Nalgonda District, by respondent Nos.1 to 4, in favour of respondent No.5, the petitioners filed the present Writ Petition. The facts, which are not in dispute, are that respondent No.3 invited tenders, from registered SSOs/NGOs/MPMOs/Vos/Local Safai Workers, in prescribed formats for maintenance of toilets in ‘A’, ‘B’ and ‘C’ class bus stations. The present case relates only to ‘A’ & ‘B’ Class bus stations, which are numbering 10. In response to the said tender notification, the petitioners have filed their tenders. Respondent No.5 has also filed its tender. In addition to these tenderers, other agencies also filed their tenders. After eliminating the tenderers, who did not obtain qualifying marks, the Tender Evaluation Committee (for short ‘the Committee’) has considered the tenders of the petitioners and respondent No.5. It is not in dispute that in respect of the 10 works, the petitioners have offered the highest amounts and respondent No.5 offered the lowest amounts. The petitioners were eliminated from further evaluation of their tenders on the sole ground that they do not possess PF and ESI registrations. Thereafter, the Committee has invited respondent No.5 for negotiations, during which the latter has agreed to enhance the license fee to the extent of the sums marginally over and above the highest offers made by the petitioners. Respondent No.5 was, accordingly, awarded all the ten contracts viz., maintenance of toilets at ‘A’ & ‘B’ Class bus stations in Nalgonda District for which the tender was called. Feeling aggrieved thereby, the petitioners filed the present Writ Petition. At the hearing, Sri O.Manohar Reddy, learned Counsel for the petitioners, advanced two submissions viz., (1) that elimination of the petitioners, from further consideration, by the Committee is arbitrary and contrary to the criteria laid down in Circular No.2, dated 15-01- 2010 and; (2) that the official respondents have accepted the experience certificates, produced by respondent No.5, which are not genuine. Sri C.Sunil Kumar Reddy, learned Standing Counsel for A.P.State Road Transport Corporation, appearing for respondent Nos.1 to 4, and Sri N.Sridhar Reddy, learned Counsel, appearing for respondent No.5, opposed the above contentions and sought to support the decision of the Corporation and its officials in entrusting the contracts to respondent No.5. Before discussing the contentions of the learned Counsel on merits, it is necessary to note that even though the tender notice does not make a specific reference to Circular No.6/2010, dated 15-01-2010, in the counter-affidavit, filed on behalf of the APSRTC, it is admitted that the said Circular applies and in terms thereof, the tender notification in question was issued on 25-01-2010. Therefore, the action of award of contracts to respondent No.5 needs to be examined in the light of the selection criteria and other relevant clauses contained in the said Circular. A perusal of the proceedings, dated 12-11-2010, of the Committee would show that the petitioners were eliminated from further evaluation of the tender process on the sole ground that they do not possess PF and ESI registrations even though it is noted therein that Sri T.Venkateswarlu, the President of petitioner No.1- Society has registered himself in his name. The first question that requires consideration is, whether such elimination of the petitioners is in conformity with the terms of the Circular. Clause 7.1 of the Circular, which lays down the selection criteria, reads as under: “Selection criteria plays key role in awarding both the contracts. Limited tenders through news paper notification shall be called exclusively from the Social Service Organisations/Non-Governmental Organisations/Voluntary Organisations/ Non-profit making Organisations/Local Safai Karmacharies etc. as being done in the existing system. The Tender Committee shall evaluate the past performance, experience etc. of the SSOs for deciding the allotment. The highest licence fee offered by the tenderers will be the prime deciding factor for allotment of Toilets maintenance contract subject to other qualifying parameters. Similarly the lowest remuneration quoted by the contractor will be considered for Bus station Sweeping & Cleaning contracts. (Emphasis added)” Clause 8 of the Circular deals with the qualifying parameters, and it prescribed marks for various parameters such as length of the period in related field, past experience and nativity etc. Clause 8.4 of the Circular, which has relevance for the present purpose, reads as under: “Each SSO shall get a minimum of 60 marks to be qualified in the Tenders for further commercial offer evaluation. The SSO which is qualified and quotes the highest licence fee will be awarded the maintenance of toilets contract. The SSO which is qualified and quotes the lowest remuneration will be awarded the Bus station sweeping and cleaning contract.” Condition No.4 of the terms and conditions of the tender notice laid down that preference will be given to those who are holding PF and ESI registration. While dealing with WP.No.2911 of 2008, filed by the petitioners herein along with another agency, this Court, on an analysis of the above-mentioned clauses of the circular and condition No.4 of the tender conditions, held as under: “The above reproduced clauses of the Circular read in conjunction with Clause 4 of the tender notification would make it evident that where tenderers get minimum marks, the uppermost criterion for award of contract is the highest licence fee for maintenance of toilets and the lowest remuneration in respect of maintenance of bus stations, sweeping and cleaning contract. If the licence fee or remuneration is quoted equally, then only the question of preference would arise. On a conjoint reading of all the above discussed clauses, I am of the view that the predominant purpose of prescribing marks is to exclude the tenderers from consideration if they fail to get qualifying marks. The marks will lose their relevance once more than one tenderer gets qualifying marks. From that stage, it is obviously the price in the first instance and where the price is equally quoted, the preference as envisaged in Clause 4 of the tender notification which assume relevance. The conditions contained in the tender notification and the above noted Circular read and understood in this manner, the reasonable conclusion that can be arrived at is that where all the tenderers have quoted the same prices as in the present case, the tenderers without PF and ESI registrations will not be considered for award of contracts and it is only those with PF and ESI registrations that will be considered” (emphasis added) The said Writ Petition, filed by the petitioners herein, was dismissed on the facts of that case for the reason that as all the tenderers have quoted equal price, the agency which had PF and ESI registrations was preferred in terms of Condition No.4. But the same is not the case here. A perusal of the tender analysis by the Committee shows that the petitioners have quoted the highest price and respondent No.5 has quoted the lowest price in respect of all the A & B class bus stations. For Kodad, petitioner Nos.1 and 2 have quoted Rs.22316/- and Rs.22516/- while respondent No.5 has quoted Rs.15555/-. For Suryapet (Ordinary), the petitioners have quoted Rs.25316/- and Rs.21000/- while respondent No.5 has quoted Rs.5555/-. For Miryalguda bus station, the petitioners have quoted Rs.32416/- and Rs.32516/- while respondent No.5 has quoted Rs.15555/-. For Suryapet (hitech), the petitioners have quoted Rs.22016/- and Rs.22516/- while respondent No.5 has quoted Rs.15555/-. Similarly, for Bhongir, the petitioners have quoted Rs.16316/- and Rs.16516/- while respondent No.5 has quoted Rs.5555/-. For Yadagirigutta, the petitioners have quoted Rs.6516/- and Rs.5116/- and respondent No.5 has quoted Rs.2121/-. For Choutuppal, the petitioners have quoted Rs.12116/- and Rs.12016/- and Respondent No.5 has quoted Rs.5123/-. For Alair, the petitioners have quoted Rs.10516/- and Rs.10316/- and respondent No.5 has quoted Rs.3121/-. For Nalgonda, the petitioners have quoted Rs.15516/- and Rs.15416/- and respondent No.5 has quoted Rs.11,121/-. For Narketpalli, the petitioners have offered Rs.20516/- and Rs.20016/- respectively and respondent No.5 has offered Rs.10123/-. The pattern, in which the petitioners and respondent No.5 have offered their prices, would clinchingly establish that there is substantial difference between the prices offered by the petitioners on one side and that offered by respondent No.5 on the other. In some cases, the variation is more than five times. Notwithstanding such variations, the officials of respondent No.1- Corporation have chosen to eliminate the petitioners form further consideration, invite respondent No.5 for negotiations and entrust all the works to him at the price marginally above the highest price offered by the petitioners. In my opinion, this method adopted by the officials of respondent No.1 is patently irrational and the same runs contrary to the criteria prescribed in the Circular. Clause 7.1 of the Circular referred to above mandates that the highest license fees, offered by the tenderers, will be the prime- deciding factor for allotment of toilets maintenance contract subject to the other qualifying parameters. Indisputably, PF and ESI registrations is not included as one of the qualifying parameters. As noted above, this Court, in W.P.No.29118 of 2010, while considering Clause 7.1 held that the predominant purpose of prescribing marks is to exclude the tenderers from consideration, if they fail to get qualifying marks; that the marks will loose their relevance once more than one tenderer gets qualifying marks and that from that stage, it is obviously the price in the first instance and; where the price is equally quoted, the preference as envisaged in the tender notification will assume relevance. At the hearing, it has come out that even though this judgment was questioned in a Writ Appeal, the same is not either stayed or suspended. Having regard to the selection criteria referred to above, and the judgment of this Court in W.P.No.29118 of 2010, this Court has no hesitation to hold that the officials of respondent No.1 have committed a serious illegality in treating respondent No.5 as the only qualifying tenderer after eliminating the petitioners by purporting to rely on condition No.4 of the tender conditions. Since the petitioners have secured the minimum qualifying marks, they ought not to have been eliminated from further consideration. Considering the fact that there is huge disparity in prices offered by the petitioners on one side and respondent No.5 on the other, the question of giving preference to respondent No.5 by taking into account its registration with PF and ESI as the sole criterion is not in consonance with the qualifying criteria fixed by the Circular, as interpreted by this Court in the aforenoted Writ Petition. Unless the prices quoted by the petitioners and respondent No.5 are equal, the question of giving preference to respondent No.5 by eliminating the petitioners on the purported application of condition No.4 of the tender conditions, would not arise. For the above-mentioned reasons, this Court is of the considered opinion that the officials of respondent No.1- Corporation have failed to act in accordance with the qualifying criteria contained in Circular, dated 15-01- 2010, and ignoring the prices quoted by the petitioners, which, admittedly, are the highest, they have committed a patent illegality in awarding contracts to respondent No.5 after holding negotiations with it. In view of this Court’s finding on the first issue raised by the learned Counsel for the petitioner, it is not necessary for this Court to delve into the second contention advanced by him viz., the genuineness or otherwise of the certificates produced by respondent No.5. For the above mentioned reasons, the Writ Petition is allowed by holding that the award of contracts viz., maintenance of toilets in A & B class bus stations in Nalgonda District, in pursuance of tender notice, dated 25-10-2010, to respondent No.5 is illegal. Respondent Nos.1 to 3 are directed to consider the tenders of the petitioners in respect of 10 bus stations for the remaining period of contract and take a decision thereon in the light of the findings rendered in this judgment within a period of two weeks from the date of receipt of a copy of this order. As a sequel, WPMP.No.13675 of 2011, filed by the petitioners for interim relief, is disposed of as infructuous. ______________________ (C.V.Nagarjuna Reddy, J) 3rd November, 2011 Note: LR copy (B/o) LUR