IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE THIRTIETH DAY OF DECEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE C.V.RAMULU WRIT PETITION NO : 13037 of 2008 Between: M/s. TRF Limited, a company incorporated under the provisions of Indian Companies Act, 1956 having its regional office at 601, Paiga Plaza, Basheerbagh, Hyderabad, rep. by its Chief Regional Manager, Mr.S.A.Abbas. ..... PETITIONER AND 1 M/s. A.P.GENCO Viuyut Soudha, Hyderabad -82. 2 The Managing Director, M/s. A.P.GENCO Viuyut Soudha, Hyderabad -82. 3 The Chairman, M/s. A.P.GENCO Viuyut Soudha, Hyderabad -82. 4 The Director Projects, M/s. A.P.GENCO Viuyut Soudha, Hyderabad - 82. 5 Chief Engineer (TPC), M/s. A.P.GENCO Viuyut Soudha, Hyderabad - 82. .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to grant an order, direction or writ, more so in the nature of writ of mandamus, declaring the action of the first respondent in canceling the tender issued under tender specification No. PCT-R5/07-08 in December, 2007 vide Lr dt. 30.5.2008 calling for tenders for the design, engineering, manufacture, supply, testing at manufacturer's works, inspection, packing, forwarding, transit, insurance, delivery at site, erection, testing and commissioning of coal handling plant with all accessories and 12 months operation and maintenance as illegal, arbitrary and violative of Article 14 of the Constitution of India and consequently set aside the same and direct the respondents to re-instate the tendering process with the petitioner herein and award the contract of design, engineering, manufacture, supply, testing at manufacturer's works, inspection, packing, forwarding, transit, insurance, delivery at site, erection, testing and commissioning of coal handling plant with all accessories and 12 months operation and maintenance of the coal handling plaint issued under tender specification No.PCT-R5/07-08 in December, 2007. Counsel for the Petitioner:MR.R.RAGHUNANDAN Counsel for the Respondents: MR.K.CHIDAMBARAM (SC FOR AP GENCO) The Court made the following : THE HON’BLE SRI JUSTICE C.V. RAMULU W.P. No. 13037 of 2008 O R D E R: This writ petition is filed seeking a Mandamus declaring the action of the 1st respondent in canceling the tender issued under tender specification No. PCT-R5/07-08 in December, 2007 vide Letter dated 30.5.2008 as arbitrary, illegal and violative of Article 14 of the Constitution of India; consequently to set aside the same and direct the respondents to re-initiate the tendering process with the petitioner and award the contract to it. The case of the petitioner is that for the purpose of establishing coal handling plant, the 1st respondent issued tender specification bearing No.PCTR5/07-08 in December, 2007 calling for tenders for the design, engineering, manufacture, supply, testing at manufacturer’s works, inspection, packing, forwarding, transit, insurance, delivery at site, erection, testing and commissioning of coal handling plant with all accessories and 12 months operation and maintenance. Pursuant to the same, though several organizations were interested in participating in the tender process, at the stage of filing of bids there were only two tenderers, namely, the petitioner and M/s. Techpro. The said M/s. Techpro was also disqualified at the pre-qualification stage and the petitioner was the sole tenderer for the contract. After the analysis, the price bid was opened on 28.4.2008 and the petitioner was called upon by 1st respondent to attend a meeting with the officials of 1st respondent on 28.4.2008 for the post bid clarifications. The petitioner accepted, unconditionally, all the clarifications raised by 1st respondent and also agreed to give discount of Rs.65.00 lakhs on the tender price. The variations were referred to the consultants – M/s. DESEIN Consultants as well as the Technical Scrutiny Committee – and both of them have agreed, in principle, for the change of technical specifications and accepted the discount offered by the petitioner. The technical consultants arrived at a figure of Rs.75 crores excluding the taxes, duties etc. The petitioner quoted a price of Rs.99.95 Crores inclusive of all taxes and duties. Thereafter, the technical scrutiny committee, after taking into consideration the taxes etc. estimated the tender at Rs.102.482 Crores and the evaluated price with the alternative proposal for alternative specifications was estimated at Rs.101.853 Crores. Thus, the price quoted by the petitioner is almost at par with the evaluated price. However, the petitioner received a letter issued by 1st respondent dated 30.5.2008 informing that the tender had been cancelled. The grievance of the petitioner is that the persons who could not participate in the tender due to non-possessing of requisite experience in undertaking such projects have prevailed upon 1st respondent and its officials to scuttle this tender to enable the first respondent to change the pre-qualification requirements and to enable the unqualified persons also to participate in the next round of tendering. The cancellation of the tender for the coal handling plant without assigning any reason and without any just cause is highly arbitrary and violative of Article 14 of the Constitution of India. Hence, this writ petition. The respondents have filed counter affidavit denying the allegations made by the petitioner. Though they have admitted that the petitioner has quoted Rs.99.95 Crores for execution of the entire package and offered a discount of Rs.63 lakhs in view of minor technical deviations from original specification, it is stated even prior to opening of the price bid of the petitioner, M/s. Desein Pvt. Ltd., New Delhi, Technical consultants for the project have furnished the revised estimate for the subject tender vide their letter dated 19.4.2008, fixing revised estimate @ Rs.75 Crores. The original estimated price furnished by the consultants during October 2007 was Rs.45 Crores. There is an increase of 30 crores (66%) within a span of five months. The subject proposal was put up for consideration of the Board of A.P. Genco, which has opined that the price quoted by the bidder is on very high side than the original estimated price of Rs.45 crores and refused to accept the proposals and cancelled the tender by directing to re-tender the subject work by relaxing the tender conditions so as to have more competition. In view of the said decision of the Board, vide letter dated 14.5.2008 the petitioner was informed about the cancellation of the tender and the EMD was also returned. As the petitioner was still pursuing vide letters dated 17.5.2008 and 28.5.2008, it was informed vide letter dated 30.5.2008 that the tender had already been cancelled and no further correspondence would be entertained. The allegation made by the petitioner that the tender has been cancelled for extraneous reasons and to accommodate persons who were not qualified is also denied and it is stated that the tender was cancelled only on account of exorbitant price quoted by the petitioner over and above the estimated price and in the public interest. Learned senior counsel Sri D. Prakash Reddy, appearing for the petitioner, strenuously contended that the petitioner quoted a price of Rs.99.95 Crores inclusive of all taxes and duties and, in fact, the technical consultant of the respondent-Board arrived at Rs.75.00 Crores excluding the taxes and duties. Thus, if the taxes are included, it would come to the same figure as was quoted by the petitioner i.e. Rs.99.95 Crores (round about Rs.100 Crores). In fact, the technical scrutiny committee, after taking into consideration the taxes etc., estimated the tender at Rs.102.482 Crores and evaluated the price with alternative proposal with alternative specifications, at Rs.101.853 Crores. Thus, the price quoted by the petitioner is almost at par with the evaluated price. Therefore, there was no necessity for cancellation of the tenders, looking from any angle. Learned senior counsel further contended that only to prefer some 3rd parties who are disqualified in the original tender, the tender conditions are relaxed and the respondent-Board has taken decision to re-tender the subject work and this is sought to be justified by saying that there will be more bidders to obtaincompetitive price; otherwise, there was no necessity of canceling the tender offered by the petitioner, particularly, when it was recommended by the Committee to the respondent-Board. Therefore, the action of the respondents in canceling the earlier tender is arbitrary and illegal. On the other hand, learned counsel for the respondent- Board Sri K. Chidambaram reiterated the same stand as was taken in the counter and submitted that the contention of the petitioner that the tender was cancelled to suit certain disqualified persons etc. is all imagination, unfounded and baseless. Even if the technical consultant and the technical committee had recommended for acceptance of the tender of the petitioner, it is not obligatory on the part of the respondent-Board to do so. Admittedly, there was only one tenderer who remained qualified i.e. the petitioner; therefore, only to have transparency and to have more bidders in order to obtain competitive price, the same was cancelled and decision was taken to re-tender the subject work. The writ petition is devoid of merits and liable to be dismissed. I have given my earnest consideration to the respective submissions made by the learned counsel on either side, perused the impugned order and other material available on record. Admittedly, the petitioner quoted Rs.99.95 Crores for execution of the entire package and also offered a discount of Rs.63.00 lakhs in view of minor technical deviations from original specifications. The price was evaluated at Rs.102.482 Crores after including the cost of certain items which shall be supplied free of cost to the contractor as per the specifications and the said price was evaluated at Rs.101.853 Crores after deducting the discount of Rs.63.00 lakhs offered by the petitioner. The technical consultant for the project had sent the revised estimate for the subject tender, vide letter dated 19.4.2008, estimating the price at Rs.75.00 Crores, excluding the taxes. Further, the technical committee also recommended for acceptance of the bid by the respondent-Board. Therefore, as is submitted by the learned senior counsel appearing for the petitioner, the fact that the price quoted by the petitioner is almost at par with the evaluated price, cannot be doubted and disputed. Thus, it cannot be said that the price quoted by the petitioner was exorbitant and over and above the estimated price, therefore, the tender was cancelled in the public interest. Further, absolutely there are no reasons furnished for cancellation of the tender except saying that on 14.5.2008 the petitioner was already informed that the tender was cancelled and no further correspondence can be entertained in the matter. However, in the counter affidavit, the respondents sought to justify the cancellation on the ground that to have more bidders to obtain competitive price and since the petitioner was the only party qualified and available as per the tender conditions, the earlier tender was cancelled and decision was taken to re- tender the subject work by relaxing the tender conditions. From this, what needs to be gathered is that there is some sort of extraneous consideration for canceling the tender and seeking to re-tender the subject work by relaxing the tender conditions, making the already disqualified persons eligible for being participated in the fresh tenders. Therefore, the needle of suspicion indicates rather shrowds against the course of action adopted by the respondents in canceling and splitting the tender and inviting fresh tenders. In the above circumstances, the writ petition is disposed of directing the respondents to re-consider the case of the petitioner without reference to the impugned order of cancellation dated 30.5.2008, taking into account all the circumstances into consideration, namely, offer made by the petitioner, advise of the technical consultant and the technical committee to the respondent-Board, particularly, in the light of the fact that the price quoted by the petitioner is almost at par with the evaluated price. The respondents shall take up this exercise and complete the same within four weeks from the date of receipt of a copy of this order and communicate the same to the petitioner. Till such time, the tenders, if any, called for shall not be finalized and given effect to. The writ petition is accordingly disposed of. No order as to costs. C.V. RAMULU, J. Date: -12-2008. MVB.