THE HON'BLE SRI JUSTICE P.S.NARAYANA Writ Petition No.27553 of 2007 Date: 5th February, 2008 Between :- K.Surendra Babu and 3 others .. Petitioners And The singareni Colliers Company Ltd., Through its General Manager, Bhupalpally, Warangal District And another .. Respondents THE HON'BLE SRI JUSTICE P.S.NARAYANA Writ Petition No.27553 of 2007 ORDER:- Heard Sri L.Prabhakar Reddy, the learned Counsel representing the writ petitioners, Sri Nandigam Krishna Rao, the learned Standing Counsel representing R.1 and Sri Bhanu Prasad, the learned Counsel representing R.2. 2. The matter is coming up for admission. 3. On 24-12-2007 Sri Nandigama Krishna Rao had taken notice to get instructions and Sri Bhanu Prasad on 26-12-2007 entered appearance on behalf of R.2. Notice before admission was ordered on 26-12-2007. Counter affidavits are filed. 4. The Writ Petition is filed for a Writ of Mandamus directing the 1st respondent to consider tenders of the petitioners in a fair and reasonable manner for awarding the contract of outsourcing the multipurpose hospitality (unskilled staff) and civic maintenance inside the Hospital of Bhupalpally of Warangal District as per tender Proc.No.BHP/PD/01/99/E-182-2007 dated 15-11-2007 from among the tenderers and consequently declare the selection process adopted by the 1st respondent as illegal, arbitrary and set aside the selection of the 2nd respondent as successful tenderer ignoring the claims of the petitioners by the 1st respondent being arbitrary and illegal and pass such other suitable orders. 5. Sri L.Prabhakar Reddy, the learned Counsel representing the writ petitioners had taken this Court through the contents of the affidavit filed in support of the Writ Petition and would maintain that even if the comparative table furnished in the counter affidavit of R.1 if carefully examined, there is no reasonable basis at all to award contract in favour of R.2, hence the same required reconsideration. The Counsel also pointed out to the relevant provisions of the counter affidavit of R.1 and R.2 as well apart from the relevant provisions of the affidavit filed in support of the Writ Petition. The learned Counsel also had drawn the attention of this Court to clause 36 of terms and conditions and would maintain that even in the light of clause 36, the 1st writ petitioner would be entitled for consideration in any view of the matter. 6. In the affidavit filed in support of the Writ Petition, it is stated that the 1st respondent is a Government company registered under Companies Act and that the main object of the Company is mining in various places in the State of Andhra Pradesh. It is also stated that the 1st respondent called for tenders by Paper Notification dt. 20-11-2007 for the supply of unskilled staff for the maintenance inside the area of Hospital, Bhupalapally, which is known as ‘out- sourcing of multipurpose hospitality (unskilled) staff – 30 persons per day’ including civic maintenance inside the Hospital, Bhupalapally for a period of 2 years in proceeding Enq No.BHP/PD/01/99/E-182-2007 dated 15- 11-2007 and in pursuance of the said notification, the petitioners have purchased tender form individually, costing about Rs.3,375/- and submitted their respective tender forms along with other tenderers. It is further averred that as per the tender schedule, the tenderers are required to quote the rates as per rate schedule enclosed. Sl.No.1 of the schedule consists of staff payment inclusive of service tax, administration charges, pension contribution, and payment of wages as per Minimum Wages at Rs.125.42 ps. Per day per worker, as per circular of the Government and profit of contractor etc., per one muster per day. Col.No.2 consists of cost of consumable items per month in lumpsum per month. Along with tender schedule, every tenderer is required to pay Rs.75,000/- towards Earnest Mony Deposit (EMD)and after acceptance of tender, the successful tenderer has to furnish Bank guaranty worth 3% of order value, in addition to the already paid Rs.75,000/- EMD amount. It is also averred that the petitioner No.1 quoted the rates @ Rs.157.42 ps., in Col.No.1 and Rs.999/- at Col.No.2 of the rate schedule and he is the lowest tenderer. It is also stated that the petitioner No.2 to 4 also quoted their respective rates as shown in the Annexure which are not only reasonable but also practicable, in view of the specific conditions with regard to payment of minimum wages, as per condition No.36 of the tender schedule. It is also stated that along with the petitioners, there are many other tenderers including 2nd respondent and that the tenders were opened on 13-12-2007 in the prsence of the tenderers and the 2nd respondent tender was selected by the 1st respondent company in an arbitrary manner, who has quoted rates Rs.158.84 ps., as against Col.No.1 and Rs.1795/- as against colon.2 of the schedule annexed to the tender schedule, which is higher than that of 1st petitioner and which is not practical and impossible to perform. Further it is stated that the selection of the 2nd respondent as successful tenderer is highly arbitrary and illegal and that there is no reason or basis for ignoring the lower tender rates of the 1st petitioner who quoted less than that of 2nd respondent, if the rates alone is the criterion for selection of tenders. It is also further stated that the 1st respondent being a Government company cannot be allowed to act in a pick and chose manner and award contracts in favour of their vested interested persons, without even considering in a fair and reasonable manner, the other tenderers. It is further stated that the 1st respondent being a Government company cannot be allowed to act in a pick and choose manner and award contracts in favour of their vested interested persons, without even considering in a fair and reasonable manner, the other tenderers. There is also no justification in ignoring the claims of the petitioners who belong to local area of Bhupalapally Mandal, Warangal District and selecting the 2nd respondent who is a resident of Karimnagar District, which is altogether different District. The nature of tender work is only supply of unskilled staff which does not require any experience to the contractor and there is no preference whatsoever in this regard. Viewed from any angle there is no justification whatsoever, in selecting the tender of the 2nd respondent ignoring the claims of the writ petitioners who alone was called for negotiations for finalizing the award in a descriptive manner. It is also further stated that the petitioners are self employed and doing small contract works in and around the area of Warangal District and our villages come within the mining area which is situate at Bhupalapally. The petitioners also lost their lands for the purpose of mining and the acquisition proceedings are still pending as the 1st respondent-company had not paid just and reasonable compensation in respect of petitioners’ acquired land as early as in the year 1990. The petitioners are therefore entitled to be considered the petitioners claim in a preferential manner with that of outsider, being the land oustees. It is specifically stated that at the time of acquisition, the 1st respondent also promised to provide employment to the land oustees family members but they did not stick to their commitment totally thereby the petitioners also uprooted from their profession of agriculture and became unemployees who are eking out their livelihood by doing small contract works on their own, having lost the hope of getting employment with the 1st respondent-company. It is also further stated that a comparison of rates quoted by the tenderers will make it clear that the successful tender of the 2nd respondent is done in a totally arbitrary manner without any reason and the same is liable to be set aside. Earlier, the same work was given only for a period of three months and now it is being proposed for a long period of two years only to favour the 2nd respondent. Further it is stated that in the earlier tender, when the minimum wages were Rs.117.17 as per the Government circular, the tender was awarded at Rs.1,38,000/- inclusive of supply of consumable item which comes to approximately Rs.153.33 per day for supply of 30 unskilled workers for a period of three months. The said period of three months is coming to an end by this month. Thus, the rates quoted by the 2nd respondent at Rs.153.33 as per Col.No.1 of rate schedule is less than that of 20% of minimum amount which is impossible to perform. Knowing fully the 1st respondent had chosen and selected the 2nd respondent as successful tenderer for the reasons best known to him in a partisan manner. Further it is stated that after opening of tenders and after informing the 2nd respondent of selection as successful tenderer, the 1st respondent- company is proceeding to finalise and award tender after getting approval from the higher authorities from Kothagudem, in which event the petitioners will suffer grave and irreparable loss. At present, the work is being undertaken from the earlier contractor only. It is also further stated that as per the norms prescribed with regard to minimum wages, if a tenderer who quoted at Rs.162.04 ps., as against col.No.1 will be barest rate without inclusion of profit of the contractor and in respect of col.No.2, Rs.2400/- per month will be the lowest amount without including the profit of the contractor which is practicable for maintenance and for paying the minimum wages. Ignoring the said practicality, without fixing the minimum rates in the tender, the 1st respondent gave total option to the tenderer to quote their rates as per their whims and fancies, thereby making it easy to select the choice of their candidates. Therefore, the entire selection process is liable to be set aside being irrational and impracticable. About the irregularities in the selection made by the 1st respondent, there is also a news item published in the newspaper. In such circumstances, the writ petitioners approached this Court praying for the reliefs specified supra. 7. The counter affidavit filed by R.1 sworn to by the Superintendent Engineer (Purchase) R.1 company, Bhoopalpalli area, several averments had been denied. A specific stand had been taken that there had been no violation of any rule or regulation or rule having any statutory force by the respondents to attract the provisions of Article 226 of the Constitution of India and hence the Writ Petition is liable to be dismissed on this ground alone. It is stated that the Writ Petition had been filed by four petitioners contending that the 1st respondent had ignored the claims of the petitioners and acting arbitrarily and illegally with respect to tender dated 15-11-2007 pertaining to Out Sourcing the Multipurpose Hospitality (Unskilled Staff) and civic maintenance inside the Hospital of Bhupalpally of Warangal District. According to the petitioners, the 1st respondent is proceeding to finalise and award the tender after getting approval from the higher authorities in which event the petitioners will suffer grave and irreparable loss. Further it is stated that the Writ Petition is prematured and not maintainable in law as the petitioners are anticipating that 1st respondent is finalizing the tender though according to them approval from higher authorities is yet to be obtained. It is further stated that the petitioners had stated in their affidavit that 1st respondent has given total option to the tenderers to quote their rates as per their whims and fancies making it easy for selection of their candidates which is totally untrue and incorrect. Further it is stated that the petitioners having not challenged the tender process and having submitted himself the tender, upon an imaginative ground that he is not likely to be selected, cannot make this wild and vague allegations. It is not open for the petitioner without proof or evidence to attribute such wild allegations which are totally untrue and incorrect. It is further stated that in order to invoke undue sympathy, the petitioner had made these allegations by stating that there is news item in the newspaper without giving any details or enclosing a copy of the same. It is also averred that the earlier contract was awarded for a period of three months as per the rates prevailing at that time. The present tender was issued, the period of which was mentioned as two years. Further it is stated that the allegation of the petitioners that the rates quoted by the 2nd respondent is at Rs.153.33 ps., is not correct. In fact, the 2nd respondent had quoted Rs.158.84 ps., whereas the 1st petitioner has quoted Rs.157.42 ps., which is less than the minimum wages under Minimum Wages Act. As far as the present tender is concerned, the petitioners or the respondents or in that matter any successful tenderer should quote a rate which is inclusive of not only the minimum wages but also the statugory payments which they have to incur once the work is awarded. Assuming the rate quoted by the tenderers is less than the amount which is inclusive of minimum wages and statutory charges, it is practically impossible to perform the contract without adopting some dubious methods as no contractor can quote a rate which is less than the expenses he has to incur. In this regard, the rate quoted by the 1st petitioner is Rs.157.42 ps., and the rate quoted by the 2nd respondent is Rs.158.84 and naturally the rate quoted by the 2nd respondent is higher than the rate quoted by the 1st petitioner. In this regard, a reading of clause-36 clearly discloses that tenderer should quote the minimum wages, CMPF/EPF plus Service Tax. In this regard, the minimum wages has been mentioned as Rs.125.42. The CMPF/EPF comes to Rs.15.95 ps., and the Service Tax comes to Rs.17.47 which in total comes to Rs.158.84. The extract of Clause-36 is as follows:- “36. The contractor should follow all statutory rules, regulations, applicable laws etc., and statutory requirement related to Government licenses, workmen compensation, insurance, CMPF/EPF, including minimum wage act. The tenderer should quote the Minimum Wages, CMPF/EPF (Employers Contribution) and Service Tax etc., (The present minimum wages for unskilled persons are Rs.125.42 per day vide circular No.CRP/PER/IR/M/361/5174, dt.14-7-2007 & % of CMPF/EPF is 12.72% on basic including Pension contribution & admn. Charges, Service Tax is 12.36% including educational cess).” Thus, it can be seen from the above that the petitioner No.1 by quoting Rs.157.42 is practically and clearly less than minimum amount he has to incur per worker and hence it is a rate which is totally unworkable in law. The 2nd respondent however has quoted a rate which is equal to the expenditure which he has to incur and if it is compared to the 2nd to 4th petitioners, it is the lowest. In this regard, the 2nd petitioner had quoted Rs.160.25 ps., 3rd petitioner has quoted Rs.159.93 and the 4th petitioner has quoted Rs.169.41 which are all higher as compared to 2nd respondent who has quoted Rs.158.84 ps. Thus, assuming the higher authorities accord approval to the 2nd respondent, it will be beneficial to the 1st respondent. Further it is stated that there is another significant feature in the contract that there are nearly 23 participants who had purchased the tender schedules and for non- submission of EMD one of the participants case was not taken into consideration leaving 22 participants in the field. Of these, nearly 7 tenderers were disqualified because they did not even quote the minimum wages. However, a perusal of the rates given by the various participants clearly shows that like the petitioner who has quoted Rs.157.42, others viz., Sri S.Venkanna quotd Rs.149.49 ps., Chand & Sons Trading Co., quoted Rs.149.99 ps., and 3others who also quoted less than the petitioner and were not taken into consideration. A detailed chart is placed below which clearly shows that the respondent company has rightly process the entire tenders and is waiting approval from the competent authority before awarding the work to the successful tenderer. Sl. No. Name of the contractors/ Firm name Rate One Muster/Shift/day Cost of Consumables Lumpsum Amount per Month 1. S.Venkanna Bhupalpalli 149.99 L1 1699.99 L3 2. Chand & Sons Trading C o . Suppliers, Nagapalli (village) Centinary Colony 149.99 L2 1999.99 L7 3. Md.Chote Miya Ghanpur 155.87 L3 4200.20 L17 4. B.Thirupathi Reddy Bhupalpalli 156.87 L4 3000.00 L14 5. B.Venkanna, Subhash Colony, Bhupalpalli 156.87 L4 1897.00 L6 6. K.Surendra Babu, Reddy Colony, Bhupalpalli 157.42 L5 999.00 L1 7. Ch.Ramesh Kasimpalli Bhupalpalli 158.19 L6 3000.00 L4 8. M/s.Mallikarjuna Engg. Contractor, Godavarikhani 158.84 L7 1795.00 L4 9. B.Kumara Swamy, Jangedu, Bhupalpalli 159.93 L8 1233.18 L2 10. Kotha Haribabu, Khashimpally, Bhupalpalli 160.25 L9 3720.00 L16 11. Gorkha Security Contractor Force & T.C., Goleti 160.72 L10 2200.00 L8 12. Burra Chandraiah contractor, Bhupalpalli 161.09 L11 2500.00 L11 13. K.Shyam Kumar, Civil Contractor Centinary Colony 162.99 L12 8765.00 L19 14. R.Shankaraiah Bhupalpalli 163.14 L13 11666.66 L21 15. S.Sripathi Rao Bhupalpalli 165.5 L14 9998.50 L20 16. Gudepu Raghu Bhupalpalli 166.27 L15 2999.79 L13 17. S. Madhu Kundurapalli Pulluri Ramaiahpalli Bhupalpalli 166.27 L15 3099.00 L15 18. Tati Ashok Jangedu, Bhupalpalli 169.41 L16 2498.40 L10 19. Kasagoni Sammaiah, Jangedu Bhupalpalli 169.42 L17 2400.00 L9 20. M.Ravinder Reddy Bhupalpalli 169.59 L18 2700.00 L12 21. G. Narayana & Brothers, Gouthaminagar, FCI 174.69 L19 1800.00 L5 22. Kosagani Thirupathi Subash Colony, Bhupalpalli 4806.10 L20 5000.18 L18 23. M/s.Sandhya Constructions, Fertilizer City. NO EMD. That apart, the petitioners ought to have approached the respondent company if they have any issue to be resolved as per Clause-46 of Tender Schedule, which is extracted below: “46. In all the cases, the decision of the company shall be final. However, in case of any unresolved dispute, the same can be resolved in the Courts of Parkal town, Warangal District in the State of Andhra Pradesh having jurisdiction to deal with and decide whatsoever arising out of the contract.” It is stated that in the light of the above clause, the present Writ Petition is also not maintainable in law. 8. In the counter affidavit filed by 2nd respondent, it is stated that pursuant to the paper publication dated 20-11- 2007 for supply of un-skilled staff for internal maintenance of Hospital at Bhupalpalli, which is known as “Out- sourcing of Multipurpose Hospitality (un-skilled)” and that the 2nd respondent submitted his tender forms by purchasing the same from the Office of the 1st respondent and that as per clause 36 of the tender conditions, tenderer has to quote the rate as per the Minimum Wage prescribed by the Government as per circular No.CRP/PER/IR/M/361/5174 dated 14-7-2007. It is also stated that the prescribed Minimum Wage per day is Rs.125-42 ps., and the other charges of CMPF/EPF is 12.72% on Basic including pension contribution and administration charges, service tax is 12.36% including educational cess. Therefore, in all it comes to, when it is worked out at Rs.158.84 ps., and that they are also supposed to quote the rate for consumables like Acid, Phenyle etc., and that the 2nd respondent quoted Rs.1795.00 ps., and that the authorities are bound to consider mainly the rate quoted for each labourer and if any tender is filed below the Minimum Wage, the same will be rejected as disqualified as per tender conditions. Further it is stated that along with the 2nd respondent, 21 others have filed their tenders, therefore, in all 22 tenderers have been applied and participated for the works in the said auction. Further it is stated that out of 22 tenderers, 8 applications were rejected as disqualified since they offered below the Minimum Wage prescribed and that the 1st petitioner is one such person, whose tender was rejected and the other three writ petitioners have offered their tender more than the rate quoted by him. Further it is stated that out of the 14 tenderers, the 2nd respondent was the first eligible tenderer, as he quoted the exact Minimum Wage prescribed under the circular referred to in the tender schedule and that the others have quoted more than the price quoted by him. It is also averred that out of the 14 tenderers, the price quoted by the 2nd respondent is the lowest one and it is exactly the Minimum Wage prescribed. It is also further averred that the 2nd respondent quoted the rate without having any profit motive and that he had been carrying out different kinds of works, there are number of unskilled labourers with him and that if he do not put them in any work, he had to spend from his own pocket to met their day to day wages and other requirements and that he can’t maintain the labour at least for a period of one week without having any work. Further it is stated that in order to provide work to the and to see that he should not be put to loss due to lack of work to the labour, he had quoted the exact Minimum Wage and that therefore, the price quoted by him is less when compared to the other tenderers. It is further stated that the 2nd respondent was selected for interview and negotiations and the work order is not yet been given to him and also stated that the writ petitioners have filed this Writ Petition on mere apprehension without there being any work order in his favour. Further it is stated that the writ petitioners are mainly seeking relief on sympathetic grounds, stating that they belong to Bhupalpalli area and that they lost their lands in acquisition for mining purposes and that they should be given preferential treatment when compared to 2nd respondent, as be belongs to Karimnagar District and that this can’t be a ground to entertain the Writ Petition and to grant any relief in favour of the writ petitioners, as there is no such condition in the tender schedule. That a part, the law doesn’t recognize in matters relating to public auction to give such kind of preferential treatment to the local tenderers, as it is opposed to public policy. Further it is stated that the Writ Petition itself is liable to be dismissed for mis-joinder of parties. In fact, the 1st petitioner whose tender was rejected on the ground of disqualification, he did not choose to challenge the rejection order made by the 1st respondent and that the other writ petitioners No.2 to 4 have quoted more than the price offered by him and therefore, their applications were not accepted. However, a person whose tender was rejected on the ground of disqualification and the other writ petitioners who quoted higher price, have joined together and filed a common Writ Petition and the same is bad in law. It is also averred by the 2nd respondent that the averment that the 1st petitioner quotd Rs.157.42 ps., at column No.1 and Rs.9.00 ps., at column No.2 of the rate schedule and he is the lowest tenderer and the other petitioners quoted their respective rates and they are not only reasonable but also practicable is incorrect and false and also further averred that the 1st respondent is at liberty to decide which price is reasonable and practicable for carrying out the works in a particular tender. It is also further averred that simply because, writ petitioners felt that the price quoted by them is reasonable and practicable, they can’t find fault with the decision taken by the 1st respondent and that in fact, the tenders of the writ petitioners were also considered along with his tender by the 1st respondent and found that the price quoted by him is the lowest from among the other eligible tenderers and therefore, he had been selected for negotiations and that therefore, there is no truth in the averment that the tenders of the writ petitioners were not considered at all and that the in such circumstances, the Writ Petition to be dismissed. 9. On a careful reading of the terms and conditions which had been referred to Clause-36 and also Clause-46 of the tender schedule and also on a careful scrutiny of Serial No.6, 8, 9, 10 and 18 of the Comparative Table, which had