THE HON’BLE Ms. JUSTICE G. ROHINI Writ Petition No. 16505 of 2010 Dated: 11.08.2010 Between: M/s . Vashist Security & Allied Services, D.No.1-3-778/1, Kavadiguda, Hyderabad, Rep. by its Proprietor, Authorised Signatory R. Surya Prakash … Petitioner And The Andhra Pradesh Health & Medical Housing And Infrastructure Development Corporation, Hyderabad., and 2 others. … Respondents THE HON'BLE MS JUSTICE G.ROHINI WRIT PETITION No. 16505 of 2010 O R D E R : This writ petition is filed seeking a declaration that the action of the 1st respondent - A.P. Health & Medical Housing and Infrastructure Development Corporation (hereinafter referred to as ‘the respondent Corporation) – in issuing tender notice No.2-2/APHMHIDC/2010-11, dated 25.05.2010 so far as items 6 and 7 therein are concerned is arbitrary and illegal and consequently to set aside the same. It is stated that the 1st petitioner was awarded a contract on 31.12.2001 to provide manpower for maintenance of sanitation in the 2nd respondent hospital (Government Hospital for Mental Care, Erragadda) for a period of two years. Similarly the 2nd petitioner was awarded contract to maintain the sanitation work in the 3rd respondent hospital – Government General and Chest Hospital, Hyderabad. It is pleaded that the contract granted to the 1st petitioner is valid upto 31.12.2011 whereas the 2nd petitioner’s contract though expired on 30.11.2009, by proceedings of the 3rd respondent dated 27.11.2009 it was extended from 1.12.2009 until further orders. While so, the respondent Corporation issued the impugned tender notice dated 25.05.2010 inviting bids on the e-procurement platform for the outsourcing of sanitation services in the Government Hospitals in the State. The said tender notice included the Government Hospital for Mental Care, Erragadda and Government General and Chest Hospital, Hyderabad as items 6 and 7 respectively in respect of which the petitioners are holding the contract at present. The last date for receipt of tenders was fixed as 14.07.2010 up to 5.00 p.m. The technical bids were scheduled to be opened on 14.07.2010 and the price bids were scheduled to be opened on 19.07.2010 after completion of technical evaluation. The duration of contract is three years, which is extendable for the next year at the discretion of the Managing Director of the respondent Corporation subject to satisfactory performance which will be evaluated by a team of Officers from the Organization of the Corporation. Contending that the action of the respondents in including the hospital in respect of which the 1st petitioner is entitled to continue till 31.12.2011 and the Chest Hospital in respect of which the 2nd petitioner is entitled to continue until further orders as per the extension granted, without issuing any notice to the petitioners informing about the cancellation of their respective contracts is arbitrary, illegal and in violation of principles of natural justice, the present writ petition is filed. It is also contended that the impugned action of the respondents in inviting tenders for providing sanitation services to the 10 hospitals as single unit prescribing that the intending bidder should have a turnover of Rs.2 Crores during the financial year 2008-2009 or 2009-2010 in providing sanitation services is impossible of compliance by any of the registered outsourcing agencies existing in the state of Andhra Pradesh is arbitrary and illegal since the same would result in eliminating the small outsourcing agencies of the State. In the counter-affidavit filed on behalf of the Corporation, it is stated that the Government of Andhra Pradesh introduced a Sanitation policy under G.O.Ms.No.99, HM & FW (M2) Dept., dated 5.5.2010 contemplating uniform sanitation standards/procedures in all its Hospitals in the State i.e., all teaching hospitals under the control of Director of Medical Education, including the Speciality teaching hospitals, the 3 Semi-Autonomous Rajiv Gandhi Institution of Medical service at Kadapa, Adilabad and Srikakulam and all the 17 District Hospitals and 58 Area Hospitals of Andhra Pradesh Vaidya Vidhana Parishad. In furtherance of the aforementioned policy the Government also issued model terms and conditions for outsourcing sanitation services in its hospitals. The respondent herein in terms of the said policy guidelines invited tenders on the e- procurement platform for outsourcing of sanitation services in Government Hospitals vide its notice No.2/APHMHIDC/2010-11, dated 25.5.2010. It is stated that the eligibility criteria mentioned in the Bid Document are prescribed to meet the policy guidelines of the Government / directions issued under G.O.Ms.No.99, dated 5.5.2010. It is further explained that though the Government was spending more than Rs.50.00 Crores every year on account of Sanitation & House Keeping in Hospitals and, it was not able to achieve desired sanitation standards. It is further submitted that in some cases within the same District, the hospitals have awarded contract at different rates without there being any scientific criteria. The Government considering all the above anomalies, issued the present policy by contemplating the District as one unit. Clause 2.1.3 under which the bidder should have a turnover of Rs.2 Crores has been prescribed considering the financial implications in executing the work at each unit i.e., the District and that the allegation that the said condition was imposed to eliminate some of the participants is baseless. So far as Clauses 2.1.2 and 2.1.3 are concerned, it is explained that the said clauses are mandatory for the purpose of successful execution of the works and the contention of the petitioner that they are contradictory to each other apart from being contrary to G.O.Ms.No.99, dated 5.5.2010 is untenable. While pointing out that the tenders invited under the impugned tender notice are global tenders and are not confined to the State of Andhra Pradesh, it is extended that there are number of Government and Private organizations where the sanitation outsourcing services are in progress in such large magnitude. The contention of the petitioner that Clause 2.4.1 is arbitrary has also been categorically denied. It is stated that it was decided by the Government to implement its new sanitation policy w.e.f. 1.10.2010 and that the existing outsourcing arrangements will continue till the expiry of the agreements or till 30.09.2010 whichever is earlier and that the existing outsourcing agreements would be terminated after giving due notice. I have heard the learned counsel for both the parties and perused the material available on record. It is a settled principle of law that the State or its Instrumentalities can choose their own terms of Invitation to Tender. 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. As held in a catena of decisions that the term of Invitation to Tender are not open to the judicial scrutiny, the same being in the realm of the contract. The Courts will not strike down the terms of the tender merely because some other terms would have been fair or logical. The interference is warranted only where the Court is of the opinion that the terms are arbitrary, discriminatory, mala fide or actuated by bias. As could be seen from the material available on record, the Government of Andhra Pradesh, having found it necessary to bring significant reform in the matter of sanitation in Government Hospitals, formulated a new sanitation policy under G.O.Ms.No.99, Health, Medical and Family Welfare (M.2) Department, dated 05.05.2010. It was found by the State Government that though over Rs.50.00 Crores was being spent under different heads for the purpose of maintenance of sanitation in the hospitals and teaching colleges falling under the Commissioner, A.P. Vaidya Vidhana Parishad and Director of Medical Education, the sanitation work in the hospitals was defective causing severe inconvenience, discomfort and hardship to the patients, their attendants and also the medical staff at the hospitals. It was also found that problems like inadequate sanitation staff, not cleaning at regular intervals, lack of proper supervision over the sanitation staff and non-standardization of cleaning procedures and material are resulting in unhygienic atmosphere. As there is no uniform procedure across the hospitals in respect of managing the sanitation, the Government decided to introduce a new sanitation policy in order to maintain satisfactory conditions of sanitation and hygiene within the hospital buildings and premises at all times adopting appropriate levels of quality standards. One of the salient features of the new sanitation policy is that the district shall be the unit for the purpose of calling tenders which would result in economy of scale and administrative convenience in supervision, payments, etc. The terms and conditions of the model bid document have also been mentioned in G.O.Ms.No.99, dated 5.5.2010 specifying the number of times each category of areas are to be cleaned and the materials to be used for cleaning. The Agency has also been made responsible for disposal of normal waste and bio-medical waste apart from cleaning the entire area in the hospitals as well as drainage and sewerage. It is also relevant to note that Clause 4.1 (iv) of Section-III (Conditions of Contract) of the Bid document mentioned that the prices quoted are inclusive of supply of chemicals specified for cleaning and lifting and disposal of normal waste and bio-medical waste as specified in the document. The scope of work and the schedule of quantity have been specified in detail in the Bid Document. Having regard to the various aspects explained in the counter-affidavit, it is clear that Clause 2.1.3 which requires that the bidder should have a turnover of Rs.2 Crores during the financial year 2008-2009 or 2009-2010 in providing sanitation services has been prescribed to achieve the laudable objects sought to be achieved under the new sanitation policy. Hence there is absolutely no reason to hold that Clause 2.1.3 prescribed by the respondent Corporation is arbitrary or irrational nor it can be held that the same is prescribed to eliminate participation of the agencies in the State. The said clause also cannot be held to be unreasonable or without any nexus with the object sought to be achieved under the new sanitation policy vide G.O.Ms.No.99, dated 5.5.2010. There is also nothing on record to infer any mala fide design on the part of the respondent Corporation to favour any particular agency or to eliminate the petitioner. Hence the contention that Clause 2.1.3 is arbitrary and illegal is untenable and cannot be accepted. However, the further contention raised by the petitioners in the present case is that as the contract in their favour is subsisting till 31.12.2011, it is not open to the respondents to invite the tenders so far as the two hospitals in respect of which they are holding the contract. At the outset, it is to be noticed that the contract granted to the 2nd petitioner in respect of the sanitation services in Government General and Chest Hospital, Hyderabad which is notified at Item No.7 of the impugned tender notice had expired on 30.11.2009 itself and as on today the 2nd petitioner is continuing pursuant to the order of the 3rd respondent dated 27.11.2009 extending its contract until further orders. Hence the 2nd petitioner cannot claim any right as such to continue as per his choice. Therefore the impugned action of the 1st respondent in proposing to grant a new contract for sanitation services in the Government Chest Hospital w.e.f. 1.10.2010 cannot be found fault with on any ground whatsoever. So far as the 1st petitioner is concerned, it is true that the contract in its favour is valid upto 31.12.2011. However, having regard to the fact that the impugned tender notice has been issued pursuant to a policy decision to award the contract for providing sanitation services by taking the District as one unit contemplating uniform sanitation standards in all the hospitals in the State, particularly in view of the fact that the said policy decision has been taken in larger public interest to maintain satisfactory conditions of sanitation and hygiene adopting appropriate levels of quality standards, it is not open to the petitioner to challenge the impugned tender notice only on the ground that it would result in termination of his existing contract. The policy decision is not challenged by the petitioner. Even assuming that such termination would cause hardship to the petitioner, implementation of the policy decision taken in the larger interest of public warrants no interference by this Court. As a matter of fact, the terms and conditions of the contract in favour of the 1st petitioner are not governed by any statute as such. Moreover, no allegations are made in the writ petition attributing mala fides to the respondents. Hence the interference by this Court in exercise of the writ jurisdiction under Article 226 of the Constitution of India is not warranted. However, this shall not preclude the petitioner to avail the appropriate remedy available under law for damages or any other appropriate relief before the proper forum. It is also made clear that the 1st petitioner’s contract should not be terminated without following due process of law. The Writ Petition is accordingly disposed of with the above observations. No costs. _______________ G. ROHINI, J. Dt. 11.08.2010 gbs