M/S. Sangeeta Manpower And Security Solutions vs. The State Of Telangana

Held

The Court held that the District Outsourcing Committee had the administrative discretion, traceable to G.O. Rt. No. 4459 dated 27.12.2006, to grant relaxation in procedural matters if satisfied with the financial soundness and operational capability of an applicant agency. The Court found that this discretion was exercised uniformly and in good faith, without any selective extension or mala fide intent. Regarding the retrospective operation of the proceedings dated 20.08.2025, the Court held that it was merely an administrative measure to synchronize the empanelment period with the financial year and maintain continuity of services, and this procedural alignment did not confer undue benefit or vitiate the selection process. The Court concluded that the petitioners failed to establish any arbitrariness, illegality, procedural impropriety, or mala fides in the empanelment process. Their contracts for the previous financial year had expired, and they had no vested right for continuation or renewal. The doctrine of legitimate expectation could not be invoked. Therefore, the Court found no reason to interfere with the impugned proceedings.

Facts

The petitioners, various manpower and security solution providers, challenged the empanelment of respondent agencies (Nos. 12 to 17) for outsourcing services for the financial year 2025-26. The petitioners had participated in the tender process and were initially included in the empanelled list. Their grievance was that respondents 12 to 17 were empanelled despite lacking mandatory qualifications, specifically regarding financial turnover and statutory compliance. The petitioners alleged that the District Outsourcing Committee (2nd respondent) illegally allowed these agencies to furnish alternative proof of financial capacity, such as bank guarantees or GST turnover certificates, instead of conventional auditor-issued turnover certificates. The petitioners sought to set aside the empanelment and allocation orders issued in favour of respondents 12 to 17 and to continue their own services.

Key Issues

1. Whether the District Outsourcing Committee acted arbitrarily and illegally by permitting respondent agencies to furnish alternative proof of financial capacity (bank guarantees or GST turnover certificates) instead of mandatory requisite qualifications as per the tender notice? 2. Whether the retrospective operation of the empanelment and allocation proceedings dated 20.08.2025, effective from 01.04.2025, is valid? Petitioner's arguments: The petitioners contended that the empanelment of respondents 12 to 17 was illegal and arbitrary as they did not possess the mandatory requisite qualifications as per the tender terms. They argued that the District Outsourcing Committee violated G.O. Rt. No. 4459 dated 27.12.2006 and G.O. Rt. No. 4271 dated 01.11.2008, and Articles 14, 19, and 21 of the Constitution of India by accepting alternative financial proofs. They also sought to continue their services. Revenue's arguments: The respondents argued that the empanelment period for the financial year 2024-25 had expired, and there was no legitimate expectation of renewal. They maintained that the petitioners voluntarily participated in the subsequent tender process and were therefore estopped from challenging it. They asserted that there was no violation of tender conditions, statutory provisions, or constitutional safeguards, and that the empanelment and allocation orders were issued in the ordinary course of administrative procedure.