Babu Jagjeevanram Sc Pipelines Buildings vs. The State Of Telangana

Held

The Court held that the 6th respondent had furnished a bank guarantee for Rs. 30,00,000/- along with valid registrations under ESI, EPF, Labour, and GST Acts prior to the finalization of the empanelment list. The District Level Selection Committee, exercising its administrative discretion under G.O.Rt.No.4459, accepted the bank guarantee as adequate proof of financial capacity in lieu of a turnover certificate. This discretion was found to be traceable to Clause 6 of the tender terms and the powers vested in the District Collector. The Court found no material to substantiate the petitioner's allegation that this relaxation was extended selectively or for extraneous considerations, noting that similar relaxation was uniformly extended to other similarly-placed applicants. The Court also held that the petitioner's past performance did not create a vested right for contract renewal, as empanelment is an annual administrative exercise. The Court concluded that the 6th respondent possessed all necessary statutory registrations and submitted a valid bank guarantee, and the procedure followed was consistent with the practice adopted for all applicants. Therefore, the Court found no procedural irregularity, illegality, or mala fide in the inclusion of the 6th respondent and the subsequent allotment of work. The Writ Petition was dismissed.

Facts

The petitioner, Babu Jagjeevanram SC Pipelines Buildings, Electricals, Paintings and Sanitory Labour Contract Cooperative Society Ltd., is an empanelled outsourcing agency that had been providing services to the Government General Hospital, Suryapet. Their contract expired on March 31, 2025. A fresh tender notification was issued on June 13, 2025, for the financial year 2025-26. The petitioner participated and was empanelled at Serial No. 5. However, the petitioner challenged the empanelment of the 6th respondent, M/s. Poorna Agency, at Serial No. 20 and the subsequent allotment of outsourcing work to them by proceedings dated August 20, 2025. The petitioner alleged that the 6th respondent was ineligible as per tender conditions regarding minimum turnover and statutory registrations, and that the allotment violated tender conditions and government orders.

Key Issues

1. Whether the empanelment of the 6th respondent and the subsequent allotment of outsourcing work to it by the 2nd respondent, in proceedings dated August 20, 2025, is illegal, arbitrary, and in violation of the tender conditions (specifically Sl.No.6 and Clause IV) and Government Orders (G.O.Rt.No.4459 dated 27.12.2006 and G.O.Rt.No.4271 dated 01.11.2008), thereby violating Articles 14, 19, and 21 of the Constitution of India? Petitioner's arguments: The 6th respondent was ineligible as it failed to meet the mandatory eligibility criteria of a minimum annual turnover of Rs. 30 lakhs in any of the last three financial years and did not furnish proof of statutory compliance for the prescribed period. The allotment was arbitrary and violated the tender terms and government guidelines. Revenue/State's arguments: The selection and allocation process was fair, transparent, and lawful, strictly in consonance with tender conditions and government orders. The District Collector acted within administrative discretion. The 6th respondent furnished a bank guarantee for Rs. 30,00,000/- along with valid statutory registrations, which was accepted as adequate proof of financial capacity in lieu of a turnover certificate, as per the discretion vested in the District Collector under the relevant government orders. The petitioner's past performance does not create a vested right for contract renewal.