M/S Bhargavi Enterprises vs. The State Of Telangana

Held

The Court held that the inclusion of respondents 5 to 10 and their subsequent allotment of outsourcing work was not illegal or arbitrary. The Court found that the District Level Outsourcing Committee, in its meeting on July 18, 2025, had consciously resolved to permit agencies lacking turnover certificates to furnish a bank guarantee of Rs. 30,00,000/- as proof of financial capacity. This discretion was exercised to ensure wider competition and transparency and was applied uniformly. The petitioner failed to provide any evidence of selective exercise of discretion or mala fide intent. The Court reiterated the principle from Durgawati Devi v. Union of India that in public tenders, terms are not subject to judicial scrutiny unless arbitrary or discriminatory, and the tendering authority is the best judge of its requirements. The Court found no infirmity in accepting bank guarantees as proof of financial capacity. The petitioner did not demonstrate that the empanelment or allotments were vitiated by arbitrariness or malice. Empanelment does not create a vested right to work, and administrative authorities retain discretion. The Court concluded that the impugned proceedings dated August 20, 2025, were issued after due consideration, and the petitioner failed to establish any violation of law, mala fides, or procedural irregularity. The contention regarding violation of Articles 14 and 21 was deemed untenable without proof of discriminatory treatment. The Court dismissed the writ petition as devoid of merit.

Facts

The petitioner, Bharoavi Enterprises, an empanelled outsourcing agency, filed a writ petition challenging the selection and empanelment of respondents 5 to 10 as outsourcing agencies for Suryapet District for the financial year 2025-26. The petitioner contended that these agencies were ineligible as they did not meet the minimum annual turnover of Rs. 30,00,000/- or possess required statutory compliance documents as per the tender notification dated June 13, 2025. The petitioner, having been shortlisted, discovered the inclusion of these allegedly ineligible agencies and their subsequent allotment of work by the District Collector and Chairman, District Out Sourcing Selection Committee, vide proceedings dated August 20, 2025. The petitioner argued this action was illegal, arbitrary, and violated tender conditions and constitutional rights.

Key Issues

1. Whether the inclusion of respondents 5 to 10 in the list of empanelled outsourcing agencies for Suryapet District for 2025-26, and their subsequent allotment of work, was in contravention of the eligibility conditions stipulated in the tender notice dated June 13, 2025, thereby violating Articles 14 and 21 of the Constitution of India? Petitioner's arguments: The petitioner argued that respondents 5 to 10 failed to meet the mandatory eligibility criteria, specifically the minimum annual turnover of Rs. 30,00,000/- in any of the last three financial years, with some having 'nil' turnover and others significantly lower amounts. They also contended that some lacked valid labour licenses and other required statutory documents. The petitioner asserted that the District Collector and District Employment Officer acted illegally and arbitrarily by including these ineligible agencies and allotting them work. Respondents' arguments: The respondents contended that the District Collector, as the competent authority, exercised reasonable administrative discretion in interpreting tender terms. They argued that the District Level Outsourcing Committee resolved to allow agencies lacking turnover certificates to furnish equivalent financial proof in the form of a bank guarantee of Rs. 30,00,000/-. They relied on the Supreme Court judgment in Durgawati Devi v. Union of India to assert that tender terms are not open to judicial scrutiny unless arbitrariness, mala fides, or discrimination are clearly established, and that the authority is the best judge of its requirements. They denied any favoritism or bias.