Koduri Suresh Babu vs. The State Of Ap

The District Diet Management Committee(DDMC)., Rep. by u Chairman / Joint Collector. O/o. The District Collector's Office Kakinada, Kakinada District. Gsieral Hospital, Rep. by it's Superintendent Member Convener, DDMC, Kakinada.

The District Medical and Health Officer, Kakinada ^ ^Of^^''3ctor, 24 Kola Street, Tirupati District,

G.Jayapal Reddy, S/o Bhagavan Reddy, Age. 51 Years, Occ Diet Contractor, R/o H.No.6/4/481/2/A, Flat No. 301. Krishna Nagar Colony, Secundrabad. it's -cum- District, Kakinada. Ankith Residency. ...Respondents per the C.O dt 30.01.2024 vide order passed in I.A. 02 C.T is amended of 2023 as Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court be pleased to issue an appropriate writ, order or direction more particularly in the nature of Writ of Mandamus declaring the action of the 2nd respondent in issuing letter of award of the diet contract dated.27.03.2023 infavour of the 5*^ and 6^^ respondents as illegal, contrary to law, arbitrary and violation of principles of natural justice and respondent authorities to consider the tender of the petitioner for diet in Government General Hospital, Kakinada Notification dated 09.02.2023 by setting aside the letter contract dated.27.03.2023 issued by the 2 6*^ respondents. may one consequently direct the supply of pursuant to the Tender award of the diet respondent in favour of 5*^ and nd lA NO: 1 OF 202.? Petition under Section 151 CPC stated in the affidavit filed i praying that in the circumstances m support of the petition, the High Court may be contract dated.27.03.2023 respondents. pleased to suspend the letter award of the diet issued by the 2"^^ respondent infavour of the 5**^ and 6^^ lA NO: 3 OF 20?.? Between: J,™ General Hospital, Rep. by it's Superintendent - cum-Member Convener, DDMC, Kakinada. ...Respondent/Petitioner AND 1. Koduri Suresh Babu, S/o. K Venkateswara Rao, Aged about 59 Occ. Diet Contractor, R/o. H.No.5-108, J P N Nagar, Miyapur Hyderabad - 500049 years ...Petitioner/Respondent

The District Diet Management Committee(DDMC)., Rep. bv it's Chairman / Joint Collector. O/o. The District Collector's Office Kakinada, Kakinada District.

The District Medical and Health Officer, Kakinada District, Kakinada.

M/s K.Beeran Kutty, Diet Contractor, 24 Kola Street Tirupati.

G.Jayapal Reddy, S/o Bhagavan Reddy, Age 51 Years Contractor, R/o H.No.6/4/481/2/A, Flat No. 301. Krishna Nagar Colony, Secundrabad. Tirupati District Occ. Diet Ankith Residency. ...Respondents/Respondents (Respondent No.2 to 6 are not Petition under Section 151 CPC stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim order passed in WP No. 10945/2023 dated 27 04-2023. necessary parties in this petition) praying that in the circumstances lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant leave and permit the e* respondent to file counter affidavit. Counsel for the Petitioner: SRI K M KRISHNA Counsel for the Respondents 1 to 4: GP FOR MEDICAL REDDY HEALTH FW Counsel for the Respondent No.5: SRI P.VEERA REDDY, SR. COUNSEL FOR SRI PAMARTHI KAMESWARA RAO Counsel for the Respondent No.6: SRI TAGORE YADAV The Court made the following YARAGORLA common order:

Interim order was passed by this Court on 27.04.2023, suspending the proceedings dated 12.04.2023. Subsequently, W.A.No.488 of 2023 was filed by Mr. K. Beeran Kutty/the unsuccessful contractor in the writ petition, wherein, the Hon’ble Division Bench of this Court stayed the operation of order passed by the learned Single Judge on 27.04.2023 and consequential Thereafter, the matter was carried to 1. Rc.No.375/G2/2021 dated 12.04.2023 proceedings dated 02.05.2023. Hon’ble Supreme Court by way of S.L.P (C) Nos. 11459/2023. The Hon’ble Supreme Court disposed of the matter, requesting the learned Single Judge of the High Court to expedite the hearing of the writ petition without waiting for the decision of the writ appeal on which the impugned interim order was passed. Hence, W.P.No. 10920 of 2023 along with W.P.No. 10901 of 2023 and W.P.No. 10945 of 2023 are placed before this Court for adjudication.

As the issue involved in all these writ petitions is inter-related, all ^ these writ petitions are taken up together and common order. disposed of through this are The petitioner is a diet contractor, engaged in supplying diet to inpatients and doctors in various Government Hospitals. The grievance of the petitioner is that, the action of the official respondents in awarding diet contract to Respondent No.5 in W.P.No. 10920 of 2023 86 10906 of 2023 and Respondent No.6 in W.P.No. 10945 of 2023 is not in accordance with law. W.P.No. 10920 of 2023 is taken as the leading case.

The facts of the case in nut-shell are that, the petitioner, a diet contractor, is engaged in supplying diet to Government Hospitals in Andhra Pradesh and Telangana. Respondent No. 3 issued a tender notice for 4. supplying diet to inpatients and duty doctors at Government Maternity Hospital, Tirupati. Despite both the petitioner and Respondent- No. 5 qualifying in the Technical Bid and quoting the same price, the contract was awarded to Respondent No.

The petitioner aheges that authorities violated rules, introduced a new evaluation method, disqualified the petitioner, and favored Respondent No.

Consequently, the petitioner challenges the official respondents' decision to award the contract to Respondent No. 5 in the present writ petitions.

During hearing, learned counsel for the petitioner submits that the petitioner operates within the domain of supplying diets to Government Hospitals and other institutions in both Andhra Pradesh and Telangana. Currently, the petitioner serves as a diet contractor to various healthcare facilities including Government General Hospital Vijayawada, Government General Hospital Srikakulam, Area Hospital Sattenapalli, Government General and Chest Hospital Hyderabad, and King Koti Hospital Hyderabad, providing dietaiy provisions to inpatients and attending physicians. It is emphasized that the petitioner is fully qualified and capable of fulfilling

WI>Nos lOWl. IO<UOA. !0<i45of^02.^ dietary supply contracts within Government Hospitals, respondent Superintendent of Government Maternity Hospital, Tirupati, issued a tender notice dated 24.03.2023, inviting sealed tenders for the supply of diets to inpatients and attending physicians at the said hospital. The third It is asserted that the petitioner intended to participate in the tender process, obtained tender forms, and prepared to submit a bid. The tender 11. process, according to stipulated conditions, involves a two-cover based system: Cover comprises eligibility, technical, and financial criteria, while Cover 2 pertains to financial bids/offers. It is emphasized that any tender submitted in violation of these mandatory requirements will not undergo evaluation. Following the opening and acceptance of valid tenders in Cover, evaluation takes place, followed by the opening of Cover 2 for financial bids. The contract is awarded to the tender offering the lowest price, with tie-breakers determined by the highest marks in the technical evaluation. Learned counsel for the petitioner submits that both the petitioner and the fifth respondent are qualified in the technical bid and quoted the same price, namely, Rs. 72/- for inpatients and attendants. Furthermore, it 12. is highlighted that the tender process must adhere strictly to the conditions outlined in the tender document and government orders. However, the contract was awarded to the fifth respondent, allegedly in violation of WP Nos.10901, 10920 & 10945 of 2023 established rules and regularizations. This action is deemed arbitrary and a misuse of power. Learned counsel for the petitioner points out a similar instance where the petitioner's diet contract was terminated by the Superintendent of Gandhi Hospital, Secunderabad, citing allegations from Niloufar Hospital, Red Hills. However, the termination was overturned by the Hon'ble High Court of Telangana, which directed that actions against the petitioner should be unbiased by any prior observations regarding the Niloufar Hospital issue.

Moreover, it is argued that despite the knowledge of these legal proceedings, the respondents awarded the contract to the fifth respondent, contrary to established regulations. This action is considered a breach of G.O.Ms.No. 325 MHSgFW, dated 01.11.2011, which mandates that tender conditions and evaluation parameters remain uncnanged to favor any particular entity. The second respondent is asserted to have no authority to alter the tender evaluation process to benefit a specific party, rendering their actions arbitraiy and illegal. Finally, learned counsel for the petitioner highlights that subsequent to the judgment in W.P.No. 15054 of 2020 by the Hon'ble High Court of Telangana, the petitioner was awarded diet contracts in various hospitals, reinforcing their capability and credibility in the field and requested to grant the relief as sought above. 14. 11 NV,.i WP Nosloyoi. 10920.\. IO')-45«if 202.1 Learned counsel for the petitioner submits that the tender evaluation authority is not entitled to evaluate or adopt methods beyond the scope of terms of tender notice. In the instant case, the allegations and recovery ordered against the petitioner by Niloufer Hospital were set-aside in Therefore, relying upon the allegations made by Niloufer Hospital to reject the tender of petitioner the ground of very same allegations is nothing but ignoring the judgment rendered by the Court as stated supra. Moreover, the 4^^ respondent herein and Maternity Hospital have made specific and categorical allegations against the 5^^ respondent herein, while he was a diet contractor for earlier period and issued memos against him and also he was not issued any performance certificate, even satisfactory certificate. Challenging the same, he preferred W.P.No. 10457 of 2021, wherein the respondents herein filed counter affidavit and narrated the poor performance of the 5^^ respondent and also rejected the claim of the petitioner. In fact, the daily newspapers also reported about his poor quality and sometimes putting the patients in starving conditions. Having knowledge about the past conduct of the 5* respondent at Government Maternity Hospital, Tirupati and exercising discretionary power in favour of 5^^ respondent is beyond the scope of terms of the tender and contrary to their own submissions vide sworn affidavit filed by them.

W.P.Nq.7302 of 2021 dated 04.07.2023. on WP Nos. 10901. 10920 & 10943 of 2023

Learned counsel for the petitioner further emphasized that this Court after hearing the matters passed an interim order on 27.04.2023 holding that the tender evaluating authorities went beyond the scope of the tender notice dated 23.03.2023 and accordingly the impugned proceedings awarding contract dated 14.04.2023 is suspended, but liberty was granted to the respondents to continue to supply the diet as pr the earlier procedure, till disposal of the writ petition. Therefore, this Hon’ble Court found fault with the respondents ignoring the allegations made by them against the respondent and weighing the allegations against the petitioner, which were already set-aside by the High Court of Telangana is nothing but an action of malice and malafide and in violation of Article 14 of the Constitution of India. Hence, the selection by rejecting the petitioner claim and awarding contract to the 5* respondent vide proceedings dated 12.04.2023 are liable to be set-aside. Sri P. Veera Reddy, learned Senior Counsel appears for Respondent No.5 in all the three writ petitions. Learned Senior Counsel draws attention of this Court to the prayer urged by the petitioner in W.P.No. 10901 of 2023 wherein the petitioner is seeking a prayer to declare the action of the 3^^ respondent in issuing diet contract dated 13.04.2023 in favour of the 5^^ respondent as illegal, contrary to law, arbitrary and violative of principles of natural justice and consequently direct the respondent authorities consider the tender of the petitioner for supply of diet in Government 17. to WPNos 10901. 10920 10«'45 ol 2023 Maternity Hospital, Tirupati, pursuant to Tender Notification dated 24.03.2023 by settin,? aside diet contract dated 13.04.2023. Referring to the prayer urged by the petitioner, learned Senior Counsel submits that, the petitioner is seeking termination of the contract of Respondent No.5 which was already awarded to him for a period of two years. When nearly year period is completed, what remains is only one year period. Further, the petitioner seeks not only setting aside termination of contract of Respondent No.5 and seeks consideration of the petitioner’s contract, which are two elements of the prayer of the petitioner. one

Learned Senior Counsel submits that, as per the averments made in the writ petition, both the petitioner and Respondent No.5 have submitted their tenders consequent to the issuance of tender notification and in the technical bid, both have qualified. He submits that, both the petitioner and Respondent No.5 have secured same marks. There is certain criterion to award marks. When both have got equal marks, then the discretion vests with the Department/Employer and that is how considering the antecedents of the petitioner. Respondent No.5 was selected and then the contract was awarded by the tendering authority.

Attention of this Court is drawn to the operative portion of the order in W.P.No. 15054 of 20210 dated 06.10.2020, wherein it is stated as follows:

Basing on the above, it is contended that, liberty was given to the respondents to proceed against the petitioner, in accordance with law. The main endeavour of the learned Senior Counsel is that the allegations against the petitioner remained static and it is not as if the 21. petitioner was given a clean chit or as if the allegations are wrong, erroneous ex facie or that there is no evidence or there is no basis. Therefore, at the time of consideration of tenders of Respondent No.5 and petitioner, both of them have secured same marks. Leveling of allegations against the petitioner, weighed the tender in favour of Respondent No.5, since there are serious allegations against the petitioner.

Learned Senior Counsel emphasized the factors which lead the official respondents to select Respondent No.5 instead of the petitioner and draws attention of this Court to various clauses contained in G.O.IVIs.No.32o Health, Medical and Family Welfare (Ml) Department dated \VI* Nos 10901. 10920 10945 of 202.^ 01.11.2011 viz., General Tender Conditions, Process for Finalization of Technical Bid, Criteria for Evaluation of Technical Bid and Financial Bid. He accentuates that, as per the Financial Bid, the person/organization who quotes lowest rates in the financial bid will be qualified as the Diet Contractor and in case of any discrepancy, the Chairman of the District Diet Management Committee (DDMC) will take an appropriate decision. Therefore, discretion is vested with the DDMC to take appropriate decision and contends that such discretion has been properly exercised by awarding the tender to Respondent No.5. 23. Learned Senior Counsel contends that, the Chairman, DDMC, Tirupati addressed a letter 05.04,2023 informing that. Respondent No.5 has been selected for award of the contract, subject to certain eonditions. Subsequently, Contract Agreement (for supply of diet in Govt. Maternity Hospital, Tirupati) was entered into between the Tirupati District Diet Managing Committee, Represented by its Chairman (Chairman/Convenor) and Respondent No.5 on 15.04.2023. It is submitted that, when the tender was award to Respondent No.5 in a proper and phased manner, any indulgence at this stage, would create any amount of hurdles. Learned counsel also contends that, no reply is filed by the petitioner to the counter affidavit filed by Respondent No.5, as such, the submissions made by Respondent No.5 should be treated as admission.

On the other hand, learned Government Pleader for Medical and Health, appearing for Respondent Nos.l to 4, while adopting the arguments advanced by Sri P. Veera Reddy, learned Senior Counsel, would contend that, no specific rule or contravention of procedure was specifically pleaded by the petitioner in his pleadings. Though the petitioner contends that while awarding the contract to Respondent No.5, the official respondents violated the rules and regulations, as stipulated in the G.O., no specific rule has been stated that has been violated by the authorities.

Learned Government Pleader placed reliance on the judgments of the Hon ble Supreme Court in Raunak International Limited vs, I.V.R. Construction Limited^, N\'.J WP Nos.10901. I0920A !09-45of202n Airport Limited^, Master Marine Services (P) Limited vs. Metcalfe fis Hodgkinson (P) Limited^, Michigan Rubber (India) Limited vs. State of Karnataka^, Municipal Corporation, Ujjain vs. BVG (India) Limited^ which the learned Single Judge had referred in W.P.No. 10457 of 2021 and the strength of the principles laid down in the above judgments, he would contend that, Courts should not normally intervene in the decision making process for award of contracts, unless blatant illegality and arbitrariness is pointed out. He submits that, the petitioner had committed blatant illegalities, which weighed in decision for awarding contract to Respondent No.

In the absence of any blatant illegality and arbitrariness, while awarding contract to Respondent No.5, writ petitions are liable to be dismissed. on 27. Learned Government Pleader argues that, in view of the language employed in the clause ‘Financial Bid’ of G.O.Ms.No.325 dated 01.11.2011, the Chairman of DDMC is the decision making authority for awarding of contract in the finan.,ial bid to any person/organization. It is argued that, since the above said clause has never been challenged with regard to ‘discretion’ of the Chairman, DDMC, thereby, the Chairman, DDMC has absolutely unfettered power to take a decision, taking into consideration of ^ (2000) 2 see 617 ^ (2005) 6 see 138 ^ (2012) 8 see 216 ^ (2018) 5 see 462

Sri P. Veera Reddy, learned Senior Counsel appears for Respondent No.5 in all the writ petitions, Sri Tagore Yadav Yaragola, learned counsel appearing for Respondent No.6 in W.P.No. 10945 of 2023, learned Government Pleader for Medical & Health appearing for Respondent Nos. 1,2,3

Perused the material available on record. Undisputedly, the petitioner is a diet contractor engaged in supplying 29. diet to Government Hospitals in Andhra Pradesh and Telangana. Respondent No. 3 issued a tender notice for supplying diet to inpatients and duty doctors at Government Maternity Hospital, 'iirupati. Despite both the petitioner and Respondent No. 5 qualifying in the Technical Bid and quoting the same price, the contract was awarded to Respondent No.

Leveling of allegations against the petitioner, weighed the tender in favour of Respondent No.5, since there are serious allegations allegedly against the petitioner. The bid of Respondent No.5 was preferred to that of the petitioner, keeping in view the previous conduct and antecedents of the petitioner, since the petitioner had allegedly committed several irregularities while serving as diet contractor to the Nilofour Hospital at Hyderabad.

Again the respondents have repeatedly stressing the poor perforinance, previous conduct, antecedents and deficiencies in services rendered by the petitioner at Niloufer Hospital which were already set-aside by the High Court, which is clearly untenable. Therefore, the respondents are specficially directed to consider the petitioner to participate in the ensuing contracts/tenders, on par with others, without obser\'ing previous conduct or antecedents at Niloufer Hospital. The petitioner is seeking termination of the contract of Respondent

No.5 in all the writ petitions which was already awarded to him for a period of two years. When nearly one year period is completed, what remains is only one year period. In W.P.No. 10945 of 2023, the tenure of Respondent WPNos-10901. 10920& 10945of2023 No.5 is for a period of one year i.e. from 01.04.2023 to 31.03.2024 and the tenure of contract of Respondent No.6 is from 01.04.2024 to 31.03.2025. As discussed in the earlier paragraphs, this Court is not inclined to intervene in the decision making process for award of contracts, since there is no blatant illegality and arbitrariness was pointed out. The Diet Contracts already awarded in favour of Respondent Nos.5 & 6 are not disturbed by this Court, conscious of the fact that this Court is not vested with the authority to intervene in the decision making process for award of contracts, unless there is blatant illegality and arbitrariness pointed out.

With the above directions, writ petitions are disposed of with the following directions: a. The respondents are directed to consider the petitioner to participate in the ensuing contracts/tenders, on par with others, without referring the alleged antecedents and deficiencies at Niloufer Hospital, since the said proceedings were set-aside by order in W.P.No.7302 of 2021- dated 04.07.2023. b. Rejecting the tender of the petitioner and awarding the tender in favour of Respondent No.5 is contrary to the facts on hand and amounts to exercising power out of the scope of terms of tender in biased manner. However, since Respondent Nos.5 & WP Nos 10901. 10920^1 10945 of 2023 6 continued more than one year and a little period is available for completion of the tender period, the Diet Contracts awarded in favour of Respondent Nos.5 86 6, but continued on the ground that supply cannot be disturbed and they may be continued as usual;

Consequently, miscellaneous applications pending if any, shall also stand closed. I K.TATATAO DEPUTY\REGISTRArl //// SECTtefTOFFlCER To,