M/S. Suraj Ram Hotels INDIA PVT. LTD. vs. Telangana State Tourism -Development Corporation Limited.

FACTS: i) Respondent No. I had issued a Tender Notification on 12.05.202\,lor selection of operator (s) for operation and maintenance of Haritha Restaurants on 'license to operate basis' and 'as is whe|e is basis'. The last date lbr submission olbids was 14.06.2021 . opening of both technical and financial bids. A single stage envelope bidding process was adopted by respondent No. I . -l I WRIT PETITION No.15881 OF 2021 counsel representing Mr. Mr. Srinivas Karra, leamed counsel for ii) Respondent No.1 has not given any schedule with regard to the t ll.P.No.I 5881 of202l iii) Pursuant to the said Notification, both the petitioner and respondent No.3 had submitted their bids in respect of Food Courts at Buddhavanam, Nagarjuna Sagar. iv) The petitioner was declared as the highest bidder (Hl) on 24.06.2021. However, no Letter of lntent was issued in its favour. v) On 08.07.2021, the petitioner had submitted a representation to respondent No.1 with a request to issue a letter of intent in its favour, as it stood Highest Bidder in the subject tender in respect of the restauranr at B uddhavanam. vi) According to the petitioner, it came to know that the letter of intent was already issued in favour of respondent No.3 on 03.07.2021, whereas, according to respondent Nos.l and 2, since the petitioner had submitted a conditional bid which would be disadvantageous to other bidders, the letter of intent was issued in favour of respondent No.3, who was the next highest bidder. vii) Respondent No.1 had also issued a show-cause notice dated 12.07.2021 to the petitioner calling for his explanation as to why it should not be blacklisted lor tampering and unauthorized modification ol the Financial Bid format. viii) Similarly, respondent No.1 also issued a notice dated 27.07.2021 to respondent No.3 calling for its explanation for submission of fake GST Registration number with fake address mentioned therein and, thereafter being dissatisfied with the explanation submitted by it, tl.P.No.l588l of 202 t issued a show-cause notice dated 18.08.2021 to respondent No'3 tbr termination of agreement lor violating the terms of agreement'

CONTENT IONS ON BEHAL FOFPETITIONER: D Mr. S. Sridhar, leamed counsel for the petitioner, would submit that respondent No.3 had submitted a fake GST Registration number along with tender documents as the said GST Registration Certificate stood cancelled on 25.11.2020 itself. The address mentioned by respondent No.3 does not belong to it and it belongs to another firm i'e'' Hotel Airport International Limited'. ii)ThelearnedcounselwouldfurthersubmitthatrespondentNo.i without issuing any notice and without giving any opportunity rejected the bid of the petitioner though he was declared as the highest bidder' According to him, on consideration of both technical and financial bid, the petitioner was the highest bidder and, therefore, the letter of intent should have been issued only in favour of the petitioner, whereas in the present case, respondent No'l had issued the same in favour of respondent No.

The show-cause notice dated 12.07.2021 issued to the petitioner for tampering the terms of Request for Proposal (RFP) document is illegal. iii) The leamed counsel would further submit that on enquiry the petitioner came to know that respondent No'l has not considered the issuance of letter of intent in lavour of the petitioner on the ground that it had tampered the RFP document and the tender submitted by it is not in !

CONTENTIONS OF RESPONDENT Nos. I AND 2: i) Referring to the contents of the counter alfidavit filed by respondent Nos.l and 2, the learned Standing Counsel rvould contend that the bid of the petitioner was disqualified since it had tampered the terms of the RFP document and submitted a condir.ional bid. The modification creates disadvantages to other bidders. I{espondent No. I has specifically mentioned the bid conditions in the tender document. ii) Referring to Clauses -2.ll.l;2.11;2.12;3.2.3; 30.1.3;30. 1.4 and 30.1.5, the leamed standing counsel would contend that the petitioner did not submit its bid in terms of the RFP document, and there is modification and tampering which amounts to alteration of tender

All the said information was brought to the notice ofrespondent Nos.l and 2 only after opening the bids, both technical and financial. According to him, the Bid Tender Authority does not have power to cancel the tender notification without assigning any reasons, whereas, in the present case, there are serious lapses on the part of the petitioner as well as respondent No.3, and both of them had not submitted tender documents in terms of the tender conditions. Therefore, by following the due procedure laid down under law, respondent No.l had cancelled the letter of intent dated 03.07.2021 issued in favour ofrespondent No.3. iv) The leamed standing counsel would also contend that the petitioner having submitted a conditional bid with modification in RFP document, has no right to seek the relief of issuance of a direction to respondent No.l to issue a letter ofintent in its favour' v) With the aforesaid submissions, the learned standing counsel sought to dismiss the writ petition. * .& tv.P.No.l588l of202l 6- CONTENT IONS ON BEHALF OF RESPOIiDENT No.3: i) Mr. M.V.S. Suresh Kumar, leamed senior counsel representing Mr. Srinivas Karra, learned counsel for respondent No'1, would contend that the GST registration certificate submitted by respondent No'3 was cancelled, but it was not a fake document' Since there was no business on account of covlD-19 pandemic, all the restaurants were closed and, therefore, respondent No.3 could not take steps to get the GST registration certiflcate renewed. while producing the registlation certificate along with tender proposal, the relevant column with regard to the period for registration was left blank. ii) With regard to the address mentioned by respondent No'3 in the tender document, the leamed senior counsel would contend that the business was shifted on 01.02'2020 to the premises bearing No'281' Vidya Nagar Cross, New Airport Road, Bengaluru, BBMP North, Kamataka, and the business at No. 007, Ground frloor, New Airport Road, Doddajala Bengaluru - 562 157 was done fiom 30'10'2019 to 01.02.2020 by a sub-lease agreement executed by one Narayana, who is the lessee of one Buchanna, the owner of the property. Therefore, there is no irregularity in submission of the bid by mentioning the said address and it is not a serious lapse. There is no violation of terms of bid' iiD The leamed senior counsel would further contend that respondent No.3 had received a letter on 02.07.2021, wherein it was stated that the bid of the petitioner was not considered and the contract at W.P.No.l588l o/ 2021 Budhliavanam was offered to it to match the price quoted by the highest bidder. Accordingly, respondent No. 3 had accepted the offer and a letter olintent was issued in its favour on 03.07.2021. Thereafter, respondent No. 3 had executed the agreement and deposited Rs.15.50 Lakhs towards tlrst six month's annual fee as security deposit. Respondent No.3 had incurred heavy expenditure for modification of the restaurant. lf the letter of intent is cancelled, it would suffer grave, irreparable loss and lnJury. iu) The learned senior counsel would also contend that the petitioner having submitted a conditional bid which is not in accordance with the terms of the tender document does not have a right to seek a direction to respondent No.l for issuance of Ietter of intent in its favour. v) With the aforesaid submissions, the learned senior counsel sought to dismiss the writ petition

ANALYSIS AND FINDING OF THE COURT: i) In view of the above submissions, respondent No.1, Tendering Authority, had issued tender notification on 12.05.2021 calling lor tenders to maintain Haritha Restaurants at various places including the restaurant at Buddhavanam, Nagarjuna Sagar, on 'license to operate basis' and 'as is where is basis'. Both the petitioner and respondent No.3 had submitted their bids in respect of the restaurant at Buddhavanam. It is not in dispute that on consideration of both technical and financial bids, the petitioner stood as the highest bidder, but respondent No.1 did not issue any letter of intent in its favour. According to respondent No.1, L/.P.No.I 5881 of202l the petitioner herein did not submit the bid in terms of the tender document, and the bid submitted by it is a conditional one tantpered ancl rnodifi ed RFP docurnent. ii) Even according to respondent No.l, r.espondent No.3 had submitted fake GST registration certificate, which was not valid as on the date of the submission of tender. Respondent No.3 was not running the business at the address shown in the tender. After coming to know the same, respondent No.1 had issued a notice dated 27.07.2021 to respondent No.l calling for its explanation. Respondent No.3 sought two weeks time, but no explanation was submitted. Therefore, respondent No.1 issued a show-cause notice dated 18.08.2021 to respondent No.3 terminating the agreement on account of violation of its terms and conditions of agreement, more particularly Clauses - 30.1.3, 30. 1.4 and 30. 1. 5. Thus, both the petitioner and respondent No.3 had submitted the tender bids which are in violation of the terms and conditions of tender. document. In view of the same, it is relevant to refer to certain conditions of the tender document, which are as under: "2.11.1 Bidders should submit the Technical proposal and Financial Proposal in the in the manner set out in Clause 2.11 and Clause 2. 12. T'he Authority would evaluate only those proposals that are received in the required format and complete in all respects. Incomplete and/or conditional Proposals shall be liable to rejection.

12 Sealing and Marking of Proposals 2.12.1 The bidder shall submit ail rhe documents sought under the RFP, together rvith the documenls ----"-:::_--- I/. P.No.15881 of2021 ,, mentioned in Clause 2.12.2 in the format provided under the RFP and in the manner specified in Clause 2.12.2. 2,12.2 The bidder shall submit the proposal in rwo separate envelops cornprising the flollou,ing documents and marked as "TECHNICAL PROPOSAL" and "FINANCIAL PROPOSAL". 3.2.3 Bidders may note that the Authority will not entertain any deviations to the RFP at the time ol submission of the Proposal or thereafter. The proposal to be submitted by the Bidders would have to be unconditional and unqualified and the Bidders would be deemed to have accepted the terms and conditions of the RFP with all its contents including the Draft License Agreement. Any conditional Proposal shall be regarded as non-responsive and would be liable for rejection. 30.1.3 Subject to Force Majeure, the SECOND PARTY fails to substantially perlorm or comply with any cornmitment. agreement, covenant, term or condition (other than those specifically described in any othcr subparagraph of this Clause) ol this Agreernent. 30.1.4 Il the SECOND PARTY fails to remedy any such act ol default as stipulated in this Agreement within 30 (thirty) days after receipt of written notice of default with respect thereto from FIRST PARTY. 30.1.5 If any representation or warranty made by SECOND PARTY hereunder is intentionally false or misleading in any material respect when made and such false or misleading representation or warranty either has a material adverse effect on the Development or has resulted in an unfair competitive advantage materially benefiting the SECOND

As pointed recently in M.C. Mehta v. Union of India [1999]3SCRI 173, there can be certain situations in which an order passed in violation of natural justice (2000) 7 scc s29 It.P.No.l588lof202l need not be set aside under Article 226 of the Constitution ol India. For example, where no prejudice is caused to the person concemed, interference under Article 226 is not necessary. Similarly, if the quashing of the order which is in breach ofnatural justice is likely to result in revival of another order which is in itself illegal as in GaddeVenkateswara Rao v. Government of Andhra Pradesh [966]2SCRl72, it is not necessary to quash the order merely because ol violation of principles ol natural justice.'' v) The contentions of the petitioner that respondent No. I has not assigned any reasons for not issuing the letter of intent in its favour and has not given any notice before issuing the letter of intent in favour of respondent No.3 etc., would amount to violation of principles of natural justice. Though there is no explanation by respondent Nos.l and 2 in their counter for the same, letter dated 12.07.2021 addressed by respondent No.1 to the petitioner, would answer the same.

CONCLUSION: i) In view of the above discussion, since both the petitioner and respondent No.3 had submitted their bids in violation of terms and conditions of tender notification dated 12.05.2021 , the Tender Notification dated 21.05.2021 issued by respondent No. I is liable to be set aside. It is relevanr to note that though respondent No.3 contends that it had incurred huge expenses for renovation of reslaurant and on account of cancellation of letter of intent by respondent No.l, it would suffer serious loss and injury, it has not filed any proof. In the absence of I

M/s. RVS Spices Restaurant, No. 007, Ground Floor, New Airport Road, Doddajala, Bengaluru - 562 157. 4. One CC to Sri S. Sridhar, Advocate [OPUC]

One CC to Sri M. Roopender (SC FOR TGTDC) IOPUCI

One CC to Sri Srinivas Karra, Advocate [OPUC]

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