Swadeshi Cotton Mills v. Union oJ India

Heard Sri T. Rajinikanth Reddy, learned Additional Advocate General appearing for the appellants and Sri Tarun G.Reddy, learned counsel for respondent Nos. 1 and 2. Perused the record.

2. This is an intra-court appeal filecl b-v the appellants/respondent Nos. 1 and 2 aggrieved by the order dated 28.IO.2O24 passed in W.P.No.2l973 of 2024 b_y the learned Single Judge of this Court declaring the action of the appellants/ respondent Nos. I and 2 in rejecting the tender bid of the respondents/ writ petitioners in respect of tender No.TGMDC/ S&M/ DSLT/JB I 2024 / 225, dated t4.O6.2O24 for de siltation of 6,OO,283.55 MT of sand from Mahadevpt:t. 12024 /3 sand reach at Jayashankar Bhupalpally District as illegal for not assigning reasons, the award of tender No.TGMDC/ S&M/ DSLT/ JB/2O24/225, dated 14.06-2024 in favour of respondent No.3 has been set aside and the writ appellants are directed to call for fresh bids in respect of tender No.TGMDC/S&M/DSLT/JB /2024/225, dated 14.06.2024. 2

3. The backg:ound facts of the case are that the r.r,r-it altpellant No.2 floated terrc'ler No.TGMDC/S&M/DSLT lJBl2O24l2115, dated

14.06.2024 for ri,: siltation of 6,OO,283.55 MT of sz,nd from Mahadevpur/ 20|24 I 3 sand reach at Jayashankar RLrupalpally District and thal ttre said tender was floated for a contrac t value of approximatel,v R:;.5,82,27,5O41 Respondent No.1 repre:.;er-rted by respondent No.2 arrd respondent No.3 participated ir-r the bid. The bid u,as awarded irr favour of respondent No.3 as per the au'ard dated 19 .O7 .2024 . 'l'l- e bid submitted by respondent No. I ras been rejected as per the information provided in rhe '1'elangana e-procuremcnt pr; rt,al.

4. The rejectrc,n of their bid is challenged by responclenr Ilos.l and 2 on the premise t rat the vvrit appellants did not conducl tl-re tender process and as,ard ing of the tender in fair and transparen, manner by referring to th( legal ratios laid down by the Hon'ble Supreme Court of India in Dhartnapal Satgapal Litnited o. Deputg Commissioner of Central Excise, Go;uhati and. otherst, PKF Sridhar and Santhanalr. u. Airports Economic Regulatory Authoritg of Ind.ia (WP(C) No.72385 of 2O21), Swadeshi Cotton Mills v. Union oJ India2 and Punjab State Power Corporation '1zors1a scc srs ' ntR t98t scc 8ts 3 Limited and another u. EMTA Coal Litnited and others3. Respondent Nos.l and 2 prirr.arlly questioned the action of writ appellants in rejecting the tender without assigning reasons and rvithout giving them hearing for giving clarification on their Work Done. Certificate. The learned Single Judge allowed the writ petition referring to various judgments of the Hon'bie Supreme Court of India holding that decision making process adopted by the writ appellants is contrary to principles of natural j ustice and lacking in transparency in the tender process. It is held that no reason is assigned for rejecting respondent No. 1's bid as failing to have fulhlled clause 3.2 tender conditions. In the light of the respondent No.l's specihc case that it fulhlled the requirement under clause 3.2 of the tender conditions. It is held that as per the entry made in e-procurement web portal on 19.07.2024, the writ appellants have clearly observed that respondent No.1 has fulfilled the eligibility criteria referring to the contents of Remarks column which are extracted and produced beiow: Remarks As r Tender Docs

5. Further, the learned Single Judge held that the writ appellants have failed to give an opportunity to respondent No.1 to give clai!fication in case of any ambiguity about the contents of the Work '1zozz1z scc r r- 4 Done Certificate. l,astly, the learned Single Judge also referred to the u,rit appellar-rts i:;suing Letter of Intent to respotldet'It No 3 on 1O.O7.2024 and the au'ard of tender to respondent No 3 too r place on Ig .O7 .2024. Thr-Ls the n'rit petition was allowed leading t: hling of the writ appezrl.

6. Thc learne,:l adchtional Advocate General wou1c1 subm 't Lhat the Government follor.r'ed correct procedure as spelled otrt in the procurement manual ancl the tender notifrcation. It is eraphasized that responclent No.1 failed to meet the tender conditic'n No'3 2, which reads as follou's: "Thc bicldcr slt Il ltavc satisfactorill' comptcted at Icast onc t'ork ol Mining,/Cr vi1/ lrr igi rt rorl uork of value not less tharl Rs.4,65.8l OO l/ (Rupccs Four Crorc Slxt, l i'e Lakhs Eightv T\\'o Thousand and Threc or)l\') (80r7 ol value of $,orkl rLrvolvrng cx..rvaLron and removal any EarLh/mineral irlclucllni sarrd in Statc/Ceritirl (l(,\'.r nmcnt t,'ndct-takings during thc Iast threc ii:l) \ear-s ' In this reg:u d referring to the Work Done Certihr:ates uide 7 . Ref. No. KGM/ JV it C)C II / 2023 I 338C/ 6O8, dated 12 I 16.O5."1023 and Ref.No.KGM/JVtl OC-IIl2023l338Dl609, dated 12 I [c.os.2023 submittecl b1' r,: spondent No. 1 , it is argued that saicl t:ertihcates clearil' demonsl-rir1-e that respondent No.1 did not conrplete the contract but ratlLer the "r.l,ork is still in progress" in "Present status of work" column. 5

8. [n that context, it is argued that any bidder has to produce certihcate showing satisfactorily completed work of value not less than Rs.4,65,82,OO31- during the last three years of the bid. It is argued that among 13 technical qualihed bidders, B u,ere rejected for not complying tender clause 3.2 and the same was informed through e-procurement website on O8.O7.2024. Respondent No.1 is one among 8 bidders whose tender was rejected for failing to meet the criteria. The learned Additional Advocate General argued that the Hon'ble Supreme Court in various judgments held that in contractual matters the scope of judicial review or interference under Article 226 of Constitution of India is available in exceptional circumstances, such as, on account of mala fides, arbitrariness and illegalities. Whereas, in the instant case, no specihc instance of malice is made out. Only because respondent No. 1 failed to satisfy the condition under clause 3.2 of tender condition its bid was rejected which is not arbitrary. The learned Additional Advocate General referred to the judgment of the Hon'ble Supreme Court in Agmatel India Priaate Limited a. Resourys Telecotn and. other*, wherein it is held that "The above mentioned statements of law make it amply clear that Lirc aulhor of the tender document is taken to be the best person to undcrstand and apprectate its requirements; and if its interpretation is manifcstly in consonance with thc Ianguage of the tender document or subserving the purchase of the tender, thc Court would prefer to keep restraint, Further to that, thc technical evaluarion or comparison b-y thc Court is impermrssible, and even if the intcrpretarion grven to thc tcnder document by the person inviting offcrs is not as such acceptat)lc to the o lzozzls scc:oz .-- 5 constitulion.llco'-ri,!lrat.blJirsctf,\:oulclnoLbeareasonforjntcrleringtltththe inLcrpreLalron gt\'(rn.' g. The conterLticn of respondent No.1 about giving opportunity under clause 21 to provide clarihcation with respect to Wlrk Done certificate, it is a.rE1]ed that the employer can seek clarificai.ion at its d.iscretion. wl'rerL ltc work Done certificate itself clearlv reflected that respondent lrlo I did not complete the work, there is n o need to seek an5, clarihczrti,rn. Lastly, it is argued that the learn ed Single Judge errecl in c,bs,::rving that the letter of intent clated lO .O7 '2024 was issued in favour of respondent No.2 and the same is contrary to the information on lhe r'r'eb site u,hich shows tender u'as ari'arded on 1g.O7.2024. Ar:r:or'ding to the learned Additional Advocate General, after the bids n'err: submitted by prospective bidders, the cids were evaluated b.\, th':' l'ender Evaluation Committee on O8-O''.2O24 to ascertain the corrdiiions stipulated and successful bidder uas issued the letter of intent ctn 7O.O7.2024 and said information was uploaded on 19.07.2024. ln lhe entire process, there is no mala fide or lack of transparenclr. L.r;arned Additional Advocate General rt'ferred to judgment in W.A.Nos.116 and ll7 of 2025, dated 1'\.O2.2025 wherein it was h,-'L1 that: A ca.clLrr rcading of Clause 17.0 rcproduced herelnabovo sho\\s that rf "16. bidcler has br:r'n l,a r red bl anJ, other body and has disclosed Lhis [acL clea'11 in his bid- as a ftrlc .: l t umb, SCCL management rvill not disqualifl' hrm. T )e SCCL manitgemcnt rrs:rres right to take appropriatc decrsion in such cvcnlLlt lil-\' Thc Ianguage empl,rl rc in Lhe aforcsaid clause shows that il en:rbles tl e SCCL maLnaLgemcnL r(, ra ( an arppropriate dccision in such cascs \Yh( re dlsc rrsurr oI 7 banning is there. The dcclsion taken b-y SCCL management in the present case rs ro disqualily the petitioner. At this stage, we are not inclined to put the clock back and direcl thc Singareni Collieries Cornpany Lirnited to undertake the entirc exercjse afresh. The Singareni Collicrics Company Limited is sewing public intercsr. For rhe smooth production and running of Singareni Collierres Company Limited, supply of bulk cxplosive is essential. Any intcrfcrcnce by us at this juncture, r.vill hampcr thc activrty o[ the industry and conscquently will have an adversc impact on public interest. Thus, rn the peculiar facts of these cases, we arc nol inclined to tnterfere in the matter. More-so, after passing of impugned order, third party rlghts arc creaLcd and conLracts have been grantcd to nine (9) contraclors and they are not partles bclorc us-'

10. On the basis of above judgment, it is argued that this Court in similar cases on earlier occasions declined to interfere with the decision made by the Government while awarding tenders.

11. Learned counsel for respondent Nos. 1 and 2 argued that it has fulfilled condition under clause 3.2 of tender conditions and therefore it was found to have qualified as per the entry in web portal dated

19.O7.2024. It is argued that the learned Single Judge had assessed the tender process adopted by the writ appellants in proper perspective u,ith respect to meeting the clause 3.2 of tender conditions, not providing opportunity under tender clause 2'l for giving clarifrcation about the Work Done Certificates and rejecting the tender without assigning reasons. In that regard, learned counsel for respondent Nos. 1 and 2 referred to judgment of the Hon'ble Supreme Court of India in M/s. Kasturi Lal Lrrkshi Reddg, rep. bg its 8 partner Shri Kasturi Lal and others u' State of Jammu and Kahsmir and anothers, u'herein it is held that "15....... uh(re tltc 1lovt:r nrncnL is dealing with lhe public, ('hether I)\ tav oI giving jobs or entcrinll llt o c()nLracts oa ql-anllllg oLher lorms of largcss rhc (lo ernmeDt cannot act artritrlrr l. atL tts, sweet q'ill and, like a privarc individLral, cl'':il rr'ith an-v person iL ple,tsts, tuL Lls action must be in conformrty rvith somr: standard or norm i(ihich is not arbllrr r\.. lrrdtional or irrelcvzrnt The govcrnmcntal acrion mu.]t not be arbitrarv or capr r:ir r s. bul musL be bascd on some prrnciple rvhir:h mee's t1e test ol reason and rr:lc r:, -rt c . '

72. Learned counsel for the respondents vehemently arrgued that no reasons are a:; signcd for rejecting its bid and there bv there is violation of prin,:ip,les of natural justice. In that context, learned counsel for the r€ spondents referred to judgment of th e Hon'ble Supreme Court of )ndia in Dharmapal's case (1 supra) anJ relevant portion is extracte,l and produced below: 'The principles ol raLural .JusLice devclopcd ovcr a period of timc and $hich is still in voguc an<l r,alirl trrrtr tod:rv were: (i) rule agalnsl bias, i.e ncmo tuclex irl crLusa sua; and [ii) opporLtLr'rt] rl being heard tr; rhe couccr-ned party, i.e. ;ruclL altctarr partcm' These are kno\{'l ai principlcs o[ natural]ustice. To these principles a rhird principle is addecl, whicir is ot lecenl ongin lt is dut-\' ro glve reasons in suppor: ol decLsion, namcly, parssing c,l r r e:tsoned order .

13. Analvsis !,y tle lqegl!: A perusal of the record and the arguments of both tlLe counsel show that the cn.x ol the dispute is with respect to u'hether or not respondent No. I met the criteria under clause 3.2 of tender conditions, rvherher the r,vrit appellants acted with mala Ji,7es in r,ot providdlg an op,pc,rtunity to respondent No. 1 to give clarifrcation ' 1r9so1a scc r 9 about its Work Done Certihcate and lastly whether the writ appellants did not give a reasoned order for rejection of bid submitted by respondent No.1 and thereby the tender process lacks transparency.

14. First and foremost tender under clause 3.2 makes it mandatory for the bidders to submit Work Done Certificate showing satisfactory completion of at least one work of mining/civil/irrigation of value not less than Rs.4,65,82,OO3/ (8O% of value of work) involving excavation and removal any earth/mineral including sand in State/Central Government Undertakings during the last three years. The aforementioned condition requires that the bidder shall complete at least one u,ork of required monitory value, compiete satisfactorily that too within tast three years of the date of the bid. While so, the Work Done Certificate submitted by respondent No. 1 shows that the said company has taken up the work of Singareni Collieries through work order No.760O009282, dated 21.1O.2022 and. has completed certain work upto March 2023 and the status of the work is "work in progress". Similarly, respondent No.1 has taken up another work from Singareni Collieries Company Limited and the certificate shows that the work is still in progress. The contents of the Work Done Certificates submitted by respondent No. 1 failed to meet two criteria, i.e. completion of work and completion of vvork 10 - satisfactorilv. or-11.r when the entire nork is completed that too to the satisfaction of th,3 € mployer, it can be said that respondcnt No. t has successfully fr-rlfrll':ci the criteria under clause 3'2 'rf tender conditions and not othent'ise. 'lhe contents of the Wlrk Done Certifrcate speal.: Ibr themselves and cannot be given ;lny other interpretation. 'lhe respondents r'l'ould contend that the contracts awarded are for a period of 11 months and 17 months r(rspectively and each compon(] nt of u'ork done is a separate piece u'orl'l r'r'hich is to be treated as c,tmpleted satisfactorily. Such interpretal ion of the contents of the \\/ork Done Certificates is not acceptable'

15. Coming to the aspect of seeking clarihcation from tl-re bidder as per clause 21 of tt:r'rder conditions, said tender conclition itr;elf ilearly shou,.s that the clarification may be sought at the cliscretion of the employer. In c.Lse, the emplover after perusing the cont'::nts Work Done certihcate L its come to the conclusion that the rvorl. is still in progress and that has not been completed, no fault can be found with the emploi,er A conjoint reading of clause 3 2 and 21 of the tender con d itic,ns together u'ith the contents of W'lrk Done Certihcates does; ttot make out a positive case in favour of respondent No.1.

16. Coming to the contention of respondent Nos.1 and 2 that as per clatrse 22.1 , t\te eligibility criteria is as per definttion ITB clause 3 11 and only when the eligibitity criteria is met, the further evaluation takes place. To ascertain the case of respondent Nos. I and 2, said entry in the web portai is produced below: Technical parameters list: Operat Nt in T\?c Max valu c

0.00 o00 lender Fulfill Remarks Evaluation Tender Clause 3.2 of Tender fulfilled

17. A reference is made to the contents of above award of tender d'ated 19.07.2024 to the "Remarks" column wherein it is entered as "As per tender docs". This entry in the Remarks column is mis- interpreted by respondent No.1 to mean that respondent No. t has met the eligibility criteria as per 3.2. To the contrary, the meaning of the contents of "Remarks" column can be construed as that respondent No. 1 qualihed for further evaluation of the bid as it has met the eligibility criteria by rrling aI the required tender documents including the work Done certificate. The title of the corumn is "Remarks". Remarks '*'ith respect to whether the bidders have rrled al1 the documents or not. only such bidders who have filed arl the documents are eligible for evaluation of their bids and further steps.

18. The next column is titled ,,evaluation comments,,, wherein it is clearly mentioned as "clause 3.2 conditions not fulfrlled". Therefore, a close scrutiny of the contents of ,.Remarks" column and the 12 contents of "eval--la.lion comments" column sho\''s that the contents of the Remarks column are meant lbr noting donn the eiigi rilitlr of a bidder prima fctcir: xt account to hling of required documerrts as per tender notificatior ancl not on tire basis of contents of said docurnents. Onll' after the documents hled for the evaluat on of the bid are in order. :he contents are examined and an evaluation is made as to the etig,ibility of the bidders and thereby responilent No' 1 has been found to ce lacking to have met the conditions utlcler clause

3.2. However, resJrondent No.1 is mis interpreting the ccrntents of "Remarks" coluntn and the "evaluation commeltts" columr and the same has been ertc,neously relied upon by the lean'rr:d Sinr3le Judge while passing tht: inrpugned order.

19. Coming to l-ht: aspect of observing prireciple s of naturll justice, about passing a. r:asoned order u'l'rile rejecting an appllcation, a reasoned order is passed when there is an adjudication process, where there are 1'.\() or more rival contestants, each persor is heard ald an evaluatiori is made of the rival contention s and reasoned order is passed. IrL the instant case, the entire tender prccess took place online \ rhcr,3in the bids are submitted online and he result also has been dr:cizrred online. A reason for rejection is tl Le criteria for meeting the re'quirements of principles of natural jusrice. The said reasoned order could be one u.ord, one line or a par rgraph or 13 In the instant case, the employer has given the reason lbr rejecting bid of respondent No.l by stating that respondent No,I failed to meet the conditions of clause 3.2 of tender conditions. The said reason when written in one line or in an elaborate manner would convey the same meaning. Thus, there is no ground to accuse the writ appellants of not observing the principles of natural justice.

20. Lastly, mala fides are attributed to the writ appellants on the basis of issuance of letter of intent dated 10.07.2024 while the information was made available by the writ appellants on e-procurement website indicated that respondent No.3 was declared the successful bidder and awarded the tender only on 1g.O7.2O24. In this regard, it is seen that the said allegation was not made by respondent No.l in the u,rit petition but was raised only at the time of filing a rejoinder to the counter filed by respondent No.3.

21. In this regard, as per judgment of the Hontrle Supreme Court in Arti Sapnt o. Stolte of Jammu and l(ashrni4, |ne a_llegations made for the first time in the rejoinder affidavit do not give scope for reasonable opportunity to the respondents to give reply and therefore cannot form basis for a finding in favour of the petitioner. Likewise in the matter of Ashok Lanka u. Rishi DikshitT, the Hon,ble Suprame Court held that when the allegations are made in the ' lrs8rlzscc as+ ' (zoos)sscc go L4 - rejoinder, u'hen n o new plea can be permitted ir-r the rejoinder' without the leave rf the Court, such allegations cannot be relied upon. While Ie q:r. precedents do not support respondent No 1's allegations made, irL the rejoinder for the iirst time attribu [ing mala fides; we are of th e considered opinion that the colltents c'f the web portal dated lg .O" 2O2l are also mis-interpreted on accot tnt of the fact that the tr:ncler evaluation process has been completed by Oa.O7 .2024 and ttre letter of intent was issued to the s;uccessful bidder on lO.Ol'.',.O24 and said information u'as upload':d in the u,ebsite on lg .t-,ti .2024. Last but not least, after tl're bids are evaluated, the eligible biddel has been selected b-v uay of lottery in the presence of all the birlders. The learned Additional Advocate General pointed c,ut that even respondent No' 1 participa'ed in the lottery process thzrt took place on 7O.O7 .2024 and thereforr', no maLa fides carr be attribtLted to reference Nos.1 and 2, as the entire process has been condurt,:d in transparent manner as per the tend-r process contemplated in the tender conditions as n'ell as not.ificati'rn' When the successful bidrler is selected through the process of drau.ing lots in the presencer tf all the eligible bidders. no mala -[d':s can be attributed to thr: ',r'rit appellants in conducting the tcn der process in fair and transparerlI manner. 15

22. For the foregoing reasons, we are ofthe considered opinion that the learned Single Judge erred in reading the contents of the Work Done Certifrcates, the e-procurement award dated 19.07.2024 arld the factum of issuance of letter of intent dated 1O.07.2024 and publishing said information on 19 .O7 .2024 in the e-procurement online website and therefore the said i-p.,g.,.Jot the learned Single Judge is liable to be set aside.

23. In the result, the Writ Appeal is allowed setting aside the order dated 28.1O.2024 in W.P.No.21973 of 2024 passed by the learned Single Judge. There shall be no order as to costs. Miscellaneous applications, if any, pending in this appeal, shall stand closed. //TRUE COPY// SD/-T.KRISHNA JOINT RE MAR TRAR SECTION OFFICER To 1 2 3 4 5 6 PSK. Y8x,B3,no'i""llft ,l{'3f"1:'"lJ["*3*-"ii]i*91955p*fgil'-"irJ"{ d;di;,"hMrw'ssB'-[remi.es rear block 3rd floor' K ?fl :'9fl Corooration Limited TGME "chairman,ee{.[gga'#Xil.i;i,J;TTr5iiY'il'irt3'":BiT#SJi l#tf5: f tl"'l*"f tS$:t' Ht:*fl'" :i9Pn"- u rt ro r th e state or Telanqana, at HYderabad. Two ccs to GP FoR ADDL ADVOCATE GENERAL', High court for the state g"-"tSqAf alil#r"'l'3:'c=83J]Advocaretopucl Two CD CoPies "o LS W I I * a( Sf- 6 + z a? J A P fl5 ). t o /: !) t: T C HIGH COURT DATED:2710312025 JUDGMENT WA.No.202 ol 2025 ALLOWING THE WRIT APPEAL WITHOUT COSTS 0 l1 v\ i)