The High Court · 2025

Counsel for the Resp,rdent No.4 : SRI p.KISHORE RAO,SC FOR TSMS&ID The Court made the r()tlowing: ORDER i1 .i THE HON'BLE SRI ]USTICE B. VIJAYSEN REDDY WRIT PETITION o.28296 of 2021 ORDER: This writ petition is filed seeking a direction from this Court to declare the action of the respondents No.1 and 4 in allotting Work/Purchase Orders for manufacturing of Hospital Furniture to the respondent No.3 who inturn entering into MOUS with private Parties without calling any tenders by depriving the object of Government for Prisoners to Learn and Earn by manufacturing of Hospital Furniture, as illegal, arbitrary and violative of Articles 14, 16, 21 and 3OO-A of the Constitution of India.

2. It is submitted that the petitioner is proprietor of M/s.Vardhini Industries, a MSME unit registered with Industries Department of Telangana State and NSIC of Central Government and having registered office at Sithaphalmandi, Secunderabad. The petitioner is engaged in manufacturing steel furniture for offices and hospitals, mostly, supplying furniture to the Government offices and Government undertaking Institutions apart from private Institutions. Petitioner's industry is running since 27 years. Petitioner had been participating in the tenders issued by the Health Department, Government of Telangana, for supplying steel furniture to Government Hospitals. The petitioner had been declared I 2 successfJl rl lder in several tenders as she quote(l lo'^/est bid amount Fc,r : r eparing steel furniture with good quality,

3. It isi : u )'n tted that wlthout following the procedure laid down by law, t I (' respondent No.4 issued Purchase: Order: to the respondent rc.3 and requested to supply Hospital furnilure item worth of l:.2,33.83,690/- vide (1) P.O.No.705/38:l/TSMSIDC/ EQU dal,e I 04.03.2021, (2) P.O.NI.7OL/276ITSMSI)C/GMC/ NAL date,l 2ti.O2.2O2t, (3) P.O.No.6871275lTSlvSI)C/GMC/ Suryapet Cat:d 15.02.2O21, (4) P.O.NO.601/437./TSM!;IC)C/ dated F,.t), 'Jc.163/5S/TSMSIDC/EQU dated

08.09.20:ll, :;) P.O.No.233/437ITSMSIDC/EQU dated 11 08.2021, (6) (7) P.O,tr,) 1.62I386[SMSIDC/EQU dated 25.06.20)-l and (8) p.o.r\r .I rr0/382/TSMSIDC/EQU dated 20.05.202 t. The lail Prisoners rr: not preparing any hospital Furnitrlre and the 26 06.2O2t, respondent llo./- without foltowing any norms and pror:edure is allotting th,) {ork to one M/s S.S. Industries Proprietor b1 entering into Memof ar'rdum of understanding for the reasons hest (nown to the autl-,ori1i( s.

4. It is s r hn-ritted that the Health Department has tret:n placing orders witl- tTe lail Department since 2018 by Quotinr3 hi<:her price than the :rr ,:: qr:oted by the petitioner. As per the understanding of the petitior r: -, the work allotted by the Health Depa.tTr€ nt to the v-1 a'l , Jails is to encourage the business in various skills including manufacturing of furniture. The said object is defeated as the health department is allotting work to lails and inturn the Jailors are entering into the MOUs with private parties. which is against law. The respondent No.4, a nodal agency for procuring the medical equipments required by the Government hospitals in the State of Telangana, never followed the Guidelines issued by the Government for extending the benefits to MSMES which says that 2oolo of the total requirement should be purchased from MSMES vide Government of India Gazette No.503 dated 26.03.2072 and the hospital furniture is reserved to MSMEs vide Government of India Gazette No.31 dated 16.06.2006.

5. It is submitted that instead of encouraging medium and small-scale industries like the petitioner, the respondent No.4 is allotting the work to jail department, in turn, the Jailors are allotting the work only to the persons known to them without calling for tenders. Recently, the Central Government adopted a method of purchasing the required equipment as well as the furniture through Portal called as "Government E-Market Place (GEM)", but such process is not followed by the respondents. The petitioner has given representation dated 01.11.2021 to the respondent authorities but the same was not considered, as such, the instant writ petition. 4

6. Initla l! counter affidavit was filed by one --' Killasagar, Superlnterce tt. of Prisons, Prlsoner's Agricultural Colony Crerlapalli (Open Ai- . i i ) on 23.11.2027 on behalf of resporde-rt No'3' Subsequent l'r another counter affidavit was filed on behalf of the respondent'j \o.1 and 4 on 70.L2.2O21. Later, Cne t4r. Santosh Kumar R.oV ! t,perintendent of lails, Central Prison, Cherlal.ralli, filed counter on t:lalf of the respondent Nos.2 and .l on 10 06.2022. The said l- Kalasagar, filed additional counter .lffidavit on

30.10.20i13 r1 behalf ofthe respondents No.2 and 3.

7. Ir tl^ € coLlnter affidavit filed by the respondent llo 4, it was stated that 1t^e World Health Organization declared Co'.'id-19 as Pandemic o r 11..03.2020 due to spread of the disease in many countries ,a :- rss the world. Sensing the seriousness of tlle ssue and future corrrllions of health emergency, which requir€ ilnmediate procuremen of certain Diagnostic, Surgical and crthet medical equipmt-'nt, t rrugs and Pharmaceutical and other essentia services and relaterl supplies on priority for undertaking COVID'19 relief operations, t re Government have issued several orders t ermitting the respolr,l-.nt No.4 to procure and supply all tre required items/equiprrent to the Health Institutions to manage & control COVID 1 { t ffectively. Lockdown has been imposed throu 3hout the country a'rc demand for Medical/Covid items har; increased drasticall,/. l.'re market has become "sellers market" and the same i 5 /1 has been opined by the Government of India vide its Oltce Memorandum No: F6l18/2019 ppD, Depaftment of Expenditure, Ministry of Finance. dated 27.O3.2020.

8. It is stated that the Government of. Telangana vide G.O.Ms.No.29 Finance (TFR) Department dated 04.O4.2O2O, permitted relaxation of the provisions of Article 125 of Telangana State Financial Code and related further government orders on the subject in respect of procurement of certain Diagnostic, Surgical and other medical equipment, Drugs and pharmaceutical and other essential services and related supplies. In view of the Covid_19 emergency, when the demand for additional beds in the designated Covid hospital increased drastically, the respondent No.4 issued purchase orders to several firms for supply of Hospital Furniture to create additional beds. The purchase Orders have been issued as per the conditions laid down under Tender Notice No.01B/TSMSIDC/ EQU/Procurement/2O18-19 dated 18.04.2018. Unfortunately, the petitioner's firm wrongly construed the same as purchase Orders issued under the 2019 tender. The prices quoted by the firm in the fresh tenders are considered only for emergency purchase in terms of G.O.Ms.No.29 Finance (TFR) Department dated

04.o4.2020. 6

9. It is; I t; tecl that the purchase orders worth Rs'?,113,5O,a46/- issued by t-t rerspondent No.4 were issued under enrerJency in terms of (i r) tvls.No.29 with the tender conditions; la d under Tender Nr:t r:,: No.01B/TSMSIDC/EQU/Procurement/2O18- 1.9 dated

18.04.2018 t is; submitted that the prices offered by th:r Central C.h ?r apalli are less than L1 prices quoted in the Prison, \otir: : No.01B/TSMSIDC/EQU/Procurement/2019-.10 dated Tender 10.05.2019 -'his has resulted in saving the public exchequr-'r.

10. It is ;-bmitted that in terms of Article 122,723 anc Rule VII an I fu rther of Article :l ,l i cf the Telangana State Finance Code instructi:rrs :'sued under this Code, a from a Government the article; purchasing officer slrould buy institution viz. lai , Forest Departmen. rrr the Public Works Workshops etc institution l: a ble to supply articles of the wlren such qua lit y. Fu rth er. the pu rc h:.:; ng officers should invariably buy all s,ta rtdardized articles of f ! rniture which he requires from lail De )artment. As rega-c1s r licles of furniture which have not been standard ised, the pur:hasrrg officer should first ask the Superinter d€ nt of the nearest .lai , rt what prices he can supply the articles iln(l whether he can :;uDr I / them within the time fixed. When the ari:icl3s can be supplieci rnr llrin fixed time and the jail price together with freight charges rlce,: not exceed by 5 per cent of the market pr ce at the 7 place where the article is required, the order should be placed with the Jail Department.

11. It is stated that in the present case the rates offered by the petitioner firm is higher than the rate quoted by th.e Central prison, Charlapalli. The respondent No.4 was regularly making procurement of Medical Equipment. Surgical Consumables, etc. through GeM portal only. So far the respondent No.4 has floated 415 numbers of tenders in GeM portal in the last 18 months. As per the tender conditions all the bidders have to undergo technical evaluation and demonstration of products being offered by them and the tender inviting authority cannot be held responsible for procurement of the items from the bidders when the Prisons Department is offering the same for much lesser prices.

12. In the counter affidavit dated 23.11.2021, filed by the respondents No.2 and 3. it is stated that Memorandam of Understanding (MoU) with entered with S.S. Industries for wooden and steel furniture manufacturing and assembling unit to provide employment and skill development for inmates of Prisoners Agricultural Colony Cherlapalli, Hyderabad, with approval of Government of Telangana. The Prison Department has approved S.S. Industries for Memorandam of Understanding (MoU) through Three Bid system i.e. "Pre-q ua lification bid", "Technical bid" and 8 v, "Commerc z l/: nancial Bid" on e-procurement systrlrr tender ! process 'ridtr tr..No.156|lnds2/20t8-]- dated 22.04 2018

13. It is stated that soon after receiving purchase orceTs from various 3or r: rment and private sector entities, the t'1 bllc Private Partnersh p ll'PP) unit manufactures articles by engagin!) inmates of the Prisone-; l\gricultural Colony. For this purpose they are getting royalty to d€ [)artment and wages to inmates. The royalty accrued is deposited t: prison development fund immediately. Th: [)rices are fixed by th€ (:ommittee comprising senior Prison Officerli, Deputy Director cf Industries, Deputy Engineer of Police Housing Corporatirrr r nd expert in industry. The committee wi I pursue local Market rat:s and Government E-Marketing (Gel'4) r;ttes of raw material a ,1 goods and finalise the rates of articles ev ery year' After manu f acturing articles, the quality of articles will bt,r checked by the sa n (-' co'nmittee members and the respondenls Nrl.2 and 3 are assuri'r! qlality with seven years warranty. Ai l)er MoU, the Puhli,: I r vate Partnership (PPP) unit is establi:;ht:d in Jail campus ( , F'risoners Agrlcultural Colony, Cher'apa li t he jail is having 12t1 :cres land out of which one acre land is al ocated to M/s. S.S. Irdustries for establishment of industry a1d they are paying nrcrtl^ly rent of Rs.50.000/- to the Prison Dep€rtment In additior tc royalty and wages. The same is transferred to Prison Developrnre n' Fu nd. 9

74. It is stated that the respondents No.2 and 3 are manufacturing wooden and steel articles and furniture after receiving work order from various departments duly following codal procedures laid by Prison Department and MoU with public private Partnership (PPP) unit.

15. In the counter affidavit dated 13.06.2022, filed by the respondent No.3, deposed by Mr. Santosh Kumar Roy, Superintendent of Jails, Central prison, Cherlapalli, it is stated that the 3 respondent is not having any MOU for manufacuring Hospital Furnlture work and the adjacent prison namely prisoners Agricultural Colony, Cherlapalli is undertaking such works. As such, the respondent No.3 is not a necessary party to the writ petition. The Purchase Orders of the respondent No.1 made to the Superintendent, Prisoners Agricultural Colony, Cherlapalli, Medchal Malkajgiri District (subject matter of the Writ petition) was cancelled by the respondent No.1 vide proceedings F.No.443lTSMSIDC/PO-cancel/2O2L-22 dated 25.11.2021 and the same has been awarded to the Superintendent, prisoners Agricultural Colony, Cherlapalli, Medchal Malkajgiri district and the said work is being executed by them, for which there is no MOU with any private parties and the said work is purely being executed by the respondent No.3. l0

16. In tf c 3dditional counter affldavit, lt was statec by the respondent: lJo..l and 3 that the prisoners are human r<lscurce and with proper ;kll and productive engagement it can ope.l a new chapter rn tllir lives. There is huge scope for further grou/th in the skill of inm:t:s of the Prison Industries and the role of r::orporate partners wi.t. can bring in cutting edge solutions will b':l crucial' They can :r ng advanced technology and latest mzrntrfacturing equipment tr uo skill the inmates of the Prisoner's Allricultural Colony, Chr:'lapalli, in turn, they can earn and support their families, ,Aftsr their release, they can get meaningfu (lmoloyment and minq e lr :he soclety as good citizens. t7. It is stated that the Head of the Department r.€r. Prisons Departmen: ras primarily issued Paper Notification & Ton(:er Notice vide Letter \o.Iad.2/ t56/2018-I-Tenders dated 22.04.:t0:.8 for the establishrnrr-t or Industries under Public Private Partnrlrship (PPP) in Steel Furr iiure Unit and publlshed on 25.04.2018 in ;rll leading news papers .er. Eenadu, Sakshi and The Hindu etc Tle Prison Department has received three tenders from various Eirms i.e. Rajadhani I: lgineering Works, S.S. Industries and lo'rfra Furn System prt, Ltd. who have participated in the tender process. But Vardhi'ri Industries - petitioner firm has not partici lal ed in this tender proce ss. After receiving the tenders within :he stipulated period, thc tsead Of the"Department has constituted ., Tenders l I I I I I I ; ; L i i i t I 11 Committee vide Lr.No.Ind.2/156/2018-L dated 08.05.2018 to examine and verify the documents and finalize the Price Bid. A meeting was convened on 15.05.2018 as per the specifications laid in the Notification. The tender committee finalized M/s. S.S. Industries where they have offered highest royalty and fulfilled all conditions as per the specifications mentioned in the Notlfication. It is stated that before entering into MoU between the S.S. Industries and Prisoner's Agricultural Colony, Cherlapalli, Medchal District, the HOD i.e., Prisons Department has taken legal opinion from the concerned Government Pleader. The department has followed due procedure to finalize tender process by following rules and regulations, terms and conditions properly contemplated in the Notlfication

18. In the reply filed to the counters it was stated that the method adopted by the respondent No.2 is agalnst public policy and public money is being misused. The respondent No.1 has no authority to say that the Central Prison offered lesser price. There are no details furnished by the Jail authorities that they have offered lesser price than the price quoted by L1 pursuant to the tender notification. There is collusion between the official respondents and the work worth crores of rupees is allotted to one individual without there being any accountability to the respondent No.3 as well as respondent No.1. i t2

19. As; :;ee tr from the averments in the writ petition arrd the relief sought, :he letitioner has not challenged any tender rlctif cation or the work orcrlr/purchase order issued by the official resporldents in favour of M /; S.S. Industries, which is not made a paft)' tt) the writ petition. -Th(' enl-ire case of the petitioner is that the resoondents have collr-rd:c with M/s. S.S. Industries and are extendirtg favour to them. That lr stead of going for public tenders, MOU is entered with M/s. S. S Ir dustries by the Jail Department and the'e is no transparen()/ as to the quality, quantity and price for wrich the Jail authoritles/!i S;, Industries are offering the furniture/equi'rment to the respo n cl(l 1t No.4.

20. Learrr:C Cjovernment Pleader for Home and lea'ned standing counsel for lhe respondent No.4 submltted that duer to Covid-19 situation a'r( errergency, the hospital equipment, fu rn ture etc. were proct r'ed by entering into MoU's with third parti€,s as per G.O.Ms.No,.r,) dared 04.04.2020.

21. Thr: r lin contention of the learned counsel for the petitioner is that th,3r: s loss to the State exchequer. Further the p€titioner willing to sr pply the articles/eq uip ment on a lesser ra1.e. The MoU dated 30.C;' 20.18 entered by the Telangana Prisons D(:rpartment with M/s ;. S. Industries is placed on record, which ret,'eals that M/s. S.:i, " rrjustries shall establish a Wooden and Sterel Furniture I i l I I I I ! I I ; i i E I I I I I I l3 unit at Prisoners' Agricultural Colony, Cherlapalli and provide work to the prisoners. They shall arrange training to the prisoners and supply raw materials. M/s. S.S. Industries agreed to pay Rs.50,000/- per month towards rent to the prison Department for allotting land of 4000 sq. yards with enhancemenL of 5olo every two years. Apart from that, M/s. S.S. Industries has to pay royalty at

5.5olo on overall sale turnover excluding GST on the articles manufactured in the Prisoners' Agricultural Colony, Cherlapalli.

22. Learned counsel for the petitioner contended that there ls no clarity on the policy followed by the Jail authorities with regard to manufacturing and supplying furniture and equipment to the respondent No.4 and other departments.

23. According to the respondent authorities, under PPp, MoU was entered by the Jail Department with M/s. S.S. Industries for the benefit of prisoners so that they can get trained and upgrade their skills to manufacture' furniture and other equipment. Clause 11 of the MoU dated 30.07.2018 states that the Deed of MoU will be in operation for a period of five years. It is not known whether the contract of M/s. S.S. Industries is extended beyond five years. t \

24. In the above circumstances, considering that MoU is stated to have been entered by the Jail Department for the benefit of prisoners and admittedly, manufacturing unit was set upon by ( [. 14 M/s. S.S. In(l,rstries, which is not a party to thls //s, this Co rrt is not inclined -o conduct a roving enquiry in this !vrit petition. As regards o';s heing, altegedly, caused to the State e<chequer and no transp,lr-. r t policy being followed by the respondent aL thorities, it would sulf r e if directions are issued to the respondents \o.1 and 2 to issuer recessary guidellnes to the respondents No 3 and 4 to follow a trzir'r iDarent policy and ensure that no scope is given in future for r I rallenging the contracts and work/purr:l- as,: orders issued to thr :cntractors.

25. Ar:cor rlrngly, the writ petition is disposed of direr.:ting the responderrt:, No 1 and 2 to consider the representa-ior of the petitioner d:ted 01.11.2O21 for encouraging the loca l"lSME Units located lr . r e State of Telangana in placing orders; for various furniture ite'Trs :o the Jail Department, by giving opt)or:unity of hearing [o llr ] petitioner and pass orders, in accordance ,vrth law. within a per ic c c,f six (6) weeks from the date of receip t of a copy of this ordr:r . The -r scellaneous petitions pending, if any, ;hi,rll stand closed. I her r: shall be no order as to costs. i/TRUE COPY// SD/-A. SR NIVASA REDDY '-- r-.- ASSISTA.N'I- REGISTRAR "SECT ION OFFICER To,

1. The Princioal !i,:r:retary, Health and Family Welfare Departrn-.nl Secretariat, State of Telia ncl; l,ra HYderabad

2. The Princiilzrl !i'rr;1s13ry, Home Department Secretariat, State: of Telangana, Hyderabacl

3. The Superir-te n l,:r.l of Jails, Central Prison, Cherlapalli, [\/ed:hi'rl ttilalka.igiri District k*,,. ...;_l .i :r&:w;;] iY ii;

4. Jhe IVanaging Director, Terangana state Medicar services and rnfrastructure - Development Corporation, Offl-ce at 2nd Floor, DI\rl and HS Campus, Sutan Bazar, Koti Hyderabad. 5 One CC to SRI M A.K tvtUKHEED, Advocate. IOPUC] 6. Two CCs to GP FOR IMEDICAL HEALTH FW, High Court for the State of Telangana. [OUT]

7. fwo CCs to GP FOR HOME, High Court for the State of Telangana at Hyderabad [OUT] B One CC to SRI P KTSHORE RAO, SC FOR TSTVS&|D [OPUC] 9. Two CD Copies. BSK BS W ( I i HIGH COURl' DATED:0910$t2025 C;C TODAY ORDER WP.No.2829(; of 2021 k q o ri i. { irtT \:\ =1=:':'-.- s 1 1ii ii, ?)2! * D 6 P a) ). .\ z' DISPOSING CF THE WRIT PETITION WITHOUT COSTS A \$' \b b