The High Court · 2025

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 vacate the interim.orders dated 25.08.2025 passed in WP No. 2531212025 and dismiss the above writ petition Counsel for the Petitioner : SRI KADARU PRAB Counsel for the Respondent Nos. 1 & 5 : GP FOR MEDIChL HEALTH FW Counsel for the Respondent Nos. 2 to 4 : GP FOR LABOUR Counsel for the Respondent No. 6 : --' The Court made the following: ORDER HON'BLE SRI JUSTICE NAGESH BHEEMAP.AI(A No. OF ORD ER: Petitioner approached this Court aggrieved by the action of the 2'd respondent - District Collector ancl Chairman, District Outsourcing Committee, Suryapet District. in issuing Proceedings dated 20.O8.2O25, allotting outsourcing'v<)rk in the Government ()eneral Hospital, Suryapet in favour of the 6th respondent - M/s Poorna Agency. According to Petitiotter, such allotnient is contrary to the terms and conditions of fhe Tender Notification dated L3.06.2025, violative of G.o.Rt.No.4459, dated 27.12.2006 and G.o.Rt.No.4271, dated o1.l i.2008 and infringes Articles 14, lg and21 of the Constitution of India. Petitioner firm states that it is a registered 2. outsourcing agency bearing Registration No' I541 /2OO3-B' dated 31.12.2003, and has been in existcnce for over two decades. It has been continuously engaged in providing outsourcing and manpower services to various ()6vernrnent Departments within Suryapet District, inclucling the Government General Hospital, Suryapet and seve rerl other departments such as the offices of the District collector, 2 Medical and Health, Panchayat Raj Engineering and other local administrative wings. It is submitted that petitioner agency has been rendering its services efficiently and in accordance with law, to the satisfaction of all the authorities concerned and there have been no complaints or adverse remarks against its functioning at any point of time. The agency's contracts have been periodically renewed and extended in recognition of its satisfactory performance and compliance with statutory requirements.

2.1. Petitioner states that it was selected and allotted outsourcing work in the 5th respondent - Government General Hospital, Suryapet where it deployed approximately 136 employees in various departments such as sanitation, maintenance and support services. [t is contended that it has been managing the said workforce and ensuring uninterrupted functioning of the hospital to the utmost satisfaction of the hospital administration. It is stated, the contract period for the financial year 2024-25 expired on 3I.O3.2O25. Anticipating renewal, petitioner addressed several representations to respondents, including those dated 29.O3.2025, 02.O4.2025, O3.O4.2O25 and 05.08.2025, requesting that its contract be ,-'\ J extended from O1.O4.2O25 till linalisation of the fresh tender process. Petitioner further asserts that in view of tkre essential nature of the hospital services and to avoid disruption, the 5d' respondent orally instructed petitioner to continue the services of its employees pending further orders frorn the 2nd respondent. Acting upon such instructions, petitioner continued to discharge its duties and maintain the hospital st:rff without interruption.

2.2. It is further stated that while they were ',vreiting for formal renewal orders, the 2"d respondent issued a fre'sh Tender Notification dated 13.06.2025 inviting Applications liom the eligibte outsourcing agencies for empanelment for tht: flnancial year 2025-26. Petitioner participated in the said tendr:r process by submitting all the requisite documents, includinll proof of statutory registrations under the Employees' Providcnt Fund (EPF) Act, Employees' State Insurance '(ESI) Act, Cloods and Services Tax (GST) Act, and turnover certificates for the preceding three financial years. Upon scrutiny of App,lications, petitioner's agency was found eligible and was act:ordingly, included in the list of empanelled agencies published try the 3'd respondent - District Emptoyment Officer, Suryapet District \i.,_ 4 wherein petitioner's name appeared at Serial No.5 among the 27 selected outsourcing agencies. However, to petitioner's surprise, the 6ft respondent was also included in the same list at Serial .No.2O, despite being wholly ineligible as per the mandatory eligibility criteria prescribed in the tender conditions. As per Clause 6 of the tender document, every outsourcing agency seeking empanelment must possess a minimum annual turnover of Rs.30 lakhs in an5, one of the last three financial years, failing which the Application was liable to be summarily rejected. In addition, under Clause IV of the tender terms, each participating agency was required to furnish proof of valid registration with the EPF, ESI, and GST authorities and to produce copies of payment receipts for the preceding six months. It is contended, the 6ft respondent failed to satisfy these mandatory requirements and did not furnish either a turnover certificate or proof of statutory compliance for the prescribed period.

2.3. It is also stated, the statement of outsourcing agencies' GST turnover details for the financial years 2022-23, 2023-24 and 2024-25 clearly reveals that the 6th respondent had "zero turnover" during the said period, therefore, was ) :tl') ineligible for consideration. Petitioner, ofl the other hand, maintains that its own annual turnover was Rs.7,25,19,918f - for the financial year 2024-25 and that it has :onsistently maintained a turnover exceeding Rs.30 lakhs every ,year since 2Ol3-14. Petitioner thus asserts that it has an unblemished record of compliance and linancial capacity far exr;eeding the prescribed norms, making its exclusion from allotment both unjustified and discriminatory. Despite their superio.: eligibility, the )nd' respondent issued Proceedings dated 2O.O8.2O25, allotting the outsourcing work of Government Genere.l Hospital, Suryapet to the 6ft respondent, who was not qualified to be empanelled in the first place. Petitioner contends that the 2n.r respondent's decision was made in an arbitrary ancl unlawful manner, without any proper scrutiny of document-s and in violation of the tender terms, particularly Clause 6 arrd Clause IV. The 2d respondent, without cancelling petitioner's subsisting arrangement and without disposing of tht: pending representations dated 29.O3.2025, 02.O4.2025, 03.04. 2025 and

05.OS.2025, proceeded to allot the work to the 6th res;pondent. Petitioner maintains that the said action amounts to 6 administrative impropriety and procedural irregularity, as their services were never terminated or formally discontinued. 2-4. Petitioner also contends that the 2nd respondent . failed to conduct tender process in a transparent manner. It is stated that scrutiny of documents submitted by the bidders was not carried out in the presence of the applicants, as required under the established practice and guiaeiines issued in G.o.Rt.No.4459, dated 27.t2.20o6 and G.o.Rt.No.42T1, dated 01. 1 1.2008. It is alleged that certain ineligible agencies, including the 6ft respondent were favoured and included in the final list contrary to the evaluation criteria and without due verification of their financial capacity or statutory compliance. The 2nd respondent's action in issuing allotment orders in favour of the 6ft respondent, while petitioner's employees were still working in the Sft respondent-hospital, is not only arbitrary but also contrary to administrative fairness and natural justice, contends petitioner.

2.5. According to petitioner, the impugned proceedings dated 2o.o8.2o25 have been issued in clear violation of G.o.Rt.No.4459, dated 22.L2.2oo6 and G.o.Rt.No.42Tl, dated 01.11.?oo8, both of which mandate that empanelment and 7 7 allocation of outsourcing agencies must be confinr:d to those agencies that fulty satisfy the eligibility criteria relating to financial capacity, statutory registrations, and compliance history. It is zrrgued that the 2'd respondent has acted beyond jurisdiction try extending undue benelit to the 6ft respondent, who did not qualify under the mandatory terms of :he tender, thereby rendering the entire process illegal and unsrrstainable. It is the further case of petitioner that the Sth respondent Government has continued to utilise the services rtf General Hospital, Suryapet petitioner's employees, acknowlectging their efficiency and necessity, but failed to release the budg,:t towards their salaries since April 2025. This situation has caused severe financial hardship to the agency and its employees, wlto depend upon timely payment of wages for their livelihood. Such deprivation legitimate coupled with the arbitrary replacement of the petitiorler by an ineligible agency, amounts to violation of Articles 14 19(1)(9), and 21 of the Constitution of India.

2.6. Petitioner finally states that the bntire process of empanelment and subsequent allotment of work tc, the 6th respondent is vitiated by arbitrariness, discrimination and lack 8 of procedural propriety. The 2"d respondent, while exercising quasi-judicial powers under the Government Orders governing outsourcing, has failed to act fairly and transparently and that the impugned proceedings dated 20.O8.2025 are liable to be set aside as being contrary to law, rules, and the principles of natural justice.

3. This Court by order dated 25.Ob.2O25, as an interim measure, suspended the proceedings dated 20.O8.2O25 issued by the 2'd respondent.

4. The 2nd respondent District Collector filed counter aflidavit stating that the entire process of empanelment and allocation of outsourcing agencies for the financial year 2025-26 was undertaken strictly in accordance with G.O.Rt.No-4459, dated 27.12.2006, which prescribes the guidelines for empanelment of outsourcing agencies and G.O.Rt.No.427l, dated O1.11.2008, which governs the procedure for allocation of departments to such agencies. These Government Orders empower the District Collector as Chairman of the District Outsourcing Committee to frame and modify tender terms, scrutinize Applications, approve eligible agencies and make 9 allocations on a yearly basis in the interest of aclministrative efficiency.

4.L. It is stated, the contract period of petitioner's agency for the financial year 2o24-2s expired by efflux of time on 31 .o3.2o25 and there is no provision for automatrc extension of outsourcing contract beyond its term. consequently, the 2"d respondent issued a fresh Tender Notification datbd 13.o6.2o2s inviting Applications from eligible outsourcing aplencies for empanelmenr for the succeeding linancial year 2o2s-26. A total of 34 Applications were received in response to the said notification. l.Jpon scrutiny of the documents, 19 Applications were found fully eligible in all respects, including compliance with the minimum annual turnover of Rs.30 lakhs, ESI, EpF, and GST registrations, while three Applicatiorrs wer,3 rejected outright for non-submission of mandatory documt:nts. The remaining 8 agt-'ncies, though holding valid ESI, EpF, and GST registrations, hzrd not furnished proof of Rs.30 lakh turnover as required under clause 6 of the tender conditions. In order to ensure fairness and provide an equal opportunity to all, the District Level Selection committee, in exercise of its administrative discretion, resolved to permit such age:ncies to l0 furnish Rs.3O lakh bank guarantee from a nationalised bank in lieu of the turnover certificate prior to finalisation of the empanelment list. This relaxation was applied uniformly to all similarly placed applicants and was duly recorded in the minutes of the Committee's meeting. Pursuant to the said decision, the 6ft respondent furnished a valid bank guarantee of Rs.30 lakhs on 1O.O7.2O25 well before finalisation of the empanelment list. After thorough verification of all the requisite registrations and supporting documents, including ESI, EPF, Labour Department, and GST certificates, the District Level Selection Committee found the 6tn respondent eligible and accordingly included it in the final list of 27 empanelled agencies.

4.2. It is further stated, allocation of Government General Hospital, Suryapet, in favour of the 6ft respondent under Proceedings dated 2O.O8.2O25 was made in accordance with the established procedure and in the ordinary course of administrative allocation. It is denied that any irregularity, favouritism or d.eviation from tender conditions occurred. Petitioner's claim that its services were orally continued beyond

31.03.2025 is untenable, as there is no record or authorisation u permitting such continuation. The District Collector possesses discretionarv authority under clause 6 of the tender document and under G.O.Rt.No.4459, dated 27.12.2006, to modify eligibility conditions or to relax procedural requirements in deserving ca,ses, and such discretion has been exercised uniformly and transparently. Petitioner, having participated in the tender process with full knowledge of these terrriS, is estopped from challenging the collector's decisirrn merely because the outcome did not favour it.

4.3. Accordingly, the 2nd respondent contr:nds that petitioner has no enforceable right to continue in its earlier contract or to question the empanelment of other agencies once the tender process was concluded. It is therefore, prayed that writ Petition be dismissed and the interim orders be vacated.

5. The 2"d respondent also filed an additionerl counter placing further material on record and redffirming the tegality of the impugned proceedings. It is stated, upon re-verif:.cation of departmental records, the 6th respondent, M/s. poornzr Agency, was found to possess all requisite qualifications and documents prior to the date of empanelment. The said documents; include GST Registration certificate No. 36ARopK96TlerzD, dated t2

16.04.2025; EPF Registration Code No. APHYD15a8553000; Labour Licence No. SEA/ SUR I ALO lKD I I IO4O25 I 2025, valid from 13.05.2025 to 12.05.2026; ESI Registration certificate No. 52OOO5797OO000999, dated 2l.O7.2OtT, and a Bank Guarantee for Rs.3o lakhs valid for the financial year 2025-26.

5. 1. It is further stated by Respondents that on verilication of records, petitioner's agency failei to pay salaries to its deployed outsourcing employees during certain months when budget release from the Government was delayed, namely June, October and November 2024. Petitioner admittedly paid pending wages only after release of funds in Augus t 2024 and January 2025, thereby violating its declaration under the tender terms that it would ensure payment of salaries for at least three months even in case of delayed budget release. The 2nd respondent submits that such conduct demonstrated non- compliance with tender obligations and was one of the factors considered by the committee while evaluating agencies for empanelment and allocation. It is reiterated that the process of selection and allocation was carried out in a fair, transparent, and lawful manner, strictly in consonance with the tender conditions and the Government orders referred to above. The l3 Collector has acted within the framework of administrative discretion vested in him, and there is no illegality or mala fides in the selection of the 6th respondent. The 2nd respondent therefore, prays that this Court may be pleased to vacate the interim orders dated 25.O8.2O25 and dismiss the \l/rit Petition as devoid of merit.

6. Heard learned counsel for petitioner llri Kadaru Prabhakar Rao, learned Government Pleader for Medical and Health on behalf of Respondents 1 and 5, learned C,overnment Pleader for Labour on behalf of Respondents 2 to 4 and learned counsel for the 6ft respondent.

7. This Court has carefully considered the rival submissions advanced by learned counsel on either side and has meticulously examined the material placed on record. Undisputedly, petitioner's contract for the financial I'ear 2024- 25 came to an end by efflux of time on 31.O3.2O25, and the 2"d respondent thereafter, issued a fresh Tender Notification dated 13.06.2025 inviting Applications for empanelment of outsourcing agencies for the succeeding financial year 2025-26. Petitioner participated in the said tender process and was included in the list of empanelled agencies at Serial No.5. The l4 grievance of petitioner, however, is directed against inclusion of the 6th respondent in the same list and the subsequent allotment of outsourcing work in its favour, which is alleged to have been done in violation of the tender conditions.

8. On a perusal of the record, it emerges that the 6ft respondent furnished a bank guarantee for Rs.3O,O0,OOO|- along with valid registrations under ESI, EPF, Labour, and GST Acts, prior to finalisation of empanelment list. The District Level Selection Committee, in exercise of its administrative discretion conferred under G.O.Rt.No.4459, dated 27.12.2006, accepted bank guarantee as adequate proof of financial capacity in lieu of a turnover certificate. Such discretion, in the opinion of this Court, is traceable to Clause 6 of the tender terms and to the powers vested in the District Collector, who functions as Chairman of the District Outsourcing Committee, to ensure flexibility and fairness in the evaluatircn process. This Court further observes that petitioner has not placed any material on record to substantiate the allegation that the said relaxation was extended selectively or for extraneous considerations. On the contrary, the material filed by the 2rd respondent clearly demonstrates that same relaxation was uniformly extended to \ l5 = all similarly-placed applicants who were otherwise compliant with the statutory requirements but had not produc:ed turnover certificates. Hence, there is no material to infer discrimination, partiality or arbitrariness in the committee's decision. 9- Petitioner's reliance on its past perfor;,ance and continuitJr of service in previous years cannot, by itsclf, create a vested right to renewal or extension of contract. IL is ,,r,ell-settled that empanelment of outsourcing agencies is ein annual administrative exercise, and that no agency c)an claim continuation beyond expiry of its contract peri.d unless specifically extended by the competent authorigr. once the period of contract expires, petitioner's right to continue automatically ceases, and the District outsourcing cornrnittee is well within its authorit5r to conduct a fresh selection and allot work to any other eligible agency. The decision to allot work to another empanelled agency, thereflore, cannot be cc,nsidered arbitrary or violative of Article 14 of the constitution of India. 10. The contention that the 6th responde:nt was ineligible for empanelment is not borne out by the rec,rrd. The documents fited along with the additional counter affi,cavit by the 2nd responclent clearly show that the 6rh res; condent l6 poSSeSSed all the necessary statutory registrations and had submitted a valid bank guarantee for Rs.3O lakhs prior to finalisation of the empanelment list. The procedure followed by the Committee in accepting such linancial proof is consistent with the practice uniformly adopted for all the applicants and is in consonance with the discretion vested under the relevant Government Orders 1 1. Upon a holistic consideration of the material on record, this Court fihds no procedural irregularity, illegality, or mala fide in the 'inclusion 6f the 6th respondent in the empanelled list o. * the subsequent issuance of Proceed.l:gs 'i .. ' dated 2O.O8.2O25 allotting work in its favour. Petitioner faitedrtd demonstrate violation of any tender terms, governing Government Orders or any principle of natural justice that would warrant interference o[ this Court under Article 226 of the Constitution of India. In view of the foregoing discussion, this Court is of

12. the considered opinion that selection and allotment of outsourcing work in favour of the 6th respondent under Proceedings dated 20.O8.2O25, were carried out in accordance with law and in due exercise of the administrative discretion L- -r ( l7 I vested in the District outsourcing committee. The process appears to have been conducted fairly and transparently and no arbitrariness, illegality or mala ftde intention has been .established. 13. costs. 14- Accordingly, the Writ petition is disn:rissed. No consequently, the interim order datecl 2s.og.2o2s stands vacated. Sd/.U.SUDHA ASSISTANT REGISTRAR 6 I/TRUE COPY// ISECTION OFFICER To,

1. One CC to SRl. KADARU PRABHAKAR RAO, Advocate [oPUCl 2. Two CCs to GP FOR MEDICAL HEALTH FW ,High Court for the State of Telangana. [OUTI \ I

3. Two CCs to GP FOR LABOUR, High court for the State of Telangana. [oUT] 4. Two CD Copies PVL PMK u \ HIGH COURT DATED:1411112025 k o , ii= o M?'ill'l .:-., L.l D =.t WP.No.25312 ot 2025 DISMISSING THE WRIT PETITION ITHOUT COSTS q