G. S. Security & Man Power Services v. The State of Telangana

Petition under section 151 CPC praying that in the c rcumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to ...RESPONDENTS J:r,: rhe interim orde ;s the above il"il*ed 25'08' 202s passed in wp No. 2533 1/202s and .tA NO: 3 OF 2OZS Between: I,v {fi.#trti,,il,*};#ii:,,*iiw,,.iiaB:ffi .Sr "ftluri,$,HftFs AND '3",?i1:',f 1-t 2. The lil$fu d;*1il#,ir,"I#r.4:::{iji{{ffi ,,0f, 1,e1",,3,&.J:1ff !*sr;"[,,,Jr,:,r*s:,,:E*iffH.?t:ymenr 3. The o;;;i"?tt'ict Emproymenr 4' rhe Dishict colrectn. ^^ , ^""" .;ir3litl,B,r,.f#,Sg::,nil0 chairman Disrrict out sour )istrict at suryapet. Suryapet, Suryapet District. suryape, ro; "_ ": sourcins committee, t-'rtstrtct Employment nt Mediar co,ege Distri";;;","r, ; #l::jionar offrcer, Distric Exchange suryapet Petition under section 1s1 r:pr, ^__ ;.:: #;I.#i::::ff, :1,;Til:llT:^11 in,rre circums,a nces s,a,ed stav sranred in ,o *""r'"]";;::,ni:n court may be preaseo No l or 2o2sin wp rvo zsssr or 2,2sdared he interel, 2s/o,/2025 in t "r;;:;:j: ..REspoNDENrs Counsel for the d;H,l" ;":,J;;il i, R RAJYA LAKSHM' counser for the l""oono;r;.r, *l.o counser for the lesponderr"..u.l The court made "respond"r, he forrowing, onDs# & 2: Gp FoR LABouR & 4: Gp FoR RE,EN,E GP FoR I'IED'.AL & HEALTH s''trAN'cHANDER RAJ HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITI ON No. 25331 OF 2o25 ORDER: Petitioner questions the action of the 3'd respondent in issuing proceedings dated 20.O8.2025, whereby outsourcing work for the Government Medical College, Suryapet, was allotted to the 6th respondent lor thr: Iinancial year 2025-2026 pursuant to Tender Notification dated

06.06.2025. They pray for the said proceedings to be declared illegal, arbitrary and contrary to the tender conditions and the principles of transparency and fairness in government contracts.

2. Petitioner asserts that it is a registererl manpower and security services agency under Registrertion No. SEA/ NAL/ALO/ NG/ 56575 l2017 , renewed periodicetlly, and has been providing outsourcing and security services to various government departments including Government. Medical College, Suryapet, for several years without .iny adverse remarks. Petitioner had successfully executed the outsourcing work for the Government Medical College during the financial year 2024-25 to the satisfaction of the authorities concerned and was even issued a certiflicate of appreciat.ion b-v the Principal, Governrnent Medical College, Suryapet, uide Rc. No. 2 - 428lE3lGMC-SRPI 12025 dated 15.O5.2025. Despite such record, petitioner was ignored for allotment of the subsequent year's work. ?.1- Petitioner states that the 3'd respondent issued Tender Notification dated 06.06.2025 inviting tenders for empanelment of outsourcing agencies for various departments for the financial year 2025-26. The last date for submission of tenders was 18.06-2025, and tenders were opened on

20.06.2025. Petitioner participated and submitted all the required documents as per the tender form, including turnover certificate, EPF, ESI, GST and Labour registrations along with six months' payment receipts. It is contended that as per Condition No. 6 of the tender, each agency was required to have a minimum turnover of Rs. 3O lakhs in any one of the last three financial years and failure to submit proof of turnover would result in rejection of the bid. The 6tt, respondent did not satisfy this condition, ?S its turnover flor 2024-25 was only Rs. 3,62,830 as per information obtained under the Right to Information Act, 2005. Petitioner further alleges that the 3rd respondent improperly accepted a bank guarantee of Rs. 30 lakhs furnished by the 6th respondent in lieu of the mandatory turnover certificate. Such substitution, according to petitioner, is impermissible as tender conditions did not provide for any -) alternative form of proof for financial eligibility. Acceptance of the 6ft respondent,s bid, despite its failure to meet the tender criteria, is contended to be arbitrary, discriminatory and violative of G.O.Rt.No. 4459 dated 27 '12'2006' which mandates transparency in empanelment of outsourcing agencies'

2.2,Petitioneralsosubmitsthatseveralrepresentations datedl5.O5.2O25,26.07'2o25,andO4'08'2O2Swereaddressed toofficialrespondentsseekingextensionofprevi<lutscclntract untilcompletionofthefreshtenderprocess'butthesamei\rcrc ignored. It is therefore, contended that proceedings dated 20.O8.2025 are illegal and liabte to be set aside' By order dated 25'08'2025' this Cotrrl granted 3. interim suspension of the proceedings dated 2o-o8'2o25 till the next date of hearing and the said order was extended from time to ttme. The 3'd respondent - District Collector' Suryapet 4. filed a counl-er affidavit and an additional counter stating that tendernotificationdated|3.06.2025wasissuedstrictlyin accordancewithG.o.Rt.No.4459dated27.l2"2006flor empanelmentofoutsourcingagenciesfor2025-26.Thirty-four agenciesapplied,andtwenty-sevenwerefounde:ligibleaflter scrutiny by the District Level selection committee. It is stated that the committee, while evaluating the Applications, notcd 4 that certain agencies were unable to produce turnover proof of Rs. 30 lakhs but were financially sound. To ensure fair participation and adequate competition, the Committee permitted such agencies, inctuding the 6th respondent' to furnish a bank guarantee of Rs. 30 lakhs in lieu of turnover certificate. The 6ft respondent furnished such bank guarantee on 14.O7.2o25-,prior to ftnalization of empanelment, which was duly verified and accePted.

5.Itisassertedthatthisrelaxationwasnotgranted exclusively to the 6th respondent but extended to eight agencies facing similar circumstances. The process was transparent and consistent with the administrative discretion vested in the District collector under G.o.Rt.No. 4459 dated 27.12.2006' petitioner's previous contract expired on 31.o3-2025, and there is no provision for automatic rene'w'al. Once the contract period ended, petitioner ceased to have any right to continue and fresh selection had to be made through open tender' The 6th respondent filed a separate counter stating 6. that it complied with all the tender requirements. It furnished a turnover certi{icate showing Rs. 31,21,6951- for 2024-25, along with valid EPF registration under Code No. 1O000839498HYD dated o4.o1.2022, ESI registration dated o5.o1.2022, GST registration dated 17.06.2022, and Labour licence valid up to ..\ -) 3L-12.2o25. It is further stated that under the EpF and ESI Acts, submission of contribution receipts is not mandatory where employees draw above the prescribed limits.

6.I. reliance is placed upon the judgments of the Hon'ble supreme court in Tata cellular a. trnion of rnd.ial and Monte carlo Ltd. a. Affpc Ltd.2 to argue that judicial review in tender matters is limited to the decision-making process and not the merits of the decision itself In Tata cellular's ca.se, the Hon'ble Supreme court held that "the court does not sit as a court of appeal but merelg reuiews thet manner in which the decision was made. The terms of the in.ui.tation to tender cannot be open to judicial scruting because the inuitation to tender is in the realm of contract." rt was further held that ' judicial reuiew is concertted with reuiewing not the mrzri.ts of the decision in terms of uhether it was correct, but the d.ecisiort- making process itself." In Monte Carlo Ltd..,s case (supra), the Hon'ble supreme court reiterated that "euaruation of tend.ers and auard. of contract are essentialty commercial functions best left to the discretion of the exeantiue authoities. courts should. refrain from interfering unless the process ad.opted. is rnalafide or intended to fauour someorle." ' lroo+y 6 scc 6sl ' (2O16) tsscc272 6

7. Petitioner filed a reply denying the averments in counter and additional counter. It is reiterated that acceptance of bank guarantee in lieu of the mandatory turnover requirement is contrary to the tender conditions and vitiates the selection process. It is asserted that G.O.Rt.No. 4459 does not authorize the District Collector to relax essential eligibility criteria specified in the tender. Petitioner further contends that respondents' claim that similar relaxation was granted to other agencies is unsubstantiated, as no record showing such uniform relaxation was furnished. They maintain that relaxation in favour of the 6ft respondent alone demonstrates a clear case of arbitrariness and favoritism. It is argued that reliance on the Hon'ble Supreme Court precedents by respondents is misplaced, as the decisions in the above two judgments do not permit relaxation of essential eligibility conditions, particularly those forming the foundation of financial competency.

8. Heard Smt. NVR. Rajyalakshmi, learned counsel for petitioner, learned Government Pleader for Labour for Respondents 1 and 2,learned Government Pleader for Revenue for Respondents 3 and 4, learned Government Pleader for Medical and Health for Respondent No.S and 7 Sri S. Manichander Raj, learned Counsel on behAlf of the 6tt, respondent.

9. This Court has carefully considered the submissions o[ both the sides and examined the record. The core issue for determination is whether acceptance of a bank guarantee of Rs. 30 lakhs in place of a turnover certificate amounts to a material relaxation of tender conditions, rendering the empanelment process arbitrary or illegal.

10. From the material on record, it is evident that tender process was undertaken pursuant to G.O.Rt.No. 4459 dated 27.12.2006, which empowers the District Collector, as chairman of the District outsourcing committee, to modify or relax tender conditions in the interest of administrative efficiency. The record further indicates that the 6th respondent furnished a bank guarantee of Rs. 30 lakhs on 14.oz.2o2s prior to empanelment, which *r" accepted by the Committee as sufficient proof of financial capability. The relaxation was uniformly extended to similarly-placed agencies, and petitioner has not adduced evidence to show that the 6th respondent was singled out for favourable treatment. Petitioner's grievance, therefore, rests on mere apprehension rather than demonstrable arbitrariness. 8

11. The principle laid down by the Hon'ble Supreme Court in Tata Cellulais case (supra) squarely applies to this case. The Court held that scope of judicial review is limited to examining whether there has been illegality, irrationality, or procedural impropriety in the decision-making process, and not to substitute its own decision for that of the competent authority. The Supreme Court observed that "the Gouernment must haue freedom of contract; in administratiue decisions, the role of the court is to erlsure fairness, not to assess the commercial uisdom of tLrc authoitg. " Similarly, the decision in Monte Carlo Ltd.'s case (supra) reinforces the principle that courts should not intervene in tender evaluation unless there is clear proof of mala fi.des, bias, or violation of statutory provisions. The Court held that "mere dbagreement with the h eualuation of the tendeing authority or the uiew that another interpretation was possible is no ground. for interference und"er Article 226."

12. Applying these settled principles, this Court finds that acceptance of a bank guarantee as equivalent proof of financial strength falls within the permissible bounds of administrative discretion. The process was neither arbitrary nor discriminatory, and no violation of natural justice or mala fide intention is established. 9

13. [n view of the foregoing discussion, this court finds no infirmity in the proceedings of the 3'd respondent dated 2O.O8.2O25 allotting outsourcing work for the ()overnment Medicat College, Suryapet, to the 6th respondent. The impugned action is consistent with the tender conditions, G.O.Rt.No. 4459 dated 27.12.2006, and the law laid down by the Hon'ble Supreme Court. Accordingly, the Writ Petition is dismissed. No Miscellaneous petitions, if any, pending shall stand 14- costs.

15. closed. ,,TRUE COPY'/ SECTION OFFICER of Telangana at of Telangana at for the State of To,

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6. Two CD CoPies BSR BS HIGH COURT DATED:1411112025 ORDER WP.No.25331 of 2025 T!-ii: S I4 .L ') + * 2 0 r{ot, ttr, z rcueo * DISMISSING THE WRIT PETITION, WITHOUT COSTS \\ \\ 0^