High Court · 2025

I M/s Sri Venkateshwara Services, Represented by iGouijni W7o Venxateswarlu Age 34 Years, Rlo 12- 211 C"i",iv, koiiJo, Survip"t Distric-t - 508206. 10.Sri Vigneswara Agency, Represented by its Partner lodanoi Venkateshwarlu s/o Saidulu Rseo aoout i"6';;;:-H -fu;'. ti--sb' t-ingata"vit6ge' Pepahad Mandal, Suryapet District its Partner Sundari 1/A, SriramnnaraYana ...RESPONDENTS Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the Hrgh Court may be pleased to issue appropriate writ, order or direction more particularly one in the nature of Writ of Mandamus, declaring the action of the respondents No. 3 and 4, in selecting and empanelling the respondents No. 5 to 10 in the List of Out Sourcing Agencies, Suryapet District (2025- 26) in contravention of tender eligibility conditions of the Tender Notice No. A2IOS/SRPT/2025 dated 13. 06. 2025 and consequentially allotting the respondent Nos. 5 to 10, to the needy government departments for out sourcing work by the 3rd respondent vide proceedings No. A2lOS/Junel2025 dated 20l08l2o25as illegal, arbitrary, unfair, against the tender rules and conditions and in violation of Article '14 and 21 of the Constitution of lndia and set aside the list of Out Sourcing Agencies Suryapet District (2025- 26) to the extent of the Respondent Nos. 5 to 10 and also set a side the consequential orders of 3rd respondent vide proceedings No- A2lOSl Junel2025 dated 2010812025. lA NO: 1 OF 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 suspend the List of Out Sourcing Agency of Suryapet District for the year 2025- 26, to the extent of the respondents No. 5 to 10 forthwith. pending the writ petition. lA NO: 2 OF 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 direct the respondents to allot the petitioner agency to needy Government department for outsourcing work in pursuance of empanelment List of Out Sourcing Agency Suryapet District for the year 2025- 26 forthwith, pending the writ petition. Counsel for the Petitioner: SMT G.JYOTHI KIRAN Counsel forthe Respondent No.1 to 4: GP FOR LABOUR Counsel forthe Respondent No.5 & 9: SRI S.CHANDRA MOHAN REDDY Counsel for the Respondent No.6: SRI S.MANICHANDER, Sr. COUNSEL Counsel for the Respondent No.8: SRI MOHAMMED HABEEBUDDIN The Court made the following: ORDER HON'BLE SRI JUSTICE NAGESH BHEEMAPAI(A TTIRIT PETITION No. 25375 OF 2O2S ORDER: Petitioner challenges the action of Respondents 3 and 4, in selecting and empanelling Respondents 5 to 10 in the List of out Sourcing Agencies, Suryapet District (2025-26) in contravention of tender eligibility conditions of Tender Notice dated 13.06.2025 and consequentially allotting Respondents 5 to 10 to the needy government departments for outsourcing ,,r,ork by the 3.d respondent uirie proceedings dated 2O-O8.2O25 as illegal, arbitrary, unfair, against the tender rules and conditions and in violation of Articles 14 and 2l of the Constitution of India; consequently, to set aside the list of outsourcing Agencies, Suryapet District (2025-26]r to the extent of the Respondent Nos. S to IO and also to set aside the consequential orders of the 3"1 respondent uide proceedings dated 20.O8.2O25. The case of petitioner is that it is a duiy registered

2. outsourcing agency, having been established in 2016, and has been providing manpower to various Government Departments in Suryapet District for several years. It claims to possess all valid statutory registrations, including labour licence, EPF, ESI, GST and professional tax registrations and asserts that it has 7 beenrenewingitslicenceperiodically'thelatesttleingvalidup ro 31 .L2.2025. The 3'd respondent issued Tender Notification dated 2.1. 13.06.2025 inviting Applications from registeretl outsourcing agencies for empanelment to provide manpower to various Government Departments in Suryapet District for the financial year2025.26.Asperthetenderconditions,alltlreinterested agencies were required to submit APPlications along with supPorting documents between 16.06.2025 and 20'06'2025 The tender notification stipulated' among other things' that each applicant should havc a minimum annuzrl turnover of Rs.3O,00,000/-in any one of the last three financial years' shouldpossessvalidEPFandEslregistratitlncertificates, should have paid contributions under those enactments for at least six months prior to submission and should hold valid GST registration and submit proof of return filings lor the last six months. Additionally, each applicant was requirecl t'o enclose a demand draft for Rs'15'0OO/- towards proct'ssing fee and Rs.5,OO,OOO/-towardsearnestmoneydeposit' Petitioner submitted its Application within the 2.2. prescribcd period along'*'ith all the necessarl' cl<lcuments and certiticates to establish compliance with the eligibility criteria' It u,asth-ereafter,includedinthelistofagenciesf<lutndeligiblefor J empanelment, and proceedings dated 23.07.2025 were issued confirming their inclusion amcng 27 agencies shortlisted for empanelment for the said financial year. It is contended, after such empanelment, Respondents 3 and 4, without any justification, included certain other agencies, namely Respondents 5 to 10, which were ineligible under the tender terms. The petitioner submits that these agencies neither had the requisite turnover of Rs.3O,OO,OOO/- nor the statutory compliance documents required under the tender conditions. Petitioner on discovering that such agencies were nevertheless included and subsequently, allotted outsourcing work through proceedings dated 20.O8.2O25, filed the present Writ Petition.

2.3. Petitioner states that it has an impeccable record of service and has been executing outsourcing work in various Government Departments such as Medical and Health Department, Revenue Department and the District Treasury, among others, for the past several years to the satisfaction of the authorities. It has duly paid its outsourcing employees' salaries and remitted statutory contributions towards EPF and ESI without default. Petitioner's annual turnover for the financial year 2024-25 was Rs. 1,52,37 ,45O /-, which exceeds the minimum financial requirement prescribed by the tender conditions. 4 Petitioner states that tender notificzrtion dated 2.4. 13.06.2025 was intended to ensure transparcncy and to cmpanel only those agencies which are financially and oper:ationally sound. It prescribes mandatory eligibility conditions that must be satisfied without exceptirln' According to petitioner, Respondents 5 to 1O failed to meet several of these mandatory criteria; they had 'nil'turnover for the financial years 2022-23, 2023-24 and, 2024-25, while Respondent No. 6 had meagre turnover amounts of Rs.5,08,4021- in 2023-24 and Rs.3,62,880/-in2O24-2S.Thus,noneofthemmetthe minimum annual turnover requirement of Rs.3(),00,000/- in any of the last three financial years.

2.5. It is further stated that Respondents 5 and 7 clid not have valid labour licences as on the last date of submission of Applications. Respondent No. 5 was newly registered onlf in May 2025, barely a month before the tender, therelbre could not have furnished proof of statutory compliance for lhe preceding six months. Respondent No. 7's registration was (:ancelled in 2Ol7 and had not been renewed thereafter. Responclent No' 8's registration expired on 31.12.2024 and was nev()r rene'ut'ed' Respondents 9 and 1O had not submitted any proof of EPF arnd ) ESI contribution payments for the last six months preceding the tender.

2.6. It is contended that the official respondents were duty-bound to verify each of these documents at the time of scrutiny but failed to do so. Inclusion of such ineligible agencies, according to petitioner, iS a result of collusion and extraneous considerations. It is further alleged that the 3'd respondent, acting as the Chairman of the District Outsourcing Selection Committee, and the 4Lh respondent, acting as the Convener, have selectively relaxed the eligibility criteria for certain favoured agencies, which is impermissible under law. Petitioner states that such actions of the ofhcial respondents are in violation of the tender terms, Government Orders governing the empanelment process, and the fundamental principles of equality and fairness. Petitioner relies upon G.O.Rt.No.4459 dated 27.12.2006 and G.o.Rt.No.4271 dated O 1. 1 1.2008, which require that all outsourcing agencies must be duly registered, financially sound, and compliant with all labour and statutory obligations. Any relaxation of these conditions, unless notified prior to the tender, is contrary to law. Petitioner contends that respondents' conduct amounts to violation of Articles 14 and. 21 of the Constitution of India, as it defeats the object of ensuring equal opportunity and lair competition among 6 outsourcing agencies. Petitioner therefore, seeks quashing of the impugned proceedings dated 2O.O8.2O25 to thr: extent they relate to Respondents 5 to 10 and a direction to respondents to consider petitioner for allocation of outsourcing work in accordancc r,vith law.

3. By' order dated O4.O9.2O25, this C.ourt granted status quo existing as on that day shall be maintreined by both the partics.

4. Thc 3',1 respondent - District Collector filed a detailed countcr affidavit denying the allegations made by the petitioncr. [t is stated that tender and selection process \vas conductcd strictly in accordance with the provisions of G.O.Rr.No..1459 clated 27.I2.2006 and G.O.Rt.No.427 1 dated O1.l 1.2OOB ancl that no deviation or irregularity oct:urred at any stage. It is further stated that petitioner misconstrued the process and has made baseless allegations without understanding the functioning of the District Outsourcing Selection Committee. A total of 34 Applications were received in responsc to the tender notification dated 13.06.2025. After preliminzrrv scrutiny, 19 agencies were found to have fulfilled all the requirements, while 8 agencies were found to have valid EPF, ESl, GST, and labour registrations but had not submitted proof of Rs.3O iakh turnover. The remaining Applir;ations were 7 rejected for want of basic documentation. The District Level outsourcing committee, in its meeting held on lg.or.2o2s, considered the matter and resolved to accept equivalent proof of financial capacity in the form of bank guarantees of Rs.3o,oo,ooo/- for those agencies that had otherwise complied with all other conditions. This decision was taken to ensure a competitive process and was uniformly applied to all the agencies falling within that category.

4.L- It is stated, ail the agencies, including Respondents 5 to 10, furnished valid bank guarantees, EpF and ESI registrations, and other documents before finalization of the empanelment list. After thorough verificatio n, 2z agencies were empanelled, including petitioner. The allegation that ineligible agencies were included is incorrect and baseless. Subsequent allotments made under proceedings dated 2o.og.2o2s \ rere done in accordance with administrative rotation and as per availability of work in various departments. It is further stated, empanelment does not confer any exclusive or vested right to be allotted outsourcing work. Empanelment merely qualifies an agency to be considered for allotment, subject to administrative discretion and requirement. Hence, petitioner's claim that it must be allotted work to the exclusion of others is legally untenable 8

4.2. It is contended that the District Coller:tor, being the Competent authority, is empowered to exercise reasonable administrative discretion in interpreting the tender terms. Acceptance o[ bank guarantees as proof of linancial capacity uras within such permissible discretion. No favoritism or bias was sho'v\.n to any particular agency. They rely on the judgment of the Hon'ble Supreme Court in Durgauati Deui a. Union oJ Indial, particularly paragraphs 5, 7 and 8, wherein it was held that the tcrms zrnd conditions of a tender are not open to judicial scrutinv except where arbitrariness, mala fides or discrimination are clearly established and that the Authority issuing tender is the best judge of its own requirements. The said judgmcnt further lays down that a tender process cannot be invalidatccl merely because another interpretation of the conditions appears possible.

4.3. On the above grounds, it is contended that there was no illegalit-y- or irregularity in the empanelment or the subsequent allotments, and Writ Petition is devoid of merit and is liable to be dismissed.

5. Heard Smt. G. Jyothi Kiran, learned counsel for petitioner,sri S. Manichander, learned Senior Counsel for Respondent No.1 and learned Government Pleader for Labour. | 2otg SCC onLine SC 2305 .s 9

6. This Court has carefully considered the rival submissions of the parties and perused the material placed on record. It is not in dispute that petitioner participated in the tender process pursuant to Notification dated 13-06.2025 and they were found eligible, and both the petitioner and Respondents 5 to 10 were included in the linal list of 27 empanelled agencies. It is also undisputed that subsequent r,r,ork allotments were made under proceedings dated

20.O8.2025 by the District Collector.

7. The core issue raised by petitioner is whether the inclusion of Respondents 5 to 1O in the empanelled list and their subsequent allotment of outsourcing work was contrary to the tender conditions and whether the District Collector had the authority to relax the linancial criteria.

8. From the records produced, it is evident that the District Level Outsourcing Committee, in its meeting held on

18.07.2025, had consciously resolved to permit agencies lacking turnover certilicates to furnish equivalent financial proof in the form of a bank guarantee of Rs.3O,00,0O0/-. The Committee exercised such discretion to ensure wider competition and transparency and applied it uniformly to all similarly-placed applicants. Petitioner has not placed any evidence to show that such discretion was exercised selectively or with any element of t0 \ mala fide. The law is well settled that in matl-ers of public tenders, the terms of the invitation to bid are not open to judicial scrutiny unless the same are arbitrary or discriminatory. The Hon'ble Supreme Court in Durgautati Deui's casr: (supra) held that the Authority floating the tender is the best judge of its requirements and that Courts should not substitute their own views or interfere with administrative decisions unless the-y are shown to be mala ftde or irrational. Applying ttre said principle to the present case, this Court finds no infirmitv in the decision of the respondents to accept bank guarantees as proof of financial capacity.

9. Petitioner has not demonstrated that tlmpanelment or subsequent allotments were vitiated by arbitrariness or malice. Empanclmcnt does not crcate a vested right to obtain ',r,ork and the administrative authority retains the discretion to allocate work based on operational requirements. Petitioner's grievance is essentially directed against a policy de'cision taken by the Committee, which, in the absence of arbitrariness, ,} cannot be interfei& by this Court under Article 226 of the Constitution of India. Upon overall consideration, this Court finds that the impugned proceedings dated 2O.O8.2O25 were issued after due consideration of all the relevant fzrctors and that petil-ioner failed to establish any violation of lavr', mala fides 1l or procedural irregularity. The contention that inclusion of Respondents 5 to 10 violated Articles 14 and 2l of the Constitutionisuntenableintheabsenceofanyproofof discriminatory treatment.

10. For the reasons stated above' this Court is of the consideredopinionthattheactionofrespondentsin empanelling and allotting outsourcing work to Respondents 5 to 1O pursuanr ro proceedings dated 2o.o8.2o25 cannot be held to be illegal, arbitrary or in violation of the tender conditions' The decision of the District Level outsourcing committee is found to be vyithin the bounds of administrative discretion and consistent withtheprincipleslaiddownbytheHon.bleSupremeCourtin Ihtrgautati Deui's case. ll.Accordingly,theWritPetitionisdismissedasdevoid of merit. No costs.

12. closed. To, Miscellaneous petitions, if d'ny' pending shall stand //TRUE COPY// . PONNA K T ECTION OFFICER

1. One CC to SMT G.JYOTHI KIRAN, Advocate [O 2. One CC to SRI S.CHANDRA MOHAN REDDY, 3. One CC to SRI S.MANICHANDER, Advocate [OPUC] 4. One CC to SRI MOHAMMED HABEEBUDDIN, Advocate [OPUC] 5. Two CCs to GP FOR LABOUR, High Court for the State of Telangana at IoPUCI Hyderabad [OUT]

6. Two CD Copies BSR {, $>., HIGH COURT DATED:1411'l12025 /. ORDER No.25375 of 2025 R THi: S T4 ( .) 20noyafi (i , Z j' i y q-.r.11itl I DISMISSING THE WRIT PETIT o , COSTS 1l I I