The High Court · 2025

Judgment

2. a

5. The State of Telangana, Rep. by its Principal Secretary, Medical Health Department, Secretariat, Hyderabad, Telangana. Ministry of Labour and Employment, Govt. of lndia,, Represented by its Secretary. The Dean, ESIC Medical College and Hospital, Sanathnagar, Hyderabad, Telangana State. Deputy Director, ESIC Medical College and Hospital, Sanathnagar, Hyderabad, Telangana State. The Superintendent, Niloufer Hospital, Hyderabad. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue order, writ or direction more particularly one in the nature of writ of mandamus declaring the action of the Respondent no.4 in disqualifying the petitioner in technical bid without considering the experience certificate issued by the Respondent No.5 and other requisite documents submitted by the petitioner as per the eligibility criteria of the tender document, only to favour sole participant as illegal, arbitrary and violative of Principles of Natural Justice apart from violative of Fundamental Rights under Articles 14, and 21 of the Constitution of lndia and consequentially direct the Respondent No.4 to consider the documents submitted by the petitioner and qualify the petitioner for the financial bid in the ongoing Bid No. GEMl2O24lBl5147441 dt.1010712024 lA NO: 1 OF 2024 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 stay all further proceedings in the ongoing Bid No. GEM120241B15147441 dt.1010712024 issued by Respondent No.4 pending disposal of the above writ Counsel for the Petitioner: SRl. PONNAM MAHESH BABU REP

SRI PONNAM MAHESH BABU Counsel for the Respondent Nos.1,3,4&5: GP FOR MEDICAL HEALTH AND FAMILYWELFARE Counsel for the Respondent No.2: SRI G. PAVAN KUMAR, SC FOR ESIC The Court made the following: ORDER {(c, HON'BLE SRI JUSTICE NAGESH BHEEMAPAXA WRIT PETITION No. 30731 OF 2o24 ORDER: The 4d respondent- Deputy Director, ESIC Medical College & Hospital disquatihed petitioner from the technical bid for Bid No. GEM /2024 /B I 5147441 dated lO.O7 -2024- Contending that the same is illegal, arbitrary and violative of the principtes of natural justice apart from being in violation of the Fundamental Rights under Articles 14 and 2l of the Constitution of India, petitioner seeks a direction to the +tr' respondent to consider the documents and qualify them for the financial bid.

2. Petitioner, who has been providing canteen food services at the 5fi respondent - Superintendent, Niloufer Hospital, claims to have extensive experience in catering field, having been involved in diet catering services since 2009. They dssert that they participated in the ongoing e-tender for the provision of canteen services at trSIC Hospital Medical College for a period of one year, along with other participants' Despite fulhlling all the eligibility criteria for the tender, the 4e \ \ 2 respondent drsqualihed Petitioner on the grotrnd of non- related 1o exPerlence compliance with certain requirements P,:titioner alleges that the 4th respondent acted certificates. arbitrarily ancl in violation of the principles of nzrtural jr-rstice especially whr:rL the experience certihcates provided by them from MGM Hospital, Warangal and the 5e respondent were not properly considered. According to petitioner' rejection ot their ' technicalbidrvasbasedonapurportedreportfromtheSth respondent, u'hich ailegedly found the services unsatislact cry'.lt is their claim that this report was obtained behincl their. back and contradicts; the previously issued satisfactory certificates' Pet itioner states that theY Possess rccluistte experience a.s Per the tender catering services at 1OOO bcdded MGM including Pror iding Hospital, Wara ngal between 2OO9 and 16'11 2O"Zl ' and to the document's etigibilitl' criteria' Sthrespondelrlorganizationfrom06.Lt.2o2ltilldateu-ithout any complain t. Petitioner claims to have mt:t the service requiremen[s srpecified in Clause (B)(1)b of the tendcr document' which mandal.es experience in providing services for at least three years in the past five years The petitioner also claims to I \l i J 'A have met the eligibility requirement under Clause (B)(1)A, which stipulates completion of similar services costing at ieast SO"h of the estimated cost of the tender. Petitioner therefore, alleges that their technical bid was rejected on false and frivolous grounds and deliberate, only to favour the existing contactor who alone is qualified as sole bidder for financial bid thereby lacking transparency in evaluation of technical bid ald fair competition in providing catering services in the 4ff Respondent Organization. Finally, it is stated that disqualification information posted in GeM on 29-70-2024 by the 4111 respondent for the reason of lack of eligible experience certrficate along with contract orders without considering the experience certificate and other documents submitted by them is discriminatory, illegal, and arbitrary and due to which petitioner would suffer huge and irreparable loss.

3. In the counter-afhdavit hled on behalf of Respondents 2 to 4, it is stated that ESIC Medical College & Hospital, Sanathnagar, Hyderabad, under the Ministry of Labour and Employment, issued an invitation to bid through GeM dated 1O.O7.2024; the nature of services required includes i 4 healthcar,: kitchen and dietary services for trSIC Medir:al College and Hospital located in Sanathnagar. The to1.al tendc r value is Rs. 4,37,214,8261- and deadline for bicl submission is 3l .O7 .2024 , and the bid validity period extcr Lds until

30.7O .2024 . Selection process for the bid is still ongoing. Technical evaluation was completed and out of 15 bidders, 14 u.'ere found to be unqualified and recommended lor re,jection by the appoin ted committee. The only bidder recommr:nded for technical qualihcation is M/s K. Suresh Babu (Venkateswara Enterprises) located at Government Chest Hospital, Erragadda, Sanathnagar. The next stage of financial evaludion u'ould take place soon It is stated, petitioner was recommcnded for rejection du e to several reasons. Firstly, they lailed to meet the experience period requirement. The expeiience r:ertihcate provided fr,:m MGM Hospital, Warangal, did not i:over the period specified in the eligibility criteria outlined in iiection B 1(a) of the Bid Document. Secondly, the certihcate from Nrloufer Hospital, Hyderabad (Respondent No. 5) did nor rneet the stipulated contract value requirement, as it only evidenced one completed s,ervice amounting to less tJ.an 8O% of tlLe tender I I 1l 5 value, as per Clause S(t)(a). Thirdly, a negative performance report indicated that quality of services was unsatisfactory. Specific concerns included deltciencies in quality, timeliness in addressing complaints, technical proficiency, and execution of work, all of which violated the standards set in the Bid Document. These factors collectively led to the recommendation for rejection by the evaluation committee. It is stated, petitioner's rejection was not based on Clause B(lXb), which mandates a minimum of three years of experience within the past five years, but it was specifically iue to non-compliance with the specified experience period and insufhcient value of experience. Petitioner failed to meet the required criteria under Clause B(l)(a) regarding the contract value and performalce report from one of the hospitals where they claimed experience. Feedback from the referenced hospital indicated issues with service quality, complaint resolution, technical proticiency, and overall execution, which violated the Bid Document's standards. Therefore, rejection was justihed based on petitioner's failure to meet the necessary requirements. 6 'lhese respondents stated that the documents submittecl by petitioncr show the following regarding their experience ccrtifi cates: MGIvI l-Iospital, Warargal: 'I'he petitioner's experience at MGM Hospital spans t\\,o f,eriods: 2009-20lO ar.d 20l2-2O21, totaling 1 I years. The total arnount paid over this period is Rs. 13,59,J9,575/- vrith an approximate average ofRs. 1,23,56,325/- per f,nancial year, representing aLtolut 28y" of the total bi,l value. Nilouf( r Hospital, Hyderabad; The petitioner's experience here covers the period from . I\ovember 6,2022, to the present, as documented in a letter dated July 11,2024. Payments received for this period are as folloris: November 2022 Lo March. 2023: Rs. 99,50,90:, April2O23 to March 2024: Rs. 23A,82,172 April2024 to J:urLe 20241 Rs. 59,7O,543 This totals Rs. 3,98,03,620/ for 1 year and 8 month:; of s,:rwice. Clause B(l)(a) of the Bid.Document requires turo similar completed services, each costing at least 5Ool, of the estimated bLd '",alue, within the iast three years (Fy 2O2l-2O22, 2022-2023, ar,d 2023 2024), however, petition€,r only met rhis requiremeltt ftr the financial year 2023-24, related to services at Niloufer Flospital. However, there is no evidcnce ol eligible l1 7 completed services amounting to more than 50% of the bid value for the liscal years 2O2l-22 or 2022-23. Therefore, petitioner does not fulhll the requirement of two similar services meeting the 50% bid value threshold across the stipulated three-year period, which forms the basis for their recommended rejection. It is further stated in the counter that the services provided are to cater to in-patients and reviews of pas[ performance are essential, especially since this service serves low-income labourers and employees. ESIC operates under welfare legislation and ensuring high-quality food for in house patients is of paramount important. This requirement is explicitly outlined in the Bid Document. The confidential report from the 5ft respondent indicates that quality of food provided was deemed "unsatisfactory The stage of tender, along' with the GeM bid technical evaluation outcome, was uploaded on the portal on 29 .7O.2O24. A1l the 15 bidders were given a 2-day period to submit representations through the GeM portal regarding rejection decision. Out of the 14 rejected bidders, 2 \ \. 8 represental i()ns were received: one from M/ s I']rism Hospitality Services Pvt. Ltd. and the other from M/s Unique Facility Management Serwices and no representation u,as recei,red lrom petitioner aglainst the rejection decision. The representations from the 2 brdders in GeM portal have been reviewed by the committec, and the decision has been submitted to the Head of Office/ Competcnt Authority for further action. Resporrdents 3 and 4 have sent confidential letters aiong with Annexure-A to veri8r the g<:nuineness of the certihcates issued by different authorities. ,\ confidential report, included in -r\nnexure-A, has been receiverl from the 5e respondent which indicates that the total value ol the completed work is Rs. 3.7(l Crores, which differs from the experience letter of petitioner dated 1 l.O7 .2024, that shows a Lotal amount paid was Rs. 3-98 Crores. Additionaill', the report highlights that the quality of the services prc,vided was found to be unsatisfactorl'.

4. lieard Sri Ponnam Ashok Babu, learned counsel representing Sri Ponnam Mahesh Babu, learned counsel for petilioner as rn ell as Sri G. Pavan Kumar, le arned Standing Counsel for E)SIC. 9

5. After considering the pleadings, documents and submissions made by both the parties, this Court is of the view that petitioner's rejection from the technical bid was based on valid and justihable grounds. The tender document clearly ou[lines the eligibility criteria, including the required experience and contract value, which petitioner failed to meet in certain aspects. The petitioner's experience at MGM Hospital did not cover the required period, and the certificate from Niloufer Hospital did not fulfill the necessary contract value requirements. Moreover, the negative performance reiort obtained from the hospitals where petitioner claimed experience is a crucial factor in evaiuating their suitability for tender. The quality of services provided is of paramount importance, particularly in the context of providing canteen services to patients and healthcare workers. The report of the srh respondent indicates that petitioner's services were found to be unsatisfactory, which justifies the rejection of their bid. in vieu' of the same, petitioner's contention that rejection was arbitrary and in violation of natural justice is without merit. The evaluation process was conducted in accordance with the tender 10 given an opportunity to submit document arlc. petitloner "vas representaticns through GeM portal However' they did not submit anv representation against the rejection clecision. unlike other bidclers who raised concerns Hence' it carl safely be said that respondsnts' action in rejecting petitioner's bid was transparent a:ed the decision was based on objec:tive criteria set outinthetenderdocument.Furtehr,itistobenotr:dthat Respondentsi 3 ar-rd 4 have sent confidentral letters along with Annexr-rre-A t'r verify the genuineness of the certificates issued by different. authorities A conhdential report' incltrded in Annexure-A, has been received from the 5h respondent which No. 5. The rellort indicates that the total value of the completed work is Rs. 3 70 Crores, which differs from the t:xperien':e letter dated Jull' l1 ,2024, that shows a total amount paid of Rs' 3'98 Crores. Acldit ionalll', the report highlights that the qualiry of the sewices prcvided r'vas found to be unsatisfactorl" In light of the above, this Court finds no merit in 6. petitioner's ':laims and is of the opinion that rejection of petitioner's technical bid was in accordance with the terms of tender d ocu ment and was based on valid and jr'rstifiable grounds. The petitioner's allegations of favoritism and lack of transparency are unfounded and without evidence. 7 . The writ petition is accordingly, dismissed. No costs.

8. Consequently, miscelianeous Applications, if any shall stand closed. To, //TRUE COPYII ASSIS SD/-MOHD.ISMAIL T REGISTRAR s Tto FICER 1 9n" CC to SRt. PONNAM MAHESH BABU, Advocate [OPUC] 2. Two CCs to Gp FoR MEDICAa rEnrrir ir.riiF,{ ^ corrt r"iti,e 5i"L'oii&"nsna at Hyderabad tou$llY 3. one cC to sRt. G. pAVANkuMAn,'sc Fori e5l6 tbpuct 4. Two CD Copies ryELFARE,Hish \ B M /BSK a( I I \ t t Z ) '( 6oa ::l li^ \i, ;. ..: !' '\,,.1'.r _'j.:, 1 fl Fii 2025 -), HIGH COURT DATED:2910112025 ORDER WP.No.30731 of 2024 DISMISSING THE WRIT PETITION WITHOUT COSTS o{"tt