Sri Venkata Siva Traders V. The Commissioner for Endowments

WP/6967/2012

AI Insights

The case revolves around a writ petition filed against the Devasthanam's tender conditions for procurement of various items, including provisions and cloth, for the year 2012-13. The petitioner argued that the requirement of a Rs. 5 Crores turnover in food grains was arbitrary and irrelevant, as he was only interested in supplying clothes. The Devasthanam defended the comprehensive tender process, citing benefits like ease of management and assurance of quality supplies. The court examined the practices of other temples and the rationale behind the turnover requirement, ultimately dismissing the petition.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 696060 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 26-03-2012
• Assessment Year: misc
• Laws Referred To: Article 14 of the Constitution of India
• Result in Favour of: Respondent
• Court: HIGH COURT
• Keywords: E-Tender; Eligibility criteria; Legal Challenge; Procurement; Arbitrary conditions
• Section: 143(3)

Judgement Text

"HON’BLE SRI JUSTICE NOOTY RAMAMOHANA RAO Writ Petition No. 6967 OF 2012 ORDER: This writ petition is instituted challenging the validity of the conditions prescribed in the notice inviting tenders floated on 5.3.2012 by the 2nd respondent – Devasthanam for procurement of provisions and various other items for the year 2012-13 as arbitrary and without any justification, hence liable to be declared as illegal. The 2nd respondent – Devasthanam has floated notice inviting tenders for procurement of provisions, kanduvas, red & black cloth pieces, covers, laminated photos and pooja saamagri for a period of one year commencing from 01.04.2012 to end of 31.03.2013. The bidders are required to submit their e-tenders on the e-procurement platform submitting EMD amount of Rs.10,00,000/- and bid processing fee of Rs.10,000/-. The bid documents were to be downloaded from 10 AM on 4.3.2012 up to 1 PM on 14.03.2012 and the bids are to be submitted latest by 3 PM on 14.3.2012. The bid process comprises of two parts, the technical bid followed by the price bid. The technical bid was slated to be opened at 4 PM on 14.3.2012 and the hard copies were to be submitted for verification latest by 5 PM on 16.3.2012 and the price bids were slated to be opened at 11 AM on 17.3.2012 at the office of the Executive Officer of the 2nd respondent – Devasthanam at Srikalahasthi, Chittoor District. The eligibility criteria prescribe that the tenderer should have annual turnover of food grains in a sum of Rs.5 Crores in each year 2008-09, 2009-10 and 2010-11. The tenderer was also required to inform the correct address wherefrom the supplies are to be procured by the tenderer. The tenderer should possess an experience certificate and other certificates like registration of firm, CST, VAT, latest Income-tax assessment order, Agmark registration certificate, wherever applicable etc. The writ petitioner is seriously aggrieved by the stipulation/the condition that the tenderer should have a turn over of Rs.5 Crores of business in the food grains in the past three years. He challenges the validity of this eligibility requirement for the following reasons:- (1) The writ petitioner carries on business in sale of clothes and he is only interested in the component of supplying required clothes to the 2nd respondent – Devasthanam and he does not carry on any business in provisions and other pooja samagris and hence the most irrelevant criteria has been prescribed as eligibility criteria. The arbitrary choice of the eligibility criteria renders the e-tender floated by the 2nd respondent – Devasthanam as infirm and illegal. (2) Carrying on business in provisions or pooja saamagri need not necessarily have any link with carrying on business in sale of clothes as well. Therefore, prescribing minimum turnover of Rs.5 Crores business in provisions for eligibility to supply clothes to the 2nd respondent – Devasthanam is totally irrelevant criteria chosen. Therefore, it violates the protection available to the tenderer under Article 14 of the Constitution of India. (3) Supplying of provisions, pooja saamagris, laminiation of photos and other clothes required by the 2nd respondent – Devasthanam have no common connection amongst them. Therefore, without much of a thought, the eligibility criterion is fixed as Rs.5 Crores turnover in food grains. A person may exclusively carry on any one of the businesses in lamination photographs, clothes, pooja saamagris and may not always or necessarily deal with the business of provisions. Instead, for each item, if a separate tender is invited, all the eligible bidders would have offered their bids for such of those items in which they carry on business. (4) Many other important temples such as Sri Lakshmi Narasimha Swamy Vari Devasthanam at Yadagirigutta, Nalgonda District and Durga Malleswara Swami Vari Devasthanam at Vijayawada have been floating tenders for each of the items required by them and consequently all the eligible bidders were competing with each other. By the impugned notice inviting e- tenders, the 2nd respondent – Devasthanam has ensured that there be the least competitiveness amongst the bidders. Further, the 2nd respondent – Devasthanam in the past has itself floated separate tenders for each of the specified items and hence the present impugned notice inviting tenders is bad for misjoinder of different classes of items. On behalf of the 2nd respondent – Devasthanam, its Executive Officer has filed a detailed counter affidavit. In paragraph (4) of the said counter affidavit, it is asserted that one other important temple viz., Sri Vara Siddhi Vinayaka Swamy Vari Devasthanam at Kaanipaakam, Chittoor has also floated a similar comprehensive e-tender for supplying of provisions along with clothes and other pooja material for the year 2012- 13 and the said temple has also similarly insisted for Rs.5 Crores turnover in food grains. Sri Lakshmi Narasimha Swamy vari Devasthanam at Yadagirigutta has floated a tender for supply of polyster jacket pieces for a period of six months commencing from 1.4.2012 and similarly a separate notice inviting e-tenders was floated by the same Devasthanam for supply of white cotton cloth pieces for a period of six months commencing from 1.4.2012. Similarly, Sri Durga Malleswara Swami vari Devasthanam at Vijayawada has floated a separate notice inviting e-tenders for supply of Vasthrams for a period of one year commencing from 1.4.2012. In paragraph (5) of the counter affidavit, it is asserted that the comprehensive notice inviting tender was issued by the 2nd respondent – Devasthanam with a view to regulate the supply of materials from a single dealer/ trader/agency/wholesale seller so that it will become easy and convenient for the said temple to deal with him for all matters concerned. So far as prescription of Rs.5 Crores turnover condition is concerned, it is sought to be answered in the counter affidavit that such an attempt will help in eliminating the small time businessmen/dealers, who were not in a position to meet with the fluctuations in the prices during the currency of the contract. Dealers who have turnover of Rs.5 Crores per annum will be maintaining large buffer stocks and consequently they will easily be able to absorb the fluctuations due to price rise during the currency of the supply period as against a small time trader. Further, on the previous occasion when a separate tender was granted for supply of red and black cloth pieces to M/s. Tirumala Fabrics, Nagari, Chittoor District whose license to supply the said items expires on 31.3.2012 was found to have supplied inferior quality of red and black cloth pieces, which are used at the performance of Rahu Kethu pooja. He was also found to have supplied kanduvas and jacket pieces which are inferior in standard and hence he was penalized by imposing a fine amount of Rs.95,933/- representing 8% of the bill payment. It is with a view to insulate against these kinds of maladies, the present comprehensive tender has been floated. In paragraph (8) of the counter affidavit, the contention of the petitioner that normally persons dealing with food grains business will not be carrying on the other varieties of business has been seriously disputed. At least seven different names of traders who dealt with all the items comprehensively have been listed out therein. WPMP No. 9506 of 2012 is moved by one Sri V.Narendra Babu seeking impleadment as respondent No. 3 to the above writ petition. It is his case that he carries on business in supply of provisions, oils, ghee, plastic covers, cloth items and various other pooja saamagris and that he was carrying on business in the name of M/s. Vignesh Traders, a proprietary firm having proper license and registration and VAT. In paragraph (6) of the affidavit filed in support of the said WPMP, it is asserted that the writ petitioner has obtained license for carrying on his business only on 1.8.2011 and hence he has not satisfied the trade experience for the past three preceding years and hence this writ petition should be dismissed. I must record that the writ petitioner has filed a detailed reply affidavit disputing the claims contained in the counter affidavit filed on behalf of the 2nd respondent and also the affidavit filed by the 3rd party. It is in paragraph (8) thereof, it is stated that the annual turnover reflected in the books of accounts of M/s. Vignesh Traders, Srikalahashi is less than the Rs.5 Crores limit prescribed and hence it is ineligible to participate. Along with the reply affidavit, notice inviting e-tenders floated by Sri Lakshmi Narasimha Swami Vari Devasthanam, Yadagirigutta, Nalgonda District for the period commencing from 1.5.2012 up to 31.10.2012 has been enclosed, a perusal of which shows that the requirement of eligibility criteria indicate that the bidder should have turnover of food grains of Rs.10 Crores for the year 2011- 12. The items sought to be procured by the aforementioned Devasthanam are provisions and other related items only and do not contain other varieties. The circular instructions said to have been issued by the Commissioner of Endowments on 9.2.2011 were also enclosed along with the reply affidavit. Further, the 2nd respondent – Devasthanam itself has floated a separate notice inviting e-tenders for supply of lemon fruit and betel nut leaves and loose flowers for a period of one year commencing from 1.4.2012 up to 31.3.2012. Similarly, the 2nd respondent – Devasthanam has also floated another tender for supply of coconuts for the same period as in the earlier case of lemons and betel nut leaves. Thus, it is contended that similar separate tendering process should have been adopted by the 2nd respondent with proper eligibility criteria, for procurement of various items, instead of one single one. It is not in dispute that the 2nd respondent – Devasthanam in the past has adopted a different method of inviting separate tenders for each variety of items sought to be procured by it such as provisions, pooja saamagris, clothes etc. But, however, they were all grouped together and a combined or a comprehensive tender is sought to be floated this time around. The justification offered by the 2nd respondent – Devasthanam for doing so was that it will be most easy and convenient to deal with a single dealer/trader/supplier for all the items/procurements. Secondly, businessmen with huge turnover will be maintaining sufficient quantities of buffer stocks so that the supply chain never gets broken down. Further, importantly, big time dealers will be able to absorb a shock of price rise during the currency of the supply period better in comparison to small time traders. Therefore, the choice exercised by the 2nd respondent – Devasthanam per se cannot be described as an arbitrary choice. Coupled with this, when we take into account and consideration the statement contained in the counter affidavit that M/s. Tirumala Fabrics, Nagari, Chittoor District, the existing contractor has been imposed penalty in a substantial amount of nearly Rs. 95,933/- for supplying poor standard and poor quality clothes to the 2nd respondent – Devasthanam, which is a very important factor, it becomes clear that the 2nd respondent – Devasthanam is only seeking to insulate itself. If a comprehensive tender is floated and a single supplier/dealer is entrusted with the entire task, the prospects of securing supplies not only in adequate quantities but also of approved and good standards can be reasonably expected. Failure to stick to the standards specified in the agreement would result in imposition of penalty and such penalties would be on the basis of the overall quantum of payments to be made. That might run into few lakhs of rupees. Therefore, the prospects or risk factors of loosing substantial amount for any default would necessarily instill in the mind of the dealer/supplier to stick to the standards of material sought to be supplied. Therefore, there is certainly greater advantage in identifying a single supplier/dealer for procuring all the items, however, heterogeneous groups they may belong to. I am therefore of the opinion that the comprehensive tender has been floated by the 2nd respondent – Devasthanam based upon its immediate experience of dealing with a bad supplier viz., M/s. Tirumala Fabrics, Nagari, Chittoor District, to whom the work of supplying clothes was entrusted on the previous occasion. Tendering process is sought to be regulated by each temple in the manner considered suitable and or appropriate by it. There is no uniformity. We have seen Sri Lakshmi Narasimha Swami Vari Devasthanam floating a tender for supply of certain material only for a period of six months. Similarly, we have also noticed that the said Devasthanam required the bidders to have a turnover of Rs.10 Crores in food grains for eligibility during the year 2011-12. Therefore, it emerges that depending upon the requirements and peculiarities of each Devasthanam and learning lessons from the past experience, suitable conditions are devised to prevent failure to supply standard items and as per the specifications. It is therefore difficult to agree with the contention of the petitioner that the eligibility criteria have been devised by the 2nd respondent – Devasthanam with a view to eliminate true and meaningful competition. The 2nd respondent – Devasthanam has no doubt floated separate notices inviting e-tenders for supply of lemon fruits, betel nut leaves and coconuts, but Sri V.T.M.Prasad, according to me very rightly, has pointed out that all those items are perishable items and therefore the dealers/suppliers will not be storing such items in bulk for long periods. For perishable items floating separate notices inviting separate tenders stand entirely on a different footing from that of non perishable items. They are completely separate and distinct and hence no comparison can be drawn between them. The petitioner has not disputed the fact that he was only registered on 1.8.2011. Whereas the impugned notice inviting e-tenders required the bidders to have a minimum business experience of three years. For his failure to have the basic required eligibility, I agree with the contention canvassed by the learned counsel appearing for the 2nd respondent – Devasthanam as well as the proposed 3rd respondent that the e-tender floated by the 2nd respondent should not be interdicted. When once the writ petitioner lacks another basic eligibility criteria of three years experience, at the hands of such a person, the correctness or otherwise of the e-tender floated by the 2nd respondent should not be tested for its validity. For this additional reason also, this writ petition deserves to be dismissed. It is no doubt true that the learned counsel for the writ petitioner has pointed out that the proposed 3rd respondent also does not satisfy the eligibility criterion as he lacks the requirement of Rs.5 Crores turnover for the past three years. That question, is bound to be examined by the 2nd respondent when the technical bids are opened. If the proposed 3rd respondent lacks the eligibility criterion his bid will be rejected. Therefore, that is not a relevant factor for us to be detained. Since several other new contentions have been canvassed in the reply affidavit filed by the writ petitioner, I do not consider it appropriate to deal with them as the respondents will not have an opportunity or chance to meet such new pleas raised in a reply affidavit. I do not see any justifiable reason for interfering with the e-tender floated by the 2nd respondent – Devasthanam which is subject matter of challenge in this writ petition and accordingly this writ petition is dismissed, but, however, without costs. Consequently, WPMP 8831 of 2012 stands dismissed. --------------------------------------------- JUSTICE NOOTY RAMAMOHANA RAO knk 26th March 2012 "