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Judgment
Heard Sri S.Ravi, learned Senior Counsel appearing for the petitioner, learned Government Pleader for Medical, Health and Family Welfare for respondent Nos.1, 2 and 4, learned Government Pleader for Revenue for respondent No.3 and Sri G.Vidyasagar, learned Senior Counsel for respondent No.5.
Though the Writ Petition was filed seeking a Writ of Mandamus to declare the action of respondent No.1 in cancelling the tender No.2026/MGM Hospital/Warangal District/IHFMS /2022-23, dated 20.04.2022, and in issuing a fresh tender No.4200/1/MGM Hospital/Warangal District/IHFMS/2022-23, dated 09.07.2022, and awarding the subject contract in favour of respondent No.5 as illegal and arbitrary.
At the threshold of the argument learned Senior Counsel Sri S.Ravi submitted that the Writ Petitioner is not pressing the relief sought in respect of cancellation of the tender, dated 20.04.2022, and confining his arguments only in respect of the action of respondent No.1 in awarding the subject work in favour of respondent No.5 herein.
Thus, the issue that arises for consideration in this Writ Petition is as to whether the action of respondent No.1 in awarding the work in favour of respondent No.5 is in terms of the tender conditions as notified under tender No.4200/1/MGM Hospital/Warangal District/IHFMS/2022-23, dated 09.07.2022 or not for the work of "Providing Integrated Hospital Facility Management Services in M.G.M Hospital, Warangal (for short 'the subject work'), includes PMSSY Super Specialty Hospital (MGMH Annex), KMC Campus, Hanumakonda, in the State of Telangana (hereinafter referred to as ‘subject work’).”
The facts of the case are that respondent No.1 herein issued a tender notification dated 09.07.2022 calling for tenders for the subject work for a period of three (03) years i.e., 2022-23 to 2024-25 at M.G.M Hospital, Warangal. The petitioner herein as well as respondent No.5 herein participated in the said tender process and respondent No.5 herein was declared as L1 bidder and was awarded with the subject work. Aggrieved thereby, the present Writ Petition is filed.
The admitted facts are that the tender notification in question was issued on 09.07.2022. Both the petitioner, as well as respondent No.5 were found qualified in the technical bid and accordingly their price bids were opened. On opening the price bids, respondent No.5 was declared as L1 bidder and the letter of acceptance of bid was issued to respondent No.5 on 28.07.2022. An agreement dated 30.07.2022 was entered into in between respondent Nos.4 and 5 herein.
It is contended by Sri S.Ravi, learned Senior Counsel appearing for the petitioner that, the respondent No.5 herein entered into a joint venture agreement with one Sri Karthikeya Security Services and participated in the tender process for similar work in respect of the Niloufer Hospital at Hyderabad, a hospital having more than 1000 bed capacity and the said joint venture emerged as successful bidder and the said work was awarded. According to learned Senior Counsel, respondent No.5 herein is treated as MOU bidder for providing Sanitation services in Niloufer Hospital and whereas the said Sri Karthikeya Security Services is the lead bidder. In view of the said award of work in favour of the joint venture of which respondent No.5 herein is a party, respondent No.5 herein is ineligible for award of the second work in respect of a hospital having more than 1000 bed capacity in the light of clause 8.3.4 of Section 8 of tender document.
According to learned Senior Counsel any bidder, who gets qualified, in the technical bid and price bid in respect of more than five (05) hospitals and stands as L1, the said bidder will be permitted to take only five (05) hospitals out of the total number of hospitals in which he stood as successful bidder and out of the said five (05) hospitals there shall be only one hospital having bed strength of above 1000. In case if any bidder become successful bidder in respect of two (02) hospitals having more than 1000 bed capacity, such bidder would be entitled to choose one among them but not both such hospitals. Thus, by placing reliance on the said clause 8.3.4, learned Senior Counsel contended that respondent No.5 being a member of joint venture, who stood as successful bidder in respect of Niloufer Hospital which is more than 1000 bed Hospital, is not entitled for award of work in respect of the M.G.M Hospital which is also more than 1000 bed Hospital, which is the subject matter of the tender in question. Thus, learned Senior Counsel contended that respondent No.1, in spite of having complete knowledge about the award of work in respect of the Niloufer Hospital, arbitrarily and for extraneous considerations awarded the subject work in favour of respondent No.5 by misinterpreting and misreading the conditions of the tender document. A copy of the MOU entered in between respondent No.5 herein and Sri Karthikeya Security Services is also placed on record, and attention of this Court is drawn to various clauses of the said MOU.
On the other hand, learned Government Pleader for Medical, Health and Family Welfare, submitted that though respondent No.5 herein is a member of joint venture with Sri Karthikeya Security Services and the said joint venture participated in the tender process in respect of the Niloufer Hospital, finally, the said work was awarded in favour of Sri Karthikeya Security Services only on 27.06.2022 but not in favour of respondent No.5 and hence respondent No.5 cannot be treated as the one who was awarded the work in respect of the Niloufer Hospital.
Sri G.Vidyasagar, learned Senior Counsel appearing for respondent No.5 contended in the similar lines as that of learned Government Pleader and further contended that respondent No.5 herein is not the agency within the meaning of definition provided under clause 1.7 of tender document, as the work in respect of the Niloufer Hospital was not finally awarded in favour of respondent No.5 herein. According to learned Senior Counsel in terms of clause 8.3.4, it is only the agency that will be permitted to take five (5) hospitals or will not be permitted to take more than one 1000 bedded hospitals, but not the bidder. Though, it is not disputed by learned Senior Counsel that respondent No.5 herein is the member of a joint venture in respect of work of Niloufer Hospital, he contended that the said joint venture is formed only for the purpose of satisfying the requirement of tender conditions in respect of having a required turnover to participate in respect of the work of Niloufer Hospital. Thus, he contended that merely because respondent No.5 herein is a part of the joint venture in respect of the Niloufer Hospital, the same is not a disqualification, for respondent No.5 being awarded the work in respect of M.G.M Hospital. He also contended that respondent No.1 has rightly construed and understood the effect of clause 8.3.4 and awarded the work in favour of respondent No.5 herein and it is not open for this Court to interpret the said clause otherwise and thereby disturb the work that was already awarded in favour of respondent No.5 herein.
There is no factual dispute in the present matter. The MOU entered into between respondent No.5 herein and Sri Karthikeya Security Services is placed on record at page No.162 of Writ Papers. The contents of the said MOU are not disputed. It is also not in dispute that it is only by virtue of the turnover or expertise/experience of respondent No.5 herein, the said joint venture became the successful bidder in respect of the work at Niloufer Hospital which is having more than 1000 bed capacity. Clause 8.3.4 of the tender document reads as under:-
"If the bidder quotes for more than 5 Hospitals/Institutions, and becomes L1 for more than 5 hospitals/Institutions, then the agency will be permitted to take 5 Hospitals/Institutions after giving undertaking that he will be blacklisted if found later that he has entered into agreement for more than 5 Hospitals/Institutions.
However this choice shall be limited to:
(i) One work of hospitals of reckonable bed strength of above 1000 beds, &
(ii) One work of hospitals of reckonable bed strength of 501 beds to 1000 beds, &
(iii) One work of hospitals of reckonable bed strength of 201 beds to 500 beds, &
(iv) The remaining works shall be from the hospitals with 200 and below reckonable bed strength/Colleges.
The agency will have choice to select the Hospitals/Institutions within 3 days from the date of opening of price bids. The L1 bidder has to submit undertaking as per Annexure-6 A, intimating inability to sign the agreement in view of more than 5 IHFMS works quoted and became L1 including the works for which MOU is given by the bidder and requesting return of EMD. On receipt of such request from L1 bidder, TFC will consider L2 bidder as L1 bidder after matching the L1 management service charges. EMD will be returned to the actual L1 bidder. If L2 bidder refuses to match L1 rate then tender shall be recalled."
A plain reading of clause 8.3.4 makes it clear that no bidder is entitled to have the work of more than 1000 bedded hospital at a time. In other words any bidder or agency is entitled to have the work of providing hospitality services in respect of only one 1000 bedded hospitals at once. There cannot be any other understanding of the said clause. In the considered view of this Court, the distinction that is sought to be drawn between the bidder/tenderer and the agency by the learned Senior Counsel appearing for respondent No.5 is totally a displaced one for the reasons mentioned herein below. May be pursuant to the participation by the joint venture in the tender process ultimately the work was awarded in the name of a lead member of the said joint venture but that cannot be construed as an award of work in favour of the lead member alone. Once the joint venture participated in the tender process, the award of work is to be construed as in favour of the joint venture alone and the said joint venture by using its expertise/experience is expected to execute the said work and but not otherwise. If the participation of respondent No.5 in respect of the Niloufer Hospital work is to be treated as the one only for the purpose of qualifying the turnover clause or experience clause and but not for executing the said work, the same would lead to a situation where a person or agency who does not have required experience or who does not qualify the tender eligibility criteria being awarded with the said work. Thereby frustrating the very purpose and intent of providing such eligibility criteria and various other tender conditions in the tender document. Such an understanding or interpretation of the tender conditions cannot be allowed to stand, as the same would result in frustrating the object that is sought to be achieved by including such clauses in the tender document. It is in fact, absurd and shocking to note that the tender inviting authority contending that the MOU entered into between the parties to a joint venture is only for the purpose of satisfying the qualification criteria till the stage of becoming successful bidder, but not for execution of the said work. Such an interpretation or understanding by the respondent No.1 who is the tender inviting authority for the work at Niloufer Hospital and M.G.M. Hospital speaks volumes about the mala fide intention and extraneous consideration on the part of the authority concerned.
As admittedly respondent No.5 is one of the parties to the joint venture and participated in the tender process in respect of the Niloufer Hospital work and the same was declared as successful bidder and work was also awarded, respondent No.5 ought have furnished a declaration in Annexure-6A of tender document by declaring that the said Sri Karthikeya Security Services being lead member of the said joint venture was successful bidder in respect of the Niloufer Hospital. But, respondent No.5 herein, failed to furnish such a declaration in Annexure-6A and on the other hand a declaration in form Annexure-6 was furnished by suppressing the fact of award of work in respect of Niloufer Hospital in favour of the lead member namely Sri Karthikeya Security Services limited. Respondent No.1, who is the employer in respect of both the works, is also fully aware that the joint venture referred to above was awarded the said work and the said work is being carried on by respondent No.5 along with its joint venture partner. But respondent No.1 instead of understanding and interpreting the clause 8.3.4 in a fair and purposive manner appears to have deliberately misread and misconstrued and acted contrary to the very intent and object that is sought to be achieved under the clause 8.3.4 and awarded the subject work in favour of respondent No.5. In view of the same, this Court has no hesitation to hold that respondent No.1, 2 & 4 have acted in an arbitrary manner and in a manner favorable to respondent No.5 for the reasons best known which are not forthcoming, and for extraneous conditions and at any rate definitely not in public interest. Normally, this Court in exercise of jurisdiction under Article 226 of the Constitution of India would not interfere with the decisions taken in the process of tender and awarding of works. But, the case on hand is a case of exercise of discretion by the respondent No.1 which is against public interest and for the reasons that remained unsurfaced. Thus the, manner in which the bid of the respondent No.5 is accepted is totally arbitrary. This Court having noticed the same, cannot remain as a silent spectator and acknowledge the illegalities committed by the respondents.
In the circumstances, the award of subject work in favour of respondent No.5 is bound to be declared as illegal, arbitrary, and violative of Article 14 of the Constitution of India.
Accordingly, the Writ Petition is allowed. The award of work in favour of respondent No.5 through proceedings dated 20.04.2022 and 09.07.2022 are hereby set aside and respondent Nos. 1 to 4 are further directed to process the tender, de hors the tender submitted by respondent No.5 and complete the said process within a period of four (04) weeks from the date of receipt of a copy of this order. Respondent No.1 is at liberty to continue the arrangements made for execution of the subject work or to make some alternative arrangement till completion of the tender process as directed above.
As a sequel, miscellaneous applications, if any, pending in this Writ Petition, shall stand closed. There shall be no order as to costs.