Dismissed

M/s.Taaza International Limited v. The State of Telangana and 2 others

Telangana HC7 Apr 2022WP/307/2020

Case brief

AI extract

What is this about?

The Single Judge bench dismissed a writ petition challenging the declaration of a bidder as the successful candidate in a tender for setting up food courts. The petitioner contested the eligibility of the successful bidder, arguing the entity did not meet specific technical criteria for retail space. The court held that technical assessment lies with the tendering authority and rejected the plea o

What did the court decide?

Writ petition dismissed with costs reserved (no order as to costs).

M/s.Taaza International Limited Vs The State of… — Company and Corporate | Telangana HC (2022)

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HIGH COURT FOR THE STATE OF TELANGANA: AT HYDERABAD (Special Original Jurisdiction)

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THURSDAY, THE SEVENTH DAY OF APRIL TWO THOUSAND AND TWENTY TWO

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PRESENT

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THE HONOURABLE SRI JUSTICE B.VIJAYSEN REDDY

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WRIT PETITION NO: 307 OF 2020

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Between:

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M/s.Taaza lnternational Limited, Rep.by its Authorized Signatory, Plot No.29, Karkhana Road, HACP Colony,Secunderabad^- 500 009

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...PETITIONER

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AND

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The State of Telangana, Rep. by its Principal Secretary^- Tourism, Secretariat, Hyderabad.

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Shilparamam Arts, Crafts and Cultural Society^(SACCS), Shilparamam, Hitech City, Madhapur, Hyderabad, Rep.by its Special Officer.

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M/s.People Combined Hospitality LLP, 7 Restaurant,^{National Highway 65,} Suryapet, Telangana, Rep.by its Managing Partner

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...RESPONDENTS

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Petition under Article 226 ol the Constitution of lndia^{prayingthat in the} circumstances stated in the affidavit filed therewith, the^{High Courtmay be} pleased to issue a Writ of Mandamus, or any other appropriate writ, order or direction, declaring the action of the 2nd^{respondent in declaringthe 3rd} respondent as preferred bidder^pursuant to'the Tender^{Notification publishedin} Economic Times on 6.11.2019 in relation to setting^up of^{lnternationalFood} Courts along with other branded retail outlets at Night^{Bazar Annexe,} Shilparamam, Hitech City, Hyderabad, though^{the 3rd respondentdoes not fulfill} the eligibility criteria contained in Clause-4.5.3^{of the Request for Proposal(RFP)} November 2019 as illegal and arbitrary and^{further directthe 2nd respondentto} accept the bid of the Petitioner.

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lA NO:^'l F 2020

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Petition under Section 151 CPC^{prayingthat in the circumstances stated} in the affidavit filed in support of the^petition, the^{HighCourt maybe pleasedto} grant lnterim stay of all further proceedings^pursuant to the^{TenderNotification} published in Economic Times on 06.11.2019 in relation to setting up^of lnternational Food Courts along with other branded^{retail outlets at Night Bazar} Annexe, Shilparamam, Hitech City, Hyderabad,^{pending disposal of the above} writ petition.

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lA NO: 2 OF 2020

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Between:

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lV/s.People Combined Nospitatity LLP, 7 Restaurant, National Highway 65, Suryapet, Telangana. Rep.by its lr,4anaging Partner

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Petit io n e r/Respo nd e nt

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AND

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1 M/s.Taaza lntemational Liflte.d, Rep.by its Authorized Signatory, plot No.29, Karkhana Road, HACP Colony,Secunderabad - S00 Odg ...Writ Petitioner/Respondent

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2 The State of Telangana, Rep. by its Principal Secretary - Tourism, Secretariat, Hyderabad.

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3 Shilparamam Arts, Crafts and Cultural Society (SACCS), Shilparamam, HitechCity,Madhapur,Hyderabad'Rep.byits5peciatofficel

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. . . Respondents

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Petition under section i 51 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to vacate the interim orders dl: 22- 01-2020 passed in l.A.No.1 ol 2O2O in W.p.No. 307 of 2020 and dismiss the writ petition as there are no merits in it.

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lA NO: 3 OF 2020

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Betwee n:

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Shilparamam Arts, Crafts and Cultural Society (SACCS), Shilparamam, Hitech City, Madhapur, Hyderabad, Rep.by it6 Speciat Officei ... Petitioner/2nd Respondent

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AND

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1 Mls.f aaza lnternational LinlleQ, Rep.by its Authorlzed Signatory, plot No.29, Karkhana Road, HACP Colony,secunderabad - 500"009^'' ...RespondenUpetitioner

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2 The State of Telangana, Rep. by its Principal Secretary - Tourism, Secretariat, Hyderabad.

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a WsPeople Combined Hospitality LLp, 7 Restaurant, Nationat Highway 65, Suryapet, Telangana, Rep.by its Managing partner

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. . . Respondents/Respondents

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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 vacate the interim order dated 22-01-2020 passed in LA.No.1/2020 in W.P.No.307/2020 and dismiss the Writ Petition with costs.

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Counsel for the Petitioner: SRI C.RAGHU

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Counsel for the Respondent No.1: GP FOR TOURISM

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Counsel for the Respondent No.2: SRI P.BADRI PREMNATH

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Counsel for the Respondent No.3: SRI CHALLA GUNARANJAN

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The Court made the following: ORDER

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TIONOURABLE SRI JUSTICE B. VIJAYSEN REDDY

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WRIT PETITION No.307 OF 2020

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ORDER:

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This writ petition is fi1ed with the following prayer:

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'(... ... to issue a Writ of Mandamus, or any other appropriate writ, order or direction, declaring the action of the 2nd respondent in declaring the 3'd respondent as preferred bidder pursuant to the Tender Notification published in Economic Times on 6.11.2019 in relation to setting up of International Food Courts along with other branded retail outlets at Night Bazar Annexe. Shilparamam, Hitech City, Hyderabad, though the 3'd respondent does not fulfil the eligibility criteria contained in Clause-4.5.3 of the Request for Proposal (RFP) November 2019 as illegal and arbitrary and further direct the 2nd respondent to accept the bid of the Petitioner ...

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The facts of the case, in brief, are as under:

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(i) Respondent No.2 - Shilparamam Arts, Crafts & Cultural Society (SACCS), Shilparamam, Hitech City, Madhapur, Hyderabad, issued tender notification inliting tenders fbr setting up

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)

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International Food Courts along with other branded retail outlets at Night Bazar Annexe, Shilparamam, Hitech City, Hyderabad. The tender notification was published in the Economic Times Newspaper on 06.11.2019. Pursuant to the notification, seven (7) bidders including the petitioner company participated. The pre-bid meeting was conducted on 15. i 1.2019 and the due date for bid submission was 27.11.2019. The date of opening of Technical Bid was27.11.2019 and the date of price bid opening was04.12.2019. The lease period is for a period often^* five years.

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(ii) That out of seven bids received, only five bids were qualified. Respondent No.3 - N{/s. People Combined Hospitality LLP., 7 Restaurant, National Highway 65, Suryapet, Telangana, has been shown as preferred bidder and the petitioner is stated to be second highest bidder. It is submitted that the petitioner owns^a constructed area of around 16,000 square feet retail space. As^per the technical eligibility required under Clause - 4.5.3 of the Request for Proposal (for short 'RIP'), the applicant shall^possess technical qualification as under:

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"a) Developed / operated air conditioned restaurants with minimum combined seating capacity of 500 PAX, which are operational as on bid due date or

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b) Developed or constructed or operating retail space of minimum 11500 Sq.feet (in one or two projects) which are operational as on the due date."

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It is submitted that the aforesaid qualifications relate to the whole project. The RFP document permits the participants to bid for any of the zones within the whole project i.e., slight modification in respect of the eligibility criteria, instead of 500 PAX, if an applicant is participating in relation to a specific zone, it has been leduced to 150 PAX and instead of 11500 square feet, it has been reduced to 3000 square feet in relation to retail space criteria.

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(iii) Respondent No.3 is running a restaurant on highway i.e., from Hyderabad to Vijayawada, but it has less than 200 PAX, however, trying to take into account the total constructed area which is not being utilized for any other purpose and trying to claim beneht under the retail space criteria under Clause - 4.5.3(b). Respondent No.3 cannot take into account the entire constructed

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area for running a restaurant i.e., open lobbies etc., wherein only food items like ice cream etc., are sold and call it as a retail space. Once a restaurant is being run by an applicant, it falls under the category of Clause - 4.5.3(a) and it cannot be considered in the category of Clause - 4.5.3(b). To be more clear, in a "retail space", multiple sub-retail spaces would be existing. Merely because some extra food outlets are provided which are ancillary to^{the main} restaurant, it cannot be treated as a retail space. The petitioner^has quoted more amount, but it was not selected. Respondent No.3 is wrongly selected though it does not fall within the said category.

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(iv) The petitioner is associated with another private limited company and formed a consortium, and submitted the bid^{which is} allowed as per the RFP. The petitioner company^{is a lead member} of the consortium. Respondent No.3 is a firm^{with limited liability} registered as "LLP" which does not fit into any of^{the three} categories specified in Clause - 4.5.1(a). The^{petitionerenquired} with regard to the permission granted to respondent^No.3 ln relation to the property to the extent of Acs.5-00 in Survey^No.729, Piltamarri Village, Rayanagudem Gram Panchayat, Suryapet

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)

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Mandal. The petitioner was informed that permissions were granted in favour of NlVs. Plus Hostilities (Pvt.) Limited. It is not known as to how respondent No.3 is claiming minimum eligibility criteria based on the said permission.

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In the counter affidavit filed by respondent No.2, it is stated that for promotion of International Food Courts and Retail Spaces to be utilized by reputed brands of products for augmenting income and for further upkeep as well as development of Shilparamam. The then Govemment of Andhra Pradesh allotted land for setting up Craft Village, Amphitheatre, Village Museum etc. About 3 00 Handicraft artisans and Handloom Weavers coming from all over the country have set up their stalls for their crafts. Cultural programmes, craft bazaars, melas, art exhibitions are organized regularly in Shilparamam. Apart from craft village and night bazaar, annexe was constructed in the premises to set up food courts and retails shops.

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(i) It is proposed to lease out the Night Bazar Annexe area for promotion of International Food Courts and Retail Space to be

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utilized by reputed brands^{of products for augmenting incomefor} further upkeep as well as development of Shilparamam.^Pursuant to the same, notification was issued^{inviting Request for Proposal.} Out of seven bids received by^{them,5 bids weretechnically} qualified. The annual lease rent amounts^{quoted (exclusiveof}

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taxes) per annum for the^{whole projectareas under:}

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"i)^{tWs. SKYlnn Services} - Rs.2,52,00,0001 ii) M/s. Ambica Agarbathies Ltd. - Rs.2,42,00,0001 iii) IWs. Taaza Intemational^Ltd. - Rs.3,02,00,000/iv) IWs. People Combine Hospitality^LLP - Rs.3,33,33,3331 v) \4/s. Jubilee Hi[l Resorts Pvt. Ltd. - Rs.2,16,00,0001"

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As shown above, respondent^{No.3quoted highest annuallease rent}

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amount of Rs.3,33,33,333/-^{whereas the petitionerhas quoted} Rs.3,02,00,000/- only,^{as such, respondentNo.3 was declaredas} successful bidder. Documentary^{evidence has beensubmittedby} respondent No.3 in Appendix^{83 of the Technical Bid showing} retail space experience having^{developed, constructedand} operating 40000 square^{feet retailspace and food court at 7 Food} Court, Suryapet, Telangana^{State. Thus, respondentNo.3 has}

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satisfied the conditions laid down for getting qualified for the whole project as per Clause - 4.5.3(1Xb).

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(ii) It is submitted that the petitioner has misread and misinterpreted Clause 4.5.3. which stipulates eligibiliry criteria for bidding for the whole project consists of two sub-clauses (a) and (b) which are independent clauses and the bidder can qualiff ifthe bidder satisf,res any of the sub-clauses but not both the sub-clauses Respondent No.3 is not only running restaurant but also has 40,000 square feet retail space and independent of running the restaurant. The word 'Pubtic Limited Company or Private Limited Company' used in the RFP under Clause 4.5.1(a) also includes the Limired Liability Partnership Act 2008 and respondent No.3 satisfied rhe eligibility of the said clause and also the Limited Liability Pannership Act 2008 read with Section 2(d) "Body Corporate" as defined under Section 3 ofthe Cornpanies Act 1956.

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In the counter affidavit filed by respondent No.3, it is stated that thev are having Food Court and retail space of 40,000 square feet for the last ten years which is South India's first and the

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largest Highway Food Court viz., '7 - Food Court' situated^on National Highway No.65 on Hyderabad to Vijayawada Road, Rayani Gudem Village, a few kilometres from Suryapet.^{The Food} Court and retail space is spread over in Acs.5-00 of^{land with} 40,000/- square feet built-up area. Around 200^workersand employees are working in it. The Govemment of^{Telangana has} awarded 'Best Way-side Amenities" for two^{timesand 'Best} Restaurant' award for two times for the^{years 2014,2016,2017 and} 2018. Further, TV5 has^given the award "Leader^{in Hospitality} Business" in 2018. Respondent No.3 apart^{from running the Food} Court also managing renowned^{multiple retailoutletsi.e., KFC,} Dominoes, Coffee Day, Cream Stone,^{Karachi Bakery, Thick} Shake Factory, Pochampally^{Handlooms, Amla Amruth,Manthani} Fashions, Gadgets 360, S.R. Toys &^{Gifts,Pan House,Candy} Shop, Book Shop, Imported Chocolates,^{HDFCATM, Sub-Way} etc., in the said 40,000 square feet^{space at Suryapet.Respondent} No.3 is a Limited Liability^{Partnership Firm.RespondentNo'3} was a group of Private Limited companies^{wherein it is one among} them.

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It was converted into LLP vide proceedings dated 27.12.2018 by the Registrar of Companies. Respondent No.3 amalgamated into one company by the orders of this Court in Company Petition Nos.83, 84 and 85 of 2012 dated 11.12.2012

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(D By using the word 'retail space' and 'restaurant' interchangeably, the petitioner is trying to create confusion in order to^justifu its claim that respondent No.3 does not fit into Clause - 4.5.3(b) ofthe l{equest for Proposal.

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In the reply affidavit filed by the petitioner to the counter affidavit of respondent No.3, if was denied that respondent No.3 is operating 40,000 square feet retail space. Respondent No.3 is running only a food court of 200 PAX and very few pan shop, ice-cream and coffee shops. The entire 40,000 square feet cannot be treated as a retail space since the entire area is not covered by shops. Only about three coffee and ice-cream shops are there and two pan shops with gift articles and toys. The alleged shops are small shops of pan shop containing popcorn and other gifts which cannot be treated as retail outlets. Respondent No.3 has not

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Clause^{4.5.3(a) and Clause} fulfilled the^{requirementsunder}

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4.s.3(b).

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Heard Mr.^{C' Raghu, leamed counsel for the petitioner;} learned Government^{Pleader for Tourism appearingfor respondent} No.l; Mr.^{Badri Premnath, leamed counsel' representing Mr' U'} Suresh^{Babu,leamed counsel for respondent No'2; and Ms'} Mamatha,^{leamed counsel, representing Mr' Challa Gunaranjan'} learned counsel^{for respondent No'3; and perused the materialon} record.

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It is^{contendedby the leamed counsel for the petitioner} thal '7 - Food^{Court' owned by respondentNo'3 is only a} restaurant^{and it has no retail space as stipulatedunder Clause -} 4.5.3 and^{permission is grantedonly for runningrestaurant' Be it} noted, the^{leamedcounselconfinedhis submissionsto the above} point and did^{not seriously argue on the pointof legal status of} respondent^{No.3 entity, though suchpoint was raised in the writ} petition.

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As per technical eligibility under Clause - 4.5.3, bidder is required to satisfr either criteria prescribed under the sub-clause (a) or (b) thereof. The case of respondent No.3 is that it is running restaurant with a retail space of 40,000 square feet and thus satisfies eligibility criteria specified under sub-clause (b) of Clause - 4.5.3.

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In the counter affidavit of respondent No.3, lt rs specifically asserted that documentary evidence is submitted by it 1n Appendix B of the technical bid showing retail space experience having developed, constructed and operating 40,000 square feet retail space and food court at '7 Food Court, Suryapet, Telangana State.' Respondent No.3 is qualified for the whole project satis$ing Clause - 4.5.3(b). It has been held in catena of decisions that the Courts do not have expertise in the technical matters and the same should be left to the decision of the employer. The Courts are only concerned with the decision making process.

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In a recent decision of the Hon'ble Supreme Courtⁱⁿ

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M/s. N.G. Projects Limited v. NUs. Vinod Kumar Jain^(Civil Appeal No. 1 846 of 2022 arising out SLP^(Civil) No.21^{03 of 2022),} it was held as under:

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The satisfaction whether a bidder satisfles the tender condition is^primarily upon^the authority inviting the bids. Such authority^is aware of expectations from the tenderers^while evaluating the consequences of non-performance. In the tender in question, there^{were 15 bidders.} Bids of 13 tenderers were found to^be unresponsive i.e., not satis8/ing the^tender conditions. The writ^{petitioner was} one^{of them.} It is not the case of the writ^petitioner that action of the Technical Evaluation Committee^was actuated by extraneous considerations or^was malafide.

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Therefore, on the same set of facts, different conclusions can be arrived at in a^bona-fide manner by the Technical Evaluation^Committee. Since the view of the Technical Evaluation Committee was not to the liking of^{the writ} petitioner, such decision does not^{warrant for} interference in a grant of contract^{to a successful} bidder. -2

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In view of the above^judgments of this Court, the Writ Court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer. The Court does not have the expertise to examine the terms and conditions of the present-day economic activities of the State and this limitation should be kept in view. Courts should be even more reluctant in interlering with contracts involving technical issues as there is a requirement of the necessary expertise to adjudicate upon such issues. The approach of the Court should be not to find fautt with magnifying glass in its hands, rather the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions. If the Court finds that there is total arbitrariness or that the tender has been granted in a malahde manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract.^-fhe injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying esca{ation costs and secondly, by being deprived of the infrastructure

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for which the present-day Govemments^are expected to work."

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As held above, it is not within the^{purview of this Court,} exercising^jurisdiction under Article^{226 of the Constitutionof} India to interpret clauses in the^{tender notification in the manner} understood by the petitioner.^{The instant tenderis issued for} establishment of a night^{bazaar which include organizingstalls,} food courts etc. Thus, contention of^{the leamed counselfor the} petitioner that respondent No.3^{should be consideredas failing} under Clause - a.5.3.(a) and^{(b) could not have been considered} under sub-clause^(b) of^{Clause -4'5.3 cannot be sustained.} Respondent No.2 is the competent^{authorityto decideeligibility of} the tenderers and knowing^{its requirements,was satisfied with the} eligibility of respondent^{No.3. This Court cannot sit overthe} decision of respondent^{No.2.In view of the same, this Courtdoes} not find any merits in^{this writ petition.}