HON’BLE SRI JUSTICE A. RAMALINGESWARA RAO WRIT PETITION No.7367 of 2009
Date: July 03, 2014
Between:
M/s. Manikanta Lorry Transport, Rep. by its Managing Partner Kandula Yadagiri.
… Petitioner And
1. The Government of Andhra Pradesh, rep. by its Principal Secretary, Civil Supplies, Hyderabad & 3 others.
… Respondents * * * HON’BLE SRI JUSTICE A. RAMALINGESWARA RAO WRIT PETITION No.7367 of 2009
O R D E R:
Heard learned counsel for the petitioner and learned standing counsel for respondents 2 and 4.
2. The petitioner is a partnership firm constituted under the name and style “M/s. Manikanta Lorry Transport” in Munugodu Road, Nalgonda District. While so, the 2nd respondent called for tenders for appointment of Stage-I food grains transport contractors for the year 2009-2010 vide tender notice dated 15.01.2009. Pursuant to the said tender notice, the petitioner filed its tender and negotiations were conducted on 19.02.2009. The petitioner became the lowest tenderer. While so, a show cause notice was issued on 20.03.2009 to the petitioner asking it to show cause why the petitioner’s tender should not be rejected and the EMD of Rs.6.00 lakhs furnished should not be forfeited as per the terms and conditions. A reading of the show cause notice indicated that some persons filed a petition on 17.02.2009 complaining that the petitioner firm indulged in several cases including the case under Section 6-A of the Essential Commodities Act and also involved in diversion of trucks owned by it from the MLS point, Choutuppal and Nalgonda and requested the authorities to investigate the details. Pursuant to the said complaint, it appears that, an enquiry was conducted by the Joint Collector and Additional District Magistrate, the 3rd respondent, and submitted a report on 02.03.2009 to the 2nd respondent. The report revealed that the existing Stage-II contractors i.e., K. Balaraju for Choutuppal and Suryapet MLS points and K. Venkataramana for Nalgonda MLS point are the sons of K. Yadagiri, Managing Partner of petitioner firm and K. Balaraju was involved in a diversion of 100 quintals of PDS rice lifted from MLS point, Choutuppal and there was a collusion by K. Venkataramana in the said crime. Relying on Condition No.17 of the terms and conditions of the tender, the EMD of Rs.6.00 lakhs was forfeited and the tender was rejected by order dated 31.03.2009. Challenging the same, the present writ petition was filed.
3. A counter-affidavit is filed by the 2nd respondent stating that trucks involved in 6A cases/diversion cases and/or other trucks belonging to their owners should not be hired. As per the tender terms and conditions No.8(b) & 8(c) the tenderer should enclose an affidavit attested by a Notary to the effect that the tenderer has no past or present criminal record with the police/vigilance of CS Department/Vigilance and Enforcement Department, Government of A.P./Government of India and that the tenderer or any of the partners or representatives were never blacklisted by the Civil Supplies Corporation/any Government organization at any time or involved in diversion of stocks. One K. Srinivasa Goud submitted a complaint on 17.02.2009 alleging that some of the partners of the petitioner firm are Stage II contractors, some of them are involved in several cases under the Essential Commodities Act, 6A cases and also in diversion of trucks. Thereupon, the Joint Collector, Nalgonda, enquired into the matter and submitted a report. As per the said report, the Managing Partner of the petitioner firm declared five vehicles out of which two vehicles were involved and engaged by the son of the Managing Partner in diversion of essential commodities during the year 2008-2009. The two sons of the Managing Partner of the petitioner firm are Stage II contractors and they were involved in diversion cases and there is a police case in Case No.C/151/S1 82/2008 dated 08.09.2008 pending at that time. On the basis of enquiry report of the Joint Collector a show cause notice dated 20.03.2009 was issued to the Managing Partner of the petitioner firm seeking his explanation which was received by the petitioner on 24.03.2009. He submitted a reply to the Corporation on 26.03.2009. As per the said reply, the sons of the Managing Partner of the firm are not partners of the firm nor any of their vehicles are involved in transport business of the said firm. Therefore, Condition No.17 is not attracted. He also filed a notarized affidavit stating that he is separated from his sons and his sons are living separately. Since the explanation was not satisfactory, the 2nd respondent issued a final notice on 31.03.2009 forfeiting the EMD of Rs.6.00 lakhs furnished by the petitioner and rejecting the tender of the petitioner for 2009-2010 by invoking Condition No.17.
4. The petitioner filed a reply stating that the firm came into existence only in the month of January 2009 and any contract held by the son of one of the partners of the firm cannot be attributed to the firm. The petitioner firm was never blacklisted and was never involved in diversion of stocks. The five vehicles furnished are owned by different partners of the firm and as such Condition No.21 is not applicable. Further they state that there is no prohibition to give vehicles on lease to third parties. The reply also states that K. Bala Raju and K. Venkata Ramana were not blacklisted by the Corporation and they are continuing as contractors of the Corporation.
5. Condition No.17 of the terms and conditions reads as follows:
“A person or firm or company who has been blacklisted by the Corporation or by any of the Government organizations or Government or involved in diversion of stocks or involved in 6A cases under E.C. Act anytime or with criminal record is not entitled to participate in the tenders. Persons or firms blacklisted/rice millers/rice millers association/ food grains wholesale or retail dealers/Stage-II contractors/fair price shop dealers and their representatives or partners or associates are not eligible or entitled to participate in the tenders. In case of any kind of participation or filing of tender by such person(s)/firm(s), the Corporation shall forfeit the entire EMD amount of Rs.6,00,000/- as penalty for such an act of false declaration besides rejecting the tender. Even if the tender is finalized the Corporation is at liberty to cancel the tender and forfeit the security deposit and bank guarantee whenever it comes to notice besides recovering the liquidated damages.”
6. The learned counsel for the petitioner submits that the son of the petitioner cannot be called as a partner of the firm or associate of the firm and he is an independent person having independent dealings with the Corporation. Even assuming that one of the partners of the firm is involved in 6-A cases under the Essential Commodities Act, it will not disqualify the firm from tendering for the work and invocation of Condition No.17 in the instant case is bad in law. The EMD was forfeited on the sole ground that the persons who are involved in diversion of PDS rice are the sons of the Managing Partner of the firm and they can be called as associates of the firm. The interpretation placed by the 2nd respondent on the relationship in terms of Condition No.17 cannot be appreciated, as no blood relative of any partner can be called as representative of a firm or associate of a firm as the firm will be having independent existence of its own. The reply affidavit also states that the sons of Managing Partners K. Bala Raju and K. Venkata Ramana, were not blacklisted also and the learned counsel for the petitioner states that subsequently they were acquitted in criminal cases also.
7. In the circumstances, the impugned order dated 31.03.2009 forfeiting the EMD is not legal and is accordingly set aside. The 2nd respondent is directed to refund the EMD to the petitioner within a period of three months from the date of receipt of a copy of this order, since the period of tender had already expired and no relief can be granted with regard to rejection of tender.
8. The writ petition is accordingly allowed. Pending miscellaneous petitions, if any, shall stand dismissed in consequence. No costs.
A. RAMALINGESWARA RAO, J Date: July 03, 2014 BSB
76 HON’BLE SRI JUSTICE A. RAMALINGESWARA RAO
WRIT PETITION No.7367 of 2009
Date: July 03, 2014
BSB