M/s Sree Pavani Collections vs State of Andhra Pradesh & Others

Court: High Court of Andhra Pradesh at Amaravati
Case No.: Writ Petition No. 6212 of 2026
Date of Judgment: 18 March 2026
Judge: Hon'ble Sri Justice Venkateswarlu Nimmagadda

Sections / Provisions Involved

  • Article 226 of the Constitution of India
  • Tender Conditions Clauses 10 & 41
  • Section 151 of the Code of Civil Procedure, 1908 (Interlocutory Application)

Facts of the Case

The petitioner, M/s Sree Pavani Collections, participated in a public auction conducted by Sri Durga Malleswara Swamy Varla Devasthanam, Vijayawada, for operating Vastra Prasadam counters. The petitioner emerged as the successful bidder and deposited 50% of the licence fee in accordance with the tender conditions, following which the auction was confirmed.

Under Clause 10 of the tender conditions, the successful bidder was entitled to one 15' × 15' space free of cost and another 15' × 15' space on rental basis. Although one counter was allotted at the uphill Ghat Road, the petitioner repeatedly requested allotment of the second counter at the ground floor of the Mahamandapam, as promised in the tender.

Instead of allotting the additional space, the temple authorities issued a demand requiring payment of the remaining 50% of the annual licence fee. The petitioner challenged this action before the Andhra Pradesh High Court, contending that the respondents could not insist upon the balance payment without first complying with the tender conditions.

Issues Involved

  1. Whether the respondents could demand the remaining licence fee without allotting the additional space promised under the tender conditions.
  2. Whether such action violated Clauses 10 and 41 of the tender document.
  3. Whether the petitioner was entitled to a direction compelling the respondents to first allot the additional Vastra Prasadam counter before collecting the balance licence fee.

 

Petitioner's Arguments

  • The petitioner argued that the auction was accepted only after payment of 50% of the licence fee.
  • Clause 10 specifically required the temple authorities to allot another 15' × 15' counter on rental basis in addition to the free space already provided.
  • Despite repeated requests, the respondents failed to provide the promised additional space.
  • Without the second counter, it would become commercially impossible to recover the substantial auction amount paid by the petitioner.
  • Therefore, demanding the remaining licence fee without fulfilling the contractual obligation was arbitrary, illegal andcontrary to the tender conditions.

Respondents' Arguments

  • The temple authorities informed the Court that they were willing to comply with Clause 10.
  • It was submitted that the petitioner would be allotted the additional space after mutual discussions with the Executive Officer of the Devasthanam.
  • The respondents expressed readiness to resolve the issue amicably by providing the additional counter as contemplated in the tender.

Court Order / Findings

The Andhra Pradesh High Court observed that:

  • The petitioner had admittedly become the successful bidder and deposited the required 50% licence fee.
  • Clause 10 of the tender clearly contemplated allotment of another counter on rental basis.
  • The grievance of the petitioner was justified since recovery of the substantial auction amount depended upon the availability of both counters.
  • During the hearing, the respondents themselves agreed to provide the additional space.

Accordingly, the Court directed:

  • The temple authorities shall allot the additional ground floor Mahamandapam space within three weeks.
  • After such allotment, the petitioner shall deposit the remaining auction amount within two weeks thereafter.
  • The writ petition was disposed of without any order as to costs.

Important Clarification

This judgment reinforces that government authorities and public institutions conducting tenders are bound by the conditions contained in the tender document. A successful bidder cannot be compelled to perform financial obligations when the authority itself has not fulfilled its corresponding contractual commitments. The Court ensured reciprocal compliance with the tender terms before directing payment of the remaining licence fee.

Significance of the Judgment

The decision highlights that:

  • Tender conditions are binding on both parties.
  • Public authorities must honour contractual promises contained in tender documents.
  • Courts exercising jurisdiction under Article 226 can enforce compliance where government action becomes arbitrary or contrary to tender conditions.
  • Financial obligations under a contract may depend upon prior performance by the authority where the contract so requires.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785407699_2418compressed.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.