Bkst Labour & Construction Coop. ... vs Govt. Of Nct Of Delhi & Ors.
1999 Latest Caselaw 778 Del

ORDER

C.M. Nayar. J

The present petition is directed against the respondents for issuance of a writ of certiorari for quashing the public notice issued by respondent No. 2 appearing in daily newspaper 'Nav Bharat Times' dated 11th March, 1999 which is filed as Annexure-P1 to the writ petition. This notice reads as under:-

"Delhi State Industrial Corporation Ltd

(A Govt. Undertaking) Security Wing,

N-Block, Bombay Life Building,

Connaught Circus, New Delhi-110001

TENDER INVITATIION NOTICE

2. On behalf of Managing Director, Delhi State Industrial Development Corporation Ltd. sealed tenders in closed envelopes are invited on daily 8 hours shift duty basis for 128 ex-servicemen/experienced security guards, from well known Security Agencies having business of minimum Rs. 25,00,000/- per annum and past experience of 5 years satisfactory service record. Applications alongwith earnest money deposit of Rs. 25,000/- in the form of demand draft/pay order drawn in favour of Delhi State Industrial Development Corporation Ltd. will be accepted upto 3 p.m. on 24.3.1999 and on the same day at 4 p.m. the applications in the presence of the applicants will be opened. The applications not accompanied with the earnest money will not be considered and rejected. Applications and the accompanying documents can be purchased against cash payment of Rs.100/- from the Cashier, Central Accounts Department, Delhi State Industrial Development Corporation Ltd. N-Block, Bombay Life Building, Connaught Circus, New Delhi on all working days upto 3 p.m. Sale of application Forms shall be closed one day before the opening of tenders/applications.

Managing Director is authorised to accept or reject any application/tender without disclosing any reason.

G.N.KUKRETI

Manager(D-702553)

3. The main grievance of the petitioner is that the contract for award of work for which the tender is now floated was granted to the petitioner on the recommendation of the Government and to make a departure from that practice it was incumbent on respondent No. 2 to issue show cause notice before issuance of tender notice in respect of the same work. The learned counsel for the petitioner has referred to the judgment of the Supreme Court reported as Amrit Banaspati Co. Ltd. and another Vs. State of Punjab and another to reiterate the proposition that once the Government has held out a promise to take a particular action, the law does not permit for modification of the same meaning thereby that once the petitioner society was awarded the contract on a policy decision by the Government, it will not be open to invite other persons to bid for the same contract by means of an open tender. The contract prima facie related for engagement of security agencies for undertaking the work as referred to in the tender notice. The award of work in the first instance to the petitioner is not in dispute. Subsequently respondent No. 2 thought it proper to invite everybody by floating a tender so that all eligible parties could apply and be considered. While issuing notice this Court permitted the petitioner to apply for the tender but stayed the award of contract till further orders. The stand of respondent No. 2 is spelt in the counter affidavit filed in answer to the show cause wherein it is stated is paragraphs (III) (IV) (VI) and (VII) of the preliminary objections as follows:-

"(III). That the relevant criterion pre-determined by specific requirements, procedure and formalities has been followed by the respondent Corporation in the award of the security contract at all times. It has been repeatedly held that public auction is the salutary procedure for award of any contracts. It is also settled law that the award of such job must satisfy the duly test of reasonableness and public interest and the choice of the recipient must not be arbitrary or capricious but according to settled norms and standards. All relevant criterion have to be kept in mind. The decision to award the job cannot be influenced by any extraneous considerations other than the totality of benefits to the public for whose benefit the job is being entrusted. The respondent Corporation humbly submits that the notice inviting tenders and the decision to invite tenders are justified, reasonable and completely in public interests in order to ensure the best security service to the public.

(IV) That without prejudice to the contention that it was always the practice and procedure of the respondent Corporation to invite tenders and thereupon award the security contracts, it is respectfully submitted that in the event that it is contended that there was a change in the policy in inviting the tenders for the current period, the respondent Corporation submits that the policy and decision to invite tenders is rationale, reasonable, equitable and in public interest being with the sole intention of getting the best at the best rate for the public at large. It is not open to the petitioner to contend to the contrary.

(VI) That the task of provisions of security services at the Industrial Complex is not in the nature of "Normal Maintenance Work". Valuable industrial fitting, etc. are required to be given security protection. In addition thereto at the time of effecting installations, valuable electrical and sanitary fittings etc. needs specialised security services. The guard deployed at the spot is required not only to be physically present but requires the mental agility and ability to take quick decisions. During the deployment of the guards by the petitioner there have been large number of thefts in the area and in the recent past Rs.50,000/- worth electrical meters and pumps have been stolen. The security services provided by the petitioner have not been effective. The industrialist in the area have lodged complaints with the officials of DSIDC that in many places the boundary wall has been broken by miscreants. Cattle freely roams in the complex without any check by the guards. It is apparent that the petitioner has failed to provide the necessary and efficient service and the respondent No. 2 is in any event justified in inviting tenders for deployment for provision of the security services at the Narela Industrial complex.

(VII) That the respondent No. 2 is dealing with the public money and is duty bound in fact and in law to ensure all provisions of best service for which public money is expended. The properties which are to be secured are public properties worth severallacs and crores. For want of proper security services, there are grave apprehensions of thefts, encroachments on public properties unauthorised constructions and even removal of soil.

(VIII) The respondent No. 2 is justified in calling for the tenders and awarding the same to the best party offering the best service at the best rates. The petitioner was not given the job for providing security guards for an indefinite period but the same was definite and commensurate with the period for which security was being asked in the past which was on an annual basis till appointment of another agency/finalisation of tenders. The nature of the service i.e. provision of security requires continuity."

4. The basic stand as taken by the above said respondent is that it will be appropriate, just and proper to award the work by contract by inviting tenders where all parties including the petitioner can participate as such a process has been upheld by the Supreme Court. In this connection reference may be made to the judgments reported as Ramana Dayaram Shetty Vs. The International Airport Authority of India and others : M/s Kasturi Lal Lakshmi Reddy, represented by its partner Shri Kasturi Lal, Ward No.4, Place Bar, Poonch, Jammu and Others Vs. State of Jammu and Kashmir and another : Sterling Computers Ltd. Vs. M/s. M&N Publications Limited and Ors. JT 1993 (1) S.C.187: Tata Cellular Vs. Union of India and Common cause a Registered Society Vs. Union of India and others .

5. In the case of Ramana Dayaram Shetty (supra) the Supreme Court clearly held as follows in paragraph 11:

"11. Today the Government, in a welfare State is the regulator and dispenser of special services and provider of a large number of benefits, including jobs contracts, licences, quotas mineral rights etc. The Government pours forth wealth, money benefits, servics, contracts, quotas and licences. The valuables dispensed by Government take many forms, but they all share one characteristic. They are steadily taking the place of traditional forms of wealth. These valuables which derive from relationships to Government are of many kinds. They comprise social security benefits, cash grants for political sufferers and the whole scheme of State and local welfare. Then again, thousands of people are employed in the State and the Central Government and local authorities. Licences are required before one can engage in many kinds of businesses or work. The power of giving licences means power to withhold them and this gives control to the Government or to the agents of Government on the lives of many people. Many individuals and many more businesses enjoy largess in the form of Government contracts. These contracts often resemble subsidies. It is virtually impossible to lose money on them and many enterprises are set up primarily to do business with Government. Government owns and controls hundreds of acres of public land valuable for mining and other purposes. These resources are available for utilisation by private corporations and individuals by way of lease or licence. All these mean growth in the Government largess and with the increasing magnitude and range of Governmental functions as we move closer to a welfare State more and more of our wealth consists of these new forms. Some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges. But on that account, can it be said that they do not enjoy any legal protection? Can they be regarded as gratuity furnished by the State so that the State may withhold, grant or revoke it at its pleasure? Is the position of the Government in this respect the same as that of a private giver? We do not think so. The law has not been slow to recognise the importance of this new kind of wealth and the need to protect individual interest in it and with that end in view, it has developed new forms of protection. Some interests in Government largess, formerly regarded as privileges, have been recognised as rights while others have been given legal protection not only by forging procedural safeguards but also by confining/structuring and checking Government discretion in the matter of grant of such largess. The discretion of the Government has been held to be not unlimited in that the Government cannot give or withhold largess in its arbitrary discretion or at its sweet will. It is insisted, as pointed out by Professor Reich in an especially simulating article on " The New Property" in 73 Yale Law Journal 733, "that Government action be based on standards that are not arbitrary or unauthorised". The Government cannot be permitted to say that it will give jobs or enter into contracts or issue quotas or licences only in favour of those having grey hair or belonging to a particular political party or professing a particular religious faith. The Government is still the Government when it acts in the matter of granting largess and it cannot act arbitrarily. It does not stand in the same position as a private individual."

6. Similarly in the case of M/s. Kasturi Lal Lakshmi Reddy (supra) it has been clearly stated that it is well settled that the Government is not free, like an ordinary individual, in selecting the recipients for its largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. The governmental action must not be arbitrary or capricious, but must be based on some principle which meets the test of reason and relevance. In the case of Sterling Computers Ltd. the law is further spelt out in the manner as indicated above in paragraph 29 which may also be reproduced as under:-

"29. Philanthropy is no part of the management of an undertaking, while dealing with a contractor entrusted with the execution of contract. The supply of the directories to public in time, was a public service which was being affected by the liberal attitude of the MTNL and due to the condensation of delay on the part of the UIP/UDI. There was no justification on the part of the MTNL to become benevolent by entering into the supplemental agreement with no apparent benefit to the MTNL, without inviting fresh tenders from intending persons to perform the same job for the next five years. Public authorities are essentially different from those of private persons. Even while taking decision in respect of commercial transactions a public authority must be guided by relevant considerations and not by irrelevant ones. If such decision is influenced by extraneous considerations which it ought not to have taken into account the ultimate decision is bound to be vitiated, even if it is established that such decision had been taken without bias. The contract awarded for the publication of the directories had not only a commercial object but had a public element at the same time i.e. to supply the directories to lacs of subscribers of telephones in Delhi and Bombay, every year within the stipulated time free of cost. In such a situation MTNL could not exercise an unfettered discretion after the repeated breaches committed by UIP/UDI, by entering into a supplemental agreement with the Sterling for a fresh period of more than five years on terms which were only beneficial to UIP/UDI/Sterling with corresponding no benefit to MTNL, which they have realised only after the High Court went into the matter in detail in its judgment under appeal."

7. The above proposition has been reinstated in the judgments of Tata Cellular (supra) and Common cause (supra).

8. In view of the settled position as referred to above, respondent No. 2 chose to invite tenders from participants and no illegality and infirmity can be found in respect of the same. The petitioner has also been granted the liberty to submit its tender and to be considered in accordance with the conditions as enumerated in the tender notice and in accordance with law. There cannot be any grievance in respect of the same and it is not established that respondent No. 2 is obliged to grant benefit of providing the contract in perpetuity in favour of the petitioner though it is contended that in view of the prevailing situation in the area it may be a device to help the persons whose lands have been acquired and who need some assistance to secure employment. However, it cannot be argued that the grant of an earlier contract in favour of the petitioner will debar respondent No. 2 to float a tender to enable all qualified parties to participate and be considered for award of contract in accordance with the settled position as has been referred to in the above-cited judgments.

9. For the aforesaid reasons there is no merit in this petition. The same is dismissed in limine.