Well Protect Manpower Service ... vs Delhi Development Authority And ...
2005 Latest Caselaw 123 Del

JUDGMENT

D.K. Jain, J.

1. Rule D.B.

2. With the consent of learned counsel for the parties, the matter is taken up for final disposal.

3. Challenge in this writ petition under Article 226 of the Constitution is to the legality and propriety of the order dated 17 July 2004, passed by the Director (Sports), Delhi Development Authority (for short ''the DDA''), respondent No. 3 herein, debarrin g the petitioner from tendering in future for the Sports Wing of the DDA. The petitioner prays for quashing of the said order with a direction to the respondents to award to them the contract for prevention of trespassing and protection of the golf coure land of Qutub Golf Course, New Delhi, their bid being the lowest.

4. The DDA, through its Chairman, has been imp leaded as the first respondent and the second respondent is the Secretary, DDA, Qutub Golf Course, New Delhi.

5. In the month of December 2003, the second respondent issued a Notice Inviting Tender (''NIT'' for short) for engagement of a firm for the afore-mentioned purpose. The tender was to be submitted in two parts. Part-I of the tender, viz., the technical bi d was to contain the details of the type of works undertaken; infrastructure and man-power available; experience in prevention of trespassing and protection of land in industrial organisations and the minimum turn over. Part-II, viz., the financial bid was to contain the amount to be charged on monthly basis for providing the said services. The material stipulation in Clause 3(b) of General Terms and Conditions was as follows:

"The offer of the firm, which does not abide by the Minimum Wages Act, as notified by GNCT Delhi on the date of submitting of tender, will be out rightly rejected."

6. The technical bid was to be opened first and the financial bids of only those tenderers, who were found technically capable of ensuring prevention of trespassing and protection of land, were to be opened.

7. In response to the NIT, the petitioner, a company incorporated under the Companies Act, 1962, submitted its tender. Four technical bids, including the one submitted by the petitioner, were found to be responsive. Their financial bids were opened and petitioner's bid was found to be the lowest. Since the rate of Rs. 3,212/- per guard per month, after adding the relieving charges, offered by the petitioner, was found to be below the rates prescribed by the Government of National Capital Territory of Delhi, vide letter dated 23 April 2004, the second respondent sought the following clarifications from the petitioner:

"Your Financial Bid, which was opened 15/3/2004 has been examined. You are requested to clarify your rate keeping in mind the stipulation of minimum wages rate based on GNCTD by adding relieving charges as laid down at Para 3 Sub-para (b) and (c) of the under document. Photocopy enclosed.

Also, you are requested to clarify how the contract will be executed without adding service charges."

8. Petitioner's response to the said letter was as under:

"The firm has quoted the rate for security services at your esteemed sports complex with accordance to the NIT of Govt. of NCT of Delhi without any motivation of profit. The break down is as below.

Minimum wage per day, Per head = Rs. 107.10 For 26 days = 2783.90 (as per notification of 20.6.2003).

Relieving charge for 4 holidays = 107.10 X 4 = 428.00 Total = 278.90 + 428.40= 3212.30

This amount is as per notification No.F.12 (142)2/MW/Lab/97 dated 20.6.03 of Minimum Wages Act 1948 of NCT of Delhi.

This firm is providing services to more than 30 Govt. Departments and we are compelled to keep a good amount of surplus man power and we would like to render car service to your honourable institution without any service charges."

9. On consideration of the explanation so furnished by the petitioner the financial bid of the petitioner was not only rejected but they were also debarred from future tendering in the Sports Wing of the DDA. Aggrieved by the said decision, the petitioner has preferred the present writ petition.

10. The writ petition is resisted by the respondents. In the affidavit in opposition, filed on behalf of the respondents, it is stated that the impugned order has been passed in order to stop the agencies from quoting below the rates prescribed by the Government and to ensure that the agencies pay to the labour the Government prescribed rates. It is also averred that the petitioner was given an opportunity to justify the rates in relation to the minimum wages as laid down by the Government of NCT of Delhi. This opportunity was availed of by the petitioner when they submitted their reply dated 27 April 2004 but could not justify how they had adhered to the requirements of the minimum wages. It is asserted that the petitioner was debarred from future tedering after due consideration of the explanation submitted by them.

11. We have heard Mr. Tarkeshwar Nath, learned counsel appearing for the petitioner and Mr.Anil Sapra, learned counsel for the respondents.

12. Learned counsel for the petitioner has assailed the action of the respondents mainly on the ground that it is violative of the principles of natural justice in as much as before blacklisting the petitioner, no opportunity was given to them to put fort h their view point on the question of compliance with the provisions of the Minimum Wages Act. It is also contended that the impugned order is per se illegal as it does not disclose any reason for debarring the petitioner from future tendering.

13. Mr. Sapra, on the other hand, while candidly admitting that no notice was issued to the petitioner for showing cause against the proposed action of debarment, has submitted that an adequate opportunity was given to the petitioner, when vide respondent s letter dated 23 April 2004, they were asked to clarify how the quoted rate had been worked out. Learned counsel has also urged that it was a bona fide action on the part of the DDA, based on past practice, when similar action against some other bidder was taken but the same was never challenged. It is thus, pleaded that DDA's action cannot be said to be arbitrary or mala fide warranting interference by this Court.

14. There is no gainsaying that any order or decision in matters involving civil consequences has to be made consistently with rules of natural justice. A ''civil consequence'' is an infraction of not merely property or personal rights but also of material deprivations and non-pecuniary damages. [See: Mohinder Singh Gill and Anr. v. The Chief Election Commissioner and Ors., ]. It is true that the rules of natural justice can neither be cast in a rigid mould nor put in a legal strait jacket. They ''are not cut and dried. They vary indefinitely'' said Lord Denning M.R. in Regina v. Home Secretary, Ex. P. Santillo, (1981) Q.B. 778. Thus, the principles of natural justice are flexible and have to be adopted to the circumstances prevelling in any particular case. Nonetheless, it is an elementary principle of natural justice that parties affected by any order should have the right of being heard and making representations against the order. It is an equally implied principle of rule f law that any order having civil consequence should be passed only after following the principles of natural justice [SEE: Raghunath Thakur v. State of Bihar, ]. Undoubtedly black listing of any person in respect of business ventures ntails serious civil consequences for his future business and therefore, any authority taking such a decision must act in accordance with the principles of natural justice. While dealing with a similar issue in Erusian Equipment and Chemicals v. State of West Bengal and Anr., , their Lordships of the Supreme Court observed thus:

"Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist."

15. Indubitably, in the instant case, no notice was given by the respondents to the petitioner to show cause why they should not be debarred from tendering in future. Therefore, the question for consideration is whether the notice issued to the petitioner on 23 April 2004, asking for clarification as to how the contract will be executed without adding service charges, was sufficient compliance with the principles of natural justice? In our opinion answer to the question posed has to be in the negative.

16. It is evident from the afore-extracted correspondence between the petitioner and the respondents, that the clarification sought was very specific, namely, how the petitioner would execute the contract at a rate, which may be less than what they were required to pay to the Guards in terms of the notification issued by the Government of NCT of Delhi. If the respondents were not convinced with the explanation furnished, the tender evaluation committee was competent to reject the bid in terms of the af re-extracted Clause 3(b) of the general terms and conditions, which enabled the respondents to outrightly reject an offer, which did not abide by the Minimum Wages Act, as notified by the Government of NCT of Delhi, on the date of submitting the tender. ever the less, in our view, recourse to the said Clause could not be had for the purpose of blacklisting a tenderer.

17. We are, therefore of the view that the respondents may be justified in rejecting the bid of the petitioner under the said Clause 3(b), on the ground that the rate quoted by the petitioner was less than what has been prescribed under the Minimum Wages Act but their action to debar the petitioner from tendering in future, being in the nature of a punishment, fundamentals of ''fair play''required that the petitioner was given an opportunity of being heard by the competent authority before the impugned order of blacklisting was passed. That having not been done, we have no hesitation in holding that the impugned action of the respondents in debarring the petitioner from tendering in future was palpably arbitrary and therefore, cannot be sustained. It is q ashed accordingly.

18. Now coming to petitioner's prayer for award of contract in terms of the NIT, on the plea that their bid was the lowest, it would suffice to note that having found that the bid did not conform to the Minimum Wages Act, it was within the competence of t he respondents to reject the bid summarily, in terms of Clause 3(b) of the terms and conditions. Having perused the original file, produced by the respondents, in particular the minutes of the tender evaluation committee, we feel that at least the decison of the respondents not to award the work to the petitioner, cannot be said to be unreasonable, or arbitrary warranting interference in exercise of power of judicial review. Furthermore, we have been informed that the NIT has since been cancelled and fresh NIT has already been issued. As a matter of fact, vide order dated 13 January 2005, the respondents have already been directed to issue to the petitioner tender documents under the fresh NIT. Since the order of debarring the petitioner from tendring in future has been quashed, the bid of the petitioner, if submitted, shall be considered and evaluated in terms of the NIT.

19. Consequently, the writ petition is allowed to the extent indicated above; order dated 17 July 2004 is quashed and the rule is made absolute. The petitioner shall also be entitled to costs, quantified at Rs. 10,000/-.