Delhi High Court
M/S. Suraksha Security Agency vs Govt. Of Nct Of Delhi And Anr on 11 August, 2015
Author: Sanjeev Sachdeva
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 31st July, 2015
Judgment delivered on: 11th August, 2015
+ WP(C) No. 6618/2015
M/S N.K. SECURITIES ..... Petitioner
versus
GOVT. OF NCT OF DELHI AND ANR ..... Respondents
AND
+ W.P.(C) 6619/2015
R.D. ENTERPRISES ..... Petitioner
versus
GOVT. OF NCT OF DELHI AND ANR ..... Respondents
AND
+ W.P.(C) 6620/2015
TOP EDGE SECRUTIY AND SERVICES PVT. LTD ..... Petitioner
versus
GOVT. OF NCT OF DELHI AND ANR ..... Respondents
AND
+ W.P.(C) 6621/2015
WP(C) 6618, 6619, 6620 & 6621/2015 Page 1 of 7
M/S. SURAKSHA SECURITY AGENCY ..... Petitioner
versus
GOVT. OF NCT OF DELHI AND ANR ..... Respondents
Advocates who appeared in this case:
For the Petitioners : Mr Rajiv Shukla with Mr Sridhar Raj, Advocates
For the Respondents : Mr Peeyoosh Kalra, Advocate
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SANJEEV SACHDEVA
JUDGEMENT
SANJEEV SACHDEVA, J
1. The petitioners have filed the present petition impugning Notice
Inviting Tender (in short "NIT") for providing security services in the
Government schools, Stadia & Field Offices of Directorate of Education,
GNCT of Delhi as per requirements of clusters namely Cluster-A, Cluster-B,
Cluster-C & Cluster-D vide Tender Enquiry No. 2015_DC_75441_1.
2. Petitioners challenge clause 5.1 of Section 2 of Instructions to Bidders
whereby partnership and proprietorship firms have been denied participation
in the tender. With regard to this challenge, learned counsel for the
respondent has submitted that the said condition has been waived and
partnerships and proprietorship firms have been permitted to participate. In
this view of the matter, the challenge of the petitioners to this Clause does
not survive.
3. The only other challenge raised by the petitioners to the NIT is that
the respondents have clubbed various schools and categorized the schools
into four clusters thereby increasing the value of the tender, which has
resulted in increase in the value of the Earnest Money Deposit and the
Performance Guarantee required to be submitted in terms of the NIT. It has
been contended that since the schools have been clubbed into four clusters,
the estimated tender value has increased manifold thereby eliminating small
players and the tender is restricted to large players, who have substantially
larger funds to provide the Earnest Money Deposit and the Performance
Guarantees of substantial amounts.
4. Learned counsel for the petitioners has submitted that the estimated
tender values for the four Clusters range from Rs. 16.2 crores to Rs. 19.2
crores and the EMD required to be submitted per Cluster ranges between 33
Lakhs to 39 Lakhs and the Performance Guarantee required to be submitted
is 10% of the contractual value. It is contended that because of the clubbing,
the Earnest Money Deposit and the Performance Guarantee required to be
submitted is substantial thereby making it impossible for small security
agencies to participate and only large security agencies would be able to
participate in the tender. This, it is contended, would reduce the competition
and thus, the NIT is liable to be quashed.
5. It is settled law that the scope of court's interference in tenders
matters is very restricted and limited. Where the State acts in a reasonable
and fair manner and in public interest, the court would refrain from
interfering. Greater latitude is to be conceded to State authorities in matters
of formulating condition of tenders and awarding contracts. Interference by
courts is not warranted unless the action of the tendering authority is mala
fide or is a misuse of statutory powers. Courts would not interfere merely
because it feels that some terms in the tender would have been fair, wiser or
more logical, The Supreme Court in Michigan Rubber (India) Limited Vs.
State of Karnataka and Ors.: (2012) 8 Supreme Court Cases 216 held as
under:-
"23. From the above decisions, the following principles
emerge:
(a) The basic requirement of Article 14 is fairness in
action by the State, and non-arbitrariness in essence and
substance is the heartbeat of fair play. These actions are
amenable to the judicial review only to the extent that the
State must act validly for a discernible reason and not
whimsically for any ulterior purpose. If the State acts
within the bounds of reasonableness, it would be
legitimate to take into consideration the national
priorities;
(b) Fixation of a value of the tender is entirely within
the purview of the executive and the courts hardly have
any role to play in this process except for striking down
such action of the executive as is proved to be arbitrary
or unreasonable. If the Government acts in conformity
with certain healthy standards and norms such as
awarding of contracts by inviting tenders, in those
circumstances, the interference by courts is very limited;
(c) In the matter of formulating conditions of a tender
document and awarding a contract, greater latitude is
required to be conceded to the State authorities unless
the action of the tendering authority is found to be
malicious and a misuse of its statutory powers,
interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders
have to be laid down to ensure that the contractor has the
capacity and the resources to successfully execute the
work; and
(e) If the State or its instrumentalities act reasonably,
fairly and in public interest in awarding contract, here
again, interference by court is very restrictive since no
person can claim a fundamental right to carry on
business with the Government.
24. Therefore, a court before interfering in tender or
contractual matters, in exercise of power of judicial review,
should pose to itself the following questions:
(i) Whether the process adopted or decision made by
the authority is mala fide or intended to favour someone;
or whether the process adopted or decision made is so
arbitrary and irrational that the court can say: "the
decision is such that no responsible authority acting
reasonably and in accordance with relevant law could
have reached"? and
(ii) Whether the public interest is affected?
If the answers to the above questions are in the negative,
then there should be no interference under Article 226."
6. The contention of the petitioners that the NIT should be quashed
merely because the NIT clubs various schools into four clusters thereby
increasing the tender value cannot be sustained. The tender inviting
authority has a free hand in settling the terms of the tender. The tender
inviting authority with a view to obtain better services and highest quality
can always impose conditions that are reasonable and fair. It is only where
the process adopted or decision made by the authority is mala fide or
intended to favour someone or where the process adopted or decision made
is so arbitrary and irrational that no responsible authority acting reasonably
and in accordance with relevant law could have reached. The eligibility
criteria prescribed in our view does not in any manner violate the principles
laid down in Michigan Rubber (India) Limited (Supra) warranting
interference. The tender inviting authority in our view has not imposed any
unfair or unreasonable conditions nor is there any malice or misuse of
statutory power by the tendering authority. Merely because by imposition of
a particular condition, the petitioners become ineligible or are not in a
position to meet the financial requirement of submission of Earnest Money
Deposit and the Performance Guarantee, the NIT would not be vitiated.
7. In our view, there is no merit in the petitions. The petitions are
accordingly dismissed, leaving the parties to bear their own costs.
SANJEEV SACHDEVA, J
BADAR DURREZ AHMED, J
August 11, 2015
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