Delhi High Court
Harshidhi Security Services vs Delhi Development Authority ... on 14 October, 2022
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 14th OCTOBER, 2022
IN THE MATTER OF:
+ W.P.(C) 6733/2022 & CM APPL. 20428/2022
HARSHIDHI SECURITY SERVICES ..... Petitioner
Through: Mr. Prashant Mehta and Ms.
Charanpreet Singh, Advocates
versus
DELHI DEVELOPMENT AUTHORITY (DDA) ..... Respondent
Through: Mr. Sanjay Katyal, Standing Counsel
for DDA with Mr. Adab Singh
Kapoor and Mr. Nihal Singh,
Advocates.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. The instant writ petition under Article 226 of the Constitution of India
has been filed challenging the Order/Notification bearing No.F6(35)A/PD-
4/DDA/2022/119 dated 21.04.2022 issued by the Respondent cancelling the
Notice Inviting Tender (NIT) bearing No.12/EE/PD-4/DDA/2021-22 dated
26.02.2022.
2. Shorn of details, the facts leading to the instant writ petition are as
under:
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By:RAHUL SINGH
Signing Date:14.10.2022
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a) The Petitioner is a partnership firm registered under the
provisions of the Indian Partnership Act, 1932 and is engaged in
carrying out the business of providing security guards, security
supervisors, Gunmen, labour supplies placement, labour contractor,
mechanized housekeeping, cleaning services and manpower
Consultant and Consultancy Services etc.
b) The Respondent/DDA invited e-bids from the eligible
bidders vide Notice Inviting Tender (NIT) bearing
No.12/EE/PD-4/DDA/2021-22 dated 26.02.2022 for allotment of
tender from specialized agencies, who have a valid license under the
Private Security Agencies Regulation Act (PSARA), 2005, for
providing round the clock security guards for watch and ward for
sites and office complexes under the flyovers (specialized work).
The estimated cost of the work was Rs.1,17,96,435/- for 365 days.
c) The Petitioner was one of the bidders for the aforesaid tender
issued by the Respondent. The Petitioner submitted all the required
documents and also submitted the quoted amount of Rs.1,12,40,
822.91/- vide letter dated 23.03.2022 to the Respondent.
d) It is stated in the writ petition that other entities have also
participated in the aforesaid tender. The tender amounts quoted by
the entities, namely, M/s Star Security and Placement services, M/s
Friends Detective Security Services, M/s. Kushal Suraksha and
Allied Services Pvt. Ltd., M/s. Rakshak Securities Pvt. Ltd. and M/s
Stallion Security were Rs. 88,00,140.51/-, Rs.88,00,140.51/-,
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Rs.88,47,326.25/-, Rs.88,74,458.05/- and Rs.88,87,434.13/-
respectively.
e) It is stated in the writ petition that all other entities quoted
amounts much lesser than what is permissible i.e., amounts quoted
by all other entities were lesser than the legal requirement of
minimum wages to be paid to skilled category workmen.
f) It is further stated that the Respondent had neither awarded the
tender nor cancelled it. Aggrieved by the same, the Petitioner filed a
petition bearing W.P.(C) 6475/2022 before this Court praying that
the tender should be awarded to the Petitioner herein who was the
only responsive bidder in the tender as other entities had quoted the
amounts below legal requirement of minimum wages payable to a
worker under a skilled category. The advance notice was served
upon the Respondent on 19.04.2022.
g) During the pending of the petition, the Respondent cancelled the
tender vide Order/Notification bearing No. F6 (35) A / PD-4 / DDA
/2022/119 dated 21.04.2022 without awarding it to the Petitioner
herein.
h) Due to the cancellation of the tender, the said petition was
withdrawn with liberty to file a fresh petition challenging the
cancellation of tender vide Order/Notification bearing
No.F6(35)A/PD-4/DDA/2022/119 dated 21.04.2022 issued by the
Respondent.
Digitally Signed
By:RAHUL SINGH
Signing Date:14.10.2022
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3. The Petitioner, thereafter, filed the instant writ petition challenging the
Order/Notification bearing No.F6(35)A/PD-4/DDA/2022/119 dated
21.04.2022 issued by the Respondent cancelling the Notice Inviting Tender
(NIT) bearing No.12/EE/PD-4/DDA/2021-22 dated 26.02.2022.
4. Notice was issued in the present petition on 28.04.2022. Counter
affidavit has been filed on behalf of the Respondent.
5. It is submitted by the learned counsel for the Petitioner that the
cancellation of the tender is completely arbitrary and bad in law. It is further
submitted that the Petitioner's bid was the only responsive bid and the tender
has been cancelled by the Respondent only to defeat the legitimate right of the
Petitioner.
6. It is submitted by the learned counsel for the Petitioner that the
estimated cost of the work as calculated by the Respondent amounts to
Rs.1,17,96,435/-, and the Petitioner, after taking into account the minimum
wages payable to a worker under the skilled category, quoted
Rs.1,12,40,822.91/-. The other entities participating in the tender had quoted
bids which were below the minimum wages payable to a worker under the
skilled category, thereby rendering their bids unresponsive. Therefore, the
Petitioner ought to have been granted the contract.
7. In the counter affidavit, it has been stated that technical bids were
received from nine parties/tenderers. On 17.03.2022, during the process of
scrutiny of the technical bids, the Respondent found that the documents of
three parties to be not conforming to the pre-requisites of the tender. On
19.03.2022, the Respondent opened the financial bids of the remaining six
entities/tenderers and the same was made available to be viewed by the
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bidders. On 25-26.03.2022, it was noticed by the Respondent that as per the
conditions in the NIT, the bidder ought to quote the rate considering the
minimum wages as per the circular issued by GNCTD. However, it was not
clearly mentioned under which category i.e. semi-skilled or skilled, the
security guards be considered. On 28.03.2022, the Respondent received a
representation from M/s Friends Detective Security (one of the six qualified
bidders), which relied upon a Government Notification bearing No.SO
2232(E) & 2233 dated 18.09.2008 and a schedule of quantity (forming part of
another NIT of DDA) to contend that the security guards without gun for
watch and ward would fall under the semi-skilled category. It is stated that on
28.03.2022 itself, it was decided by the Respondent to seek clarification with
respect to the categorization of security guard from GNCTD. On 16.04.2022,
in view of the ambiguity in the condition in Notice Inviting Tender (NIT)
leading to the lack of clarity to the contractors, it was decided by the
Respondent to recall the tender. On 18.04.2022 while accepting the
recommendation, the accepting authority decided to recall the tender.
8. On 06.07.2022, the Respondent DDA has produced the original files
before this Court which deals with the cancellation of the tender.
9. Heard Mr. Prashant Mehta, learned counsel for the Petitioner,
Mr.Sanjay Katyal, learned Standing Counsel for the Respondent, and perused
the material on record.
10. Learned counsel for the Petitioner draws attention of this Court towards
Schedule - E of the Tender wherein it is stated that the estimated cost for
providing round the clock security guards for watch and ward for sites and
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office complexes under the flyovers (specialized work) was Rs.1,17,96,435/-
for 365 days.
11. Learned counsel for the Petitioner also draws attention of this Court
towards the Schedule of Quantity which reads as under:
SCHEDULE OF QUANTITY
N.O.W.- M/O completed scheme under Flyover.
S.H.:- Providing round the clock security guard for watch &
ward for sites, office complexes under Flyover. (Specialized
work)
S. DESCRIPTION QTY UNI RATE AMOUNT
No OF ITEMS T
.
1 Providing round 10950.00 Each 1077.30 11796435
the clock security job.
guard without
gun for watch &
ward of
Government
premises and its
all belongings by
deploying neatly
dressed security
guards in 8 hour's
shift including
necessary T&P
like torch, lathi
and uniform etc.
complete as per
the direction of
Engineer-in-
charge. (One job
means 8 hour's
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duty).
TOTAL 11796435
AMOUNT
Conditions:-
1) The above rate includes provision of GST and Cess.
Therefore, the bidder is required to quote the rate accordingly.
However, the bidder should quote rate considering minimum
wages as per GNCTD plus GST & Cess.
2) Payment to be done through electronic mode in the bank
accounts of Security Guards & proof.
3) Security Guards will be deployed in PD-1, 2 ,3, 4 & as per
requirement and direction of Engineer-in-charge."
11. Learned counsel for the Petitioner further draws attention of this Court
towards a letter dated 18.08.2021 regarding classification of labour and points
out that the security guard without gun (8 hours shift duty per day) comes
under skilled category. He, therefore, states that the services of security guard
without gun would come under the skilled category and, therefore, there was
no ambiguity regarding the category of the person to be engaged. He further
states that Petitioner has quoted the amount after taking into account the
minimum wages payable to a skilled category. He states that the bids
submitted by all other bidders were below the minimum wages payable to a
skilled category worker. He, therefore, states that in the absence of any
ambiguity in the tender regarding the category of worker, the tender ought not
to have been cancelled and the same should have been awarded to the
Petitioner herein.
12. Learned counsel for the Petitioner states that since the security guard
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(watch and ward) staff belongs to the skilled category worker, they cannot be
paid lesser than the minimum wages payable to a skilled worker. Therefore,
the reason given by the Respondent in its counter affidavit regarding the
ambiguity of the category of the worker cannot be accepted.
13. Per contra, learned counsel for the Respondent/DDA draws attention
of this Court towards the file notings wherein it is noted that the NIT and
BOQ do not clearly mention under what category would security guard fall as
per the minimum wage circular issued by GNCTD. The file notings also
indicates that after taking into account the nature of work i.e. watch and ward,
it is more close to a semi-skilled category and as per the minimum wages
payable to semi-skilled category, the amount comes to Rs.88,87,239/-. The
office notings further indicates that out of six agencies/tenderers, the
Petitioner and one M/s Stallion Security had quoted above the desired amount
i.e. Rs.88,87,239/-. The office notings further indicates that from the scrutiny
of the case, it was noticed that there is an ambiguity in the tender document as
to whether under which category the worker would fall i.e. under a skilled
category or a semi-skilled, and since there was an ambiguity regarding the
category of worker, a clarification was sought from the Labour Department,
GNCTD regarding the category of security guards. The office notings further
indicates that due to the ambiguity regarding category of worker, the tender
was recalled by the Respondent/DDA.
14. Learned counsel for the Respondent/DDA further states that one of
the bidders, namely, M/s Friends Detective Security Services had also filed a
Schedule of Quantities for engagement of Firm/Agency for watch and Ward
of UER-III Road from Mohammad Pur Mazri Road to Western Yamuna
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By:RAHUL SINGH
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Canal which reads as under:
"SCHEDULE OF QUANTITY
Name of Work:- A/R & M/o Completed scheme (UER-I,II & III)
for the year 2021-2022.
Sub Head.:- Engaging of Firm/Agency for watch and Ward
of UER-III Road from Mohammad Pur Mazri
Road to Western Yamuna Canal.
S. DESCRIPTION QTY UNIT RATE AMOUNT
No. OF ITEMS
1 Providing round 2190 Each 1077.30 23,59,287.00
the clock job. (Rs. One
security guard Thousan
without gun for d
watch & ward of Seventy
UER-III Seven &
Road/DDA by Thirty
deploying neatly Paisa
dressed security Only)
guards in 8
hour's shift
including
necessary T&P
like torch, lathi
and uniform etc.
complete as per
directions of
Engineer-in-
charge. (One job
means 8 hour's
duty). (wages for
Security Guard
are as for Semi-
Skilled
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Category)
Total 23,59,287.00
Cost Index @ - -23,593.00
1%
Total 23,35,694.00
The portion in bold is missing in the Schedule of Quantity in the present
tender.
15. Learned counsel for the Respondent/DDA states that it is clear from the
above Schedule of Quantity that the security guard without gun for watch &
ward comes under a semi-skilled category. He, therefore, states that there is a
clear discrepancy in the Notice Inviting Tender (NIT) which did not specify
as to whether under which category the worker would fall i.e. under a skilled
category or a semi-skilled category. He states that most of the
bidders/tenderes participating in the tender had submitted their quotations
after taking into account the category of worker as a semi-skilled category
which rendered their bids unresponsive. He, therefore, states that the
Petitioner herein should not be given benefit of the ambiguity in the Notice
Inviting Tender (NIT). He further states that the Respondent will end up
paying substantial amount of money due to ambiguity in the tender.
16. Heard learned counsel for the Parties and perused the material on
record.
17. This Court has perused the file notings which deal with the cancellation
of tender. The file notings read as under:
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18. The powers of judicial review and the scope of interference by Courts
in matter relating to tender is well settled. It has been held repeated times by
the Apex Court and several High Courts that interference by Courts regarding
tender matter is warranted only if decisions taken by the State is so arbitrary
or unreasonable that requires judicial scrutiny or that the decision taken by the
authority is accentuated by malafides to favour a particular party.
19. In Michigan Rubber (India) Ltd. vs. State of Karnataka, (2012) 8 SCC
216, the Apex Court after referring to a number of judgments has summarised
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
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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. "
20. In Afcons Infrastructure Ltd. vs. Nagpur Metro Rail Corpn. Ltd.,
(2016) 16 SCC 818, the Apex Court has observed as under:
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"11. Recently, in Central Coalfields Ltd. v. SLL-SML (Joint
Venture Consortium) [Central Coalfields Ltd. v. SLL-SML
(Joint Venture Consortium), (2016) 8 SCC 622 : (2016) 4 SCC
(Civ) 106 : (2016) 8 Scale 99] it was held by this Court, relying
on a host of decisions that the decision-making process of the
employer or owner of the project in accepting or rejecting the
bid of a tenderer should not be interfered with. Interference is
permissible only if the decision-making process is mala fide or
is intended to favour someone. Similarly, the decision should
not be interfered with unless the decision is so arbitrary or
irrational that the Court could say that the decision is one
which no responsible authority acting reasonably and in
accordance with law could have reached. In other words, the
decision-making process or the decision should be perverse and
not merely faulty or incorrect or erroneous. No such extreme
case was made out by GYT-TPL JV in the High Court or before
us.
12. In Dwarkadas Marfatia and Sons v. Port of Bombay
[Dwarkadas Marfatia and Sons v. Port of Bombay, (1989) 3
SCC 293] it was held that the constitutional courts are
concerned with the decision-making process. Tata Cellular v.
Union of India [Tata Cellular v. Union of India, (1994) 6 SCC
651] went a step further and held that a decision if challenged
(the decision having been arrived at through a valid process),
the constitutional courts can interfere if the decision is
perverse. However, the constitutional courts are expected to
exercise restraint in interfering with the administrative decision
and ought not to substitute its view for that of the administrative
authority. This was confirmed in Jagdish Mandal v. State of
Orissa [Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517]
as mentioned in Central Coalfields [Central Coalfields Ltd. v.
SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622 :
(2016) 4 SCC (Civ) 106 : (2016) 8 Scale 99] .
13. In other words, a mere disagreement with the
decision-making process or the decision of the administrative
authority is no reason for a constitutional court to interfere. The
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threshold of mala fides, intention to favour someone or
arbitrariness, irrationality or perversity must be met before the
constitutional court interferes with the decision-making process
or the decision.
21. In Municipal Council, Neemuch v. Mahadeo Real Estate, (2019) 10
SCC 738, the Apex Court has observed as under:
"14. It could thus be seen that the scope of judicial review of an
administrative action is very limited. Unless the Court comes to
a conclusion that the decision-maker has not understood the
law correctly that regulates his decision-making power or when
it is found that the decision of the decision-maker is vitiated by
irrationality and that too on the principle of "Wednesbury
unreasonableness" or unless it is found that there has been a
procedural impropriety in the decision-making process, it
would not be permissible for the High Court to interfere in the
decision-making process. It is also equally well settled that it is
not permissible for the Court to examine the validity of the
decision but this Court can examine only the correctness of the
decision-making process.
xxx xxx xxx
16. It could thus be seen that an interference by the High
Court would be warranted only when the decision impugned is
vitiated by an apparent error of law i.e. when the error is
apparent on the face of the record and is self-evident. The High
Court would be empowered to exercise the powers when it finds
that the decision impugned is so arbitrary and capricious that
no reasonable person would have ever arrived at. It has been
reiterated that the test is not what the Court considers
reasonable or unreasonable but a decision which the Court
thinks that no reasonable person could have taken. Not only this
but such a decision must have led to manifest injustice."
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22. This Court has gone through the file notings and the same have been
extracted above. A perusal of the office notings shows that there was a
genuine doubt with regard to the categorization of the worker as to whether
the security guards without gun for watch & ward would come under a skilled
category worker or a semi-skilled category.
23. Learned counsel for the Petitioner has drawn attention of this Court
towards a letter dated 18.08.2021 wherein comments were invited by the
CPWD on the classification of labour taken in DSR 2021 and DAR 2021. The
Annexure-I of the said letter i.e., a table showing the type of labour and their
category as per the minimum wages notification issued by Ministry of
Labour, in which the Security Guard without gun (8 hours shift duty per day)
has been shown as a skilled worker. The said letter also clarifies the scope of
skilled and semi-skilled occupation which reads as under:
"(u) "skilled occupation", means an occupation which involves
skill and competence in its performance through experience on
the job or through training as an apprentice in a technical or
vocational institute and the performance of which calls for
initiating and judgement
(t) "semi skilled occupation" means and occupation which in
its performance requires the application of skill gained by the
experience on job which is capable of being applied under the
supervision or guidance of a skilled employee and includes
supervision over the unskilled occupation."
24. The file notings indicate that there was an ambiguity as to whether the
Security Guard without gun (8 hours shift duty per day) performs a job of a
skilled worker or a semi-skilled worker.
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25. As stated already, it is well settled that Courts must be slow in
interfering matters relating to tender. The Courts must not use a magnifying
glass while scanning the tenders to make every small mistake appear like a
big blunder.
26. In Silppi Constructions Contractors vs. Union of India, (2020) 16 SCC
489, the Apex Court, after considering previous judgments, has observed as
under:
"19. This Court being the guardian of fundamental rights is
duty-bound to interfere when there is arbitrariness,
irrationality, mala fides and bias. However, this Court in all the
aforesaid decisions has cautioned time and again that courts
should exercise a lot of restraint while exercising their powers
of judicial review in contractual or commercial matters. This
Court is normally loathe to interfere in contractual matters
unless a clear-cut case of arbitrariness or mala fides or bias or
irrationality is made out. One must remember that today many
public sector undertakings compete with the private industry.
The contracts entered into between private parties are not
subject to scrutiny under writ jurisdiction. No doubt, the bodies
which are State within the meaning of Article 12 of the
Constitution are bound to act fairly and are amenable to the
writ jurisdiction of superior courts but this discretionary power
must be exercised with a great deal of restraint and caution.
The courts must realise their limitations and the havoc which
needless interference in commercial matters can cause. In
contracts involving technical issues the courts should be even
more reluctant because most of us in Judges' robes do not have
the necessary expertise to adjudicate upon technical issues
beyond our domain. As laid down in the judgments cited above
the courts should not use a magnifying glass while scanning the
tenders and make every small mistake appear like a big
blunder. In fact, the courts must give "fair play in the joints" to
the government and public sector undertakings in matters of
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contract. Courts must also not interfere where such interference
will cause unnecessary loss to the public exchequer.
20. The essence of the law laid down in the judgments referred
to above is the exercise of restraint and caution; the need for
overwhelming public interest to justify judicial intervention in
matters of contract involving the State instrumentalities; the
courts should give way to the opinion of the experts unless the
decision is totally arbitrary or unreasonable; the court does not
sit like a court of appeal over the appropriate authority; the
court must realise that the authority floating the tender is the
best judge of its requirements and, therefore, the court's
interference should be minimal. The authority which floats the
contract or tender, and has authored the tender documents is
the best judge as to how the documents have to be interpreted. If
two interpretations are possible then the interpretation of the
author must be accepted. The courts will only interfere to
prevent arbitrariness, irrationality, bias, mala fides or
perversity. With this approach in mind we shall deal with the
present case."
27. The Judgment of Silppi Constructions Contractors vs. Union of India
(Supra) has further been followed by the Apex Court in N. Ramachandra
Reddy v. State of Telangana, (2020) 16 SCC 478.
28. Learned counsel for Respondent/DDA has drawn attention of this
Court towards another tender for engagement of Firm/Agency for providing
round the clock security guard without gun for watch & ward of UER-III
Road from Mohammad Pur Mazri Road to Western Yamuna Canal for DDA,
wherein in the Schedule of Quantity it is clearly mentioned that security guard
without gun for watch & ward would come under a semi-skilled category.
This portion as stated above is missing in the present tender.
29. In the instant tender documents, the clarification regarding the category
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of security guard without gun for watch & ward is not available and it was left
for bidders to contemplate this and decide for themselves as to whether the
security guards will fall in skilled category or unskilled category.
Consequently many bidders have submitted their bids on the assumption that
the workmen would belong to the minimum semi-skilled worker category. In
view of the above, the Respondent/DDA was well within its right to cancel
the tender.
30. Though, it has been contended by the learned counsel for the Petitioner
that the tender was cancelled by the Respondent/DDA only to extend benefit
to the existing contractor, the said argument does not cut any ice as there is
nothing on record to substantiate the said argument.
31. As the Respondent/DDA has cancelled the tender owing to the
ambiguity in the tender, this Court does not find any reason to interfere with
its decision. Nothing prevents the Petitioner herein from participating in the
subsequent tender which has already been floated by the Respondent/DDA.
32. With these observations, the instant petition is dismissed, along with
pending application(s), if any.
SATISH CHANDRA SHARMA, CJ
SUBRAMONIUM PRASAD, J
OCTOBER 14, 2022
S. Zakir
Digitally Signed
By:RAHUL SINGH
Signing Date:14.10.2022
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