Madhya Pradesh High Court
Balaji Security Services Pvt. Ltd. ... vs The State Of Madhya Pradesh on 6 February, 2024
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari, Pranay Verma
1
W.P. No. 26434 of 2023
IN THE HIGH COURT OF MADHYA
PRADESH
AT I N D O R E
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND
DHARMADHIKARI
&
HON'BLE SHRI JUSTICE PRANAY VERMA
ON THE 6th FEBRUARY, 2024
WRIT PETITION No. 26434 of 2023
BETWEEN:-
BALAJI SECURITY SERVICES PVT. LTD. THROUGH ITS AUTHORIZED
SIGNATORY SHRI SACHIN MODI S/O SHRI HEMENDRA MODI, AGED
ABOUT 41 YEARS, REGISTERED OFFICE AT 412, NAVNEET PLAZA, 5/2,
OLD PALASIA, INDORE (MADHYA PRADESH)
.....PETITIONER
(SHRI SUMIT NEMA SENIOR ADVOCATE WITH SHRI PIYUSH PARASHAR,
ADVOCATE FOR THE PETITIONER)
AND
THE STATE OF MADHYA PRADESH ADDITIONAL CHIEF SECRETARY
DEPARTMENT OF FARMER WELFARE AND AGRICULTURE
1.
DEVELOPMENT ROOM NO. 213, VALLABH BHAWAN 1, BHOPAL
(MADHYA PRADESH)
MADHYA PRADESH STATE AGRICULTURAL MARKETING BOARD
2. THROUGH MANGING DIRECTOR 26 KISAN BHAWAN ARERA HILLS
BHOPAL (MADHYA PRADESH)
M/S RB AASSOCIATES A PARTNERSHIP FIRM, PLOT NO. 30, 4TH
3. FLOOR MAHARANA PRATAP NGAR ZONE, 2, BHOPAL (MADHYA
PRADESH)
.....RESPONDENTS
(SHRI RISHI TIWARI, ADVOCATE WITH SHRI ANSHUMAN JAT, ADVOCATE
FOR THE RESPONDENT NO.2).
(SHRI BRIEN D SILVA ,SENIOR ADVOCATE WITH SHRI SOMESH AWASTHI,
ADVOCATE FOR THE RESPONDENT NO. 3)
--------------------------------------------------------------------------------------------------------
2
W.P. No. 26434 of 2023
Reserved on : 23.11.2023
Pronounced on : 06.02.2024
-----------------------------------------------------------------------------------------
This petition having been heard and reserved for order coming
on for pronouncement this day, Hon'ble Shri Justice S.A.
DHARMADHIKARI pronounced the following
ORDER
The present petition under Article 226 of the Constitution of India,
petitioner is inter alia challenging certain provisions included in
impugned notice inviting tender (NIT) issued by the respondent no.2 as
published on 06.09.2023 bearing Specification No. TS-001 and Tender
No. 2023 - MPSAM-3850 for outsourcing of human resources required
for various tasks at Mandi Board Divisional Office, Technical Division
Office and Mandi Samiti/Committee Campus as well as impugned award
of contract and work order dated 06.10.2023 issued by the respondent no.2
in favour of the respondent no. 3 on the ground that the whole process in
awarding the contract is unreasonable, arbitrary, discriminatory and
biased.
2. Facts in nutshell are that petitioner is a private company and was
incorporated on 01.04.1999 under the name and style 'M/s Balaji
Detective and Security Services(India) Pvt. Limited. Thereafter, its name
was changed to its present name vide Certificate of Incorporation dated
30.10.2015 issued by the Registrar of Companies, Gwalior under the
provisions of Companies Act, 2013. The respondent no.2 is a statutory
authority created under the provisions of M.P. Krishi Upaj mandi
Adhiniyam, 1972(hereinafter referred to as " Adhiniyam, 1972") and
functions under the respondent no.1. Thus, respondent no.2 is "State"
within the meaning of Article 12 of the Constitution of India and is an
instrumentality of State.
3. Pursuant of the publication of NIT issued by the respondent no.2 on
08.09.2023inviting tender (Annexure P-2) dated 06.09.2023, for
outsourcing of human resources required for various tasks at Mandi Board
Divisional Office, Technical Division Office and Mandi Samiti/Committee
Campus which functions for procurement of agricultural produce at the
Local/District Level, the bidders submitted various objections which were
responded by way of issuance of a corrigendum dated 25.09.2023.
4. Petitioner herein also submitted bid on 03.09.2023. The respondent
no.3 and other bidders including the petitioner participated in the bid
process. After submission of bids and after examining the bid submitted by
the respondent no.3, it came to the knowledge of petitioner that certain
specific/tailor made conditions have been incorporated in the tender
specifications to eliminate all the other bidders including petitioner,
basically to accommodate the respondent no. 3.
5. It is the case of the petitioner that being a state-authority under
Article 12 of the Constitution of India, the respondent no.1 and 2 are
legally obliged to adhere to the requirements of the Article 14 of the
Constitution and act in a fair and transparent manner without
discriminating between the parties. However, respondent no.2 acting in
gross violation of Article 14 of the Constitution of India has awarded the
contract emanating out of the impugned tender to respondent no.3 . Hence,
the present petition is filed.
6. Learned Sr. counsel for the petitioner has began the arguments
raising various grounds which are as under:
CLAUSE 39 - TIE BREAKING MECHANISM
''39. टटाइ बब्रेकककिंग
39.1 टटाइ बब्रेकककिंग कब्रे मटामलब्रे ममें यटाननी एक सब्रे अधधिक
धनवविदटाकटाररों कब्रे एल-1 हहोनब्रे ककी ससस्थिधति ममें धनमनधलसखिति क्रम
ममें प्रस्थिधमकतिटा कटा पटालन (क्रधमक तिररीकब्रे सब्रे) तिब तिक ककयटा
जटाएगटा जब तिक कक एकल एल-1 धनवविदटाकटाररों कटा धनरर्णय नहरी
हहो जटातिटा-
1. उचच्चतिम तिकननीककी- विटासरसजयक सकहोर विटालब्रे धनवविदटासकटार
कहो अकिंधतिम एल-1 धनवविदटाकटार मटानटा जटाएगटा।
दस
द रब्रे उचच्चतिम तिकननीककी-विटासरसजयक सकहोर विटालब्रे धनवविदटाकटार
कहो एल-2 धनवविदटासकटार मटानटा जटाएगटा।
इसनी प्रकटार धनवविदटाकटाररों कब्रे तिकननीककी-विटासरसजयक सकहोर कब्रे
अपरहोहरी क्रम कटा उपयहोग धनवविदटाकटाररों पर एल-3, एल-4 और
इसनी तिरह कब्रे धनरर्णय कब्रे धलए ककयटा जटाएगटा। यकद समटान अकिंक
कब्रे सटास्थि अभनी भनी एक सब्रे अधधिक धनवविदटाकटार हह , तिहो अगलब्रे
च्चरर कटा पटालन ककयटा जटाएगटा।
2. म.प्र. रटाजय सरकटार कब्रे ककसनी भनी वविभटाग/शटासककीय
उपक्रम/शटासककीय सकिंसस्थिटा कब्रे कटायटार्णदब्रेश कब्रे मटाधयम सब्रे मधयप्रदब्रेश
कब्रे सभनी सजलरों ममें महनपपॉविर उपलबधि करटानब्रे कटा अननुभवि हहोनब्रे
विटालब्रे धनवविदटाकटार कहो अकिंधतिम एल-1 धनवविदटाकटार कब्रे रूप ममें मटानटा
जटाएगटा।यकद अभनी भनी एक सब्रे अधधिक धनवविदटाकटार हह , तिहो अगलब्रे
च्चरर कटा पटालन ककयटा जटाएगटा।
3. म.प्र. रटाजय सरकटार कब्रे ककसनी भनी वविभटाग/शटासककीय
उपक्रम/शटासककीय सकिंसस्थिटा दटारटा वविगति कहलब्रेणण्डर विरर्ण 2022 ममें
सबसब्रे अधधिक सकिंखयटा कटा महनपटाविर उपलबधि करटानब्रे कटा एकल
कटायटार्णदब्रेश कदयटा गयटा हहो सजसममें मधयप्रदब्रेश कब्रे सभनी सजलब्रे
ससममधलति हहो, ऐसब्रे धनवविदटाकटार कहो अकिंधतिम एल-1 धनवविदटाकटार
कब्रे रूप ममें मटानटा जटाएगटा।''
7. While drawing the attention of this Court to Clause 39 of the
impugned Tender which provides for a mechanism of how bidders would
be treated in case of an eventuality where a condition of more than one L-
1 bidder emerges out, to break a tie between two bidders, the bidder who
has been awarded a contract by any Government undertaking/Government
organization in the preceding year 2022 with the highest/maximum
number of manpower provided through single work order including all the
districts of M.P. shall be considered as the final L-1 bidder.
8. It is contended that by force of Clause 39 of the impugned tender ,
primarily emphasis has been given on two points viz (i) single work order;
(ii)preceding Calendar Year 2022. However, it is a long established
practice for authority issuing tenders to asses the bidders in case of a tie-
breaking situation by scrutinizing the number of manpower deployed in a
range of previous "financial years" and not "calendar years" as has been
done in the present case under the garb of sub-clause (3) of Clause 39 of
the impugned tender.
9. Thus, it is as clear as noon day that tie-breaking mechanism under
Clause 39 i.e. preference to a bidder possessing maximum number of man
power deployed/obtained in the Calendar year 2022, that too through a
Single work order and award of scores depending upon the number of
personnel currently deployed in the departments under M.P. Government
including provision of awarding zero marks to companies having such
deployment in less than 5 such departments etc. has been specifically
designed to eliminate them from bidding process and simultaneously
ensuring that respondent no. 3 succeed in the bidding.
10. FINAL SCORESHEET ISSUED BY RESPONDENT NO.2
Taking this Court to the scoresheet issued by the respondent no.2,
learned counsel for the petitioner submitted that based upon the above
unreasonable conditions particularly Condition No. 39 included in the
impugned tender, petitioner and respondent no. 3 participated in the tender
process and after opening of bid on 04.10.2023, the respondent no.2
awarded its scores to all the bidders which are as under:
S. No. Conditions Scores
Balaji Security M/S R.B.
Services Pvt. Associates
Ltd.
1 सटाविर्णजधनक कब्रेतरों ममें मटानवि P-192 to 279 P-131 to 149 &
243 to 467
सकिंसटाधिन ककी आउटसहोधसकिंग ममें
समग्र अननुभवि प्रतयब्रेक कहलमेंण्डर विरर्ण
कब्रे अननुक्रम कब्रे धलए एक अकिंक
(कब्रेविल कहलब्रेणण्डर विरर्ण 2018,
2019,2020,2021,2022 कहो
मटानय ककयटा जटाएगटा) अलनुलगनक
XIV अधधिकतिम अकिंक-5
2 भटारति ममें वपछलब्रे 3 वविततिनीय विरर 2020-2021 6532 + 2022-2023 +
employees to 334 8319 employees
ममें कमेंदरीय/रटाजय सरकटार/पनीएसयद P-254,
ममें धनयहोसजति ककए गए आउटसहोसर्ण 257, 275, 276,
278, 288, 289,
मटानवि सकिंसटाधिन ककी उचच्चतिम
290, 405, 406,
सरकटार/पनीएसयद ममें धनयहोसजति
प्रतियब्रेक 1000 आउटसहोसर्ण मटानवि
सकिंसटाधिन हब्रेतिनु एक अकिंक)
3 भटारति ममें वपछलब्रे तिनीन वविततिनीय 44.39 Cr. P-110, 26.55 Cr. P-207 to
विरर ममें कमेंद/रटाजय
सरकटार/पनीएसयद ममें आउटसहोसर्ण
मटानवि सकिंसटाधिन सब्रे औसति
टनर्णओविर अधधिकतिक अकिंक-
S. No. Conditions Scores
20( 5.00 Cr. To 15.00Cr.+
10 Point, 15.00Cr. To 25.00
Cr. + 15 Point & Above
25.00 Cr. + 20 Point)
4 (P-337 to 339 (04 P-392 to
मधय प्रदब्रेश कब्रे वविभटागरों ककी
Deptt.) 404(28 Deptt)
सकिंखयटा सजन ममें धनवविदटाकटार दटारटा
वितिर्णमटान ममें महनपपॉविर सब्रेविटाएकिं प्रदटाय
ककी जटा रहरी हहो अधधिकतिम अकिंक
-20(05 to 15 Dept. + 10
Point, 15 to 20 Dept. 15
Point & Above 20 Dept. +
20 point)
11. The final scoresheet as released by the respondent no.2 after
technical and financial bid being submitted by the petitioner and the
respondent no.3 clearly depicts that while the petitioner and respondent
no.3 scored identical marks on all other criterion, the respondent no.3 has
edged past the petitioner only in the category of current deployment of
manpower in departments under Government of Madhya Pradesh, in as
much as, the petitioner with deployment of manpower in four departments
has been awarded zero marks while the respondent no. 3 with deployment
of manpower in 28 departments has been awarded with twenty marks i.e.
the maximum possible marks in such category.
12. Learned Sr. counsel while asserting his arguments on the scheme of
score based evaluation submitted that the controversial score evaluation
has been carried out in order to accommodate the respondent no.3. It is
further submitted that respondent no.2 crafted a tailor made condition of
the tender so that respondent no. 3 will get maximum marks in technical
evaluation. The publication of NIT is nothing but merely an eye-wash to
complete formalities in awarding the contract in favour of respondent
no.3. Hence, as per final scorehseet, the respondent no.3 has scored over
the petitioner on the strength of discriminatory conditions of the impugned
tender and has been awarded the contract on 06.10.2023 vide Annexure P-
7.
13. Learned Sr. counsel further submitted that on examination the
above conditions contained in the impugned tender, especially after
comparison of Tender 2020 issued by the same authority, it is loud and
clear that respondent no.2 has acted in collusion with respondent no.3 in
designing the tender conditions in such a nefarious manner so as to
sabotage the interest of petitioner to favour the respondent no.3 by
awarding tender which is arbitrary and not expected out of State
authorities.
14. Learned Sr. counsel further submits that petitioner is aware that
there is a limited scope of judicial review/intervention in matter involving
floating of tenders by the state-authorities, as it is considered that the
tender issuing authority is the best judge of its requirement. Yet it is also
settled law that the Hon'ble Courts are inclined to exercise their
jurisdiction in cases wherein decisions of executives are arbitrary,
malafide or irrational and infested with favouritism.
15. In support of his contention learned counsel for the petitioner has
placed reliance on plethora of judgments which are as under:
➢ In the case of Raunaq International Tld. Vs. I.V.R. Construction
Ltd. & Others reported in (1999) 1 SCC 492, the Apex Court has
reiterated the established principle governing the process of judicial
review and held that the writ Court would not be jusitified in
interfering with commercial transactions in which the State is one of
the parties except where there is substantial public interest involved
and in cases where the transaction is malafide.
➢ Also in the case of Monarch Intrastructure (P) Ltd. Vs.
Commissioner, Ulhasnagar Municipal Corporation and
Others reported in 2000(3) SCR 1159, it has been clearly stated
by the Apex Court that where the policies adopted by the
Government has no nexus with the object it seeks to achieve or is
malafide or when the process is arbitrary or discriminatory, the
power of judicial review can be exercised. Relevant extract of
the judgment is reproduced below for convenience:
"10. .... Ultimately what prevails with the courts in these
matters is that while public interest is paramount there should
be no arbitrariness in the matter of award of contract and all
participants in the tender process should be treated alike. We
may sum up the legal position thus:
(i) The Government is free to enter into any contract with
citizens but the court may interfere where it acts arbitrarily or
contrary to public interest.
(ii) The Government cannot arbitrarily choose any person it
likes for entering into such a relationship or to discriminate
between persons similarly situated.
(iii) It is open to the Government to reject even the highest
bid at a tender where such rejection is not arbitrary or
unreasonable or such rejection is in public interest for valid
and good reasons."
➢ Dutta Associates Pvt. Ltd. s. Indo Merchantiles Pvt. Ltd.
reported in (1997) 1 SCC 53
➢ Shiv Sagar Tiwari Vs. Union of India reported in (1996) 6
SCC 558
➢ Tata Cellular Vs. Union of India reported in (1994) 6 SCC
➢ Air India Ltd. Vs. Cochin International Airport Ltd. And
Ors. reported in 2000(1)SCR 505.
➢ Jagdish Mandal Vs. State of Orissa and Others reported in
(2007) 14 SCC 517.
➢ Tejas Construction & Intrastructure Pvt. Ltd. Vs.
Municipal Council , Sendhwa & Anr. reported in (2012) 6 SCC
464.
➢ Michigan Rubber(India) Ltd. Vs. State of Karnataka
reported in (2012) 8 SCC 216.
➢ Food Corporation of India Vs. Kamdhenu Cattle Feed
Industries reported in (1993) 1 SCC 71.
➢ Union of India Vs. Tulsiram Patel reported in (1985) 3
SCC 398.
16. Concluding his arguments, learned Sr. counsel for the petitioner
submits that the action of respondent no.2 is in contravention to the
Article 19(1)(G) and Article 301 of the Constitution of India, in so much
so that constitutional rights of the petitioner to pursue its profession as a
manpower provider, as guaranteed under Article 19(1)(g) and 301 of the
Constitution have been seriously prejudiced.
17. Under such circumstances, it is prayed that writ in the nature of
certiorari be issued to quash the impugned Tender floated by the
respondent no.2 and the consequential award of contract in favour of
respondent no.3 be also quashed.
18. Learned counsel for the respondent no.2 rebutting the arguments
advanced by learned Sr. counsel has raised preliminary objection as to the
maintainability of the petition on the ground of suppression of material
facts It is submitted that petitioner has concealed the fact that it never
raised any objection in the pre-bid meeting or otherwise to the conditions
of the NIT. However, all the conditions which petitioner is objecting were
disclosed in the NIT and if petitioner was aggrieved by any of the said
conditions, he should have raised objections then and there only. It is only
after completion of entire process i.e. even after more than one month of
the publication of NIT when petitioner was unsuccessful in getting the
contract, he has filed the instant petition raising many objections regarding
conditions to be tailor made, discriminatory etc.
19. It is further submitted that it is well settled in law that contractual
matters are not amenable to writ jurisdiction. The employer is the best
person to understand the requirement of a project and is entitled to
incorporate conditions for ensuring successful completion of work. Hence,
merely bald allegations without any proof have been made in the petition.
20. Learned counsel referring to the objection as regards tie-breaking
conditions contended that impugned tender does not contain any new tie
breaking conditions which would evoke any suspicion on the same being
infested with malafide. It is also submitted that the previous NIT was also
having the same Tie-Breaking clause and petitioner's failure in pre-bid
meeting amounting to an estoppel against the petitioner for challenging the
impugned tender at a later stage.
21. Learned Sr. counsel for the respondent no.2 and 3 referring to the
detailed reply filed by them stated that petitioner had not raised any
objection even in the pre-bid meeting held on 18.09.2023 where other
bidders were also present and after considering all the objections raised by
the bidders, a corrigendum dated 25.09.2023 was issued. However, it is
not out of the place to mention here that petitioner has not raised any
objection in the context of any of the conditions of impugned tender and
contrary to the same, petitioner agreed to all the conditions and at this
stage when the L-1 bidder was selected, petitioner has started questioning
the veracity of the conditions of impugned tender. Hence, it is nothing, but
an after thought which cropped up in the mind of the petitioner after he
lost the impugned tender.
22. Learned counsel for the respondents no.2 and 3 addressing as
regards infringement of constitutional rights of the petitioner submits that
it is alleged that impugned tender contains discriminatory conditions and
is designed in a malafide manner to suit the respondent no.3 at the outset
submits that tender conditions were framed after fair discussion by a duly
constituted committee comprising the Additional Director
(Administration), Additional Director, HRM, Additional
Director(Finance), Superintendent Engineer and Deputy Director
(Premises) and after due deliberation, conditions of the tender were
finalized.
23. Learned Sr. counsel for the respondent no.2 and 3 further contended
that after award of contract, the Mandi Board has executed 200 sub-
contracts and has also deployed approximately 3000 personnel in various
Mandis across the State and has rescinded all earlier contracts/agreements.
It is also submitted that tender of other departments like Panchayat Raj
Department, M.P. Madhya Khsetra Vidhyut Company Ltd etc. had similar
condition as contained in the impugned tender relating to a specific
calendar year and the evaluation of capacity of bidder is done through
single work order.
24. In the past i.e. previous tender of 2020 (Tender No. 2020-MPSAM-
113324), the respondent no. 2 provided a condition that in case of a Tie-
break between bidders after technical and financial evaluation, the
selection of L-1 bidder would be done on the basis of choosing the bidder
who had supplied the maximum number of manpower in "any 1 of the last
3 Financial Years", to any Government agency not limited to the
Government of Madhya Pradesh. This was required to be demonstrated
through examination of certificates issued by the concerned authority in
respect of the amount of money deposited in the Employees Provident
Fund (EPF). The relevant clause of previous Tender of 2020 issued by the
Respondent no.2 is reproduced below:
''उपरहोकति मब्रेररट क्रमटाकिंक - 1,2 तिस्थिटा 3 ककी समसति धनवविदटायमें तिकननीककी
रूप सब्रे मटानय ककी जटाविब्रेगनी वि उनकब्रे वविततिनीय ऑफर खिहोलब्रे जटाविब्रेगब्रे। वविततिनीय
ऑफर ममें नयदनतिम दर प्रसतिनुति करनब्रे विटालब्रे धनवविदटाकटार कटा च्चयन ककयटा
जटायब्रेगटा। समटान दरमें प्रटापति हहोनब्रे ककी ससस्थिधति ममें तिकननीककी मदलयटाकिंकन ममें
सविटाधर्ण धिक अकिंक विटालब्रे धनवविदटाकटार कटा च्चयन ककयटा जटाविब्रेगटा। यकद तिकननीककी
मदलयटाकिंकन एविकिं वविततिनीय ऑफर ममें समटान अकिंक हह तिहो ऐसब्रे धनवविदटाकटार कटा
च्चयन ककयटा जटाविब्रेगटा सजसकब्रे दटारटा वविगति 03 विरर ममें सब्रे ककसनी 01 विरर्ण ममें
सविटाधर्ण धिक सकिंखयटा ममें मटानवि सकिंसटाधिन उपलबधि करटायटा गयटा हहो। मटानवि
सकिंसटाधिन ककी सकिंखयटा कटा आकलन सकिंसस्थिटा दटारटा वविधभनन सकिंसस्थिटाओकिंममें पदसस्थि
ककए गए कधमय
र्ण रों कटा ई.पनी.फ ककी रटाधश जमटा करटानब्रे कटा प्रमटार पत कब्रे
आधिटार पर मटानय हहोगटा।''
25. In rejoinder, learned Sr. counsel for the petitioner has submitted that
after technical evaluation of all the eligible documents of prospective
bidders, the work was to be awarded to L-1,L-2, L-3, Companies as per the
Condition No. 37.3 of the NIT, however the respondent no.2 contrary to
the aforesaid condition issued single work order of all three groups in
favour of respondent no. 3.
26. On the other hand, learned Senior counsel for the respondent no. 3
has submitted that Clause 37.3 has to be read alongwith Clause 9.5 of the
NIT which empowers the respondent no. 2/Mandi Board to award single
Contract to the lowest bidder and therefore there is no illegality in
awarding the Contract to respondent no.3. They lastly submitted that the
decision of the competent authority in awarding the contract to respondent
no. 3 strictly in terms of impugned NIT is just and proper. It is not open to
this Court to sit like a Court of appeal over the decision of Competent
authority and prayed for the dismissal of the writ petition.
27. Learned counsel for the respondent no.2 submitted that the reference
made by the petitioner to the conditions of tender 2020 is misleading. So far
as the allegation that the conditions of impugned tender are unreasonable
and are in contrast to the tender of year 2020 is concerned, it is pertinent to
mention that the tender floated in the year 2020 was cancelled and never
opened thus comparison with the conditions of tender 2020 is misconceived
and irrelevant.
28. In support of his contentions, learned counsel for the respondent
no.2 has pressed into service, judgments of Apex Court as well as this
Court which are as under:
➢ S.J.S. Business Enterprises (P) Ltd. Vs. State of Bihar
and Others reported in (2004) 7 SCC 166.
➢ N.G. Projects Limited Vs. Vinod Kumar Jain and
Others reported in (2022) 6 SCC 127.
➢ Central Coalfileds Limited and Others Vs. SLL-SML
(Joint Ventures Consortium) and Others reported in (2016)
8 SCC 622.
➢ World Class Services Limited Vs. Madhya Pradesh
Paschim Kshetra Vidhyut Vitaran Company Ltd.[W.P. No.
15239/2020]
➢ Monarch Infrastructure(P) Ltd. Vs. Commissioner,
Ulhasnagar Municipal Corporation and Others reported in
(2000) 5 SCC 287.
29. We have heard learned Sr. counsel for the parties at length and
perused the record of the case.
30. The award of a contract, whether it is by a private party or by a
public body or the State, is essentially a commercial transaction. In
arriving at a commercial decision, considerations which are paramount are
commercial considerations. The State can choose its own method to arrive
at a decision. It can fix its own terms of invitation to tender and that is not
open to judicial scrutiny. But the State, its corporations, instrumentalities
and agencies are bound to adhere to the norms, stands and procedures laid
down by them and cannot depart from them arbitrarily. Though, that
decision making process is not amenable to judicial review, the Court can
examine the decision making process and interfere if it is found vitiated by
malafides, unreasonableness and arbitrariness. The State and its agencies
have the public duty to be fair to all concerned.
31. As held by the Apex Court in the case of Jagdish Mandal(supra)
that a Court before interfering in tender or contractual matter in exercise of
power of judicial review should pose to itself the two questions:
(I) Whether the process adopted or decision made by the authority is
malafide or intended to favour someone.
(II) Whether public interest is affected?
32. Testing on the anvil of these two questions, this Court reached to the
conclusion that matter requires exercise of power of judicial review as the
practice adopted by the authority while floating tenders in previous years
and while floating the impugned tender is questionable in as much as
conditions suiting to the bidder whom they want to be chosen as L1 are
being introduced in the impugned tender.
33. According to the petitioner, the respondent no. 2 has deliberately
and intentionally allowed the respondent no. 3 to score more marks than
the petitioner by way of rewarding it for deploying more manpower in the
Calendar year through Single work orders which shows that respondent
no.2 in collusion with the respondent no. 3 and to safeguard the interest of
respondent no.3 had incorporated the aforesaid conditions to eliminate the
petitioner.
34. In the present case, there was a tie between the petitioner and
respondent no. 3. The respondent no.2 invoked Clause 39 and gave
preference to respondent no.3 on the ground that he was possessing
maximum number of manpower in the Calendar Year 2022 only through
Single work orders in the Departments under M.P. Government and thus
respondent no.2 scored 100% marks in technical evaluation due to its
agreement with CEDMAP. The petitioner and other bidders failed to fulfill
the condition and could not score 100 marks in technical evaluation
because the eligibility crietria for them is based on experience gained from
different Government or Semi Government Department of any State in
India [Condition No. 3.3.3(1)]. However, contract with Government
autonomous company like CEDMAP (Clause 3.3.3) was also treated as
different work orders with different Government Departments with a
weightage of 20 points.
35. To draw a distinction between the two tenders i.e. the Impugned
Tender and Tender 2020, relevant clause of both the tenders are
reproduced below:
Clause 3.3.3.(Criterion No. 4) of 2023 Tender
provides that scores would be awarded to bidders
whose manpower is presently deployed to any
department under Government of Madhya Pradesh
in the following manner:
Between 0 - 15 Departments 10 Marks
Between 15-20 Departments 15 Marks
More than 20 Departments 20 Marks
Whereas 2020 tender had provided for
award of marks on the basis of deployment of
manpower in any organization (not limited to
Government of Madhya Pradesh) in the last five
years as under:
Between 1-10 Organization 3 Marks
Between 11- 20 Organization 5 Marks
Between 21 - 30 Organization 7 Marks
More than 30 Organization 10 Marks
36. On account of award of marks on the basis of manpower deployed,
the impugned Tender prefers bidders who have presently deployed
manpower in departments under the Government of Madhya Pradesh only:
while the 2020 Tender provides for such assessment through examining
the number of manpower deployed in any organization in the last five
years.
37. The relevant extract of score awarding Clauses in impugned tender
and Tender 2020 reads as under:
UNDER THE UNDER THE
TENDER IMPUGNED TENDER
2020(Clause No. 2023
7.1 - Condition (Clause No. 3.3.3 -
No. 6 on page Condition No. 4 on page
No. 12 no. 39.
6. वविगति (अ) 01 4. मधयप्रदब्रेश 20. आविशयक
10 सब्रे कब्रे दसतिटाविब्रेज
05 विरर सब्रे 10 ममें वविभटागरों 15 सकिंलगन करमें।
सकिंसस्थिटानरों वविधभनन ममें- ककी सकिंखयटा
03 सकिंसस्थिटाओकिं अकिंक ममें वविभटाग
मटानवि सकिंसटाधिन (ब) सजनममें -10
11 प्रदटाय सब्रे 20 धनवविदटाकटार
करनब्रे कटा सकिंसस्थिटानरों दटारटा 15 सब्रे
अननुभवि ममें -05 अकिंक वितिर्णमटान ममें
सकिंसस्थिटानरों ममें -07 अकिंक महनपपॉविर
(द) 30 सब्रे अधधिक वविभटाग
सकिंसस्थिटानरों ममें -10 अकिंक सब्रेविटाएकिं -15
कनुल 100 अकिंक प्रदटाय ककी
अकिंक जटा रहरी
हहो।
20 सब्रे
अधधिक
वविभटाग
38. From the above relevant extract, it is crystal clear that impugned
Tender unreasonably emphasizes on current manpower deployment only
and only under any Department of Government of Madhya Pradesh.
Moreover, award zero marks to any bidder whose "current manpower
deployment' is less than 5 such departments. On the contrary, in Tender
2020 provided for marks for bidders whose manpower was deployed in
any organization (not only limited to State Government of Madhya
Pradesh) in the last 5 years and experience gained therefrom thus,
provided for a more wholesome and comprehensive manner of evaluation.
Moreover, the Tender 2020 did not penalize any bidder whose manpower
was recruited than 5 "Government Department" as has been prescribed in
the impugned Tender.
39. The impugned Tender arbitrarily provides that the Tie-Breaking
clause would call for choosing L-1 on the basis of maximum number of
manpower supplied by such bidder not in any financial year or years but
specifically in the Calendar Year 2022(January to December, 2022)
obtained through one Single Work Order. According to the petitioner, this
has been provided because it suits the experience of Respondent no. 3 and
to enhance its chance to succeed in the aforesaid tender.
40. The respondent no.2 in its reply has stated that Tie-Breaking clause
was prevalent in the 2017 Tender issued by them and similar condition has
been incorporated in the impugned tender. The petitioner examined the
same and para 14 of the rejoinder very categorically states that none of the
tenders as relied upon, contain even a passing reference to a specific
"Calender Year" but have instead always referred to financial year which
shows that the newly inducted provision of "Calendar Year" in the
impugned tender is a clear deviation in order to favour the respondent
no.3.
41. As per para 13 of the rejoinder filed by the petitioner, the
methodology of award of its score by tender issued by
MPMKVVCL(Government Company State PSU) provides that highest
turnover (from manpower outsourcing) in any of the last financial year.
Simiarly, in the tender issued by the Department of Panchayat
Raj(Government of M.P.) also provide that under single contract ....
maximum number of manpower supplied in 1 out of last 8 years. Further,
the tender issued by the Panchayat Raj Department is also having Tie-
breaking clause for highest single order "awarded by Central or State
Government or PUS in last financial year 2022-23". Similarly, in 2017, the
respondent no. 2 i.e. the Mandi Board issued tender which provided the
methodology of awarding its scores (technical evaluation) on the basis of
manpower supplied in the last three years. This is unlike the impugned
tender by the same respondent no.2/Mandi Board which provides supply
of manpower number at present in the department especially and only
under the Government of Madhya Pradesh.
42. From the certificates issued by the local mandis, it is clear that
during intervention period, the previous contractor is carrying out the
work. Thus, the stand of the respondent no.3 that he has already deployed
manpower of 3000 personnel cross the State has no force.
43. In the technical evaluation condition of tender documents, the
eligibility criteria for participating companies is based on the experience
gained from the Government or Semi Government Department of any
State in India over last three financial years viz 2020-21, 2021-22 and
2022-23. Condition No. 3.3.3(2). The Condition No. 39.1 speaks about
experience of a specific "Calendar Year 2022" only in Tie-breaking
condition is discriminatory and violative to Article 14 of the Constitution
of India.
44. The Apex Court has time and again urged that the need for
overwhelming public interest should always be kept in mind to justify
judicial intervention in contracts involving the State and its
instrumentality and while exercising the power of judicial review in
relation to contracts, the Court should consider primarily the question
whether there has been any infirmity in the decision making process.
45. The law on the subject is settled that the Courts being the custodian
of fundamental rights are under an obligation to interfere where there is
arbitrariness, irrationality, unreasonableness, malafides and biasness, if
any but at the same time, the Courts should exercise the power of judicial
review with a lot of restraint, particularly in commercial and contractual
matters.
46. Ultimately what prevails with the Courts in these matters is that
while public interest is of paramount importance, there shall be no
arbitrariness in the matter of award of contract and all participants in the
tender process should be treated without any discrimination. The
Government arbitrarily choose any person it likes for entering into such a
relationship or to discriminate between persons similarly situated.
47. The impugned tender arbitrarily provides that the Tie-breaking
clause would call for choosing L-1 on the basis of maximum number of
manpower supplied by such bidder not in any financial year or years, but
specifically in the Calendar Year 2022(January, to December 2022)
obtained through only Single work order. No justification has been put
forth therein in the impugned tender which nevertheless demonstrate that
there is no nexus between the tender clauses and objects sought to be
achieved by it. Such incorporation is apparently made to accommodate the
respondent no.3. It is clearly evident from the earlier tenders issued by the
respondent no.2 in previous years where they choose the L-1 by checking
and examining the EPF certificates instead of calling for Single Work
orders obtained by the bidders.
48. For the sake of convenience and ready reference, Clause 37.3 and
2.1 of the impugned Tender is reproduced below:
मणण्डरी बहोण्डर्ण/ आकिंच्चधलक कटायटार्णलयरों/तिकननीककी कटायटार्णलयरों/मणण्डरी
सधमधतियरों ममें ''वविवविधि कटायर कब्रे धलए आविशयक मटानवि सकिंसटाधिन
ककी आउटसहोधसकिंग कब्रे धलए एजमेंधसयहो कब्रे च्चयन कब्रे धलए धनवविदटा
प्रकक्रयटा शनुरू ककी गई हह। धनवविदटाकटार धनमन सदच्चनी ममें दशटार्णयब्रे
अननुसटार धनवविदटा लगटानब्रे कब्रे धलए सवितिकिंत हह , हटालटाकिंकक धनवविदटाकटार
कहो म.प्र. रटाजय ककृवर वविपरन बहोण्डर्ण कब्रे कटायर्णकब्रेत अकिंतिगर्णति 03
समदहरों ममें सब्रे एक कब्रे धलए हरी कटायर्ण आविकिंटन कब्रे धलए पत हहोगटा।
आविकिंटन ककसनी वविशब्रेर कब्रेत ममें सकिंभटावविति धनवविदटा मदलय कब्रे घटतिब्रे
क्रम ममें ककयटा जटाएगटा।
2.1 मणण्डरी बहोण्डर्ण/ आकिंच्चधलक कटायटार्णलयरों/तिकननीककी कटायटार्णलयरों तिस्थिटा
गविटाधलयर/भहोपटाल सकिंभटाग ककी मणण्डरी सधमधतियरों सब्रे सकिंबकिंधधिति कटायर्ण
एविकिं उजजहन/इकिंददौर सकिंभटाग ककी मणण्डरी सधमधतियरों सब्रे सकिंबकिंधधिति कटायर्ण
तिस्थिटा जबलपनुर/ररीविटा/सटागर सकिंभटाग ककी मणण्डरी सधमधतियरों सब्रे
सकिंबकिंधधिति कटायर्ण कब्रे धलए सकिंभटावविति मटानवि सकिंसटाधिन ककी लटागति ननीच्चब्रे
सटाररनीबद्ध हह।
सस.क. मसडड/ककारकार्यालरय 03 वरर्या कके ललए ससभकाववत लकागत (कररोड
रूपए मम )
1. उजजहन/इकिंददौर सकिंभटाग ककी 75.92
मणण्डरी सधमधतियरों सब्रे सकिंबकिंधधिति
कटायर्ण 60.10
2. मणण्डरी बहोण्डर्ण
मनुखयटालय/आकिंच्चधलक
कटायटार्णलयरों/ तिकननीककी
कटायटार्णलयरों तिस्थिटा भहोपटाल 44.27
सकिंभटाग ककी मणण्डरी सधमधतियरों
सब्रे सकिंबकिंधधिति कटायर्ण
3.
गविटाधलयर/जबलपनुर/ररीविटा
/सटागर सकिंभटाग ककी मणण्डरी
सधमधतियरों सब्रे सकिंबकिंधधिति कटायर्ण
नहोट : म.प्र. रटाजय ककृवर वविपरन बहोण्डर्ण मटानवि सकिंसटाधिन ककी
जटानकटाररी उजजहन/इकिंददौर सकिंभटाग ककी मणण्डरी सधमधतियरों सब्रे
सकिंबकिंधधिति कटायर्ण एविकिं मणण्डरी बहोण्डर्ण मनुखयटालय/आकिंच्चधलक
कटायटार्णलयरों/तिकननीककी कटायटार्णलयरों तिस्थिटा गविटाधलयर/भहोपटाल सकिंभटाग
ककी मणण्डरी सधमधतियरों सब्रे सकिंबकिंधधिति कटायर्ण एविकिं
जबलपनुर/ररीविटा/सटागर ककी मणण्डरी सधमधतियरों सब्रे सकिंबकिंधधिति कटायर्ण
कब्रे धलए वविधभनन अननुभटाग शटाधमल हह।
49. The stand of the respondent no.2 in awarding Single work orders to
all the three groups contrary to Clause 37.3 r/W Clause 2.1 is that Clause
37.3 has to be read alongwith Clause 9.5 of the impugned tender which
gives power to the respondent no.3 to issue single work order to all the
three groups in favour of the respondent no.3.
Clause 9.5 of the impugned tender reads as under:
9.5 म.प्र. रटाजय ककृवर वविपरन बहोण्डर्ण दटारटा म.प्र.
ककृवर उपज मकिंण्डरी अधधिधनणयम 1972 सब्रे प्रदतति कतिर्णवय और
दटाधयतविरों कब्रे तिहति मकिंकण्डयरों कटा उधच्चति सब्रेविटाएकिं और सनुवविधिटाएकिं
समरूपतिटा सब्रे उपलबधि करटानब्रे हब्रेतिनु एककीककृति रूप सब्रे मटानवि
सकिंसटाधिन प्रदटाय कब्रे धलए धनवविदटा आमकिंवतति ककी जटा रहरी हह।
50. If we consider the arguments of the respondent no.2 that the word
''एककीककृति रूप'' has been intentionally used which imply that the intent of
respondent no.2/Mandi Board has been " to have a single agency for
supplying manpower". Per contra, the interpretation of the petitioner is
that the phrase/words simply refers to single/unified manner in which the
issuing-authority intended to execute the tender and to outsource the
manpower supply. The words ''एककीककृति रूप'' is not equivalent to ''एककीककृति
धनवविदटाकटार''. Since the latter of which would mean a single agency/bidder.
Thus, the respondent no.2/Mandi Board got entangled in its self-defeating
arguments by incorrectly equating single/unified manner with single
agency. The language of Clause 37.3 and its intent is express and
unequivocal without any scope for ambiguity.
51. On perusal of the same, we are of the view that Clause 37. 3
expressly provides that the successful bidder would be eligible for work
only 1 out of 3 groups/divisions falling under the jurisdiction of
respondent no.2/Mandi Board which means that the work has to be
allotted in the manner prescribed above for all the groups/divisions of the
respondent no.2/Mandi Board. The respondent no.2 acted illegally and in
contravention to Clause 37.3. in issuing single work order for all the three
groups in favour of respondent no.3.
52. The aforesaid clause 37.3 has to be read in conjunction with Clause
2.1 which provides that the work is to be allotted to L-1 bidder in only one
out of three divisions under the jurisdiction of the Mandi Board. The
respondent no.2 just to give undue favour has granted/awarded the whole
work of three divisions to the respondent no. 3 i.e. Single work order of all
the three groups (divisions) were issued in violation of Clause 37.3 of the
tender document to respondent no.3.
53. So far as the objection raised by the respondent that petitioner has
raised the objections at a later stage thereby amount to an estoppel is
concerned, learned Sr. counsel submitted that pre-bid meeting is merely to
clarify the issues and to answer questions on any matter that may be raised
and same is not a quasi-judicial proceedings which could adjudicate the
legality of any provision of impugned tender. The legality of any tender
condition can be effectively adjudicated before the Court under its writ
jurisdiction and not by the same tender-issuing authority and, therefore
we reject the objections of the respondents that failure of petitioner in
raising objections in the pre-bid meeting amounts to an estoppel against
him from challenging the impugned tender at a later stage. Even
otherwise, the similar objections were raised by one of the bidder M/S
Third Eye Security Pvt. Ltd. Particularly with regard to the Tie-Breaking
Clause No.39 which was dismissed by the respondent without assigning
any cogent reasons. Thus, it cannot be said that no one has raised any
objection about inducting Clause 39 in the impugned Tender.
54. So far as the maintainability of petition is concerned, there is no
suppression of fact as the objection as regards condition no.39 - Tie-
breaking Condition was raised by one of the bidder. However, the same
was dismissed without assigning any cogent reason and after opening of
bid, the same objection was raised by the petitioner which cannot be
termed as suppression of facts.
55. Moreso, this Court finds force in the submission made by the
learned counsel for petitioner that it is expected out of the State authorities
to act in a fair, transparent and non- partisan manner as the held by the
Apex Court in the case of Tata Cellular(supra), where having reviewed
the law on award of public contracts,the Apex Court has held that fair play
in the joints is necessary concomitant for an administrative body in an
administrative sphere or quasi-administrative sphere. However, the
decision must not only be tested by the application of Wednesbury
principle of reasonableness (including its other facts pointed out above)
but must be free of arbitrariness not affected by bias or actuated by
malafides.
56. When the State is trading with the public, the democratic form of
Government demands equality and absence of arbitrariness and
discrimination in such transactions. The Activities of the Government have
a public element and, therefore, there should be fairness and equity.
Hence, we have to keep the larger public interest in mind in order to
decide whether intervention is called for or not and in the present lis, we
have arrived at a conclusion that overwhelming public interest requires
interference by this Court .
57. We are obliged to interfere on the ground of arbitrariness and
violation of principle of natural justice confining ourselves to the doctrine
of judicial restraint, however, by the application of permissible parameters
to set right the decision making process, as by and large, such malafide or
intent to accommodate a bidder tantamounts to affect the public interest as
other aspiring bidders who have participated in the tender process having
certainly equal scores on some criterion lost the tender due to inclusion of
some clauses which are suitable only for the respondent no.3 to knock off
others.
58. In view of the above discussion and in the light of the judgments
enunciated above, we find that the condition no.39 being discriminatory is
the result of arbitrary action of the respondent no. 2 and is not liable to be
sustained. Accordingly, the petition is allowed and the impugned tender
No. 2023_MPSAM_305806 dated 06.09.2023 and the consequential
award of contract in favour of the respondent no.3 are hereby quashed.
59. However, the respondents are at liberty to initiate the retendering
process afresh, in accordance with law.
60. The writ petition is allowed. No order as to cost.
(S. A. DHARMADHIKARI) (PRANAY VERMA)
JUDGE JUDGE
sh/-
