Madras High Court
Quality Property Management ... vs Tamil Nadu Textbook And ... on 20 April, 2023
W.A.No.660 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 20.04.2023
CORAM :
THE HON'BLE MR.T.RAJA, ACTING CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
W.A.No.660 of 2023
and C.M.P.No.6613 of 2023
Quality Property Management Service
Private Limited,
Represented by its Director
Chinta Bharath .. Appellant
Versus
1. Tamil Nadu Textbook and Educational Services
Corporation,
EVK Sampath Maaligai,
D.P.I Campus,
No.68, College Road,
Chennai - 600 006.
2. The Principal Secretary to Government of
Tamil Nadu,
School Education Department,
Secretariat, Fort St. George,
Chennai - 600 009. .. Respondents
Prayer : Writ Appeal filed under Clause 15 of the Letters Patent against the
order, dated 16.03.2023 in W.P.No.7276 of 2023.
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1/19
W.A.No.660 of 2023
For Appellant : Mr.Murali Kumaran
For Respondents : Mr.J.Ravindran,
Additional Advocate General,
Assisted by M/s.S.Varsha,
for R1
JUDGMENT
(Made by the Hon'ble Mr.Justice D.Bharatha Chakravarthy)
This Writ Appeal is directed against the order of the learned Single
Judge, dated 16.03.2023 made in W.P.No.7276 of 2023, in and by which,
the Writ Petition filed by the petitioner challenging the tender floated by the
respondents bearing Ref.RC No.613/PUR-1/2023 inasmuch as it prescribed
Criteria III (3), (4) and (5).
2. The gist of the grievance of the petitioner in the Writ Petition is
that for the first time, the respondents are inviting tenders to provide
housekeeping, sanitation, and security services in all the schools run under
the School Education Department in the State of Tamil Nadu. For the
purpose of inviting tender, for the reasons best known to the respondents,
they have divided the 38 districts into four zones and are inviting tenders.
The tender documents prescribe detailed eligibility criteria, inter alia, the
following conditions were made:-
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W.A.No.660 of 2023
Sl. Criteria Proof
1 ... ...
2 ... ...
3 The bidder should have carried out the Copies of contracts evidencing
above services in at least 25,00,000 sq. handling of the minimum building area
ft. (Twenty-Five Lakh Square feet) of at least 25,00,000 sq. ft. (Twenty-
either in a single or multiple contracts Five Lakh Square feet) in any one of
(not more than 3), in any one of the last the last three financial years (2019 – 20
three financial years (2019 – 20 to 2021- to 2021-22) towards housekeeping
22), having the nature and complexity services either in single or multiple
equivalent to the services called for in contracts in the same year, having the
the present tender, with satisfactory nature and complexity equivalent to the
performance on the date of bid opening. services called for in the present
tender.
End-user certificates for satisfactory
performance also to be submitted.
4 The average annual turnover of the Audited P&L statement for the last 3
bidder should not be less than Rupees 50 FYs (2019 – 20 to 2021-22).
(Fifty) Crore in the last three financial
years (2019 – 20, 2020-21, and 2021-
22).
5 The bidder should have the experience of CA audited statement of manpower
having employed a minimum of 5,000 wages for a minimum of 5,000
personnel throughout the year in each of personnel employed throughout the
the last three financial; years (2019 – 20 year in each of the last three years
to 2021-22) in the field of (2019 – 20 to 2021-22) should be
Housekeeping, Sanitation and Security submitted. Also, Proof of PF/ESI
services, either in single contract or details of employees of last year FY
multiple contracts (not more than 3) in 2021 – 2022 must be submitted.
the same year.
Note: Bidder should submit affidavit in
Note: In the proof submitted for the Rs.100 Non-Judicial paper that in the
projects, at least 4,500 personnel should event of work is awarded to our
be in the area of housekeeping and agency: the wages to be paid to the
sanitation services. workers engaged shall not be less than
the minimum wages determined by
Tamil Nadu State Govt. Authority from
time to time.
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W.A.No.660 of 2023
Therefore, it is the case of the petitioner that the above criteria are
absolutely arbitrary and not based on any rationale or data.
3. All that the respondents want is that the successful bidders should
do the housekeeping i.e., cleaning the schools including the toilets and
keeping the premises clean and providing security services at the gate. It is
very much a doable job for any entrepreneur or organisation which can
provide these services. But, however, the respondents without any basis
whatsoever have included the said criteria which will exclude 99.9% of the
intending bidders. Thus, virtually excluding competition and making it
monopolistic to one or two giants alone who are already in the business, is
opposite to rule of law. The purpose of floating tenders or framing tender
conditions should only be in public interest and in the instant case, they are
anathema to public interest. The petitioner also would compare the exercise
done by the State of Tamil Nadu in respect of the Hospitals. As a matter of
fact, the Hospitals require more cleaning, more sanitising and more security.
The petitioner also relied upon the following comparative statement to bring
home their point that the impugned criteria are absolutely without any basis
and designed to keep only a handful alone.
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W.A.No.660 of 2023
Comparative Statement showing Tender Conditions and Eligibility
Sl.No. Tender Inviting Tamil Nadu Medical Tamil Nadu Textbooks
Authority Servic es Corporation and Educational
Services Corporation
1. Nature of Work House Keeping,Sanitation, House Keeping,
Security Services at Sanitation, Security
Medical Colleges, Services at Tamil Nadu
Hospitals, Nursing Govt.Schools
Colleges
3. No. of Sites 94 Hospitals in 5 zones 6155 Schools in 4 zones
4. Total Area to be serviced 14,11,31,992 sq.ft 9,80,36,546 sq.ft
5. Contract value 240 Crores 150 Crores
6. Manpower Required 20000 16501
7. EMD 10 Lakh for Each Zone 75 Lakh
8. Performance Bond 5% of Contract Value for 5% of Contract Value
1 Year
9. Contract Period 3 Yrs 3 Yrs
10. Consortium Allowed Not Allowed
11. PSARA Licence Required Not Specified
ELIGIBILITY CRITERIA
12. Experience 3 Years 5 Years
13. Minimum Area Coverage 10 Lakh Sq.Ft in any 1 25 Lakh Sq.Ft in any
year during the last 5 Yrs one of the last 3 Yrs
For Each Zone (100
Lakh Sq.Ft for all the 4
Zones)
14. Annual Turnover 20 Crores during any one 50 Crores average for
of the last 3 financial Yrs the Last 3 Financial
Years
For Each Zone (200
Crores for all the 4
Zones)
15. Man Power 1800 Housekeeping Minimum 5000
personnel in any one of Housekeeping personnel
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Comparative Statement showing Tender Conditions and Eligibility
the last 5 Yrs to be deployed
throughout the last 3
financial years
For Each Zone (20000
for all the 4 Zones)
4. The Writ Petition was resisted by the respondents by filing a
detailed counter-affidavit. The case of the respondents is that it is for the
Tender Floating Authority to classify the schools into four zones and
determine the process of tender. They have framed tender conditions in the
exercise of their powers under the Tamil Nadu Transparency in Tenders
Act, 1998 and the tender conditions are equally applicable to all persons.
They submitted that the tender conditions cannot be challenged by the
petitioner. It was submitted that the conditions which are prescribed, are
strictly commensurate with the quantum of services sought. The conditions
will not make any MSMEs ineligible to participate.
5. By a judgment, dated 16.03.2023, the learned Single Judge,
considering the case of the parties and after adverting to the law on subject,
held that the Court should be very much circumspect in intervening with the
tender processes. It was well within the rights of the respondents to impose
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W.A.No.660 of 2023
restrictive conditions which cannot be a subject matter for judicial review.
Considering the enormity of the work, it cannot be said that the eligibility
criteria prescribed are unreasonable. Therefore, when the respondents
authorities, having regard to all facets of the matter, drafted the eligibility
conditions, it cannot be termed as onerous, discriminatory, or arbitrary and
dismissed the Writ Petition, aggrieved by which, the present Writ Appeal
has been filed before this Court.
6. In the present Writ Appeal, a counter-affidavit is filed by the first
respondent, wherein, it is stated that they conducted the pre-bid meeting on
08.03.2023 and the Board of Directors and the Tender Floating Authority
scrutinised the queries received and have published a corrigendum
modifying various conditions of the tender including the ones which are
challenged by the Writ Petition. The following table reveals the
modifications done by the respondents vide corrigendum, dated
03.04.2023:-
S.No. Original eligibility condition Revised eligibility condition
1. Eligibility Criteria (For bidding in one This clause stands removed from the
zone) : For bidding in more than one Eligibility Criteria.
zone, the eligibility criteria as
mentioned in Sl. No.3, 4, and 5 shall be
multiplied by the number of zones
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W.A.No.660 of 2023
S.No. Original eligibility condition Revised eligibility condition
2. The bidder should have carried out the The bidder should have carried out the
above services in at least 25,00,000 sq. above services in at least 10,00,000
ft. (Twenty-Five Lakh Square feet) sq. ft. (Ten Lakh Square feet) either in
either in a single or multiple contracts a single or multiple contracts (not
(not more than 3), in any one of the last more than 3), in any one of the last
three financial years (2019 – 20 to 2021 three financial years (2019 – 20 to
– 22), having the nature and 2021 – 22), having the nature and
complexity equivalent to the services complexity equivalent to the services
called for in the present tender, with called for in the present tender, with
satisfactory performance on the date of satisfactory performance on the date
bid opening. of bid opening. In case the bidder
intends to apply for multiple zones,
the sq. ft. shall increase
proportionately
3. The average annual turnover of the The annual turnover of the bidder
bidder should not be less than Rupees should not be less than Rupees 30
50 (Fifty) Crore in the last three (Thirty) Crore in any of the last three
financial years (2019 – 20, 2020–21, financial years (2019 – 20, 2020-21,
and 2021-22) and 2021-22)
4. The bidder should have the experience The bidder should have the experience
of having employed a minimum of of having employed a minimum of
5,000 personnel throughout the year in 3,000 personnel throughout the year
each of the last three financial; years in any of the last three financial years
(2019 – 20 to 2021-22) in the yield of (2019–20 to 2021-22) in the yield of
Housekeeping, Sanitation and Security Housekeeping, Sanitation and Security
services, either in single contract or services, either in single contract or
multiple contracts (not more than 3) in multiple contracts (not more than 3) in
the same year. Note: In the proof the same year. Note: In the proof
submitted for the projects, at least submitted for the projects, at least
4,500 personnel should be in the area 2,700 personnel should be in the area
of housekeeping and sanitation of housekeeping and sanitation
services. services.
7. In this background, we heard Mr.Murali Kumaran, learned Senior
Counsel for the appellant and Mr.J.Ravindran, learned Additional Advocate
General for the first respondent.
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W.A.No.660 of 2023
8. Mr.Murali Kumaran, learned Senior Counsel submitted that except
for pleading that the conditions are not arbitrary, no justification or data is
provided to justify the original conditions as well as the modified
conditions. He would submit that there must be level paying field for the
parties. He would submit that the so-called Decision Oriented Systematic
Analysis (DOSA) said to be done in the instant case results in only one or
an extremely less number of persons/entities participating in the bid and
therefore, the very process is arbitrary. Learned Senior Counsel would
submit that when the very same State of Tamil Nadu, in respect of the
Health Department which requires more work and competency, has imposed
pre-conditions enabling more players to participate, the very same State
authorities in the Education Department have imposed onerous and
impossible conditions virtually excluding participation by most of the
intending bidders like the petitioner and thereby, defeating the very purpose
of the tender. Learned Senior Counsel relied upon the following judgments
in respect of this case:-
S.No. Name of the citation
1. Reliance Airport Developers (P) Ltd. Vs. Airports Authority of India and Ors.
[(2006) 10 SCC 1]
2. Reliance Energy Ltd. and Anr. Maharashtra State Road Development Corpn.
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W.A.No.660 of 2023
S.No. Name of the citation
Ltd. and Ors. [(2007) 8 SCC 1]
3. Sri. Ajay Kumar Jain Vs. State of Odisha and Ors. [2017 SCC OnLine Ori
473]
4. JCB India Limited and Anr. Vs. State of Maharashtra and Ors. [2018 SCC
OnLine Bom 7942]
5. JMC Projects (India) Ltd. Vs. Union of India and Anr. [2022 SCC OnLine
Del 3641]
6. Kamala Agencies Vs. State of Odisha and Anr. [2022 SCC OnLine Ori 2451]
7. State of Orissa and Ors. Vs. Utkal Pharmaceuticals Manufacturers Association
and Anr. [(2016) 2 SCC 780]
8. Airport Authority of India Vs. Centre for Aviation Policy, Safety & Research
(CAPSR) & Ors. [2022 SCC OnLine SC 1334]
9. Uflex Limited Vs. Government of Tamil Nadu and Ors. [(2022) 1 SCC 165]
10. Silppi Constructions Contractors Vs. Union of India and Anr. [(2020) 16 SCC
489]
11. Michigan Rubber (India) Limited Vs. State of Karnataka and Ors. [(2012) 8
SCC 216]
9. Opposing the above said submissions, Mr.J.Ravindran, learned
Additional Advocate General, taking this Court to paragraph No.10 of the
counter-affidavit filed before this Court, would submit that already, by
virtue of the pre-bid meeting, the conditions have been diluted and the
quantity of square feet required had been reduced from 25,00,000 Sq.ft to
10,00,000 Sq.ft. Similarly, the turnover of Rs.50,00,00,000/- had been
reduced to Rs.30,00,00,000/- in any of the last three financial years.
Similarly, the experience of having 5000 personnel has been reduced to
3000 personnel in any of the last three financial years. He would submit
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W.A.No.660 of 2023
that the Tender Floating Authority has the right to fix the conditions and
their wisdom cannot be questioned and judicially reviewed before this
Court. In support of his contentions, learned Additional Advocate General
relied upon the judgment of the Hon'ble Supreme Court of India in Balaji
Ventures Pvt. Ltd. Vs. Maharashtra State Power Generation Company
Ltd. & Anr1, more-fully relying upon paragraph No.5.1 that the tender
conditions cannot be challenged by the individuals simply because they are
not convenient to them. He would rely upon the judgment of the Hon'ble
Supreme Court of India in Silppi Constructions Contractors Vs. Union of
India and Anr (cited supra), more-specifically relying upon paragraph
No.20, whereunder, it is laid down that there must be overwhelming public
interest to justify judicial interference in matters of contract and the
authority, which floats the contract or tender, is the best judge as to how the
documents have to be interpreted. Learned Additional Advocate General
also relied upon the judgment of the Hon'b le Supreme Court of India in
Airport Authority of India Vs. Centre for Aviation Policy, Safety &
Research (CAPSR) & Ors. (cited supra), more-specifically relying upon
paragraph Nos.3.5 and 3.6 to contend that it is within the ambit and policy
decision of the Tender Making Authority to frame the conditions and it is
1 MANU/SC/0740/2022
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W.A.No.660 of 2023
outside the scope of judicial scrutiny.
10. We have considered the rival submissions made on either side and
perused the material records of the case. Firstly, it has to be seen that after
contending before the learned Single Judge that the criteria in the impugned
notification are commensurate to the enormity of the work and after
asserting that they have applied their mind, framed the above conditions and
thus having invited the impugned judgment in their favour, the respondents
themselves have given a go-bye to their conditions by drastically reducing
the rigor of the eligibility criteria. As their sole contention before the
learned Single Judge goes, therefore, the contention of the respondent that
the order of the learned Single Judge upholding the said conditions is to be
affirmed is unsustainable. Because by altering the disputed conditions of
tender before the Appellate Court the respondents admittedly conceded the
claim of the appellant that the tender criteria impugned are arbitrary.
11. We are in complete agreement with the proposition of law, as
argued by the learned Additional Advocate General, that it is for the Tender
Floating Authority to fix the conditions and it is not for the Court to
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W.A.No.660 of 2023
determine the desirability or adequacy of the eligibility conditions. We are
also in agreement that such conditions cannot be scrutinised by the Court as
if it is an appellate authority. At the same time, even as per the above three
judgments relied upon by learned Additional Advocate General, it would be
clear that what is within the realm of judicial review is that is not the
ultimate decision, but whether there is application of mind on the part of the
Tender Committee and whether the conditions are serving the public
interest. The Tender Floating Authority cannot arbitrarily assert before this
Court that it has the power under the Tamil Nadu Transparency in Tenders
Act, 1998 and therefore, it will fix the conditions. On the other hand, the
authorities have to satisfy that there was an application of mind by the
Committee and that no condition, which is stipulated, is arbitrary and
irrational.
12. On a perusal of the counter-affidavit filed before the learned
Single Judge and the counter-affidavit filed before this Court, it would be
clear that such justification is completely absent. Not even an attempt is
made by the respondents that on account of any particular data or concern,
the eligibility criteria is fixed. It is simply and baldly argued that the criteria
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W.A.No.660 of 2023
fixed by the Health Department is not binding on the Education Department.
Admittedly, in the instant case, it is for the first time, the tender is floated.
The work is to provide housekeeping services, sanitation and security to the
Government schools. Therefore, it is for the respondents to take into
consideration the nature of work, whether at all it requires such a huge prior
experience. It is for them to justify as to why in the first instance, they
adopted the contentious criteria and on what basis, it has now been reduced
at the appellate stage. Apparently, the counter-affidavits filed before this
Court failed to justify the reasons for modifying the conditions and
therefore, where bereft of any reason. The same only takes this Court to the
irresistable conclusion that there has been no application of mind at all and
that the criteria fixed is arbitrary and irrational. When this Court cannot
substitute its opinion on behalf of the Tender Floating Authority, whether
there should be prior experience or not and if so, what should be the criteria
so as to ensure the smooth conduct of the works which is done, certainly
this Court can interfere when the overwhelming public interest of due
participation of bidders is seriously affected by the tender conditions.
Besides the tender conditions failed to provide a level paying field to all the
players who have experience with huge turnover and those who are
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W.A.No.660 of 2023
upcoming with marginal turnover, the Court can interfere with such
conditions.
13. We, therefore, find that there is no application of mind and
justification shown before this Court as to the decision making process and
as to what led the respondents to impose those impugned conditions and as
to what led them to reduce / relax the conditions to a huge extent and as to
what led them to fix in the current level. Therefore, we are of the view that
there has been no application of mind nor any objective criteria has been
considered by the Tender Floating Authority. The above mentioned
comparative table between the criteria adopted in respect of the Health
Department, on being compared with the down scaled tender conditions will
appear to run contra to the public interest of inviting tenders that is to
encourage participation of persons/entities who are in the field, resulting in
best of the prices offered to the Government.
14. Our above finding is suffice for the purpose of deciding the above
Writ Appeal. We have gone through the tender document in full. From the
nature of work, it can be seen that the regular / temporary Watchman will
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W.A.No.660 of 2023
guard the gate and the Sweeper and the sanitation staff will be doing the
housekeeping and sanitation work, who are all hitherto the employees of the
Government or the local bodies as the case may be. For the first time, now
schools are opened up to these private companies and their employees.
While tender authorities have applied their mind as to the number of
employees, the nature of training to be given for carrying out the works and
the articles to be purchased for them, we find that application of mind with
respect to the following aspects are totally missing. While the tender is to
cover all the Government schools including the schools exclusively meant
for girl children, there is no corresponding condition as to whether, in the
girls schools, woman staff alone will be permitted. The tender conditions
only say that there shall not be men staff in the women's toilet. However,
there is no mention about the other housekeeping staff etc., in respect of
girls schools. This apart, the Government school students are more from the
poor strata of the society. Their parents also mostly know only local
language. Interaction with the security staff near the gate and even the
sanitation staff is necessary. For example, primary school children will run
to toilet only at the last moment and they will even mess up the floor, their
dress etc. Interaction with the sanitation staff in the language known to
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them is essential. The tender does not even contain any condition as to the
fact that they should be conversant in communicating, reading and writing
in the local language, as schools are located in deep down in every village
throughout Tamil Nadu. Therefore, not only on the fairness of the
qualifications / conditions, since this effort is attempted for the first time,
the authorities have omitted to apply their mind on the above issues also.
15. In the result,
(i) This Writ Appeal in W.A.No.660 of 2023 is allowed and the
impugned order passed by the learned Single Judge, dated 16.03.2023 in
W.P.No.7276 of 2023 is set aside;
(ii) The impugned Writ Petition in W.P.No.7276 of 2023 is allowed
on the following terms:-
(a) The impugned tender, dated 27.02.2023 in Ref.RC No.613/PUR-
1/2023 stands quashed inasmuch as it imposed Criteria III (3), (4) and (5)
and it would be open for the respondents and the appropriate Tender
Floating Committee to apply its mind and appropriately frame the
conditions taking into account all the materials including the criteria
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adopted by the other departments in the best interests of the work which is
to be done and invite fresh tenders in accordance with law;
(b) The Tender Committee may also consider making knowledge of
Tamil or the local language of the area in which the school is located as
mandatory for all those to be employed by the successful bidders;
(iii) There shall be no order as to costs.
(iv) Consequently, connected miscellaneous petition is closed.
(T.R., ACJ.) (D.B.C., J.)
20.04.2023
Index : yes
Speaking order
Neutral Citation : yes
grs
To
1. Tamil Nadu Textbook and Educational Services
Corporation,
EVK Sampath Maaligai,
D.P.I Campus,
No.68, College Road,
Chennai - 600 006.
2. The Principal Secretary to Government of
Tamil Nadu,
School Education Department,
Secretariat, Fort St. George,
Chennai - 600 009.
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W.A.No.660 of 2023
T.RAJA, ACJ.,
AND
D.BHARATHA CHAKRAVARTHY, J.,
grs
W.A.No.660 of 2023
and C.M.P.No.6613 of 2023
20.04.2023
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