Orissa High Court
Bombay Intelligence Security ... vs Mr. Goutam Mukherjee on 26 August, 2022
A.F.R.
HIGH COURT OF ORISSA : CUTTACK
W.P.(C) No.29177 of 2021
In the matter of an application under Articles 226 and 227 of the
Constitution of India.
Bombay Intelligence Security (India) Ltd. ....... Petitioner.
Versus.
Union of India & others ........... Opp.parties
For Petitioner : Mr. D.P.Nanda, Sr. Advocate
Miss. Sarita Moharana, Advocate
For Opp.parties : Mr. P.K.Parhi, ASGI
Mr. B.S. Rayaguru, CGC
(for Opp.Party nos.1 to 4)
Mr. Goutam Mukherjee, Sr. Advocate
Mr. Aviral Dhirendra, Advocate
Mr. Anupam Dash, Advocate
Ms. Supriya Patra, Advocate
(for Opp. Party no.5)
PRESENT
THE HON'BLE SHRI JUSTICE JASWANT SINGH
AND
THE HON'BLE SHRI JUSTICE M.S.SAHOO
---------------------------------------------------------------------------------------------
Date of hearing : 02.08.2022 : Date of judgment: 26.08.2022
BY THE BENCH : The petitioner, a company registered under the Companies Act,
namely Bombay Intelligence Security (India) Ltd challenges the decision of the
tendering authority/the opposite party no.2-All India Institute of Medical
Science (Hereinafter, AIIMS for short), Bhubaneswar in qualifying the bid of
opposite party no.5 : Quess Corporation Ltd. and awarding the contract to
opposite party no.5 for providing manpower on job outsourcing basis at AIIMS
Bhubaneswar for a period of two years from the date of award of contract and
further extendable.
2. In the writ petition the following prayers have been made :
(a) The acceptance of the tender bid of the opposite party no.5
and award of contract under Annexure-13 should be
declared illegal, arbitrary, unreasonable and be quashed.
(b) The bid of the petitioner should be accepted since the
petitioner has complied all criteria of the tender notice
dated 10.02.2021 and quoted equal rate similar to
opposite party no.5.
(c) The process adopted by the opposite party nos.3 & 4 in
evaluation and finalization of the public tender should be
declared illegal, arbitrary, mala fide and violative of the
article 14 of the constitution of India.
3. The opposite party no.2-All India Institute of Medical Science
Bhubaneswar is a statutory body and it is agreed by the petitioner as well
as the opposite parties that the said authority is a "State" as defined under
Article 12 of the Constitution of India.
4. The facts as they have emerged are that after the E-tender notice
dated 30.12.2020 (Annexure-2) inviting tender from intending bidders, a
corrigendum dated 10.02.2021 (Annexure-4 to the writ petition) was
issued. In the said corrigendum, Clauses-11, 19 & 20 of Technical Bid
(Eligibility Criteria) have proved to be the bone of contention between the
parties and, therefore, are quoted herein for convenience of reference :
"Clause-11 (i) Valid Labour License copies issued in favour of the
Firm by Labour Commission, GOI of respective areas exclusively for
manpower deployment (Health care, Technical, Administrative,
Engineering and similar Services) where manpower have been
provided by the firm during last 05(Five) FYs (2015-16), 2016-17,
2017-18, 2018-19, 2019-20).
(ii) Undertaking to be submitted by the bidder (who is not operating
in Bhubaneswar) that they will obtain and submit valid labour
license from the local authority for area of work at Bhubaneswar
within 30 (Thirty) days from the date of award of work/contract."
"Clause-19-Experience in providing Manpower Services {(Health
Care, Technical, Administrative, Engineering and Similar Services
(Excluding security, Watchman & Housekeeping Services)} as per
Annexure-III. This shall cover the details of works of similar nature,
approximate magnitude and duration carried out and/or on hand
as on 31.03.2020 for last 5 years along with copy of work
orders/certificates issued by concerned authority from Central
Government/State Govt./PSU/Autonomous bodies/reputed private
organization where the job was carried out.
Clause-20- Bidders must have completed a single work order for
minimum value of Rs.5.00 crore (Rupees five crore only) towards
Manpower service {for Health care, Technical, Administrative,
Engineering and similar Services (Excluding security, watchman &
Housekeeping service)} in any year during last 5 years. (Please
enclose copy of necessary completion certificate.)".
The notice inviting the tender requires the bidders to enclose the
copies of completion certificate towards satisfaction of the eligibility
criteria as quoted here above, provided in Clauses-19 and 20. The
completion certificate has to be of the work done towards manpower
during the last five years excluding Security, Watchman, Housekeeping
Service.
Referring to clauses quoted above, it is sought to be submitted that
the opposite party no.5's bid should have been disqualified being not in
consonance with Clauses-19 & 20 above as the opposite party no.5 in the
completion certificate produced for evaluation of it's bid has not excluded
"Security, Watchman & Housekeeping Services".
5. The tender is in two parts as specified in the E-tender No.11031
dated 30th December,2020 as quoted herein:
"TENDER EVALUATION
Tenders evaluation will be done in two stages:
a. Technical bid (Eligibility Criteria).
b. Financial bid.
Terms of Two Bid System:
The e-tender online shall be submitted in 2(Two) parts:
(i) Technical Bid: Online Submission of all required documents.
(ii) Financial Bid: Financial bid shall be submitted online. The
Financial Bid of bidders, who qualify at Technical Bid
Evaluation, will be opened thereafter."
The tender was to be awarded to the L1 bidder as provided in
Clause-11 of the "General Terms and Conditions" that is quoted herein:
"... ... Firstly, agency who have quoted lowest service charge not
below 2.08% in finance part shall be awarded as L1 bidder.
Secondly, if two or more agencies have quoted same service charge
then the lowest bidder amongst them will be decided based on the
highest value of cumulative gross turnover arising out of the
manpower services for last 05(five) years of the bidder as depicted
in the Audited Financial Statement/IT Returns during the year
2015-16, 2016-17, 2017-18, 2018-19 and 2019-20. Accordingly
bidders have to enclose self-attested copies of IT Returns and
Audited Financial statements along with their Technical bid."
Clause-4 of the Financial Bid further clarifies the method of selection
of L1 bidder as quoted herein :
"4. The Lowest Bidder (L-1) shall be determined on the basis of
service charges quoted by the bidders. The service charge should
be more than 2.08% (TDS-IT) @ 2% primary education cess @ 2% of
TDS-IT & Higher education cess @ 2% of TDS-IT)of the consolidated
wage and maximum two digits after decimal points is to be taken
for evaluation. It should not be mentioned in the fraction. It should
not be mentioned in the fraction. The service charge is also to be at
percentage common to all categories. Firstly, agency who has
quoted lowest service charge (More than 2.08%) in finance part
shall be awarded as L-1 bidder. Secondly, if two or more agencies
have quoted same percentage of lower service charge, than the
lowest bidder amongst them will be decided based on the highest
value of cumulative gross turnover arising out of manpower
services (excluding security, watchman and housekeeping services)
for last five (05) years of the bidder as depicted in the column A of
the Annexure-IV. Accordingly, bidders have to enclose self-attested
copies of IT Returns and Audited Financial Statements along with
their technical bid. Clearly showing the turnover for manpower
service (excluding security, watchman & housekeeping service). In
case the value of such services are not segregated clearly, the bid
will be rejected."
(emphasis supplied)
6. Out of ten bidders, nine bidders including the petitioner and the
opposite party no.5 were declared qualified in the technical bid. On
06.09.2021 the price bids were opened and it was found that out of nine
qualified bidders, six bidders quoted equal rate of service charges, i.e., 2.09
percent (%) of total remuneration payable for the outsourcing job. The
tender committee selected opposite party no.5 as lowest bidder on the
ground that the opposite party no.5 showed to have highest turnover and
the petitioner was found to be the second lowest bidder.
7. The petitioner on 19.07.2021(Annexure-6) issued request letter for re-
valuation of the tender document on certain grounds pertaining to technical
evaluation of bids.
On 27.07.2021 (Annexure-7) the authority replied to the petitioner
giving clarification in the form of parawise reply to the issues raised
petitioner's letter dated 19.07.2021, i.e., pertaining to nature of service to
be provided by bidders, Trade licenses of the bidders turnover of bidders
and lastly regarding the bidders having office at Bhubaneswar.
Thereafter, the petitioner on 03.08.2021 (Annexure-8) made a further
request to the authority for reconsideration of all the evaluated technical
bids tendered by all the participants and not to proceed further in finalizing
the tender. The tendering authority responded to the letter dated
03.08.2021 giving detailed reply and went on to finalise the tender and
awarded the contract in favour of opposite party no.5 by issuing
"Notification of Award" dated 06.09.2021 (Annexure-13).
8. The challenge to the acceptance of the (Technical Bid) tender of
opposite party no.5 is on the ground that the completion certificate
submitted by the opposite party no.5 as part of his bid document includes
"housekeeping, sanitation service, cleaning etc.," therefore is contrary to the
mandatory condition of Technical Bid (Eligibility Criteria).
It is alleged by the petitioner that action of the opposite party nos.2 to
4, qualifying the bid of opposite party no.5 and accepting the same is a
result of favouritism shown to the opposite party no.5, therefore, rendering
the process of decision making bad in law, and hence award of the contract
is liable to be set aside.
9. It is submitted by the petitioner that the work completion certificate,
furnished by opposite party no.5 in the form of performance statement, is
not in accordance with Clauses-19 and 20 of the Technical Bid (Eligibility
Criteria) as the said clauses provide that housekeeping service is to be
excluded while giving completion certificate whereas the opposite party no.5
had included housekeeping service to show the financial turnover.
It is averred by the petitioner that in contrast to the approach of
opposite party no.5 tenderer, the petitioner has complied with the
conditions contained in Clauses-19 and 20 and has excluded the financial
turnover of housekeeping, "sanitation service,, cleaning etcs." in the work
completion certificate.
10. This Court after hearing the learned counsel for the petitioner and
the learned Additional Government advocate on 01.10.2021 issued notice
and in the interim it was directed that there shall be stay of operation of
the work order dated 06.09.2021 (Annexure-13) by which the opposite
party no.5 was awarded the tender and the work order was issued. Since
the tender is for the provision of manpower service for a large Hospital like,
AIIMS, the petitioner who was earlier engaged by the opposite party no.2
was allowed by the employer to extend the contract up to 31.10.2021 and
the said contract has been extended during the pendency of the present
writ petition, thereby the petitioner is continuing. Interim order passed by
this Court in I.A.No.13499 of 2021 dated 01.10.2021 has been extended
by the subsequent orders of this Court.
11. As far as the pleadings are concerned, in response to the writ petition
counter has been filed by opposite party no.5 dated 08.12.2021. The
tendering authority opposite party nos. 1 to 4 have filed their counter dated
16.02.2022. Thereafter additional affidavit on behalf of opposite party nos.1
to 4 has been filed. Rejoinder dated 16.05.2022 in response to the counter
filed by opposite party nos.1 to 4 dated 16.02.2022 has been filed.
Additional affidavit dated 05.08.2022, has been filed by the opposite
parties-1 to 4, which are on record.
12. On 21.06.2022 a Division Bench while hearing the matter considered
the contention in respect of ineligibility of opposite party no.5 as advanced
by the petitioner and noted by it's order that the turnover component qua
"Housekeeping, Sanitation Service" was severable and by excluding the
same, opposite party no.5 was not only eligible but has much more
turnover than the petitioner. For ready reference the said order dated
21.06.2022 is reproduced herein :
"3. Referring to the e-tender documents, Mr. B.Routray, learned
Senior Advocate for the petitioner argued vehemently stating inter
alia that the bidders must have completed a single work order of
minimum value of Rs.5.00 crore (rupees Five Crore only) towards
Manpower service {(Human Resources (health care, Technical
Administrative, Engineering and other Services)} in a year during
last 05 (five) years for which necessary completion certificate
should be furnished by the bidder. Thereafter a corrigendum was
issued on 10.02.2021 under 2 Annexure-4, wherein at Clause-20,
it has been indicated as follows:-
"Bidders must have completed a single work order for
minimum value of Rs.5.00 crore (rupees Five Crore only)
towards Manpower service {(for Health care, Technical,
Administrative, Engineering and other Services (excluding
security, watchman & House keeping Service)} in any year
during last 05 (five) years."
3.1 Learned counsel for the petitioner further contended that since
tender condition stipulates exclusion of security, watchman &
House keeping Service and for that the minimum value of 5 crore
will be computed towards Manpower service {(for Health care,
Technical, Administrative, Engineering and other Services in any
year during last 05 (five) years, the opposite party no.5 does not
satisfy this requirement. He also brings to the notice of this Court
the certificate issued by the Kasturba Hospital at page 130 and
referring to Clause-9, i.e. description of the services provided by the
firm, which reads as follows:-
"Integrated Facility Management services including
Housekeeping & Sanitation, Cleaning, Façade Cleaning,
Horticulture, Pest control, Paramedics & Disinfection,
Garbage Management, Canopy cleaning, Mechanized
cleaning of High rise building Glass and Steel structure etc.,
Bio waste management, Hygiene, Patient care, Repair and
Maintenance (includes preservative maintenance of Electrical
equipment, Civil, Air-Conditioning equipment's and repairs
thereof, Engineering services including repairs and
maintenance of lifts, Mechanical, Plumbing & Sewage,
Medical Gas system and Laundry services etc.
3.2 It is further contended that since the housing keeping and
sanitation, cleaning, Façade Cleaning, Horticulture, Pest control,
Paramedics & Disinfection, Garbage Management, Canopy
cleaning, Mechanized cleaning etc. have been included, therefore,
the opposite party no.5 does not satisfy the requirement as per the
terms and 3 conditions of the tender documents.
4. Mr. G. Mukherjee, learned Senior Advocate appearing for the
opposite party no.5 brings to the notice of this Court the very same
document, where at Clause-12, the break up of the amount has
been made and House Keeping & Sanitation has also been
excluded and the amount was indicated. If that will be excluded, it
also comes to 12.00 crores. In the subsequent document at page-
131 issued by the very same hospital, it comes to 15 crores.
Thereby even excluding security, watchman & House keeping
Service as has been mentioned above, the opposite party no.5
satisfies the minimum value of 5.00 crores in any year of the last 5
years. Thereby the opposite party no.5 is eligible to participate in
the tender."
(emphasis supplied)
13. Mr. D.P. Nanda, learned Senior Advocate, instructed by Miss. Sarita
Maharana, learned counsel for the petitioner; Mr. P.K. Parhi, learned
Assistant Solicitor General of India (ASGI) along with Mr. B.S.Rayaguru,
learned Central Government Counsel (CGC) for opposite party no.1 & Mr.
Goutam Mukherjee, Senior Advocate instructed by Mr Aviral Dhirendra and
Mr. Anupam Dash, learned counsel for O.P. No.5 made their submissions
on behalf of the respective parties and the learned counsel were heard at
length. The parties have filed their list of dates and notes of submission
which form part of the record.
14. In view of the contention of the petitioner that acceptance of the
Technical Bid of the petitioner is contrary to clause-11 of the "General
Terms and Conditions" issued by the tendering authority along with the
notice dated 30.12.2022 (Annexure-2) inviting tender, the said "Clause-11"
is quoted herein:
"11. After evaluation, the work shall be awarded to L1 bidder after
complying with all Acts/provisions stated/referred to for adherence
in the tender. The service charge to be quoted should be more than
2.08% ([email protected]%, Primary education [email protected]% of TDS-IT- &
Higher education cess- @ 0.02% of TDS-IT) of the consolidated
wage and maximum two digits after decimal points is to be taken
for evaluation. The service charge is also to be at Percentage
common to all categories. The Bidder has to comply all the
provisions of the labour laws and all other applicable
rules/regulation/laws."
It is found that since all the nine technically qualified bidders quoted
service charge @ 2.09%, the lowest bidder has been decided as per the
clause: "if two or more agencies have quoted same service charge then the
lowest bidder amongst them will be decided based on the highest value of
cumulative gross turnover arising out of the manpower services for last
05(five) years of the bidder as depicted in the Audited Financial Statement/IT
Returns during the year 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20."
15. The contention of the petitioner that the opposite party no.5 has not
complied with Clauses-19 and 20 of the Technical Bid (Eligibility Criteria)
quoted (supra) and that the tendering authority have not followed the said
clauses-19 and 20, has been specifically answered by the tendering
authorities in their counter affidavit filed by opposite party nos.1 to 4 dated
16.02.2022 which is as follows (in paragraph-20) :
"The Tender Committee evaluated the documents submitted by the
participating bidders including the petitioner and the opposite party
no.5(Quess Corporation Ltd.), as per the requirements of the
Technical Bid (Eligibility Criteria) and found 9 (nine) nos. of bids as
technically qualified in the Technical Bid, including both the
petitioner-company and the opposite party no.5. Further, the
opposite party no.5 submitted list of posts deployed by it at
Kasturba Hospital along with the performance report, as per
requirement of Clause-19 of the Technical bid (Eligibility Criteria)
and also submitted documents regarding competition of single work
order for minimum 5.00 crore (in any year between 2015-16 to
2019-20) of Kasurba Hospital, as per the requirements of Clause-
20 of the Technical bid (Eligibility Criteria).
The documents as has been submitted by the opposite party
no.5 in Technical Bid, clearly reflects that the opposite party no.5
has provided Manpower service, i.e., health care, technical,
administrative, engineering and similar services], apart
from security, watchman & Housekeeping service, to
Kasturba Hospital, Manipal and has got outstanding
performance report, as per requirement of Clause-19 of the
Technical bid (Eligibility Criteria). Further the documents submitted
by opposite party no.5 in the Technical bid, it is mentioned that it
has completed single work order for minimum 5.00 Crore (i.e.,
1468.36 lakhs, in the financial year 2018-2019, in other
Outsource Manpower), in Kasturba Hospital, Manipal, which
does not include the value of services for Housekeeping and
Sanitation. Thus, the documents clearly established the Technical
bid eligibility Criteria, in favour of opposite party no.5 (Quess
Corporation), as per requirements of Clause-19 and Clause-20."
16. To fortify their pleadings, the tender evaluating authorities/employer
have annexed the work completion certificate submitted by opposite party
no.5 enclosed to their counter marked as Annexures-A/2 and B/2. It has
been further pleaded by opposite party nos.1 to 4 (Paragraphs-18, internal
pages-11, 12 & 13 of the counter) as reproduced herein :
"Thus, as per Condition (4) of the Financial Bid, if two or more
agencies have quoted same percentage of lowest service charge,
then the lowest bidder amongst them will be decided based on the
highest value of cumulative gross turnover arising out of manpower
service (Excluding security, watchman & Housekeeping Service) for
last 05 (five) years of the bidder as depicted in the Column "A" of
Annexure-IV). The Opp.Party No.5 (Quess Corporation)
submitted Turnover Certificate duly certified by Chartered
Accountants showing value of cumulative gross turnover
arising out of manpower service (Excluding security,
watchman & Housekeeping Service) for last 05(Five) years of
the bidder as per Column "A" of Annexure-IV). The Turnover
certificate submitted by opposite party no.5 reveals the
value of cumulative gross turnover arising out of manpower
service (Excluding security, watchman & Housekeeping
Service) for last 05 (Five) years, as 18,027.19 crores."
" ... ... In the instant case, as six bidders quoted same
percentage of lowest service charge i.e., 2.09, hence the
lowest bidder (L-1) is determined basing upon the highest
value of cumulative gross turnover arising out of manpower
service (Excluding Security, watchman & Housekeeping
Service) for last 05 (Five) years of the bidders, as per
Condition (4) of the Financial bid.
As the value of cumulative gross turnover of Opposite Party
No.5 for last 05 (Five) years from manpower service (Excluding
Security, watchman & Housekeeping Service) (Quess Corporation)
was the highest i.e. 18027.19 Crores and hence the Tender
Committee declared Opposite Party No.5 as L-1, as per the
terms and conditions stipulated at the Financial Bid of the
Tender Document. The Tender committee has not committed any
irregularity or illegality in evaluation of both Technical bid and
financial bid of the bid documents submitted by participating
bidders, in the Tender Process. The Opposite Party no.5 is declared
as L-1 (Lowest bidder) in the Tender Process validly and rightly, as
per terms and conditions of Tender Notice."
The turnover certificate of opposite party no.5 has been annexed
marked as Annexure-C/2 to the counter of opposite party nos.1 to 4.
17. The rejoinder filed by the petitioner to the counter of opposite party
nos.1 to 4 breaks no further ground, the averments being inter alia
repetitions of the averments made in the writ petition.
18. The opposite party no.5, the successful bidder, in its counter dated
8.12.2021 has raised preliminary objection regarding maintainability of the
writ petition contending that it is the prerogative of the tendering authority
to evaluate the tender and it is also in the realm of policy of the public
authority (Opposite party nos.2 to 4) and, therefore, the writ petition is not
maintainable.
18.1 Apart from the raising preliminary objection on ground of
maintainability, it has been specifically averred by opposite party no.5 in
their counter that the evaluation of tender has been done within four
corners of the bid conditions in accordance with the tender documents as
envisaged under Caluse-4 (quoted at above) of the financial bid which
provides the manner of selecting L-1.
It has been further averred by opposite party no.5 that on opening of
the financial bid on 6.9.2021 in presence of all the bidders including the
petitioner, it was found that all the bidders have quoted service charge in
excess of 2.08 and at the relevant para-17 of counter it has been thus
stated :
" ... ... Since, all the nine financial bidders quoted service charge
in excess of 2.08% and six financial bidders quoted the same
service charge. However, the opposite party no.5 was declared as
a lowest (L-1) bidder as per Clause-4 of the Financial Bid because
the annual cumulative turnover of the opposite party no.5 for the
last financial year was highest among the six financial bidders
who quoted the same price for service charge."
18.2 Regarding the cumulative turnover of opposite party no.5 as
compared to the petitioner, it has been specifically averred by the opposite
party no.5 "... cumulative turnover of the opposite party no.5 for the Financial
Years 2015-16 to 2019-20 is INR 18027,19,00,000 (Eighteen Thousand
Twenty Seven Crore Nineteen Lakh Only) whereas the cumulative turnover of
the petitioner for the Financial Years 2015-16 to 2019-20 is INR
1065,61,92,592 (One Thousand Sixty Five Crores Sixty One lakh Ninety Two
Thousand Five Hundred Ninety Two Only ... ..." and therefore the opposite
party no.5 has to be declared as L1 as per the conditions of tender.
19. The comparative assessment of annual turnover of bidders by the
authorities (opposite party nos.1 to 4) filed before this Court, is reproduced
herein for reference :
Comparison statement as per Turn over
Sl Firm Name FY Year
No
2015-16 2016-17 2017-18 2018-19 2019-20 Cumulative
Turnover(Rs.)
1 M/S Total Annual 1,92,50,00,034.00 1,99,92,17,401.00 2,25,92,57,661.00 2,22,03,51,432.00 2,25,23,66,064.00 10,65,61,92,592.00
BIS(Petitioner) turn over out
of Manpower
service(Rs.)
Total Annual 3,37,50,00,221.00 4,14,60,32,231.00 4,87,61,13,585.00 4,81,66,17,967.00 4,65,84,17,910.00 21,87,21,81,914.00
turn over other
than
manpower
service(Rs.)
Total 5,30,00,00,255.00 6,14,52,49,632.00 7,13,53,71,246.00 7,03,69,69,399.00 6,91,07,83,974.00 32,52,83,74,506.00
Turnover(Rs.)
2 GA Digital Total Annual 132.95 Crores 125.86 Crores 145.66 Crores 209.72 Crores 272.06 Crores 886.25 Crores
turn over out
of Manpower
service(Rs.)
turn over other
than
manpower
service(Rs.)
Total 132.95 Crores 125.86 Crores 145.66 Crores 209.72 Crores 272.06 Crores 886.25 Crores
Turnover(Rs.)
3 Kapston Total Annual 70,27,38,022.00 90,63,08,004.00 1,11,02,84,164.00 1,47,23,03,769.00 2,13,39,27,316.00 6,32,55,61,275.00
Facilities turn over out
of Manpower
service(Rs.)
Total Annual Nil Nil Nil Nil Nil Nil
turn over other
than
manpower
service(Rs.)
Total 70,27,38,022.00 90,63,08,004.00 1,11,02,84,164.00 1,47,23,03,769.00 2,13,39,27,316.00 6,32,55,61,275.00
Turnover(Rs.)
4 Source Dotcom Total Annual 28,55,61,322.00 22,87,55,312.00 21,67,35,517.00 24,43,23,420.00 25,54,67,879.00 1,02,64,69,146.80
turn over out
of Manpower
service(Rs.)
Total Annual 10,87,11,199.00 8,77,67,060.00 8,73,93,064.00 11,18,23,975.00 7,84,68,914.00 9,48,32,842.40
turn over other
than
manpower
service(Rs.)
Total 39,42,72,521.00 31,65,22,372.00 30,41,28,581.00 35,61,47,395.00 33,39,36,793.00 1,43,78,58,227.00
Turnover(Rs.)
5 Quess Crop Total Annual 2,419.46 Crores 2787.19 Crores 2799.56 Crores 3,725.77 Crores 6,295.21 Crores 18,027.19 Crores
(Opp. Party turn over out
No. 5 of Manpower
service(Rs.)
Total Annual 498.72 Crores 655.74 Crores 1611.27 Crores 1969.02 Crores 1445.02 Crores 6179.77 Crores
turn over other
than
manpower
service(Rs.)
Total 2,918.18 Crores 3,442.93 Crores 4,410.83 Crores 5,694.79 Crores 7,740.23 Crores 24,206.96 Crores
Turnover(Rs.)
6 Oriental Total Annual 24.1041 Crores 26.3919 Crores 36.6068 Crores 41.9868 Crores 40.2968 Crores 169.3864 Croress
Security turn over out
of Manpower
service(Rs.)
Total Annual 0.1445 Crores 0.1059 Crores 0.1394 Crores 0.1741 Crores 0.2918 Crores 0.8557 Crores
turn over other
than
manpower
service(Rs.)
Total 24.2486 Crores 26.4978 Crores 36.7462 Crores 42.1609 Crores 40.5886 Crores 170.2421 Crores
Turnover(Rs.)
The above comparative analysis goes to show that the cumulative
annual turnover of petitioner "excluding security, watchman, housekeeping
service" is Rs.2187.21 crores, whereas that of the opposite party no.5 is
Rs.6179.77 crores.
20. Before we proceed to deal with the rival contentions we would deem it
appropriate to take note of the pronouncements laying down the
propositions of law regarding scope of judicial review of the process of
evaluation of tender by State/instrumentality of State.
Learned counsel for the petitioner has placed reliance on the decision
rendered by the Hon'ble Supreme Court reported in (2017) 4 SCC 269:
Reliance Telecom Ltd. V. Union of India to contend that the judicial
review cannot be denied so far as exercise of power of government/public
bodies to enter into the contract is concerned, so as to prevent
arbitrariness or favoritism.
21. The opposite party nos.1 to 4 have relied on the decisions rendered by
the Hon'ble Supreme Court in TATA Cellular v. Union of India: (1994) 6
SCC 651 paragraphs-70, 74 and 75; Jagdish Mandal v. State of Orissa
and others : (2007) 14 SCC 517 and Montecarlo Ltd. V. National
Thermal Power Corporation Ltd. : (2016) 15 SCC 272. Referring to Tata
Cellular (supra), it is contended by opposite party nos.1 to 4 that on clear
scrutiny of the materials available on record, it can be concluded that in the
tender process the authority has adhered to the principles established by
law and the entire tender process was free from arbitrariness, malafides &
favoritism as well as is in consonance with the public policy.
22. The learned counsel for opposite party no.5 seeks support from the
decisions of Hon'ble Supreme Court in TATA Cellular (supra), Jagdish
Mandal (supra) and further on Tamil Nadu Generation & Distribution
Corporation Limited (TANGEDCO) Rep. by its Chairman and Managing
Director and another v. CSEPDI- TRISHE Consortium, Rep. by its
Managing Directors and another): (2017) 4 SCC 318; N.G. Projects
Limited v. Vinod Kumar Jain & others: 2022 SCC Online SC 336 and
Jasoda Roadlines and Ors v. Orissa State Warehousing Corporation
and Ors: 2020(III) ILR-CUT-587, to show the scope of judicial review of a
process of selection of bidder/finalization of tender by the
Government/instrumentality of the Government.
It is submitted by the learned Senior Counsel for opposite party no.5
that the Courts cannot really enter into the realm of evaluation of tender by
the authority, in exercise of power of judicial review, when the evaluation is
neither ex-facie erroneous nor can be perceived as flawed nor perverse or
absurd.
It is further contended that the Court cannot adopt the approach of
an appellate forum or authority and extend the principle of judicial review
to the area of evaluation of tender unless some manifest error in the method
adopted is shown to the Court.
23. Apart from the above decisions cited at the bar, it would be apt to
refer to certain other judicial pronouncements those are regarded as Locus
Classicus on the scope of judicial review of administrative action.
In Chief Constable of the North Wales Police v. Evans: 1982(1)
WLR 1155; (1982)3 All E R 141 (HL): pp 1160H-1161A, 1173F 1174F-G of
WLR, it was held by the House of Lords "judicial review, as the words imply,
is not an appeal from a decision, but a review of the manner in which the
decision was made". ".....judicial review is concerned, not with the decision,
but with the decision-making process"
Lord Hailsham in his separate yet concurring opinion observed
(pp.1160E-H -1161-A of WLR):
"The first observation I wish to make is by way of criticism of some
remarks of Lord Denning M.R. which seem to me capable of an
erroneous construction of Rules of the Supreme Court: the rules
which governed civil procedure in the Supreme Court of Judicature of
England and Wales from its formation in 1883 until 1999. The
purpose of the remedy by way of judicial review under R.S.C., Ord.
53. This remedy, vastly increased in extent, and rendered, over a
long period in recent years, of infinitely more convenient access than
that provided by the old prerogative writs and actions for a
declaration, is intended to protect the individual against the abuse of
power by a wide range of authorities, judicial, quasi-judicial, and, as
would originally have been thought when I first practiced at the Bar,
administrative. It is not intended to take away from those
authorities the powers and discretions properly vested in them by
law and to substitute the courts as the bodies making the decisions.
It is intended to see that the relevant authorities use their powers in
a proper manner.
(emphasis supplied)
Since the range of authorities, and the circumstances of the
use of their power, are almost infinitely various, it is of course
unwise to lay down rules for the application of the remedy which
appear to be of universal validity in every type of case. But it is
important to remember in every case that the purpose of the
remedies is to ensure that the individual is given fair treatment by
the authority to which he has been subjected and that it is no part of
that purpose to substitute the opinion of the judiciary or of individual
judges for that of the authority constituted by law to decide the
matters in question. The function of the court is to see that lawful
authority is not abused by unfair treatment and not to attempt itself
the task entrusted to that authority by the law. There are passages
in the judgment of Lord Denning M.R. (and perhaps in the other
judgments of the Court of Appeal) in the instant case and quoted by
my noble and learned friend which might be read as giving the
courts carte blanche to review the decision of the authority on the
basis of what the courts themselves consider fair and reasonable on
the merits. I am not sure whether the Master of the Rolls really
intended his remarks to be construed in such a way as to permit the
court to examine, as for instance in the present case, the reasoning
of the subordinate authority with a view to substituting its own
opinion. If so, I do not think this is a correct statement of principle.
The purpose of judicial review is to ensure that the individual
receives fair treatment, and not to ensure that the authority, after
according fair treatment, reaches on a matter which it is authorized
by law to decide for itself a conclusion which is correct in the eyes of
the court.
(Emphasis supplied)
Lord Brightman in his opinion (which was agreed to by the majority)
observed as follows :
Judicial review is concerned, not with the decision, but with the
decision-making process. Unless that restriction on the power of the
court is observed, the court will in my view, under the guise of
preventing the abuse of power, be itself guilty of usurping power.
(pp.1173-F of WLR)
(Emphasis Supplied)
There is however a wider point than the injustice of the
decision-making process of the chief constable. With profound
respect to the Court of Appeal, I dissent from the view that " Not only
must [the probationer constable] be given a fair hearing, but the
decision itself must be fair and reasonable." If that statement of the
law passed into authority without comment, it would in my opinion
transform, and wrongly transform, the remedy of judicial review.
Judicial review, as the words imply, is not an appeal from a
decision, but a review of the manner in which the decision was
made.
(pp. 11874-F, G of WLR)
(Emphasis supplied)
24. Again, the House of Lords in Council of Civil Service Unions
(C.C.S.U.) v. Minister for Civil Service, [1984] 3 AII E.R.935, H.L.(E);
[1984] 3 W.L.R. 1174; Civil Services [1985] A.C 374, considering the
scope of judicial review of administrative action have held (opinion of Lord
Diplock, pp:1196-B-C-D-E-F-G of WLR) as follows :
" ... ... Judicial review has I think developed to a stage today when
without reiterating any analysis of the steps by which the
development has come about, one can conveniently classify under
three heads the grounds upon which administrative action is
subject to control by judicial review. The first ground I would call
"illegality", the second "irrationality" and the third "procedural
impropriety". That is not to say that further development on a case
by case basis may not in course of time add further grounds. I have
in mind particularly the possible adoption in the future of the
principle of "proportionality" which is recognized in the
administrative law of several of our fellow members of the
European Economic Community; but to dispose of the instant case
the three already well-established heads that I have mentioned will
suffice.
By "illegality" as a ground for judicial review I mean that the
decision-maker must understand correctly the law that regulates
his decision-making power and must give effect to it. Whether he
has or not is par excellence a justiciable question to be decided, in
the event of dispute, by those persons, the judges, by whom the
judicial power of the state is exercisable.
By "irrationality" I mean what can by now be succinctly referred to
as "Wednesbury unreasonableness" (Associated Provincial Picture
Houses Ltd v Wednesbury Corp [1948] 1 KB 223). It applies to a
decision which is so outrageous in its defiance of logic or of
accepted moral standards that no sensible person who had applied
his mind to the question to be decided could have arrived at it.
Whether a decision falls within this category is a question that
judges by their training and experience should be well equipped to
answer, or else there would be something badly wrong with our
judicial system. To justify the court's exercise of this role, resort I
think is today no longer needed to Viscount Radcliffe's ingenious
explanation in Edwards v. Bairstow [1956] A.C. 14 of irrationality
as a ground for a court's reversal of a decision by ascribing it to an
inferred though unidentifiable mistake of law by the decision-
maker. "Irrationality" by now can stand upon its own feet as an
accepted ground on which a decision may be attacked by judicial
review.
I have described the third head as "procedural impropriety"
rather than failure to observe basic rules of natural justice or
failure to act with procedural fairness towards the person who will
be affected by the decision. This is because susceptibility to judicial
review under this head covers also failure by an administrative
tribunal to observe procedural rules that are expressly laid down in
the legislative instrument by which its jurisdiction is conferred,
even where such failure does not involve any denial of natural
justice. ..."
(Emphasis supplied)
25. Apart from the broad principles to be adopted by the superior courts
for Judicial Review of administrative action, as laid down in Chief
Constable of the North Wales Police (supra), the development of the
principle of proportionality as a further ground of judicial review is to be
noted. (R. v. Secretary of State for the Home Department, ex Brind,
(1991)1 AC 696; (1991)2 WLR 588 (HL): (Opinion of Lord Lowry: pp 609C,
D, H-610 A, B of W.L.R).
"The applicants have relied on the doctrine of proportionality. That
is, in one sense of the word, a deeply rooted and well understood
idea in English law. In a claim for damages for personal injuries
suffered by a workman allegedly through his employer's negligent
system of work the court has to weigh the risk of an accident, the
likely severity of the consequences, the expense and difficulty of
taking precautions and the resources of the employer with a view to
deciding whether the employer failed to take reasonable care for the
safety of the workman. In another field, as counsel once contended
in Reg. v. Secretary of State for Transport, Ex parte Pegasus
Holdings (London) Ltd. [1988] 1 W.L.R. 990, 1001, proportionality is
simply a way of approaching the Wednesbury formula: was the
administrative act or decision so much out of proportion to the needs
of the situation as to be "unreasonable" in the Wednesbury sense.
xxx xxx xxx
2. The judges are not, generally speaking, equipped by training or
experience, or furnished with the requisite knowledge and advice, to
decide the answer to an administrative problem where the scales
are evenly balanced, but they have a much better chance of reaching
the right answer where the question is put in a Wednesbury form.
The same applies if the judges' decision is appealed. 3. Stability and
relative certainty would be jeopardized if the new doctrine held
sway, because there is nearly always something to be said against
any administrative decision and parties who felt aggrieved would be
even more likely than at present to try their luck with a judicial
review application both at first instance and on appeal. 4. The
increase in applications for judicial review of administrative action
(inevitable if the threshold of unreasonableness is lowered) will lead
to the expenditure of time and money by litigants, not to speak of the
prolongation of uncertainty for all concerned with the decisions in
question, and the taking up of court time which could otherwise be
devoted to other matters. The losers in this respect will be members
of the public, for whom the courts provide a service. ... ..."
Having considered the conspectus of the decisions as discussed
above, in our considered view, the efforts of this Court has to be to adopt
the test, i.e. to "consider whether something has gone wrong of the nature
and degree which requires its intervention".
26. Similarly, the Hon'ble Supreme Court in TATA Cellular (supra) (at
paragraphs-77 & 80 of SCC) considering the scope of judicial review of the
process of evaluation of tender by State/instrumentality of State have laid
down the following :
"77. The duty of the court is to confine itself to the question of
legality. Its concern should be :
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would
have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether a
particular policy or particular decision taken in the fulfillment of
that policy is fair. It is only concerned with the manner in which
those decisions have been taken. The extent of the duty to act
fairly will vary from case to case. Shortly put, the grounds upon
which an administrative action is subject to control by judicial
review can be classified as under:
(i) Illegality : This means the decision- maker must understand
correctly the law that regulates his decision-making power and
must give effect to it.
(ii) Irrationality, namely, Wednesday unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out
addition of further grounds in course of time. As a matter of fact,
in R. v. Secretary of State for the Home Department, ex Brind,
Lord Diplock refers specifically to one development, namely, the
possible recognition of the principle of proportionality. In all these
cases the test to be adopted is that the court should, "consider
whether something has gone wrong of a nature and degree which
requires its intervention".
"80. At this stage, The Supreme Court Practice, 1993, Vol.1, pp.
849850, may be quoted :
"4. Wednesbury principle.- A decision of a public authority will
be liable to be quashed or otherwise dealt with by an
appropriate order in judicial review proceedings where the
court concludes that the decision is such that no authority
properly directing itself on the relevant law and acting
reasonably could have reached it. (Associated Provincial
Picture Houses Ltd. v. Wednesbury Corpn. per Lord Greene,
M.R.)"
27. It has also to be noted that there was pre-bid conference amongst the
tenderer and the intending bidders on 12.01.2021 and subsequent
opportunity was given to the tenderers including the petitioner to make
representation seeking clarification. These inbuilt mechanisms included in
the tender process also add to the sanctity of the tender process making it
more in tune with the principles of natural justice as well as making the
process more transparent.
28. When the matter was taken up on 08.07.2022 the learned Senior
Counsel for the petitioner submitted that the petitioner would prefer not to
raise the contention that the opposite party no.5's bid was technically
disqualified. However, since the said issue has been pleaded it is answered
by this Court.
In view of the aforesaid discussions, it has to be held that the
petitioner has not been able to demonstrate that the opposite party no.5
has not complied with the conditions provided in Clauses 19 & 20 of the
Technical Bid (Eligibility Criteria) as quoted supra.
The comparative evaluation shows total annual turnover of the
opposite party no.5 other than manpower service is Rs.6179.77 crores
whereas the said annual turnover other than manpower service of the
petitioner is Rs.2187.21 crores (Rs.21,87,21,81,914.00), thereby, indicating
that both having quoted 2.09% as rate of service charge the opposite party
no.5 having higher cumulative turnover for the last five years becomes L1.
29. The pleadings of the petitioner and assertions based thereon have
been duly evaluated. In the legal and factual premise, the petitioner's
contention that the O.P. NO.5 did not satisfy the conditions as contained in
clauses 11, 19 & 20 Technical Bid (Eligibility Criteria) and that the
evaluation of the bid of O.Ps.1 to 4 was contrary to the said clauses-11, 19
& 20 as well as clause-4 of Financial Bid, fails scrutiny of this Court.
We find that substantial and pertinent reasons have been ascribed by
the tender evaluating authority in qualifying the bid and awarding the
tender to the O.P. No.5 which is upheld. The dictum in Reliance Telecom
Ltd. (supra) is of no avail to the petitioner.
30. Now coming to the other allegations of the petitioner that is: the
process of evaluation of tender, is vitiated by arbitrariness, is unreasonable
and therefore, is liable to be interfered with, has to be rejected, inasmuch
as, this Court from the materials available on record, comes to a finding
that the evaluation of tender was done by following due process as
advertised, giving equal opportunity of consideration to all the participating
bidders as per the Clause-4 of the Financial Bid read with Clauses-11, 19
and 20 of the Financial Bid (Eligibility Criteria).
31. Before parting with the case, considering that by interim order dated
01.10.2021 this Court directed stay of operation of the work order dated
06.09.2021 (Annexure-13) issued in favour of O.P. No.5 that was to
commence w.e.f. 01.10.2021 and taking into consideration the principle
actus curae neminem gravabit i.e, act of Court should harm none, it is
further directed that the work order dated 6.9.2021 (Annexure-13) issued
by the O.Ps.1 to 4, in favour of O.P. No.5 shall be implemented forthwith by
the parties keeping intact the paragraph-4 of the work order i.e., the
duration of the contract shall be initially for a period of 02(two) years from
the date of award of contract and further extendable for another 01(One)
year on mutually agreeable terms of conditions.
32. The writ petition is dismissed, however, opposite party nos.1 to 4 shall
be bound by the aforesaid directions. There shall be no order as to costs.
........................... ........................
Jaswant Singh,J. M.S.Sahoo,J.
Orissa High Court, Cuttack
The 26th August,2022/dutta/Gs
