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2003 DIGILAW 1393 (JHR)

Samrat Securities and Intelligence Services Pvt. Ltd. through its Manager Sushil v. State of Jharkhand

2003-12-18

P.K BALASUBRAMANYAN, TAPEN SEN

body2003
Order Heard counsel on all sides. 2. This appeal challenges the decision in W.P.(C) No. 1606 of 2003 [reported in 2003(4) JLJR 364 ]. The petitioner in that writ petition is the appellant before us. A notice dated 9.6.2002 inviting tenders was published by the Jharkhand Agricultural Marketing 80ard calling for quotations for the purpose of creating a panel for appointment of Security Personnel in the marketing yards (29 in number) in the State of Jharkhand. Certain conditions were stipulated in the notice inviting tenders. 19 tenders were submitted pursuant to the said notice inviting tenders. One Trimurty Securities and Intelligence Service Private Limited was the lowest tenderer. The Bihar Ex-Servicemen Securities Company Limited was the second lowest. Samrat Securities, who is the appellant before us, was the third lowest tenderer. Trimurty Securities and Intelligence Service Private Limited, the lowest tenderer, was eliminated for certain reasons. Though Trimurty Securities and Intelligence Service Private Limited filed a writ petition W.P. (C) No. 2278 of 2003 before this Court which was heard along with the writ petition giving rise to this appeal that writ petition was dismissed and Trimurty Securities and Intelligence Service Private Limited has not pursued its claim or challenged its elimination. 3. The writ petitioner-appellant, the third lowest tenderer,' contended that respondent no. 4, who has been chosen, did not fulfil the requirements of the notice inviting tenders. A contention was raised that respondent no. 4 has been blacklisted by the Electricity Board. It was contended that respondent no. 4 was in arrears under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as "the Act"). It was further contended that it had no registration under the Employees State Insurance Act, a condition specifically stipulated as "essential in the notice inviting tenders. It was, therefore, contended by the appellant that selection of respondent no. 4 was mala fide and had been done without even considering whether it has fulfilled the conditions of the notice inviting tenders. 4. Respondents 2 and 3 filed their counter-affidavit contending that they had considered the respective claims and had found that respondent no. 4 was the second lowest tenderer and since they found that the lowest tenderer, Trimurty Securities and Intelligence Service Private Limited, was not qualified, respondent no. 4 was rightly chosen. Respondent no. 4 contended that it was duly qualified. Respondents 2 and 3 filed their counter-affidavit contending that they had considered the respective claims and had found that respondent no. 4 was the second lowest tenderer and since they found that the lowest tenderer, Trimurty Securities and Intelligence Service Private Limited, was not qualified, respondent no. 4 was rightly chosen. Respondent no. 4 contended that it was duly qualified. It disputed the assertion that it was in arrears under the Employees Provident Fund Act and claimed that there was a registration for it under the Employees State Insurance Act and the Registration No. was 42-6478/ 99 Patna. It was asserted that respondent no. 4 was fully qualified. 5. The learned Single Judge while hearing the writ petition felt that certain aspects required to be clarified. The learned Judge, therefore, passed the following order on 8.5.2003:- "8.5.2003 Heard in part. Prima facie it appears that the 4th Respondent has not quoted the wages for payment to its workmen on the basis of the minimum wages prescribed by the State Government. It further appears that there are cases of defalcation pending against 4th respondent and for non-deposition of provident fund amount a notice under section 7A of the Employees Provident Fund (Misc. Provision) Act, 1952 (E.P.F. & M.P. Act for short) has been issued. It is also not clear whether the 4th Respondent is registered with the Employees State Insurance Corporation or not. The respondents are directed to file supplementary counter-affidavit giving details of rate quoted by 4th Respondent; the minimum wage(s) prescribed by the State Government (year 2001-02) for payment to the workmen and State whether any notice has been issued on 4th Respondent under E.P.F. & M.P. Act, 1952 or not. The 4th Respondent will also enclose the copy of the registration with Employees State Insurance Corporation. Place the case for further hearing under the heading "For Admission" on 4th June, 2003 subject to other overnight part heard cases. Until further order, the Respondents will not release any fund in favour of 4th Respondent. Let a copy of this order be handed over to Mr. V.P. Singh"; 6. Pursuant to this order, respondents 2 and 3 filed an additional counter affidavit in which the stand was taken that it was not correct to say that the rate quoted by respondent no. 4 was even less than the minimum wages prescribed under the Minimum wages Act. Respondent no. V.P. Singh"; 6. Pursuant to this order, respondents 2 and 3 filed an additional counter affidavit in which the stand was taken that it was not correct to say that the rate quoted by respondent no. 4 was even less than the minimum wages prescribed under the Minimum wages Act. Respondent no. 4 was registered under the Employees State Insurance Act and its registration no. was ESI-42-6478/99 Patna dated 16.4.1999. Respondent no. 4 had also disclosed to respondents 2 and 3 that they had paid upto-date contribution under the Employees State Insurance Act. It was also asserted that respondent no. 4 had paid contribution up-to-date under the provisions of the Employees Provident Fund Act. As regards the pendency of cases of defalcation against respondent no. 4, it was submitted that respondent no. 4 may be asked to furnish the details. Similarly it was also submitted that respondent no. 4 may be directed to disclose the fact about the service of notice under section 7A of the Provident Fund Act. 7. Respondent no. 4 filed a supplementary counter-affidavit in which it was contended that even though an attempt was made to blacklist it, the same has been given up by the Electricity Board. Respondent no. 4 had received a notice under section 7A of the Provident Fund Act for the period 1988 to October, 2000. It had filed a written defence submitting that the dues had to be paid by the Bihar State Electricity Board who was the principal employer and it was the principal employer who had not paid the provident fund dues. It was further contended that one Ex-servicemen Security and Intelligence Service was the sister concern of respondent no. 4 and that sister concern was registered under the Employees State Insurance Act with Registration No. ESI/426478/ 99 Patna. Thus the, fact that respondent no. 4 did not have registration under the Employees State Insurance Act was admitted. 8. In the light of the materials thus available, the learned Single Judge found that the authorities have been very careless in awarding the work to, respondent no. 4. The learned Judge noticed that the rate quoted by respondent no. 4 was not even sufficient to meet its obligation to pay the minimum wages. Respondent no. 8. In the light of the materials thus available, the learned Single Judge found that the authorities have been very careless in awarding the work to, respondent no. 4. The learned Judge noticed that the rate quoted by respondent no. 4 was not even sufficient to meet its obligation to pay the minimum wages. Respondent no. 4 had not paid the provident fund dues of its employees and a notice under section 7A of the Act had been issued to respondent no. 4. The learned Judge then stated that the authorities, before issuing the order in favour of respondent no.4, should have taken care of the past performance and reputation of respondent no. 4. Thus, after finding that the selection of respondent no. 4 was not proper, the learned Judge declined to interfere with the selection on the ground that only six and a half months were left for the completion of the period of the contract which was for one year ending with 31st March, 2004. But the learned Judge directed respondents 1 to 3 to take into consideration the past performance and reputation of each agency including the fact whether one or the other is a defaulter of any kind any of the related statutes while making a fresh selection. 9. Challenging this decision, it is submitted that on the findings, the writ petition should have been allowed by the learned Single Judge. It is submitted that the authorities had not even cared to ensure that the tenderer chosen had forfeited (sicfulfilled?) the conditions set out in the notice inviting tenders. Hence, there was no other option but to strike down the action which can be held to be only arbitrary or influenced by extraneous considerations. Even if only six months were left of the period of the contract, it behoved the Court to interfere when the action was found to be illegal and improper and when it was demonstrated that even the statutory obligations were not met by the agency which been awarded the work. Once the process of selection is found to be arbitrary and improper, the Court should not have declined to interfere on the ground relied on by it. 10. Once the process of selection is found to be arbitrary and improper, the Court should not have declined to interfere on the ground relied on by it. 10. On behalf of respondents 2 and 3, an attempt was made to salvage the situation but it could not be shown on their behalf that there was any consideration of the question whether the tenderers had complied with the requirements of the notice inviting tenders and the conditions described as "essential condition" therein. Annexures-2, 11,12 and 13 were read over, but they did not show that there was any consideration of the question whether the condition prescribed as 'essential condition', in the notice inviting tenders was fulfilled by the concerned tenderer or not. 11. On behalf of respondent no. 4 it was contended that its sister concern was registered under the Employees State Insurance Act and that was enough. It was further contended that though there was a demand of dues under the Provident Fund Act, the stand of respondent no. 4 was that the contribution had to be made by the principal employer, the Bihar State Electricity Board and, hence, respondent no. 4 could not be treated as being a defaulter. 12. Normally, when a notice inviting tender is published with a condition prescribed therein, it is the duty of the assessing authority to first verify whether the tenderers have satisfied the condition as laid down. This, according to us, is the fundamental requirement in verification of the tenders submitted pursuant to the notice. In this case, for example the requirement for having a registration under the Employees State Insurance Act is described as an "essential condition” (aniwarya). Therefore, respondents 2 and 3 or the Committee that was duly constituted to evaluate the tender had the duty to see whether this condition was satisfied and whether the claim of respondent no. 4 that its sister concern was registered, was sufficient. We see no consideration of this aspect. As found by the learned Single Judge, it is also seen that there is a demand for substantial dues under the Provident Fund Act from respondent no. 4. The only defence of respondent no. 4 is that it had tried to dispute the liability and had claimed that the liability is that of the Principal employer. Whether such a stand is acceptable under the Act, is another question. 4. The only defence of respondent no. 4 is that it had tried to dispute the liability and had claimed that the liability is that of the Principal employer. Whether such a stand is acceptable under the Act, is another question. But the fact remains that these aspects were not properly assessed by the Evaluating Committee. Though this Court may not concern itself with the correctness of the decision taken by an administrative authority, this Court is certainly concerned with the process of arriving at the decision in order to satisfy itself that there has been a proper consideration of the relevant aspects including whether the qualifications prescribed were fulfilled by the tenderer successful. Interference would be justified when such allegations are found. In that view, notwithstanding that half of the period has expired, the learned Single Judge should have interfered and directed a re-tendering or at least a re-assessment of the existing tenders. We are, therefore, satisfied that interference is called for with the decision of the learned Single Judge. 13. We, therefore, allow this appeal and set aside the decision of the learned Single Judge to the extent that he did not interfere with the award of the contract in favour of respondent no. 4. We quash the award of contract in favour of respondent no. 4. We find that the whole tendering process has been messed up by respondents 2 and 3 and the so-called Evaluating Committee constituted and, therefore, it will be just and proper for respondents 2 and 3 to invite fresh tenders for the work covered by Annexure 4. Obviously, they will have to ensure that the tenderer to be chosen has fulfilled under the relevant laws. 14. Mr. V.P. Singh, learned Senior Counsel for respondents 2 and 3 submitted that it will take time to invite fresh tenders and to award the contract to anyone and in that situation, some interim protection should be given. It was suggested by learned counsel for the appellant that the need is to provide the security. Of course, there is a contention for the appellant that being the third lowest tenderer, it should be awarded the work. On balancing all the aspects, we think that the proper course to adopt is to direct respondents 2 and 3 to employ the security guards furnished by respondent no. Of course, there is a contention for the appellant that being the third lowest tenderer, it should be awarded the work. On balancing all the aspects, we think that the proper course to adopt is to direct respondents 2 and 3 to employ the security guards furnished by respondent no. 4 and the appellant in equal proportion until a fresh selection is made. In other words, 50% of the post of security guards will be filled up by the Guards provided by the appellant and the other 50% by the guards provided by respondent no. 4. We may make it clear that this is a purely temporary arrangement and the fresh process of selection will be taken up by respondents 2 and 3 immediately.