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2008 DIGILAW 218 (GAU)

North Eastern Security Service v. Tezpur University

2008-03-14

BIPLAB KUMAR SHARMA

body2008
JUDGMENT B.K. Sharma, J. 1. The petitioner, a registered partnership firm is aggrieved by awarding of the contract relating to security and housekeeping (cleaning) services to the respondent No. 4 by the respondent University. 2. The petitioner, in response to the Annexure-1 NIT dated 27.11.2007 floated by the Tezpur University responded to the same by offering its bid. The contract is for a period of one year extendable by another year. The tender consisted of two bid system-- (i) Technical bid and (ii) Financial bid. As per the requirement of the NIT, the bidders were to have permission/licence from Central/State Government authority to operate as security and housekeeping Agency with at least 5 years experience. The qualifying criteria laid down were the certificates of registration for EPF, ESI, Service Tax, PAN for Income Tax and atleast one or two clients of Central Government/State Government/Autonomous Bodies, PSUs in India with sufficient strength of security guard (Ex-serviceman). 3. As per the terms and conditions of the tender, the requirement for the job was security and cleaning personnel. The price to be quoted was the salary/wages of such personnel and also rate of the equipments like walki-talki, GSM Mobile Phone, Bicycles, Motor Cycles, Torch Light with battery and search light with Hellogene lamp. The total number of personnel was to be intimated in the offer letter at the time of awarding the contract. The petitioner being eligible, responded to the NIT. Two other agencies i.e. the respondent No. 4 and one Surakhsa Security Service (P) Ltd. also responded to the NIT by submitting tenders. 4. The Technical bids were opened on 12.12.2007 and all the three bidders were found to be technically qualified and consequently their price bids were opened on 20.12.2007 in presence of their representatives. It is the case of the petitioner that the financial bids revealed that the bid offered by the petitioner was the lowest with agency charge @ 6.5% as against 10% quoted by the respondent No. 4. Other rates quoted by the said respondent were also higher than that of the rates quoted by the petitioner. Be it stated here that the financial bid offered by Surakhsa Security Service Pvt. Ltd. being incomplete, same was rejected and accordingly it was the petitioner and the respondent No. 4 which remained in the fray. 5. Other rates quoted by the said respondent were also higher than that of the rates quoted by the petitioner. Be it stated here that the financial bid offered by Surakhsa Security Service Pvt. Ltd. being incomplete, same was rejected and accordingly it was the petitioner and the respondent No. 4 which remained in the fray. 5. In paragraph 10 of the writ petition, the petitioner has given the comparative chart of the prices quoted by the petitioner and the respondent No. 4, which indicates difference in price of Rs. 6,03,714.77 taking into account the number of personnel to be engaged as 52. The petitioner being the lowest eligible bidder, it was its expectation that the contract would be awarded to it. However, the petitioner was called for a discussion on 27.12.2007. The representative of the petitioner visited the office of the respondents on 27.12.2007 and found the representative of the respondent No. 4 present in the office. According to the petitioner, during discussion certain questions were put to the representative of the petitioner relating to back ground and performance of the petitioner's firm. Further stand of the petitioner is that there was no negotiation relating to the price quoted by the petitioner. 6. After the aforesaid developments, the petitioner could come to know that the contract was awarded to the respondent No. 4. Being aggrieved, the petitioner made Annexure-4 application dated 03.01.2008 to the Vice Chancellor of the University to intervene in the matter. In response to the application, the petitioner was intimated vide Annexure-V letter dated 03.01.2008 that no injustice was done to it while awarding the contract to the respondent No. 4. The letter reads as follows: To The Managing Director, North Eastern Security Service Thakuria Building, Suraj Nagar, Six Mile, P.O.-Khanapara Guwahati-781022. Sub: Contract for security service at Tezpur University. Ref: Your letter No. NESS/2007-08/272 dated 03.01.08. Sir, We acknowledge receipt of your letter above by Fax with reference to your letter above, I am to state as under: (i) We are thankful to you for taking part in the bidding for providing Security Services to Tezpur University. (ii) We considered all the 3 parties i.e. North Eastern Security Service, Sun Security Service and Suraksha qualified in the technical bid. (iii) We opened the financial bid of all the above three parties qualified in technical bid. (ii) We considered all the 3 parties i.e. North Eastern Security Service, Sun Security Service and Suraksha qualified in the technical bid. (iii) We opened the financial bid of all the above three parties qualified in technical bid. (iv) The Security Committee of the University, while negotiating with the parties, took into consideration the Government approved rates quoted by the parties including you. After a thorough examination of die relative capabilities of the parties, the Tezpur University authority has decided to engage the Sub Security Services, an ISO certified and DGR sponsored Security Service provider for providing security service at this University at a negotiated ate on service charge. (v) The points raised at para 4 in your letter is untenable and cannot be accepted. (vi) Considering all aspects, Tezpur University has decided to offer the contract to M/S Sun Security Services as they are found qualified in both technical bid and also in financial bid on negotiation. (vii) On the basis of above we are sure that no injustice was done to you. Thanking you Yours sincerely (M. Ahom) Registrar 7. Since the aforesaid letter refers to paragraph 4 of the application dated 03.01.2008 submitted by the petitioner as untenable and not acceptable, same is also quoted below: To The Hon'ble Vice Chancellor Tezpur University, Napaam Tezpur, Assam. Sub: Cordial prayer for justice on selection for providing round the clock campus security and housekeeping (cleaning) services at Tezpur University, Napaam, Tezpur. Ref: Tender No. F.12-12/98 (Vol-III), (GA-II)Security/1. Hon'ble Sir, At first we wish to convey from our Agency A Very Happy New Year. That Hon'ble Sir, Self on behalf of our firm, most humbly and with profound respect wish to pray your honour for justice on the following mentioned points. (1) That Sir, we have submitted our tender for security and cleaning service on 11.12.2007. (2) That Sir, on 12.12.2007 at the time of opening the technical Bid we were stand on first position depending on all and every documents required on tender paper than the other two tender quoting parties, i.e. Sub Security Service, Guwahati and Suraksha Security Service Pvt. Ltd., Dibrugarh. (3) That Sir, on 20.12.2007, Financial Bid opened and we have seen that covering Govt. (3) That Sir, on 20.12.2007, Financial Bid opened and we have seen that covering Govt. norms including all, our firm was in first position quoting lowest rate with minimum 6.5% of agency charge where the other part quoted the rate following a circular which is not specified for Security Service by labour dept. with 10% agency charge. (4) That Sir, our Agency were asked for discussion on 27.12.2007 and discussion meeting was held in the office room of Hon'ble Registrar, Tezpur University. The topic of discussion with our agency was our background performance and development criteria of Security Service and we have not asked any quotation for rate negotiation from the Chairman of the Committee. That Sir, other present members were trying to quoting quotation on the matter of rate negotiation, but respected Chairman were seen to avoid the same by saying that it will be latter on and all. (5) That Sir, we have came to know over telephone of Tezpur University that finally the other part have selected for providing service. That Hon'ble Sir, we became so much astonished how this selection was made. For the mentioned points of view, we cordially wish to pray your honour to kindly give our agency the way of justice. Thanking you with keen anticipation. Yours faithfully North Eastern Security Service. 8. As per the aforesaid reply dated 03.01.2008, the University decided to award the contract to the respondent No. 4 at a negotiated rate on service charge. The reply also indicates that the fact that the respondent No. 4 is an ISO certified and DGR sponsored security service, also carried weight, which according to the petitioner could not have been taken into account, as the NIT no where specified that ISO certified and DGR sponsored security service provider would be preferred over others. 9. The respondent No. 4 as well as the respondent University have filed their affidavit-in-opposition. According to the respondent No. 4, the petitioner quoted rates of wages below the revised minimum rates. In this connection, it has referred to the letter dated 15.02.2003 and 01.09.2004 issued by Labour Commissioner, Assam. Further stand of the respondent is that 13.61%; 4.7% and 25.2% respectively are to be added to the rate of basic wages as employees provident fund contribution, contribution for employees state insurance and leave reserved charges respectively. 10. In this connection, it has referred to the letter dated 15.02.2003 and 01.09.2004 issued by Labour Commissioner, Assam. Further stand of the respondent is that 13.61%; 4.7% and 25.2% respectively are to be added to the rate of basic wages as employees provident fund contribution, contribution for employees state insurance and leave reserved charges respectively. 10. In the affidavit-in-opposition filed by the University, it is the stand that the wage structure should adhere to the Minimum Wages Act and as such quoting higher or lower rate than what is prescribed in the Minimum Wages Act is immaterial. According to the University, both the parties were called for negotiation and during discussion the respondent No. 4 was apprised of its lapses during the earlier engagement pertaining to the period from 01.09.2003 to 15.02.2005. On a total reading of the affidavit-in-opposition filed by the University, no definite stand towards awarding the contract to the respondent No. 4 is discernible. 11. In the affidavit-in-reply filed by the petitioner, it has specifically dealt with the contention of the respondent No. 4 relating to rate of wages at the prescribed rate. The petitioner has denied that the rate quoted by it is below the minimum wages prescribed under the law. The petitioner has denied the applicability of the letter dated 15.02.2003 on which the respondent No. 4 has placed reliance. Further stand of the petitioner is that the letter dated 01.09.2004 being in respect of contract labourers and having been issued by the authority of the State Government, same is not applicable, the University being a Central University. According to the petitioner, even otherwise also since the petitioner quoted rates more than the rates prescribed in the letter dated 01.09.2004, the plea of the respondent No. 4 that the rates offered by it do not conform to the prescribed rates falls through. 12. The petitioner has referred to the Annexures-P-1, P-2, P-3 and P-4 letters dated 07.09.2002, 26.11.2002, 14.12.2004 and 26.02.2004 issued by the Government of Assam in the Labour and Employment Department categorizing security guards as "skilled workers" and other workers as "unskilled workers" and for payment of minimum wages on that basis. The petitioner has also referred to the Annexure-P-5 letter dated 03.08.2007 issued by the Government of Assam in the Labour and Employment Department indicating the latest rates of minimum wages, which include the variable deaeress allowances (VDA). The petitioner has also referred to the Annexure-P-5 letter dated 03.08.2007 issued by the Government of Assam in the Labour and Employment Department indicating the latest rates of minimum wages, which include the variable deaeress allowances (VDA). According to the petitioner, the rates quoted by it having conformed to the requirements indicated in the letter, it cannot be said that the rates quoted by it were below the minimum rates envisaged under the Minimum Wages Act. It has also referred to the Annexure-P-6 circular dated 07.11.2007 issued by the Government of India in the Ministry of Labour and Employment specifying the minimum wages for highly skilled, skilled/clerical, semi skilled/unskilled supervisory and unskilled workers. According to the petitioner it has conformed to the requirements of minimum wages as fixed by the Central Government and the University beingaCentral University is bound by the Central Government wage structure. 13. I have heard Mr. J.M. Choudhury, learned Sr. Counsel assisted by Mr. N. Deka, learned Counsel for the petitioner as well as Mr. S.S. Dey alongwith Mr. M. Nath, learned Counsel representing the respondent No. 4. I have also heard Mr. N.C. Das, learned Sr. Counsel assisted by Mr. B. Choudhury, learned Counsel representing the University. Learned counsel for the parties exclusively referred to the rates quoted by the petitioner and the respondent No. 4 to justify their respective claim of conforming to the requirements of the Minimum Wages Act. Mr. Das, learned Sr. Counsel representing the University upon a reference to the records produced, submitted that there was nothing wrong in taking into account the added qualification of ISO certificate and DGR sponsorship of the respondent No. 4. He further submitted that the service charge initially quoted by the respondent No. 4 as 10% having been reduced to 6.5% upon negotiation, the rate quoted by it cannot be said to be in the higher side. 14. I have given my anxious consideration to the submissions made by the learned Counsel for the parties. I have also perused the materials on record. The records have revealed that the committee (Security Committee) in its meeting held on 27.12.2007 decided to award the contract to the respondent No. 4 at the negotiated rate on service charge, which was 8%, admittedly higher than the rate quoted by the petitioner, which is 6.5%. I have also perused the materials on record. The records have revealed that the committee (Security Committee) in its meeting held on 27.12.2007 decided to award the contract to the respondent No. 4 at the negotiated rate on service charge, which was 8%, admittedly higher than the rate quoted by the petitioner, which is 6.5%. The minutes of the meeting refer to assurance furnished by the respondent No. 4 upon negotiation to come to negotiated rates on service charge, charge allowances to Security Officer in-charge and Assistant Security Officer. On the other hand, the Committee noted the assurance of the petitioner to provide services as per terms and conditions prescribed. For a ready reference, the minutes of the meeting are quoted below: The Committee held discussion with the two short listed quotationers vice North Eastern Security Services and Sun Security Services. During discussion both the quotationer expressed their readiness to provide Security Services to the University if the contract is awarded. M/s. North Eastern Security Services assure to provide services as per term & condition prescribed. M/s. Sun Security assured to come to negotiated rate on service charge, charge allowances to Security Officer in-charge and Assistant Security Officer. The Committee after considering all aspects and also in view of the ISO certificate held by the Sun Security Services, decided to offer the contract of security service for one year on first chance to M/s. Sun Security Service. Rates be paid as per Govt. rates wherever applicable. If the firm does not accept the offer of modified rates as negotiated, the offer be awarded to the other agency, M/s. North Eastern Security Service. Rates recommended by the Committee are as follows: Rs. Per month Security Officer in charge 5831/- Assistant Security in charge 4838/- Security Guard (Ex-Servicemant Security Guard (Trained) 4401/- Security Guard (Trained) 4312/- In Addition Service charge @8% of total emolument Service tax @12.36% Wage as and when revised by the Government. 15. The Committee once again met on 31.12.2007 for further discussion in the matter and it reviewed its earlier decision. On a review it decided to offer the contract to the respondent No. 4 with charge allowances of Rs. 700/- and Rs. 500/- respectively for Security Officer in-charge and Assistant Security in-charge and at a reduced service charge of 6.5%. The Committee also decided that the other rates would be as per Govt. rates in force. On a review it decided to offer the contract to the respondent No. 4 with charge allowances of Rs. 700/- and Rs. 500/- respectively for Security Officer in-charge and Assistant Security in-charge and at a reduced service charge of 6.5%. The Committee also decided that the other rates would be as per Govt. rates in force. It was observed that if the rate was not acceptable to the respondent No. 4, the contract should be awarded to the petitioner. 16. After the aforesaid meetings of the Security Committee, the University authority made the offer to the respondent No. 4 to award the contract on the terms and conditions specified. The offer was made by letter dated 01.01.2008. In response to the letter, the respondent No. 4 by its letter dated 02.01.2008 accepted the offer. 17. The records produced by the University authority have revealed that the matter relating awarding of contract was processed by office note dated 24.12.2007 intimating that the comparative statement reflected merits/demerits of the rates quoted by the parties. Thereafter, it was decided to call the parties for discussion on 27.12.2007. Immediately after the discussion, the Committee held its meeting on the same date. The minutes of the meeting have been quoted above. Since the comparative statement, which was placed before the authority with the note appended thereto was the foundation of the entire process and has a bearing, same is quoted below: Notes 1. Service charges quoted by M/s North Eastern Security Service is the lowest (6.5%) compared to other two parties i.e. M/s. Sun Security Services and M/s Suraksha (both have quoted as 10%) 2. Rates for security personnel and cleaning staff quoted by M/s North Eastern Security Service are lowest and commensurate to Govt. Rules (D/W rates as per Labour laws) 3. Rates for security staff quoted by M/s Sun Security Service are higher and rates for cleaning staff are not as per Govt. D/W rules. The leave reserve rates for cleaning staff should be 7.32% instead of 25.21% 4. Rates quoted by M/s Suraksha for security and cleaning staff are not as per Govt. norms. 5. Rate (others) for insurance/convenience quoted by M/s North Eastern Security Service not acceptable and is to be settled through discussion. 6. D/W rules. The leave reserve rates for cleaning staff should be 7.32% instead of 25.21% 4. Rates quoted by M/s Suraksha for security and cleaning staff are not as per Govt. norms. 5. Rate (others) for insurance/convenience quoted by M/s North Eastern Security Service not acceptable and is to be settled through discussion. 6. Rates for security equipments quoted by M/s. North Eastern Security Service are lowest for all items in total quantity but unit cost for Motor Cycle is higher. This is to be negotiated for Rs. 300/- per month per unit. On the basis of C/S on rates quoted by the three firms, rates quoted by M/s North Eastern Security Service may perhaps be accepted with negotiation as mentioned in 5 and 6 above for security service and cleaning service. 18. It was on the basis of the aforesaid C/S and the note thereto the matter was processed and the parties were invited for negotiation. The meeting held on 27.12.2007, although observed that the petitioner expressed its readiness to provide security services to the University as per terms and conditions prescribed, but decided to award the contract to the respondent No. 4 on the negotiated rates on service charge, charge allowances etc. with further recommendation of rates noted above. As against the service charge of 6.5% quoted by the petitioner, the Committee recommended 8% in respect of the respondent No. 4. However, later on same was further reduced to 6.5%, which is the rate offered by the petitioner. Thus, naturally the petitioner has felt aggrieved. Further the rates recommended by the Committee in respect of the Security Officer in-charge, Assistant Security in-charge, Security Guard (Ex-service man) and Security Guard (Trained), which are Rs. 5831/-, 4838/-, 4401/- and 4312/- respectively are on the higher side than the rates quoted by the petitioner, which are Rs. 5381/-, 4638/-, 3676/- and 3676/- respectively. Negotiation to be had with the petitioner in respect of the items was indicated in the aforesaid note, but no such negotiation was held with it, although, it was the lowest bidder. 19. Even after the aforesaid position, the Security Committee struck the deal with the respondent No. 4 on the negotiated rates. There is nothing to indicate that any such meaningful negotiation was carried out with the petitioner, which admittedly was the lowest _ bidder. 19. Even after the aforesaid position, the Security Committee struck the deal with the respondent No. 4 on the negotiated rates. There is nothing to indicate that any such meaningful negotiation was carried out with the petitioner, which admittedly was the lowest _ bidder. It is also not discernible from the materials on record, more particularly, the minutes of the Security Committee meeting that the rates offered by the petitioner were not viable and/or did not conform to the requirement the Minimum Wages Act, rather it was noted that the petitioner was ready to provide services as per terms and conditions prescribed. Even after such a position, the Committee recorded the assurance of the respondent No. 4 to come to negotiated rate on service charge, charge allowances to Security Officer in-charge and Assistant Security Officer. It was on that basis, the respondent No. 4 was recommended alongwith further recommendation regarding rates noted above. 20. The case of the petitioner was not treated at per with that of the respondent No. 4. It was not the finding of the Committee that the petitioner was not ready to accept the negotiated terms. Moreover, question of such negotiated terms would have arisen only in the event of making the terms known to the petitioner. The minutes of the meeting also do not reflect any negotiation with the petitioner as per the suggestion made in the note appended to C/S. 21. For what has revealed from the records, it is really not necessary to address to the arguments advanced relating to the prescription of rates under Minimum Wages Act. The bid offered by the petitioner has not been rejected on the ground of being not viable and/or not conforming to the requirement of the Minimum Wages Act. In fact, no ground has been assigned by the Security Committee as to why the respondent No. 4, which admittedly offered higher bid than that of the petitioner should be preferred over the petitioner. It is true that the Committee took note of the fact that the respondent No. 4 is a ISO certificate holder, but that aspect of the matter, when considered with the other attending circumstances discussed above, cannot give any weightage to the respondent No. 4. It was also not indicated in the NIT that ISO certificate holder would be preferred and/or such a certificate is a condition precedent for getting the contract. 22. It was also not indicated in the NIT that ISO certificate holder would be preferred and/or such a certificate is a condition precedent for getting the contract. 22. Mr. Dey, learned Counsel for the respondent No. 4 referred to Clause 2.6 of the instructions to the bidder so as to argue that the ISO certificate being an added qualification, the tender committee was within its domain and jurisdiction to prefer the respondent No. 4 on that count. Clause 2.6 relates to furnishing of any additional information in separate sheet, which in the opinion of the bidder will highlight the added qualification and experience. I am of the considered opinion that the said clause cannot be said to have taken into its fold the ISO certificate. Had it been the intention of the authority to invite tenders only from the parties having had ISO certificate, same would have been clearly indicated in the NIT. The requirements of the NIT have been noted above. Clause 2.6 does not take into its fold the ISO certificate. The clause only entitles the tenderers to furnish additional information, which might be considered to be added qualification and experience. 23. The minutes of the Security Committee nowhere reflect that the respondent No. 4 was preferred over the petitioner because of the ISO certificate and/or the petitioner could not be considered since it did not possess the ISO certificate. Although, nothing adverse was recorded against the petitioner and rather it was recorded that the petitioner expressed its readliness to provide security service as per terms and conditions prescribed, but yet the recommendation was made in favour of the respondent No. 4 with further recommendation in respect of the rates to be provided. It was a one-sided affair, inspite of the fact that the petitioner was also invited for negotiation. In case of disagreement with the rates quoted by the petitioner in any of the items, same could have been sorted out through negotiation, its tender being the lowest, as was done with the highest bidder i.e. the respondent No. 4. In fact, the respondent No. 4 was chosen at the rate of service charge offered by the petitioner. 24. In the affidavit-in-opposition filed by the respondent University, certain observations have been made in respect of the past performance of the petitioner. The respondents cannot develop its case at a later stage by taking additional ground. In fact, the respondent No. 4 was chosen at the rate of service charge offered by the petitioner. 24. In the affidavit-in-opposition filed by the respondent University, certain observations have been made in respect of the past performance of the petitioner. The respondents cannot develop its case at a later stage by taking additional ground. As observed by the Apex Court in Mohinder Singh Gill v. Chief Election Commissioner reported in [1978] 2 SCR 272, validity of an order must be judged by the reasons mentioned in the order and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, gets validated by additional grounds later brought out. 25. From the discussions made above, there is no manner of doubt that the petitioner has been discriminated in the matter. Admittedly, the petitioner was the lowest bidder. The Security Committee in its meeting did not assign any reason as to why the lowest bid offered by the petitioner could not be accepted and also as to why in case of any necessity to strike a deal upon negotiation the said lowest bidder could not be made known the terms of negotiation. On the other hand the deal was struck with the respondent No. 4 on negotiated terms with further recommendation regarding rates and in the process the rate relating to service charge of 6.5% which the petitioner has offered, was offered to the respondent No. 4, which quoted the same at10%. 26. For all the foregoing reasons, discussions and findings, the matter needs fresh consideration of the respondent University consistently with the observations made above. Accordingly the writ petition is allowed by setting aside and quashing the order awarding the contract to the respondent No. 4. The matter shall now go back to the Security Committee of the University for a fresh decision in the matter in accordance with law. The fresh decision to be arrived at shall be as expeditiously as possible keeping in mind the interest of the University itself. The writ petition is allowed to the extent indicated above. There shall be no order as to costs. Petition allowed