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2016 DIGILAW 290 (UTT)

Men Power Security Agency (Regd. ) v. State of Uttarakhand

2016-06-30

V.K.BIST

body2016
JUDGMENT : Counter affidavit has been filed on behalf of respondent nos.2 and 3 in the Court today. Same is taken on record. 2. By means of this writ petition, the petitioner has sought following reliefs: (i) Issue a writ, order or direction in the nature of certiorari quashing the order dated 22.06.2016 passed by respondent no.3 (Annexure No.1 to the writ petition). (ii) Issue a writ, order or direction in the nature of mandamus directing the respondent no.1, 2 and 3 to give the effect financial bid given by the petitioner. (iii) Issue a writ, order or direction in the nature of mandamus directing the respondents not to change the Men Power of the M/s Men Power Security Agency (Regd.) working in the different Samitis in State of Uttarakhand, during the final decision of this writ petition. (iv) Issue any other suitable writ, order or direction which this Hon’ble Court may deem fit and proper in the circumstances of the case. (v) Award the cost of the writ petition in favour of the petitioner. 3. Petitioner has challenged the order dated 22.06.2016 passed by respondent no.3 by which the petitioner has been asked to remove manpower from the establishment of respondent nos.1 to 3 w.e.f. 30.06.2016. Petitioner is a registered firm and running the business of E.S.M. (Recruiting Agency) in the name and style of M/s Men Power Security Agency (Regd.) in Kham Garden, Nainital Road, Haldwani, District Nainital. Petitioner was awarded the contract for supply of manpower in the year 2012 for a period of one year, which subsequently was renewed and extended till 30.06.2016. In the year 2016, respondent nos.2 and 3 did not extend the period of contract with the petitioner and issued an advertisement on 10.5.2016 for supply of manpower, wherein the petitioner also participated. According to the petitioner, as per the advertisement, the tender was to be opened on 25.05.2016 at 03:30PM in the presence of all the applicants, but on the said date, the tender was not opened by respondent no.2 due to non-presence of all the Board members and another date, i.e., 28.05.2016, was given. According to the petitioner, thereafter nothing was done and, subsequently a letter was given to the petitioner on 31.05.2016, stating that at present the work of taking manpower, after inviting tender, is under process and requested the petitioner to provide manpower till further orders. According to the petitioner, thereafter nothing was done and, subsequently a letter was given to the petitioner on 31.05.2016, stating that at present the work of taking manpower, after inviting tender, is under process and requested the petitioner to provide manpower till further orders. The bid of respondent no.4 being the lowest was accepted; the petitioner was second lowest. Vide impugned order dated 22.06.2016, the petitioner has been asked to remove manpower by 30.06.2016. 4. Mr. M.S. Pal, learned Senior Counsel appearing for the petitioner submitted that the letter dated 31.05.2016 clearly shows that the work of taking manpower by inviting tenders was under process and, therefore, respondent nos.2 and 3 should have invited fresh tenders; however respondent nos.2 and 3 entered into contract with respondent no.4. It is the contention of learned Senior Counsel that this conduct of respondent nos.2 and 3 is unfair and the work of government undertaking should be transparent. 5. Learned Senior Counsel for the petitioner referred a recommendation of the Tender Committee dated 28.05.2016 and submitted that when the Tender Committee has recommended the rates of respondent no.4, respondent nos.2 and 3 should have mentioned this fact in the letter dated 31.05.2016. 6. In support of his contentions, learned Senior Counsel for the petitioner has placed reliance upon a judgment of the Hon’ble Apex Court passed in the case of Larsen and Toubro Limited and another vs. Union of India and others reported in (2011) 5 SCC 430 , wherein at para-20 & 21, it is held as under: “20. Having heard the learned counsel for the respective parties, we are satisfied that the High Court did not commit any error in dismissing the writ petition filed by the petitioners, since in the absence of compliance with the terms and conditions relating to firm and fixed price offer, the petitioners stood excluded from consideration. The offer in this regard made by Respondent 4 satisfies the requirements of a firm and fixed offer, since once the commercial bids were opened, there was no further scope of the rates being altered, which was not so in the case of the petitioners, which tried to make its bid responsive while withdrawing the initial offer and substituting the same with another. 21. 21. As far as the decision in Ramana Dayaram Shetty’s case is concerned, the same does not in any way help the petitioners’ case and, on the other hand, has very clearly laid down that where tenders are invited for grant of government contract, the standard of eligibility laid down in the notice for tenders could not be changed arbitrarily as that would be hit by the provisions of Article 14 of the Constitution. It was also observed by this Court that an executive authority has to be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observed those standards on pain of invalidation. It has been repeatedly stated by this Court that every action of the executive Government must be informed with reason and should be free from arbitrariness, the same being the very essence of the rule of law. The said decision, in fact, supports the case of Respondent 4.” 7. Learned counsel appearing for respondent no.4 has raised a preliminary objection and contended that the writ petition is not maintainable as in pursuance of advertisement/tender notice dated 10.05.2016, contract has been awarded to respondent no.4 and an agreement has been executed between respondent nos.2 and 3 and respondent no.4 to this effect; and that said consequential contract has not been challenged by the petitioner. 8. Learned counsel appearing for respondents no.2 and 3 has denied the contentions of the petitioner and has stated at para-7 of the counter affidavit that on 25.05.2016 the bid document could not be opened as on 25.05.2016 all the members of the board were not present. On 24.05.2016 it was notified that the bid documents would be opened on 28.05.2016 at 3.30 P.M. On 28.05.2016, the bid of respondent no.4 being the lowest was accepted. It is further submitted that the bid of respondent no.4 and the petitioner has been quoted in the writ petition, a comparison of which clearly reveals that respondent no.4 was L1 and therefore his bid was accepted. It is submitted that bid of respondent no.4 was found lowest. It is further submitted in the counter affidavit that the petitioner had been working with Uttarakhand Agricultural Produce Marketing Board since 2012 and his contract was extended from 2012-2013 till 2015-2016 continuously. On 30.03.2015, the last rates were approved by the board. It is submitted that bid of respondent no.4 was found lowest. It is further submitted in the counter affidavit that the petitioner had been working with Uttarakhand Agricultural Produce Marketing Board since 2012 and his contract was extended from 2012-2013 till 2015-2016 continuously. On 30.03.2015, the last rates were approved by the board. It is further submitted that negotiations were conducted with respondent no.4 wherein he agreed to increase the wages of workmen to what was being paid by the petitioner. It is further submitted that after negotiations respondent no.4 agreed to provide manpower at the same rate which was provided by the petitioner so that the Government Order dated 06.03.2013 is not violated which provides for minimum wages. The service charge of respondent no.4 was @ 3.5% whereas petitioner was charging the same @ 10%, this has benefitted the board. Even in the tender for 2016-17 petitioner has quoted service charge @ 5%. It is further submitted that Uttarakhand Procurement Rules (Annexure C.A.4) also permit negotiations and as per chapter 1 clause 9 negotiations can be done only with L1 and not with any other bidder. It is further submitted that petitioner was very well aware that his tenure had ended and therefore a fresh advertisement was issued on 10.05.2016 wherein the petitioner also participated. As regards the order dated 31.05.2016, it is submitted that a perusal thereof clearly reveals that tender process was on. On 28.05.2016, the bid of respondent no.4 was accepted and the contract was executed on 21.06.2016. Respondent no.4 could not immediately start from 29.05.2016 until a valid agreement was entered between him and Uttarakhand Agricultural Produce Marketing Board. Petitioner was only requested to provide manpower until further orders and it is clarified that the process was never shelved or revoked. The process continued and respondent no.4 has been awarded the contract. It is also submitted that petitioner has not challenged the said consequential contract and therefore on this ground the writ petition is not maintainable. 9. In support of his contentions, learned counsel for respondent nos.2 and 3 has also placed reliance upon a judgment of Hon’ble Apex Court passed in the case of Air India Ltd. Vs. Cochin International Airport Ltd. And others reported in (2000) 2 SCC 617 , wherein at Para-7, it is held as follows: “7. 9. In support of his contentions, learned counsel for respondent nos.2 and 3 has also placed reliance upon a judgment of Hon’ble Apex Court passed in the case of Air India Ltd. Vs. Cochin International Airport Ltd. And others reported in (2000) 2 SCC 617 , wherein at Para-7, it is held as follows: “7. The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in R.D. Shetty v. International Airport Authority, 1979 (3) SCC 488 ; Fertilizer Corporation Kamgar Union v. Union of India, ; Asstt. Collector, Central Excise v. Dunlop India Ltd., Tata Cellular v. Union of India, ;. Ramniklal N. Bhutta v. State of Maharashtra, and Raunaq International Ltd. v. I.V.R. Construction Ltd.,. The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are of paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the Court can examine the decision making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. Even when some defect is found in the decision making process the Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The Court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the Court should intervene.” 10. Learned counsel for respondent nos.2 and 3 has further submitted that now an agreement has been executed between respondent no.4 and respondent nos.2 and 3 which will be applicable w.e.f. 01.07.2016. He further submitted that the petitioner has a remedy of making a representation to the Managing Director as per clause no.25 of the tender document. 11. I have heard submissions of learned counsel for the parties. The main submission of the learned Senior Counsel is that once the respondent nos.2 and 3 has issued letter dated 31.05.2016 the contract could not be awarded in favour of respondent no.4 and, in fact, fresh tenders should have been invited. I have carefully read letter dated 31.05.2016. Although the said letter speaks about the invitation of tender and speaks that the process of taking of manpower is on, but if the same letter is read in toto, it does not state in any specific term that the earlier tender has been cancelled. 12. In respect of the contention of learned Senior Counsel that the letter also does not speak about the acceptance of the tender of respondent no.4 and that the respondent nos.2 and 3 should have mentioned the facts that the rates quoted by respondent no.4 has already been accepted, in my opinion, is not a serious mistake, on the basis of which, the tender awarded in favour of respondent no.4 can be cancelled. Furthermore, tender awarded in favour of respondent no.4 cannot be cancelled as the contract executed between respondent no.4 and respondent nos.2 and 3 has not been challenged, and in the absence of the same, no order can be passed in favour of the petitioner. 13. Furthermore, tender awarded in favour of respondent no.4 cannot be cancelled as the contract executed between respondent no.4 and respondent nos.2 and 3 has not been challenged, and in the absence of the same, no order can be passed in favour of the petitioner. 13. So far as the judgment cited by learned Senior Counsel is concerned, the same is of no help to the petitioner as in Larsen’s case (Supra) the petitioner’s commercial bid, although lowest, was rejected as the petitioner had not completed the formalities. However, in the case at hand, the respondent no.4, being the lowest bidder, had complied with the terms and conditions of the contract. 14. In Air India’s case (supra) cited by learned counsel for respondent nos.2 and 3, observation has been made by Hon’ble Apex Court that unless there is mala fide the judicial review is not called for. In the present case, no mala fide is pointed out. 15. In view of the above discussion, I dispose of the writ petition leaving it open to the petitioner to make a representation before respondent no.2-Managing Director today itself. If such a representation is made, respondent no.2 shall decide the same within a period of one week from today, in accordance with law, after affording opportunity of hearing to all the parties concerned. 16. There will be no order as to costs. 17. Let certified copy of the order be supplied to the parties today itself.