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Himachal Pradesh High Court · body

2021 DIGILAW 952 (HP)

GLOBAL MANPOWER AND SANITATION SERVICE, THROUGH ITS DIRECTOR AND AUTHORIZED SIGNATORY v. STATE OF H. P. THROUGH ITS SECRETARY HEALTH TO THE GOVERNMENT OF HIMACHAL PRADESH, SHIMLA

2021-12-15

MOHAMMAD RAFIQ, SABINA

body2021
ORDER : Since all these writ petitions are raising identical question of law and facts, therefore, the same are heard together and are being disposed of by this common order. 2. For the sake of convenience, the facts of CWP No.2916 of 2021, titled M/s Global Manpower and Sanitation Service versus State of H.P. and others, are being taken for deciding these writ petitions. CWP No.2916 of 2021 3. According to the facts of that petition, the petitioner is engaged a duly enlisted Contractor for providing skilled and unskilled manpower on outsource basis in the State of Himachal Pradesh. The respondents vide e-Tender Notice dated 08.04.2021, invited tenders from the registered firms or any legal entities for providing sanitation services for the Civil Hospital Bhawarna, District kangra, H.P. The last date for submissions of the tender document was 03.05.2021. According to the petitioner, as he was eligible for participating in the said tender process, he submitted his bid alongwith all the requisite documents. As per the tender document Annexure P-5, the list of the documents which was to be attached/uploaded with the technical bid, was filed by the petitioner-Firm alongwith tender documents. The petitioner claims to have submitted the certificate of the registration of the firm alongwith the licence with the labour authority, EPF authority and details of the employees with the firm apart from ESI registration, GST registration and EPF registration. Apart from these documents, the petitioner also claims to have furnished an undertaking as per format Annexure P-3. 4. The respondents opened the technical bid on 04.05.2021 and conveyed to the petitioner on 11.05.2021 that his bid has been rejected on technical ground that since he failed to submit an undertaking, as depicted in Sr. No.16 of the technical bid evaluation report. 5. Ms. Seema Guleria, learned counsel for the petitioner, has referred to Sr. No.16 of the Tender Bid Technical Evaluation. According to her, the firm/agency upload an undertaking on the organization letter head that: (i) That firm/agency shall deploy medically fit personnel’s and shall also bear expenses of routine check-up of its personnel’s; (ii) The bidder must be having its office in Himachal Pradesh at the time of applying for the tender. No.16 of the Tender Bid Technical Evaluation. According to her, the firm/agency upload an undertaking on the organization letter head that: (i) That firm/agency shall deploy medically fit personnel’s and shall also bear expenses of routine check-up of its personnel’s; (ii) The bidder must be having its office in Himachal Pradesh at the time of applying for the tender. The certificate to the above effect, under the Labour and Contract Act/Shops & Commercial Establishment Act/Company Act, must be attached with the Tender Document; (iii) That firm/agency shall be able to deploy at least 70% Himachali; and (iv)That there is no case pending with the police or any investigating agency against the Proprietor/Firm/Agency/Partner and the firm/agency has not been blacklisted by the Government or Non-Government organization. Learned counsel submitted that the petitioner has furnished all these declarations/undertakings alongwith the requisite documents as required in terms of Annexures 3 to 10 of the bid document. The petitioner also filed the details of its registration as required under Clause-(ii)(iv) of Serial No.16, as mentioned above. 6. Referring to Check List, Annexure P-2, the learned counsel for the petitioner submitted that document Serial No.16(i) and 16(iii) were never directed to be filed by the respondents, even then the respondents have illegally rejected the technical bid of the petitioner for want of documents. As regards the petitioner’s claim as per Annexure P-6, alongwith declaration that the petitioner has not been blacklisted, the same was also filed alongwith the tender document, which is placed on record as Annexure P-5 (colly). The action of the respondents in rejecting the technical bid of the petitioner is highly arbitrary and discriminatory. It is intended to give undue advantage and favour to their favourities in violation of the Procurement Rules. The respondents have illegally ousted the petitioner from competition by rejecting his technical bid on the ground that he had failed to file the document as per Clause 16(i) & 16(iii) of the tender document, whereas, as per the tender documents, no such document was required to be filed by the petitioner, neither was there any written direction to the petitioner nor even the Evaluation Committee raised any such objection prior to technical bid. The respondents have acted against the public policy. The evaluation of the bid has to be done as per the tender document which requires the bidders to file certain documents to prove their eligibility. The respondents have acted against the public policy. The evaluation of the bid has to be done as per the tender document which requires the bidders to file certain documents to prove their eligibility. The Evaluation Committee cannot include any new document as the mandatory requirement. 7. Mr. Ajay Vaidya, learned Senior Additional Advocate General, submitted that as per the mandatory terms and conditions of the tender document at Sr. No.49, which the petitioner has referred to as Clause-16, the service provider was required to upload an undertaking on the letter head of the organization to the effect: (i) that firm/agency shall deploy medically fit personnel’s and shall also bear expenses of routine check-up of its personnel’s; (ii) that bidder must be having its office in Himachal Pradesh at the time of applying for the tender. The certificate to the above effect, under the Labour and Contract Act/Shops & Commercial Establishment Act/Company Act, must be attached with the Tender Document; (iii) that firm/agency shall be able to deploy at least 70% Himachali; and (iv) that there is no case pending with the police or any investigating agency against the Proprietor/Firm/Agency/Partner and the firm/agency has not been blacklisted by the Government or Non-Government organization. It is contended that as per the information gathered by respondent No.3, the petitioner, alongwith the other firms, have submitted their documents for participating in the e-Tendering process. However, the meeting of the local e-Tender Opening-cum-Evaluation Committee of respondent No.3, after making the technical evaluation of the bids of all the participating firms, declared four of them, including the firm of the petitioner, as technically disqualified firms, for its failure to adhere to the requirement of providing undertaking on the letter head of the organization in terms of the above referred to mandatory Condition in Clause 49 of the tender document. The tender has, therefore, rightly been rejected in respect of the petitioner-firm on technical ground by the duly constituted Tender Scrutiny Committee at the level of the Chief Medical Officer, Kangra. 8. Learned Senior Additional Advocate General, in support of his arguments, has relied upon the Supreme Court judgments in cases titled Jagdish Mandal versus State of Orissa and others, reported in (2007) 14 SCC 517 and Michigan Rubber (India) Limited versus State of Karnataka and others, reported in (2012) 8 SCC 216 . 9. 8. Learned Senior Additional Advocate General, in support of his arguments, has relied upon the Supreme Court judgments in cases titled Jagdish Mandal versus State of Orissa and others, reported in (2007) 14 SCC 517 and Michigan Rubber (India) Limited versus State of Karnataka and others, reported in (2012) 8 SCC 216 . 9. We have given our anxious consideration to the rival submissions made and gone through the record. 10. The petitioner-firm has itself placed on record the Check List of the documents to be attached with the technical bid, Clauses 1, 9 & 10 whereof, read as under:- “01. I, the undersigned certify that I have gone through all the terms and conditions mentioned in the tender document and undertake to comply with them. 02 to 08. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 09. Damage of hospital property if any, due to lapse on my part/my staff may be recovered from me. 10. Should any lapse occur on my part or on my staff while discharging the services the hospital authorities may cancel my contract and award the work to another agency and the costs difference may be recovered from me and can forfeit security money.” 11. The respondents-State, in their reply, have placed on record the complete Model E-Tender Document for Outsourcing of Sanitation Services in the Hospitals/Health Institutions of the State, vide Annexure R-1/T. This is accompanied by the instructions for submission of cost of tender document and earnest money deposit. It also provides that the e-tender document shall be uploaded in two parts, i.e. Pre-qualification/Eligibility Bid & Financial Bid/Price Bid/BOQ. The eligibility criteria for participation in the tender has been incorporated therein. The terms and conditions at Item No.49, are enumerated as under:- “49. Service provider will upload an Undertaking on organization letter head: (i) That firm/agency shall deploy medically fit personnel’s and shall also bear expenses of routine check-up of its personnel’s. (ii) The bidder must be having its office in Himachal Pradesh at the time of applying for the tender. The certificate to the above effect, under the Labour and Contract Act/Shops & Commercial Establishment Act/Company Act, must be attached with the Tender Document. (iii) That firm/agency shall be able to deploy at least 70% Himachali. (iv) That there is no case pending with the police or any investigating agency against the Proprietor/Firm/Agency/Partner and the firm/agency has not been blacklisted by the Government or Non-Government organization.” 12. (iii) That firm/agency shall be able to deploy at least 70% Himachali. (iv) That there is no case pending with the police or any investigating agency against the Proprietor/Firm/Agency/Partner and the firm/agency has not been blacklisted by the Government or Non-Government organization.” 12. It would be evident from the above that service provider was mandatorily required to upload an undertaking on the letter head of the organization to the effect that: (i) the firm/agency shall deploy medically fit personnel’s and shall also bear expenses of routine check-up of its personnel’s, (ii) the bidder must be having its office in Himachal Pradesh at the time of applying for the tender. The certificate to the above effect, under the Labour and Contract Act/Shops & Commercial Establishment Act/Company Act, must be attached with the Tender Document, (iii) the firm/agency shall be able to deploy at least 70% Himachali and (iv) there is no case pending with the police or any investigating agency against the Proprietor/Firm/Agency/Partner and the firm/agency has not been blacklisted by the Government or Non-Government organization. 13. It is not disputed before us that the petitioner failed to furnish the undertaking to the above aspect on the letter head of the organization. The Supreme Court in Jagdish Mandal’s case (supra), has elaborately dealt with the scope of interference by the High Court under Article 226 of the Constitution of India, in the contractual matters. It was held that when the power of judicial review is invoked in the matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bonafide and is in public interest, the Courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or the contractor with a grievance can always seek damages in a Civil Court. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or the contractor with a grievance can always seek damages in a Civil Court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade Courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. 14. Their Lordships further held that the argument to the effect that the tender of the lowest bidder was rejected on the ground that it was defective, as not being accompanied by a valid earnest money deposits, when the action was challenged by the concerned bidder, the Supreme Court in that case interfered in the matter by way of judicial review and noted that the Tender Committee, before consideration of tenders, receiving a complaint alleging tampering and manipulation in the postal TD account passbook submitted as EMD, sought confirmation from Postal Department as to whether the TD Passbook was genuine and valid. The Superintendent of Post Offices replied that the passbook in respect of the tender document should not be acted upon. Thus, treating the tender to be defective in absence of a valid EMD, the Committee rejected the same. The Supreme Court held that the limited question that had to be examined by the High Court in exercise of its power of judicial review was whether the decision of the Committee and consequential rejection of the lowest tenderer’s tender was irrational, unreasonable or arbitrary. Since the act in question of the Committee was not arbitrary and unreasonable, no interference therewith was called for. The High Court was held to have erred in interfering with the said decision after relying on a contradictory police report submitted during the pendency of the writ petition. 15. Since the act in question of the Committee was not arbitrary and unreasonable, no interference therewith was called for. The High Court was held to have erred in interfering with the said decision after relying on a contradictory police report submitted during the pendency of the writ petition. 15. In Michigan Rubber (India) Limited’s case supra, also dealing with the scope of interference by the High Court in exercise of the powers under Article 226 of the Constitution of India, the Supreme Court held that the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance, being exercised within the purview of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities. For fixation of a value of the tender is entirely within the purview of the executive and Courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, the scope of interference by the Courts is very limited. 16. As regards the matter of formulating conditions of a tender document for awarding a contract, their Lordships held that the greater latitude is required to be conceded to the State authorities. Unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted. It was held that certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work and that if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, the interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government. The Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, malafide or actuated by bias, only with regard to that the Courts would interfere. The Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, malafide or actuated by bias, only with regard to that the Courts would interfere. The Courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. 17. In the present case, it is not in dispute that the petitioner, while furnishing the undertaking in terms of Clause 49 with the Notice Inviting Tender (NIT), failed to abide by the requirement of uploading such undertaking on the letter head of the organization and therefore, the respondents uniformly, not only in respect of the petitioner-firm but also in respect of other three firms, have taken the decision by rejecting all such technical bids. 18. In view of the aforesaid discussion/observations, we do not find any infirmity in the action of the respondents, so as to justify interference in exercise of power of judicial review by this Court under Article 226 of the Constitution of India. Consequently, the writ petition is dismissed. Interim order dated 13.05.2021, passed by this Court, shall stand vacated. 19. Pending miscellaneous applications, if any, shall also stand disposed of. CWPs No. 2917, 2918 & 2919 of 2021 20. In view of the dismissal of CWP No.2916 of 2021, raising similar question of law and facts, these writ petitions are also dismissed. Interim orders passed by this Court in these writ petitions on 13.05.2021, shall stand vacated. 21. Pending miscellaneous applications, if any, shall also stand disposed of.