S. S. Consultancy, (Out Sourcing, Manpower supply and Security Services) v. State of Telangana, Represented by its Principal Secretary, Department of Health, Medical and Family Welfare
2022-11-21
MUMMINENI SUDHEER KUMAR
body2022
DigiLaw.ai
ORDER : This Writ Petition is filed aggrieved by the action of respondent No.4 in issuing proceedings No. RC No.GMC/IHFMS/2022-23, dated 27.06.2022 awarding the work of providing Integrated Hospital Facility Management Services in Gandhi Medical College, Secunderabad, Hyderabad District, in the State of Telangana (hereinafter referred to as ‘the subject work’) in favour of respondent No.5 as illegal and arbitrary. 2. The facts of the case are that the respondent No.2 herein called for tenders for the ‘subject work’ through tender notice, dated 30.04.2022 and in response thereto the petitioner and respondent No.5 herein and another submitted their bids. After evaluation of the bids, the petitioner herein and respondent No.5 were found to be technically qualified for award of the work and after opening of the price bids, both the petitioner and respondent No.5 were found to have quoted the same price. In view of the same, in terms of tender condition, respondent No.5 herein is declared as successful bidder on the ground that the annual turnover of respondent No.5 is more than the turnover of the petitioner herein. Accordingly, respondent No.4 herein issued the impugned proceedings awarding the subject work to respondent No.5. Aggrieved by such award of work in favour of respondent No.5 herein, the present Writ Petition is filed. 3. Heard Sri A.K. Jayaprakash Rao, learned counsel appearing for the petitioners, learned Government Pleader for Medical, Health and Family Welfare and Sri Swaroop Oorilla, learned counsel appearing for respondent No.5. 4. It is contended by learned counsel for the petitioner that the bids submitted by respondent No.5 herein are not incompliance with the conditions of tender document as respondent No.5 failed to upload the work experience certificate on online e-Procurement Market Place as required under clause 1.1.3 of Section (1) of bid document and any failure to upload the required documents on e-Procurement Market Place will entail in disqualification of such bidders and the bids submitted by respondent No.5 ought not have been declared as qualified technically by the respondents. It is further contended that though the bid submitted by respondent No.5 is not complying with the requirements of the tender documents, the respondents have erroneously and for extraneous considerations, awarded the work in favour of respondent No.5 detrimental to the interest of the petitioner herein.
It is further contended that though the bid submitted by respondent No.5 is not complying with the requirements of the tender documents, the respondents have erroneously and for extraneous considerations, awarded the work in favour of respondent No.5 detrimental to the interest of the petitioner herein. It is also further contended that in terms of clause 1.1.3 read with 1.1.11, no offline submission of documents would be considered and the bids that are submitted devoid of proper documents or adequate information are liable to be rejected. According to learned counsel for the petitioner in the instance case the bid of respondent No.5 though was defective the same was not in compliance with the tender conditions, the respondent No.2 considered it erroneously and illegally. 5. Learned Government Pleader for Medical and Health submitted that respondent No.5 has submitted bid document by uploading the same on online e-Procurement Market Place except the work experience certificate and that the said work experience certificate was submitted by respondent No.5 offline. It is further submitted that having taken note of the fact that respondent No.5 failed to upload the experience certificate on online and after having received the same offline, respondent Nos.2 and 4 stated to have submitted a detailed report before respondent No.3 herein and as per the decision of respondent No.3 herein, the bid of respondent No.5 was considered and accordingly, the work was awarded in favour of respondent No.5. It is further submitted by learned Government Pleader that in view of the interim order passed by this Court on 12.09.2022, the previous contractor was asked to undertake to provide the services at Gandhi Medical College, Secunderabad till the disposal of the present Writ Petition. 6. The respondent No.5, filed counter affidavit contending that, the respondent No.5 has submitted all the required documents both online as well as offline, and after having considered the document submitted by respondent No.5, the authorities have declared respondent No.5 as successful bidder and awarded the work in favour of respondent No.5. 7. Sri Swaroop Oorilla, learned counsel appearing for respondent No.5, contended that even assuming that the past work experience certificate is not submitted by the petitioner online, the same is admittedly submitted offline and before the finalization of the tenders and the same is already considered by the respondents in their discretion and awarded the work in favour of respondent No.5.
Sri Swaroop Oorilla, learned counsel appearing for respondent No.5, contended that even assuming that the past work experience certificate is not submitted by the petitioner online, the same is admittedly submitted offline and before the finalization of the tenders and the same is already considered by the respondents in their discretion and awarded the work in favour of respondent No.5. It is also contended that, it is for the tender accepting authority whether to consider any such deviations from the tender conditions which are not of serious nature and which are also not mandatory conditions and in case if the authorities deviate from such tender conditions, thereby ensuring the substantial compliance with the tender conditions, it cannot be interfered with by this Court in exercise of jurisdiction under Article 226 of the Constitution of India. Thus, contending he placed reliance on various judgments of the Hon’ble Apex Court reported in Poddar Steel Corporation v. Ganesh Engineering Works and Others, (1991) 3 SCC 273 , Om Prakash Sharma v. Ramesh Chand Prashar & others, (2016) 12 SCC 632 , B.S.N. Joshi & Sons Ltd v. Nair Coal Services Ltd. & Others, (2006) 11 SCC 548 , Jagdish Mandal v. State of Orissa & Others, (2007) 14 SCC 517 . In Poddar Steel Corporation (supra) case, it was held as under: “It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank the clause no. 6 of the tender notice was not obeyed literally, but the question is as to whether the said non-compliance deprived the Diesel Locomotive Works of the authority to accept the bid. As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance. The requirements in a tender notice can be classified into two categories-those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly.
The requirements in a tender notice can be classified into two categories-those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. This aspect was examined by this Court in G.J. Fernandez v. State of Karnataka, (1990) 2 SCC 488 : ( AIR 1990 SC 958 ), a case dealing with tenders. Although not in an entirely identical situation as the present one, the observations in the judgment support our view. The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489 : ( AIR 1979 SC 1628 ), but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon. The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination. The judgment indicates that the Court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question. This part of the judgment demonstrates the difference between the two categories of the conditions discussed above. However it remains to be seen as to which of the two clauses, the present case belongs.” In Om Prakash Sharma v. Ramesh Chand Prashar & others ( supra), the Hon,ble Supreme Court held as under: “Now, the question that remains to be considered is whether requirement to furnish Annual Turnover and Net Worth for last three years was a mandatory condition for infraction of which the bid made by the appellant had to be rejected. In Poddar Steel Corporation v. Ganesh Engineering Works and Others, 1991 3 SCC 273 , this Court considered conditions which are essential conditions of eligibility and those which are ancillary or subsidiary with the main object to be achieved.
In Poddar Steel Corporation v. Ganesh Engineering Works and Others, 1991 3 SCC 273 , this Court considered conditions which are essential conditions of eligibility and those which are ancillary or subsidiary with the main object to be achieved. Thus, having referred to the case of Poddar Steel Corporation case it was further held as under: “In the present case, the site in question was to be sold on outright sale basis. The advertisement or the stipulations therein did not contemplate creation and or continuation of any relationship between the parties calling for continued existence of any particular level of financial parameters on part of the bidder, except the ability to pay the price as per his bid. The condition was not an essential condition at all but was merely ancillary to achieve the main object that was to ensure that the bid amount was paid promptly. The advertisement contemplated payment of bid amount whereafter the Sale Deed would be executed and not a relationship which would have continued for considerable period warranting an assurance of continued ability on part of the bidder to fulfill his obligations under the arrangement. Nor was this condition aimed at ensuring a particular level of financial ability on part of the bidder, for example in cases where the benefit is designed to be given to a person coming from a particular financial segment, in which case the condition could well be termed essential. The idea was pure and clear sale simplicitor. As a matter of fact, the appellant did pay the entire bid amount within the prescribed period and the Sale Deed was also executed in his favor. In the circumstances the relevant condition in the advertisement would not fall in the first category of cases as dealt with by this Court in Poddar Steel Corporation. The authorities could therefore validly deviate from and not insist upon strict literal compliance. The discretion so exercised by the authorities could not have therefore been faulted.
In the circumstances the relevant condition in the advertisement would not fall in the first category of cases as dealt with by this Court in Poddar Steel Corporation. The authorities could therefore validly deviate from and not insist upon strict literal compliance. The discretion so exercised by the authorities could not have therefore been faulted. Thus, the assessment made by the High Court that the condition in question was an essential condition for non-compliance of which, the bid furnished by the appellant was required to be rejected, in our view was not correct.” In B.S.N. Joshi & Sons Ltd v. Nair Coal Services Ltd. & Others (supra), the Hon’ble Supreme Court held as under : “We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under: i) If there are essential conditions, the same must be adhered to; ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction..
v) When a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with.” In Jagdish Mandal v. State of Orissa & Others ( supra), the Hon’ble Supreme Court held as under: “Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in 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 bona fide and is in public interest, 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 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. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone.
Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone. Whether the process adopted or decision made is so arbitrary and irrational that the court can say: 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.' ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing or imposition of penal consequences on a tendered/contractor or distribution of state largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.” 8. In order to appreciate the rival contentions, it is necessary to refer to certain clauses contained in the tender document as per the clause, which are extracted hereunder:- “1.1.3. Agencies would require to register on the e-Procurement Market Place “www.eprocurement.gov.in” and submit their bids online. The TIA will not accept any bid submitted in the paper form (No hard copies are accepted). 1.1.11. There is a tendency among some bidders to submit bids deficit of some documents. Bidders are cautioned that bids devoid of proper documents or adequate information are liable to be rejected. Tender may be rejected if it is not submitted by the date/time prescribed for acceptance and any of the documents listed are either not attached or attached but they are not in proper form/properly attested/not signed by authorized/competent person. Tender is also likely to be rejected if instructions for filing up the tender/submission of quotations annexed herewith, are not fully and properly adhered to. 1.1.12. Bids of firms who have furnished all the required documents alone will be considered. Utmost care should be taken to see that all the required/proper documents are uploaded as there will be no further chance for rectifying the defects/furnishing the missing documents. 4.2. Past Experience: Minimum experience of 3 years in sanitation and security services. If the agency is having experience only in sanitation services, the agency has to submit MOU with another agency having security services experience of 3 years and vice-versa. 4.2.1. Required General Past Experience: 1.
4.2. Past Experience: Minimum experience of 3 years in sanitation and security services. If the agency is having experience only in sanitation services, the agency has to submit MOU with another agency having security services experience of 3 years and vice-versa. 4.2.1. Required General Past Experience: 1. The bidder must have successfully executed/completed one work costing not less than the amount equal to Rs.18857664-00 (Eighty percent of the estimated cost of services per year) pertaining to sanitation and security services in any one year during last three financial years (2018-19, 2019-20 & 2020-21) OR 2. The bidder must have successfully executed/completed two works costing not less than the amount equal to Rs.11786040-00 (Fifty percent of the estimated cost of services per year) pertaining to sanitation and security services in any one year during last three financial years (2018-19, 2019-20 & 2020-21) OR 3. The bidder must have successfully executed/completed three works costing not less than the amount equal to Rs.9428832-00 (Forty percent of the estimated cost of services per year) pertaining to sanitation and security services in any one year during last three financial years (2018-19, 2019-20 & 2020-21) with facilities ranging from IT Parks, Hospitals, Institutional buildings (Govt. or Private), Shopping Malls and Residential buildings or any other infrastructure or public use such as Railway stations, stadiums etc. Note: The bidder should produce the proof of the above experience by submitting the copies of contracts executed by the bidder in the past with authorization of the concerned client.” 9. From the above extracted tender conditions, the experience as required under clause 4.2 and 4.2.1 is one of the eligibility criteria. Any tenderer in order to get qualify, is required to produce the certificates evidencing that they do possess the experience as is required under clause No.4. In terms of clause 1.1.3, every bidder or agency is required to register on the e-Procurement Market Place and submit their bids online. It is further clear from the said clause that the tender inviting authority will not accept any bid submitted in the paper form and no hard copies are accepted. Thus, it is clear that the entire bid document is required to be submitted on online e-Procurement Market place alone but not by way of hard copies or by way of offline.
Thus, it is clear that the entire bid document is required to be submitted on online e-Procurement Market place alone but not by way of hard copies or by way of offline. In terms of clause 1.1.11, the bidders are cautioned that the bids devoid of proper documents or adequate information are liable to be rejected. In terms of clause 1.1.12, the bids of forms who have furnished all the required documents alone will be considered and utmost care should be taken to see that all required documents are uploaded as there will be no further chance for rectifying the defects or furnishing the missing documents. Thus, the tender conditions are very clear that no missing documents can be supplied at later point of time, especially by way of hard copies or in offline mode. It is only the bid documents that are uploaded online alone will be considered and in case if any documents that are required to be uploaded or not uploaded, such tender document would entail rejection. 10. Though, in the counter affidavit, respondent No.5 had contended that it had complied with all the requirements of the tender conditions and uploaded the documents both online as well as offline, such contention is not seriously pursued during the course of arguments and the arguments are advanced on the premise that respondent No.5 has not uploaded the experience certificate online. Further, from the counter affidavit filed on behalf of respondent Nos.1, 2 and 4, it is evident that respondent No.5 herein failed to upload the experience certificate as required under the tender conditions. The relevant paragraphs from the counter affidavit of respondent Nos.1, 2 and 4 reads as under :- “It is respectfully submitted that all the documents were uploaded online and regarding work experience certificate has not been uploaded online by respondent No.5 i.e., M/s. Srinisatva Solutions and as per the endorsement of the District Collector and Magistrate Hyderabad on the note Dated:03.06.2022 the application of M/s. Srinisatva Solutions has been qualified for technically though the matter was brought to the notice of the District Collector and Magistrate Hyderabad in the detailed note submitted to him.
It is respectfully submitted that as per the endorsement of District Collector and Magistrate Hyderabad District the application of respondent No.5 has been considered to be qualified in technical grounds as all the documents were uploaded by respondent No.5 online except the work experience certificate. It is respectfully submitted that on specific endorsement of District Collector and Magistrate the tender submitted by respondent No.5 i.e., M/s Srinisatva has been considered to have qualified technically and financial bids were opened as per the endorsement of the District Collector and Magistrate, Hyderabad District on the note Dated: 25.06.2022 with a remarks “tender awarded to the agency as its turnover is highest among both” and the contract was awarded to M/s. Srinisatva Solutions.” 11. Thus, there is no dispute that respondent No.5 failed to upload the work experience certificate which is a primary document in order to claim eligibility to participate in the tender process. Though respondent Nos.2 and 4 agreed that respondent No.5 has not uploaded the work experience certificate online, the bid of respondent No.5 is stated to have been accepted by the respondents basing upon the decision taken by respondent No.3 herein. According to the said counter, a detailed report is placed before respondent No.3 and respondent No.3 herein stated to have declared respondent No.5 herein as qualified in the technical bid. Along with the counter affidavit, the respondents also placed before this Court, the report, dated 03.06.2022 submitted to respondent No.3. Respondent No.5 herein submitted a report with certain observations in respect of all the three bidders, who have participated in the tender process. The same are extracted hereunder for ready reference. “It is pertinent to submit that, as per the permission accorded by the District Collector and District Magistrate, Hyderabad through whatsapp message to open the technical bid, this office has opened the technical bid and found that, the following bidders have been participated in the bidding through e-procurement. 1. M/s SS Consultancy 2. M/s Srinisatva Solutions 3. M/s Quality Property Management Services Pvt. Ltd. Further, the Technical committee constituted purpose to evaluate has been examined the documents uploaded in online and offline and submitted their observations as follows: (Evolutions sheets enclosed for your perusal) Sl. No. Name of the Bidder Observations of the Committee Qualified/Disqualified 1. M/s SS Consultants NIL May be Qualified in the Technical Bid 2.
No. Name of the Bidder Observations of the Committee Qualified/Disqualified 1. M/s SS Consultants NIL May be Qualified in the Technical Bid 2. M/s Srini Sattva Solutions (i)The bidder has submitted experience in offline but not uploaded the experience certificate in online. (ii) The bidder has submitted MOU with the Phoenix for the Security Services, but the Phoenix is having the security license from the Government of AP, but not from the Government of Telangana. (iii) The Phoenix who is having experience in the field of Security is having license from the year 2021 only, but submitted experience since 2017 May be Qualified subject to ignore the observations based the fulfillment the same within three months if he the successful bidder 3. M/s Quality Property Management Pvt. Ltd. The bidder is not having the 3 years experience in the field of Sanitation and Security. May be disqualified In spite of the detailed report placed before respondent No.3 herein as above, without taking note of the observations made in respect of respondent No.5, an endorsement has been simply made on the said report stating as “Sl.No.1 and 2 qualified technically”. Financial bid can be opened immediately. 12. Basing upon the said endorsement made by respondent No.3, the price bid of respondent No.5 is also opened by respondent Nos.2 and 4 and he was ultimately awarded the work. From the observations as contained in the report submitted to the respondent No.3, it is seen that respondent No.5 submitted experience certificate offline, but not uploaded online and a defect is also found in respect of the experience certificate. In spite of the same respondent No.3 herein, without assigning any reasons and without there being compliance with the requirements of the tender conditions, erroneously declared respondent No.5 to be qualified. Even the said recommendation by respondent Nos.2 and 4 through the said report is subject to respondent No.5 fulfilling the deficiencies within three (03) months, in case if he is declared as successful bidder. The respondent Nos.2 and 4 having pointed out the defects in the bid submitted by the respondent No.5 in their report, erroneously recommended for qualifying the same and respondent No.3, without application of mind in a mechanical manner declared the respondent No.5 as qualified in the Technical Bid.
The respondent Nos.2 and 4 having pointed out the defects in the bid submitted by the respondent No.5 in their report, erroneously recommended for qualifying the same and respondent No.3, without application of mind in a mechanical manner declared the respondent No.5 as qualified in the Technical Bid. The said defects and insufficiency in the tender submitted by respondent No.5 are totally ignored by respondent Nos.2 to 4 while issuing the impugned proceedings. 13. Further, from the combined reading of clauses 1.1.3, 1.1.11 and 1.1.12 it is evident that the bidders are sufficiently cautioned about necessity of uploading/submitting all the documents online and also were put on notice that no hard copies will be accepted. It is also made clear that there will be no further chance to rectifying the defects or to furnish the missing documents, and any such infirmity and failure to upload the documents may result in rejection of the bid. In spite of the same, no explanation is coming forth from the respondents in technically qualifying the respondent No.5. Further, it is also not the case of the respondents that any public interest is better served by choosing the respondent No.5, when its bid does not satisfy the tender conditions, especially when other bidder who satisfied all the norms and tender condition is very much available. Hence, the reliance placed on the Judgments of the Hon’ble Apex Court by the learned counsel for respondent No.5 is of no avail as the case on hand is a case of not having the requisite qualification and is a case of non-compliance with mandatory conditions of tender document. 14. In the light of the above, facts and circumstances and for the aforementioned reasons this Court has no hesitation to hold that respondent Nos.1 to 4 have acted arbitrarily and exercised the discretion not vested in them. 15. Coming to the contention of learned counsel for respondent No.5 that the respondent No.5 has substantially complied with the requirements of the tender conditions by submitting the experience certificate offline much before processing of the tenders and that the respondents have exercised their discretion and accepted the said deviation from the tender conditions cannot be accepted as the very purpose of imposing the tender conditions as noted above will be defeated and any such lenience shown towards the discretion exercised by respondent Nos.1 to 4 will lead to arbitrary exercise of power.
The reliance placed on the various judgments by learned counsel for respondent No.5 as noted above have no application to the facts of the present case especially in the context of the fact that respondent Nos.2 to 4, while considering the qualification of respondent No.5, have made an observation that in case of respondent No.5 being declared as successful bidder, he may be required to comply with the requirements of the tender conditions within a period of three (03) months. Such an observation presupposes that respondent No.5 is not qualified in the technical bid. The said lacunae, as pointed out in the report dated 03.06.2022, is not at all explained by respondent No.5 in its counter affidavit. Even during the course of the arguments, on being pointed out by the Court, there is no explanation coming forth from the respondents in this regard. Thus, it is not a case of substantial compliance as contended by learned counsel for respondent No.5, but the same is a case of submission of a bid by respondent No.5, which is not satisfying the bid conditions and the eligibility criteria as required under the Bid document. 16. In the light of the above and for the reasons aforementioned the Writ Petition is allowed and the impugned proceedings dated 27.06.2022 is set aside with a further direction to respondent Nos.1 to 4 to take immediate steps for processing the tender submitted by the petitioner for awarding the subject work and complete the same within a period of three (03) weeks from the date of receipt of a copy of this order. As a sequel, miscellaneous petitions, pending if any in this Writ Petition, shall stand closed. There shall be no order as to costs.