Murali Manpower Agencies Rep. By Its Proprietor Muralidhar Chikkala v. Union Of India, Rep. By Its Secretary, Ministry Of Labour And Employment
2026-01-21
NAGESH BHEEMAPAKA
body2026
DigiLaw.ai
ORDER : NAGESH BHEEMAPAKA, J. Petitioner - M/s Murali Manpower Agencies, a sole proprietorship concern registered under the provisions of the Micro, Small and Medium Enterprises Act, 2006 is engaged in the business of providing manpower services including security services, housekeeping services and other ancillary services to various establishments. Petitioners contend that they have at all times conducted their business strictly in accordance with the requirements of law and statutory compliances. 1.1. It is contended that in 2023, pursuant to the tender floated by the 3rd Respondent for providing security services across the Employees State Insurance Corporation Medical College and Hospital Campus situated at Sanathnagar, Hyderabad, Telangana, contract was awarded in favour of Petitioners vide Contract dated 31.01.2023. Accordingly, Petitioners commenced providing security services in terms of the said contract and discharged their obligations to the satisfaction of the Respondent authorities. In January 2024, the 3 rd Respondent issued proceedings extending the aforesaid contract till 31.03.2024 or till finalisation of a new contract by the Respondent authorities, whichever was earlier. Thus, Petitioners were existing service providers and stood already adjudged technically and financially competent by the Respondent authorities themselves. 1.2. It is contended, while Petitioners were continuing to render services, the 3 rd Respondent floated a fresh Tender dated 28.08.2025 through the Government e-Marketplace Portal for providing security services at the Employees State Insurance Corporation Medical College and Hospital, Sanathnagar, Hyderabad, for one year with total value of the contract as INR 12,47,20,021/-. Tender was uploaded on the Government e- Marketplace Portal, which is a centralized platform facilitating on line procurement of goods and services for Government departments, organizations and public sector undertakings. Petitioners participated in the said tender process and submitted their technical bid on 08.09.2025. 1.3. It is the specific contention of Petitioners that the 2nd Respondent issued binding Guidelines dated 14.11.2024 for engagement of contractual manpower in establishments run by the Employees State Insurance Corporation (ESI) which prescribe the technical eligibility criteria evaluation methodology and mark break-up to be followed while awarding tenders. Bid Document dated 28.08.2025 itself makes reference to and relies upon the Guidelines dated 14.11.2024, thereby expressly admitting that the tender process is governed by the said Guidelines. Consequently, the 3 rd Respondent was bound to strictly adhere to the provisions and framework prescribed under the said Guidelines while framing the tender conditions and while evaluating the bids.
Bid Document dated 28.08.2025 itself makes reference to and relies upon the Guidelines dated 14.11.2024, thereby expressly admitting that the tender process is governed by the said Guidelines. Consequently, the 3 rd Respondent was bound to strictly adhere to the provisions and framework prescribed under the said Guidelines while framing the tender conditions and while evaluating the bids. Upon opening and scrutiny of the technical bids submitted pursuant to the Tender dated 28.08.2025, the 4 th Respondent Committee shortlisted 15 bids out of 62; on completion of technical evaluation, the 4 th Respondent Committee furnished its report allocating marks to the shortlisted bidders, wherein Petitioners were awarded 77 out of 100 marks. 1.4. It is contended that one of the technical evaluation parameters under the tender pertained to the average annual turnover of the bidder for the previous three financial years. As per the tender conditions, a bidder was to be awarded 10 marks if the average annual turnover was above INR 49,89,00,000/- and less than INR 54,97,90,000/-, and 12 marks if the average annual turnover was above INR 59,86,80,000/- and less than INR 64,85,70,000/-. The average annual turnover of Petitioners for the previous three financial years was INR 60,55,57,475/-, as certified by a certificate dated 05.09.2025. Despite the Petitioners' turnover being far in excess of the contract value, the 3rd Respondent awarded only 12 marks under the turnover criterion. The Guidelines dated 14.11.2024 permit only three slabs for turnover-based scoring, namely 10 marks, 15 marks and 20 marks. Contrary thereto, Tender dated 28.08.2025 introduced ten different slabs ranging from 10 to 20 marks, including intermediate slabs such as 11, 12, 13, 14, 16, 17, 18 and 19 marks. Petitioners contend that such deviation is ex facie contrary to the binding Guidelines dated 14.11.2024 and is therefore illegal. 1.5. It is further contended that the minimum turnover requirement of INR 49,89,00,000/- and the maximum turnover limit of INR 99,78,00,000/- prescribed under the tender are grossly disproportionate to the contract value of INR 12,47,20,021/-. Petitioners contend that turnover criteria are intended only to ensure financial capacity to execute the contract and must be proportionate. The impugned criteria are arbitrary, irrational and contrary to the CVC Guidelines governing public procurement. Under the experience criterion prescribed, a bidder was entitled to be awarded 20 marks if it had executed more than five contracts in the relevant field.
The impugned criteria are arbitrary, irrational and contrary to the CVC Guidelines governing public procurement. Under the experience criterion prescribed, a bidder was entitled to be awarded 20 marks if it had executed more than five contracts in the relevant field. Petitioners stated, six operational contracts executed in the relevant field, duly supported by Proforma-D and documentary evidence. Despite submission of six eligible contracts, the 3 rd Respondent awarded only 15 marks instead of the entitled 20 marks, without any lawful justification. Such reduction of marks is stated to be deliberate and intended to prejudice the technical evaluation of Petitioners. 1.6. Under the guise of prescribing the nature of documents to be submitted, the 3 rd Respondent illegally introduced an additional eligibility condition requiring that only experience certificates or work orders pertaining to ongoing operational security contracts involving deployment of a minimum of 40 outsourced contractual personnel per contract would be considered. Such a condition finds no place in the Guidelines dated 14.11.2024 and is therefore illegal. Even assuming such a condition to be applicable, Petitioners had fully complied with the same and they had deployed more than 40 personnel under all six contracts by engaging relievers and additional manpower as mandated under labour laws. The actual deployment always exceeds the numbers mentioned in work orders due to statutory requirements relating to weekly offs, leave and relievers. 1.7. It is contended that one of the contracts relied upon by Respondents pertains to Survey of India, where the work order mentions deployment of 34 personnel. The said figure represents only the minimum requirement and that actual deployment exceeded 40 personnel. The Respondent authorities were fully aware of this practice. Even the 2 nd Respondent itself had issued work order for deployment of 210 personnel for security services for 2024-25 but actually required deployment of 261 personnel to comply with labour laws, demonstrating that actual deployment always exceeds work order figures. It is contended that on 29.10.2025, immediately upon declaration of technical evaluation results, Respondent authorities proceeded to open the financial bids without granting a minimum window of forty-eight hours to enable bidders to seek clarification or redressal of grievances. Petitioners therefore, are stated to have addressed e mail dated 29.10.2025 and raised a grievance ticket objecting to the technical evaluation.
It is contended that on 29.10.2025, immediately upon declaration of technical evaluation results, Respondent authorities proceeded to open the financial bids without granting a minimum window of forty-eight hours to enable bidders to seek clarification or redressal of grievances. Petitioners therefore, are stated to have addressed e mail dated 29.10.2025 and raised a grievance ticket objecting to the technical evaluation. After technical evaluation, seven bidders including Petitioners were shortlisted for submission of financial bids Petitioners contended their financial bid quoting a total amount of INR 12,47,19,081.85/-. 1.8. It is contended that five out of the seven shortlisted bidders, including Petitioners, quoted identical amount of INR 12,47,19,081.85/- and thus emerged as H1 bidders. Despite the same, Respondent authorities declared the 5 th Respondent as the successful bidder. Pursuant to awarding contract in favour of the 5 th Respondent, the 2 nd Respondent issued Communication dated 11.11.2025 extending Petitioners' existing contract till 30.11.2025. Since five bidders quoted identical financial bids, the technical score became determinative. Due to illegal reduction of marks under the turnover and experience criteria, Petitioners were awarded only 70 marks, whereas had the Guidelines dated 14.11.2024 been followed, they would have secured 90 marks in the technical evaluation. 1.9. It is contended that as per Order dated 23.03.2012 issued by the Development Commissioner. MSME, out of the 20% annual procurement target earmarked for MSMEs, a sub- target of 20% is reserved for MSMEs owned by Scheduled Caste and Scheduled Tribe entrepreneurs. Petitioners are an MSME entity owned by individuals belonging to Scheduled Caste and Scheduled Tribe categories and, having emerged as HI bidder, the contract would have been awarded in their favour but for the illegal technical evaluation. The GeM Portal also considers additional parameters such as bidder rating and proximity to the place of service. Petitioners hold a 5-star rating on the GeM Portal and are situated in close proximity to the ESIC Medical College and Hospital, Sanathnagar. 1.10. It is contended that the ESIC Hospital (Hyderabad) Contract Workers Union submitted a Complaint dated 18.02.2025 before the Central Vigilance Commission against the 5 th Respondent alleging illegal removal of employees and illegal monetary demands for reinstatement, specifically naming one Mr. Mahesh, HR Manager of the 5 th Respondent. Despite pendency of such serious allegations, Respondent authorities proceeded to award the tender in favour of the 5th Respondent.
Mahesh, HR Manager of the 5 th Respondent. Despite pendency of such serious allegations, Respondent authorities proceeded to award the tender in favour of the 5th Respondent. Petitioners therefore, submitted detailed representation dated 14.11.2025 bringing to the notice of Respondent authorities the illegal conditions imposed in the Tender dated 28.08.2025. It is contended that in a tender floated on 17.10.2025 for the ESIC Super Specialty Hospital, Respondents followed the Guidelines dated 14.11.2024 and prescribed only three turnover slabs, namely INR 4.25 crores to INR 8.50 crores for 10 marks, INR 8.50 crores to INR 12.75 crores for 15 marks, and above INR 12.75 crores for 20 marks. Guidelines dated 14.11.2024 mandate adoption of QCBS with 70% weightage for non- financial parameters and 30% for financial parameters, whereas the Tender dated 28.08.2025 reverses the ratio to 30:70, which is contrary to the Guidelines and illegal. The stipulation denying MSME exemptions in the bid document is also illegal. 1.11. It is contended that Petitioners continue to render security services and their contract has been extended till 31.12.2025, thereby demonstrating their continued technical and financial capability to execute the work under the impugned tender. Respondents' contention that objections raised by the Petitioners are an afterthought is incorrect, as the illegality became apparent only upon declaration of the technical evaluation. The Petitioners had raised issues during the pre-bid stage and by email dated 29.10.2025, which were ignored. It is therefore contended that the action of the Respondent authorities in awarding contract pursuant to Tender dated 28.08.2025 bearing No. GEM/2025/B/6488045 in favour of the 5th Respondent is arbitrary, illegal, violative of Articles 14 and 19 of the Constitution of India, contrary to the doctrine of level playing field and principles of natural justice. 2. By order dated 14.11.2025, this Court directed both the parties to maintain status quo in all respects. 3. Respondent No. 3 filed counter opposing the Writ Petition and contending that the entire tender process pursuant to Tender dated 28.08.2025 was conducted strictly in accordance with law, in a fair, transparent and objective manner through the Government e-Marketplace Portal. The tender process was designed to ensure transparency, competitive pricing and optimal utilisation of public funds, particularly in the sensitive sector of healthcare.
The tender process was designed to ensure transparency, competitive pricing and optimal utilisation of public funds, particularly in the sensitive sector of healthcare. It is asserted that there was no irregularity, arbitrariness, bias or mala fide in the tender process and Petitioners, being unsuccessful bidders, have approached this Court with false, misleading and exaggerated allegations with an ulterior motive. 3.1. It is contended that Petitioners, having participated in the tender process with full knowledge of the tender conditions, eligibility criteria, evaluation methodology and scoring mechanism, are estopped from subsequently challenging the same after being unsuccessful. According to Respondents, a bidder who has voluntarily accepted tender conditions and participated in the process cannot, after failing to secure the contract, turn around and question the very conditions which were uniformly applied to all bidders. 3.2. It is stated, the scope of judicial review in tender and contractual matters is extremely limited. Reliance in this regard is placed on the judgment of the Hon'ble Supreme Court in Tata Cellular v. Union of India , (1994) 6 SCC 651 , wherein it was laid down that Courts should exercise restraint in administrative matters, should not sit as appellate authorities over tender decisions, and should interfere only where the decision-making process is vitiated by arbitrariness, bias, mala fides or perversity. None of these grounds are made out in the present case. 3.3. It is contended that public tenders are commercial transactions and Government must have freedom of contract, subject only to the requirement of fairness and reasonableness. Courts lack technical expertise to evaluate tender decisions taken by expert committees and that interference at an advanced stage of the tender process would impose heavy administrative and financial burdens on the State and result in loss to the public exchequer. The 3rd Respondent contends that tender dated 28.08.2025 was governed not only by internal guidelines but primarily by the Manual for Procurement of Non- Consultancy Services issued by the Department of Expenditure, Ministry of Finance, Government of India, which came into force with effect from 20.06.2025. It is asserted that as per Clause 1.3 of the said Manual, the provisions are binding on Central Government Ministries, Departments, attached and subordinate offices, autonomous bodies and statutory bodies, including the Respondent organization. 3.4.
It is asserted that as per Clause 1.3 of the said Manual, the provisions are binding on Central Government Ministries, Departments, attached and subordinate offices, autonomous bodies and statutory bodies, including the Respondent organization. 3.4. According to this respondent, the Manual for Procurement of Non-Consultancy Services expressly applies to outsourcing of services and that the tender in question squarely falls within its ambit. The Manual provides a comprehensive framework governing bid invitation, qualification criteria, technical evaluation, financial evaluation and Quality-cum-Cost Based Selection (QCBS) methodology. The tender document dated 28.08.2025 clearly stipulated that bid would be evaluated on the basis of QCBS methodology and that the ratio of technical to financial weightage was fixed at 30:70 in strict compliance with Clause 4.3.2.4 of the Manual. The said clause mandates that the maximum weightage for non-financial parameters shall not exceed 30%. The Respondents assert that the QCBS ratio adopted in the tender is therefore lawful and valid. 3.5. It is further contended that Respondent No.3 constituted a Technical Committee in terms of Clause 4.3.2.6 of the Manual. The said Technical Committee was entrusted with the task of recommending the technical parameters, their respective weightage, scoring methodology and minimum qualifying scores. The recommendations of the Technical Committee were accepted by the Competent Authority and were duly incorporated into the tender document. Thus, it is contended that all due procedures prescribed under the Manual were meticulously followed. Petitioners attended the pre-bid meeting held on 08.09.2025 through their representative and did not raise any objection whatsoever regarding the QCBS ratio, turnover criteria or scoring methodology at that stage. Having failed to object at the pre-bid stage and having accepted the tender conditions, Petitioners cannot now challenge the same after being unsuccessful. 3.6. It is contended that turnover requirement prescribed under the tender was fixed in accordance with Clause 5.1.9.1(c) of the Manual for Procurement of Non- Consultancy Services, which permits prescription of average annual turnover ranging between three to seven times the estimated cost of the contract. Since contract value was INR 12,47,20,021/-, the minimum average turnover was fixed at INR 49,89,00,000/-, which is approximately four times the contract value. According to the Respondents, the turnover requirement is thus reasonable, proportionate and lawful. Technical evaluation was carried out strictly in accordance with the tender conditions. Out of 62 bids received, 15 were shortlisted after preliminary scrutiny.
Since contract value was INR 12,47,20,021/-, the minimum average turnover was fixed at INR 49,89,00,000/-, which is approximately four times the contract value. According to the Respondents, the turnover requirement is thus reasonable, proportionate and lawful. Technical evaluation was carried out strictly in accordance with the tender conditions. Out of 62 bids received, 15 were shortlisted after preliminary scrutiny. Thereafter, upon verification of documents uploaded on GeM Portal, seven bidders were found technically qualified and eight bidders were disqualified. Marks were awarded to the qualified bidders strictly as per the mark break- up stipulated in the tender document. 3.7. It is contended that Petitioners allegation regarding illegal introduction of turnover slabs is misconceived, as the mark break-up for average annual turnover was clearly delineated in Chapter-1, Clause 3(A) of the tender document. Petitioners, having accepted the said criteria prior to submission of bids, cannot now contend that the same is illegal or arbitrary. Under the experience criterion, the tender document specifically required submission of proof of operational (live) contracts in security services involving deployment of a minimum of 40 outsourced contractual personnel in a single contract. As per Proforma-D, only five of the six contracts submitted by the Petitioners satisfied this criterion and were therefore eligible for consideration. It is contended that with respect to the sixth contract relied upon by Petitioners, namely the contract awarded by the Additional Surveyor General, NIGST, Survey of India, Uppal, Hyderabad-500039, Petitioners misrepresented that 40 security personnel were deployed. However, as per the actual contract document, the sanctioned manpower was only 34 security personnel. On account of such misrepresentation, Petitioners were rightly awarded only 15 marks instead of 20 under the experience criterion. 3.8. It is contended that Petitioners have not only misled Respondent authorities but have also attempted to mislead this Court by suppressing the correct manpower figures contained in the Survey of India contract. According to Respondents, this misrepresentation by itself disentitles Petitioners from any equitable relief under Article 226 of the Constitution of India. The allegation regarding hurried opening of financial bids is baseless. The tender was processed entirely through GeM Portal, and after completion of technical evaluation, the portal automatically proceeds to the financial evaluation stage. There is no mandatory requirement under the GeM framework to provide a 48-hour window for grievance redressal prior to opening of financial bids.
The allegation regarding hurried opening of financial bids is baseless. The tender was processed entirely through GeM Portal, and after completion of technical evaluation, the portal automatically proceeds to the financial evaluation stage. There is no mandatory requirement under the GeM framework to provide a 48-hour window for grievance redressal prior to opening of financial bids. It is contended that financial evaluation was conducted strictly in accordance with the QCBS methodology. The final score was computed by normalising the technical score and financial score and applying the prescribed formula, namely Final Score (0.3 Technical Score)+(0.7 Financial Score). The bidder securing the highest composite score was declared successful. 3.9. It is contended that Petitioners' claim of having emerged as H1 hidder is misleading, as the tender was not awarded solely on the basis of lowest financial quote. Respondents assert that the 5th Respondent emerged as the successful bidder based on the highest final composite score under QCBS methodology and not merely on the basis of financial bid. It is contended that the Petitioners reliance on MSME status and SC/ST ownership is misconceived. According to Respondents, there is no automatic entitlement to award of contract merely on the basis of MSME status or reservation claims, particularly when the tender conditions expressly stipulated that no exemptions would be granted. It is contended that Respondents are not in a position to verify the authenticity of GeM Portal ratings and proximity parameters relied upon by the Petitioners, as such criteria are determined by GeM authorities, who are not parties to the present proceedings. 3.10. It is contended that the entire tender process was undertaken strictly in conformity with the prevailing public procurement guidelines and that the Petitioners' challenge is an afterthought raised only after they failed to secure the contract. Petitioners, having participated in the tender without demur, lack locus to challenge the tender conditions post facto. Writ Petition has been filed with an intent to mislead this Court and to stall the implementation of the tender. It is pointed out that the existing contract is expiring on 30.11.2025 and that continuation of interim orders would severely affect the functioning of the hospital and disrupt essential healthcare services. 3.11.
Writ Petition has been filed with an intent to mislead this Court and to stall the implementation of the tender. It is pointed out that the existing contract is expiring on 30.11.2025 and that continuation of interim orders would severely affect the functioning of the hospital and disrupt essential healthcare services. 3.11. It is contended that Employees State Insurance Corporation Medical College and Hospital is a Central Government hospital providing essential services to patients and that public interest and continuity of healthcare services must prevail over private commercial interests of an unsuccessful bidder. Any delay in commencement of services by the successful bidder would result in irreparable harm to the public at large. 4. Respondent No.5 filed a detailed counter contending that Petitioners have not demonstrated any violation of their constitutional or fundamental rights and have failed to establish any public law element justifying invocation of writ jurisdiction. According to them, Writ Petition is based entirely on disputed questions of fact, including technical evaluation, scoring and ranking, which cannot be adjudicated in writ proceedings. On this ground alone, the writ petition is stated to be misconceived and liable to be dismissed. 4.1. Respondent No. 5 contends that they are professionally-managed private limited company established in 2006 having 18 years of experience in the field of security services with branch offices across 11 States including New Delhi, Maharashtra, Uttar Pradesh, Bihar, Gujarat, Jharkhand, Telangana, Rajasthan, Andhra Pradesh, Chandigarh and Chhattisgarh. It is further contended that they manage more than 5,500 security personnel across India and successfully partnered with more than 100 Central and State Government departments, with a sustained growth rate of 50 to 80%. 4.2. Respondent No.5 participated in Tender dated 28.08.2025 facilitated by Respondent No.2, for providing unarmed security services at a healthcare facility for a contract period of one year, with an estimated bid value of INR 1,24,72,00,21.44/-. They submitted its bid diligently and furnished all documents, certifications and particulars strictly in accordance with the tender conditions. A total of 62 bidders participated in the said tender. Upon preliminary scrutiny, 15 bidders were shortlisted and out of those, 7 bidders were found technically qualified. It is contended that technical scores of 7 qualified bidders ranged between 70 and 90 marks.
A total of 62 bidders participated in the said tender. Upon preliminary scrutiny, 15 bidders were shortlisted and out of those, 7 bidders were found technically qualified. It is contended that technical scores of 7 qualified bidders ranged between 70 and 90 marks. Among these 7 bidders, top five were placed in H1 category, while the remaining two were categorized as H2 and H3 respectively, strictly in accordance with the evaluation criteria prescribed under the tender document. 4.3. It is further contended, Tender Evaluation Committee shortlisted 15 bidders out of 62 based on verification of documents uploaded on the Government e-Marketplace Portal. Upon such scrutiny, Respondent No.5 was found technically-compliant and was duly shortlisted along with other eligible bidders. It is asserted that the evaluation was objective, uniform and non-discriminatory. It is contended that the challenge raised by Petitioners to the technical criteria relating to average annual turnover and mark break-up system is wholly untenable. According to Respondent No.5, the technical criteria uniformly applied to all 62 bidders and the determination of eligibility criteria and allocation of marks falls exclusively within the domain of Respondents 2 to 4. Petitioners, having participated with full knowledge of the criteria, cannot challenge the same after being unsuccessful. 4.4. Respondent No.5 contends that tender document, particularly pages 5 and 7, clearly prescribed the methodology for awarding marks based on the average annual turnover of the preceding three financial years. Petitioners themselves admitted that their average annual turnover was INR 64,85,70,000/-, for which they were rightly awarded 12 marks strictly as per the tender conditions. The annual turnover of Respondent No.5 is substantially higher than that of Petitioners, hence they were rightly awarded 20 marks under the turnover criterion. Respondent No.3, as the procuring organization, had absolute authority to prescribe the tender methodology and evaluation parameters. The competent authority constituted a Tender Evaluation Committee, which applied the prescribed scoring methodology uniformly to all bidders based on documents submitted. No deviation or preferential treatment is alleged or established. 4.5. Respondent No.5 disputes Petitioners' claim that execution of more than five contracts automatically entitles a bidder to 20 marks. It is contended that tender required submission of present operational contracts in the relevant field. While Petitioners submitted six contracts, one was not accepted by the competent authority.
No deviation or preferential treatment is alleged or established. 4.5. Respondent No.5 disputes Petitioners' claim that execution of more than five contracts automatically entitles a bidder to 20 marks. It is contended that tender required submission of present operational contracts in the relevant field. While Petitioners submitted six contracts, one was not accepted by the competent authority. In contrast, Respondent No.5 submitted eight currently operational contracts, of which seven involved deployment of more than forty outsourced contractual personnel. Respondent No.5 and Petitioners were evaluated strictly under the same criteria. Respondent No.5, having scored higher marks under the prescribed parameters and having been found more suitable, was rightly placed above the Petitioners in the technical evaluation. Respondent No.5 further contends that the tender prescribed separate criteria for total experience and experience in Government, Semi-Government and Public Sector Undertakings. Any company with more than 10 years of total experience was entitled to 15 marks, and any company with more than 10 years of experience in the relevant field in Government, Semi-Government or PSUs was entitled to 20 marks. Respondent No.5, being registered in 2006 and continuously engaged in the relevant field, fully satisfied both criteria and was rightly awarded the corresponding marks. 4.6. It is contended that Respondent No.5 had no role whatsoever in the processing or evaluation of the tender. The entire process was conducted through the GeM Portal, which automatically progresses through evaluation stages based on predefined system protocols. All evaluations were therefore independent, objective and transparent. It is admitted that five out of the seven shortlisted bidders, including Petitioners and Respondent No.5, quoted an identical financial bid of INR 12,47,19,081.85/-. However, Respondent No.5 emerged as the successful H1 bidder on account of securing the highest technical score among the H1 bidders and was therefore ranked at the top. Respondent No.5 secured 90 out of 100 marks in the technical evaluation, whereas Petitioners secured only 77 marks and were rightly placed in the H2 category. Petitioners, having been aware of the tender conditions and having participated voluntarily, cannot challenge the process merely because the outcome was unfavourable to them. Respondent No.5 further contends that it also possesses a valid MSME certificate. Petitioners' SC/ST MSME status, by itself, cannot override a technically-superior bidder, particularly where technical score is the prescribed tie-breaker and the top bidder is equally MSME compliant. 4.7.
Respondent No.5 further contends that it also possesses a valid MSME certificate. Petitioners' SC/ST MSME status, by itself, cannot override a technically-superior bidder, particularly where technical score is the prescribed tie-breaker and the top bidder is equally MSME compliant. 4.7. It is contended that Petitioners' existing contract, extended till 30.11.2025, does not create any vested or legitimate right to secure the new contract. Such extension is only a stopgap arrangement and cannot be relied upon in a fresh tender process. Respondent No.5 further contends that themselves and Petitioners participated in an earlier tender dated 21.05.2025 issued by ESIC for providing Healthcare Sanitation Services. In that tender, Petitioners secured HS rank, Respondent No.5 secured H2 rank, and the contract was awarded to BVG India Limited as H1 bidder. It is contended that the tender dated 21.05.2025 contained the very same selection criteria and turnover-based scoring slabs ranging from 10 to 20 marks, identical to the tender dated 28.08.2025. Despite the uniform application of identical criteria, the Petitioners did not challenge the earlier tender and have chosen to challenge the present tender only because the evaluation did not yield a favourable result. 4.8. Respondent No.5 places reliance on the judgments of the Hon'ble Supreme Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. , (2016) 16 SCC 818 , Jagdish Mandal v. State of Orissa , (2007) 14 SCC 517 and MS Michigan Rubber (India) Ltd. v. State of Karnataka , (2012) 8 SCC 216 , to contend that mere disagreement with tender evaluation does not warrant judicial interference and that courts must defer to the tendering authority unless mala fides, arbitrariness or perversity is established. It is finally contended that Writ Petition is a clear attempt by a disgruntled and unsuccessful bidder to derail a lawfully concluded and transparent tender process on speculative allegations. Respondent No.5 asserts that its selection as the highest qualifying H1 bidder is strictly in conformity with the tender conditions and applicable law and that the Writ Petition deserves dismissal. 5. Heard Sri Raja Sripathi Rao, learned Senior Counsel on behalf of Sri Pasham Mohith, learned counsel for petitioners, Sri N. Bhujanga Rao, learned Deputy Solicitor General on behalf of Respondent No.1, Sri G. Venkateshwarlu, learned Standing Counsel for Respondents 2 to 4, and Sri Madan Mohan Rao, learned Senior Counsel appearing on behalf of Sri M.P.K. Aditya, learned counsel for Respondent No.5. 6.
6. At the outset, the undisputed factual position that emerges from the record is that Tender dated 28.08.2025 was admittedly governed by the Guidelines dated 14.11.2024 issued by the 2nd Respondent for engagement of contractual manpower in establishments run by the Employees State Insurance Corporation. The bid document itself contains a specific reference acknowledging the applicability of the said Guidelines. Having expressly adopted the Guidelines dated 14.11.2024 as the governing framework, Respondents were bound to adhere to the same in letter and spirit while formulating the tender conditions as well as while undertaking the technical evaluation. 7. A careful examination of the Guidelines dated 14.11.2024 reveals that the turnover-based evaluation criterion is exhaustively prescribed therein. The Guidelines consciously restrict the mark break-up for turnover to only three slabs, namely 10, 15 and 20 marks. The object of such restricted slabs is clearly to prevent arbitrary gradation, eliminate subjectivity and ensure uniformity and fairness in technical evaluation across ESIC establishments. However, in the present tender dated 28.08.2025, the 3 rd Respondent introduced as many as ten different slabs ranging from 10 to 20 marks. This departure is not a minor procedural deviation but a substantive alteration of the evaluation framework prescribed under the binding Guidelines. Significantly, no material has been placed on record by Respondents to demonstrate that any approval, relaxation or deviation from the Guidelines dated 14.11.2024 was obtained from the competent authority. In the absence of such approval, unilateral introduction of multiple turnover slabs by the 3 rd Respondent clearly ultra vires the Guidelines which admittedly govern the tender. Once the Guidelines are held to be binding, Respondents cannot selectively apply or ignore portions thereof to suit the outcome of the tender process. 8. This Court also finds considerable force in the contention of Petitioners with respect to the turnover requirement prescribed under the tender. The minimum average annual turnover of INR 49,89,00,000/- has been stipulated for a contract whose total value is only INR 12,47,20,021/-. Such a requirement is nearly four times the contract value. Even assuming that the Manual for Procurement of Non-Consultancy Services relied upon by Respondents is applicable, the said Manual itself mandates that technical criteria must be relevant, reasonable and proportional to the scope and value of the contract and should not be framed in a manner that excludes otherwise competent bidders. 9.
Even assuming that the Manual for Procurement of Non-Consultancy Services relied upon by Respondents is applicable, the said Manual itself mandates that technical criteria must be relevant, reasonable and proportional to the scope and value of the contract and should not be framed in a manner that excludes otherwise competent bidders. 9. In the present case, Petitioners demonstrated that their average annual turnover is far in excess of the contract value and that they are already performing the very same work as existing service providers. In such circumstances, fixation of an excessively high turnover threshold, coupled with an artificial gradation of marks, cannot be justified on the touchstone of proportionality. The principle of proportionality, which has now become an integral facet of Article 14, stands clearly violated. 10. The Court further finds merit in the challenge to the experience criterion adopted by Respondents. Imposition of an additional requirement that only those operational contracts involving deployment of a minimum of 40 outsourced personnel per contract would be considered for awarding full marks is not traceable either to the Guidelines dated 14.11.2024 or to any statutory provision. The Guidelines do not contemplate any such numerical threshold relating to manpower strength in a single contract. 11. The material placed on record by Petitioners, including wage registers, pay slips and other statutory records, prima facie establishes that actual deployment of manpower exceeded 40 personnel by accounting for relievers and statutory compliance under labour laws. Reliance solely on the manpower figures mentioned in work orders, while completely ignoring the actual manpower deployed on the ground, reflects a clear non- application of mind and mechanical evaluation. Such an approach defeats the very purpose of assessing technical capability and experience. 12. The allegation of misrepresentation levelled against Petitioners by Respondents also does not stand to judicial scrutiny. Except for a bald assertion based on figures mentioned in one work order, no cogent material has been produced to discredit the documentary evidence furnished by Petitioners. On the contrary, the contemporaneous wage registers and pay slips lend credence to Petitioners' assertion regarding actual deployment. In the absence of clear and convincing material, the serious allegation of misrepresentation cannot be sustained. 13. The Court also takes note of the fact that in the present tender, five out of seven shortlisted bidders quoted identical financial bids. In such a scenario, technical evaluation assumes decisive and determinative significance.
In the absence of clear and convincing material, the serious allegation of misrepresentation cannot be sustained. 13. The Court also takes note of the fact that in the present tender, five out of seven shortlisted bidders quoted identical financial bids. In such a scenario, technical evaluation assumes decisive and determinative significance. When the outcome of the tender hinges substantially on technical scores, any illegality, arbitrariness or deviation from prescribed norms at the stage of technical evaluation vitiates the entire selection process. Petitioners demonstrated that, but for the illegal grading and arbitrary denial of marks, and the failure of the Evaluation Committee to consider their status as an MSME entity belonging to the SC/ST category despite their emergence as H1 bidders, they would have secured substantially higher technical scores. 14. It is true that the scope of judicial review in tender matters is limited and that courts ordinarily refrain from interfering in commercial decisions of the State. However, it is equally well-settled that such self-imposed restraint does not operate as an absolute bar. Where the tender conditions or the evaluation process are found to be arbitrary, discriminatory, irrational or in direct contravention of binding guidelines, this Court would be failing in its constitutional duty if it declines to intervene. 15. In the present case, cumulative effect of the deviations from the Guidelines dated 14.11.2024, disproportionate turnover requirement, introduction of extraneous eligibility conditions, and mechanical manner in which the technical evaluation was undertaken clearly demonstrates arbitrariness and violation of the doctrine of level playing field. The Court is also constrained to observe that the Evaluation Committee did not apply its mind to the Petitioners' status as an MSME entity belonging to the SC/ST category, despite Petitioners having emerged as one among the H1 bidders. The failure to consider such a material and relevant aspect, while finalising the technical evaluation, renders the process not only procedurally flawed but substantively unfair. The tender process, therefore, stands vitiated at the stage of technical evaluation itself. 16. This Court is therefore of the considered view that the impugned action of Respondents in evaluating the technical bids and in awarding the tender pursuant to Tender dated 28.08.2025 cannot be sustained in law. Petitioners have made out a clear case for interference under Article 226 of the Constitution of India. 17.
16. This Court is therefore of the considered view that the impugned action of Respondents in evaluating the technical bids and in awarding the tender pursuant to Tender dated 28.08.2025 cannot be sustained in law. Petitioners have made out a clear case for interference under Article 226 of the Constitution of India. 17. For the foregoing reasons and in view of the detailed discussion hereinabove, this Court holds that the tender conditions as well as the technical evaluation carried out pursuant to Tender dated 28.08.2025 bearing No. GEM/2025/B/6488045 are in clear derogation of the binding Guidelines dated 14.11.2024 issued by the 2 nd Respondent. The deviations in the formulation of eligibility criteria, the arbitrary manner of technical evaluation, and the failure of the Evaluation Committee to consider the Petitioners' MSME status and their belonging to the SC/ST category, despite their position as H1 bidders, reflect non-application of mind, lack of proportionality and institutional unfairness. The impugned action, therefore, violates the mandate of Article 14 of the Constitution of India. 18. In the result, the Writ Petition is allowed. The action of Respondents in awarding tender pursuant to Tender dated 28.08.2025 bearing No. GEM/2025/B/6488045 in favour of the 5th Respondent is set aside. Official Respondents are directed to undertake a fresh technical evaluation of the bids strictly in accordance with the Guidelines dated 14.11.2024 and in conformity with the observations and principles laid down in this judgment. Such fresh evaluation shall be completed within a reasonable period of eight weeks from the date of receipt of a copy of this order. No costs. 19. Consequently, the miscellaneous Applications, if any shall stand closed.