HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH A.F.R. Reserved Case :- MISC. BENCH No. - 10620 of 200[SECTION] Petitioner :- M/S Cantt Dry Cleaners,[SECTION]9 Sadar Bazar,Lko.(Morning Session) Respondent :- Union Of India Thru G.M., North Eastern Railway Gorakhpur Petitioner Counsel :- [ENTITY] Respondent Counsel :- [ENTITY] Hon'ble [ENTITY],J.
Hon'ble Dr. [ENTITY],J.
( Delivered by Hon'ble Dr. [ENTITY], J. ) By this writ petition, the petitioners have challenged the award of contract in favour of opposite-party no.3 on 14.[SECTION].200[SECTION] with effect from 15.[SECTION].200[SECTION] to 14.[SECTION].20[SECTION] by the opposite-party no.2 for a period of three years.
The brief facts of the case are that the petitioner is a sole proprietary concern owned by petitioner no.2 and is engaged in laundry business since [SECTION]70. The opposite-parties no.1 and 2 (hereinafter mentioned as Railways) invited the tender for washing/cleaning, drying, pressing of bed rolls including linen used by the passengers in the trains for a period of three years. Earlier, during the period 1[SECTION].2.2004 to 17.2.2007, the petitioner was awarded the contract for providing the services of mechanised washing/cleaning drying and pressing of the bed rolls including the linen etc. The contract was extended from 1[SECTION].2.2007 till 31.3.200[SECTION] and for a further period of four months on the basis of single quotation.
For the period from 200[SECTION] to 20[SECTION] vide notice no.2 of 200[SECTION], tenders were invited by the opposite-parties no.1 and 2. But the same was challenged by the petitioner and later on, the said notice was cancelled by the competent authority being technically defective having the defect like omission of signature, so the Writ Petition no. [SECTION]59[SECTION] of 200[SECTION] (M/B) filed by the petitioner was dismissed as 'not pressed'.
Fresh tenders were invited by notice no. 4 of 200[SECTION] dated 25.9.200[SECTION] after cancellation of notice no. 2 of 200[SECTION]. The fresh tender was in the format of two packet system i.e. packet 'A' and packet 'B'. Packet 'A' was the technical bid and Packet 'B' was the financial bid. Only the bidders who qualify the terms and conditions for packet 'A' i.e. technical bid were eligible to be considered for the financial bid. The tender committee while processing the tenders found that the petitioner was not found to be qualified for technical bid for the reasons recorded in details in the proceedings of the Tender Committee, whereas the opposite-party no.3 qualified for the technical bid. As per tender conditions, the contract was awarded in favour of opposite-party no.3 after negotiating the rates offered by him. Being aggrieved, the petitioner has filed the present petition.
With this background, Sri [ENTITY], Senior Advocate, assisted by Sri [ENTITY], learned counsel for the petitioner submits that the tender notice no. 4 of 200[SECTION] was published in Rashtriya Sahara, Lucknow and the petitioner fulfilled the eligibility criteria. He submits that the petitioner is engaged in the laundry business since [SECTION]70 and has been awarded ISO certificate because of its excellent service. The petitioner is continuing its laundry contract with major establishment at Lucknow like SGPGI, Balrampur Hospital, North-Eastern Railway, Rural Institute of Medical Science, Saifai, Etawah and so on. In 2004, the petitioner was having the contract for North-Eastern Railway (opposite-parties no. 1 and 2) for a period of three years which was continued up to 30.9.200[SECTION].
According to him, on the other hand, the opposite-party no.3 has mainly engaged in dry cleaning business and has no experience for mechanized washing bedrolls including linen. He also submits that opposite-party no.3 is not a qualified firm having proven credit of unblemished performance in reputed/major establishment as they have not done the required work/contract. The opposite-party no.3 has not completed the work for the minimum value of 50% of the advertised tender. The opposite-party no.3 had not submitted the tender, details of work which they have done.
Learned counsel further submits that the opposite-parties no.1 and 2 have acted illegally and in an arbitrary manner by denying the contract to the petitioner by violating the tender procedure laid down in [SECTION] and [SECTION] of the tender. The opposite-parties no.1 and 2 have clearly violated the provisions of [SECTION] and [SECTION] of the [ACT] by excluding the petitioner before taking final a decision regarding tender process. The opposite-party no.3 is engaged only in dry cleaning business which has been the subject of service tax. The opposite-party no.3 has no experience pertaining to the mechanized washing, dry cleaning and pressing of bed rolls including linen, so the award of contract in their favour is a violation of [SECTION] and [SECTION] of the [ACT]. He further submits that the tender value for the period in question has been reduced after negotiation from Rs. 1,9[SECTION],3[SECTION],62[SECTION] to Rs. 1,73,17,260 with a view to favour the opposite-party no.3. Lastly, he made a request to quash the contract dated 15.[SECTION].200[SECTION] awarded in favour of opposite-party no.3 by the Divisional Railway Manager (Commercial), North-Eastern Railway, Lucknow. He also prays that the opposite-parties no.1 and 2 be directed to consider the technical and financial bids of the petitioner. However, he accepts that the present contract is only up to 14th November, 20[SECTION].
On the other hand, Sri [ENTITY], learned counsel for the respondent no.3 submits that from the very beginning his client was having a good reputation in the business of laundry in the name of M/s Hind Laundry and thereafter since [SECTION]64, the name of firm was changed to M/s Rocket Dyers & Dry-cleaners who is providing its service to prestigious hotels in Lucknow such as Comfort Inn, Gemini Continental, Amber Banquets and Hotel etc. He also submits that earlier, the tenders were invited vide Notice No. 2 of 200[SECTION] for mechanized washing, cleaning, drying, pressing of bed rolls including linen for the period from 200[SECTION]-20[SECTION] and the same was finalized in favour of respondent no.3 and a letter of acceptance was issued. Being aggrieved, the petitioner filed Writ Petition No. [SECTION]59[SECTION] of 200[SECTION] (M/B) before this Hon'ble Court where the opposite-parties no. 1 and 2 have cancelled the said notice due to technical flaw in the notification. As in earlier tender notification, the word current year' was left to be mentioned inadvertently, so the authorities have cancelled the earlier tender notice no. 2 of 200[SECTION] and invited the fresh tender (notice no. 4 of 200[SECTION]). In the fresh tender, it was decided to have eligibility criteria consisting of 50% each of the last three years turn-over as well as current year.
In response to fresh notice, the petitioner as well as the opposite-party no.3 have participated in tender procedure. He read out [SECTION] which runs as under:-
"Only experienced and qualified firms having proven credentials of unblemished performance in reputed/major establishments for similar work should apply along with supporting documents."
He also submits that the petitioner had earlier been working with railway administration. During whole span of its contract, a number of complaints were received about the poor service rendered by the petitioner. For more than fifty times, the petitioner had deposited about Rs. 90,000/- fine for its blemished work. He also submits that this was one of the reasons that petitioner was not found eligible to qualify the terms and conditions of the technical bids. He also alleged that the petitioner did not sign the complete tender form of Tender notice No. 4 of 200[SECTION] and as such its technical bid was found defective, and the same has already been accepted by the petitioner in its brief submissions. For the tenders in question which were invited against the notice No. 4 of 200[SECTION], were finalized in favour of respondent no.3 and an agreement was executed between the railway authorities and the respondent no.3 who has built up its infrastructure by investing the huge amount and installing the machine at the space provided by the railway administration. For the purpose of contract, the respondent no.3 is working without any complaint and the work is being appreciated.
He further mentioned that the respondent no.3 has fulfilled all the conditions laid down in the tender procedure and accordingly after fulfilling all the eligibility and qualifications and in pursuance of work order, it had started working since 15th November, 200[SECTION] as per the agreement which was executed between the railway authorities and the respondent no.3 on 20.1.2009 and vested right of the respondent no.3 has accrued to start its work. For the purpose, he relied on the ratio laid down in the following case-laws:-
1.Tata Cellular v. Union of India and others ([SECTION]94) 6 SCC 651
2.Delhi Development Authority and others v. UEE Electricals Engg. (P) Ltd. & others, 2004 ([SECTION]) SCC 213
3.Director of Education & others v. Educomp Datamatics Ltd. & others, 2004 (4) SCC [SECTION] and
[PRECEDENT].
Lastly, he made a request to dismiss the writ petition.
Sri [ENTITY], learned counsel for the opposite-parties no.1 and 2 (Railways) assisted by Smt. [ENTITY], Advocate, submits that the petitioner had earlier been working with Railway Administration. During whole span of its contract, a number of complaints were received about the poor services rendered by it which were found true after enquiry for which the petitioner was punished by the authorities for more than fifty times and had deposited more than Rs. 90,000 as penalty for its blemished work and service. A number of complaints on regular basis were received by the authorities against the sub-standard washing and ironing of linen etc. during the period of earlier contract. For the purpose, he has drawn the attention to Annexure SCA-1 (containing pages 7 to 16 of the supplementary counter affidavit) which reveals that the penalty had been imposed upon the petitioner for unsatisfactory cleaning of linen and bed rolls on a number of times in compliance to the relevant provisions contained in [CASE NUMBER] dated 24.1.2003 (Annexure SCA-3, pages 74 to 990) issued by the Railway Board pertaining to the "Terms and conditions in respect of linen washing/cleaning contract for cleaning of bedrolls etc.".
Learned counsel further submits that the provisions are to be read as a special condition of tender for linen washing contracts. It is clearly mentioned at internal page 6 of the Circular against clause 5(l) quoted "details of experience" that the same are to be stated in the tender form. Annexure-2 to the Circular provides a form for obtaining the information in item 5 from the tenderer. The Circular specifically provides for inclusion of Annexure-2 in tender documents for all such tenders. Clause [SECTION] of Annexure-1 to the Circular provides for "scale of penalty in case of default or delay in collection or in return of clothes/linen or in case of unsatisfactory cleaning or complaints from passengers" (page no. 100-[SECTION]0).
While considering the technical bid, experience against clause 5 (l) at page 6 and penalty imposed upon the petitioner in terms of the clause [SECTION] page 7 of the Circular as part of the tender form were relevant material considered by the tender committee while evaluating the technical bid of the petitioner. The tender committee did not find suitable for accepting the technical bid of the petitioner, on the basis of the material/record forming part of the tender form submitted by the petitioner. Hence, the tender form of the petitioner was not considered for the next stage of the process i.e. the financial bid. All the complaints received against the petitioner were examined strictly as per the procedure prescribed in the Indian Railway Commercial Manual Vol. [SECTION] as well as the guidelines issued by the Department of Administrative Reforms and Public Grievances. Sri [ENTITY], learned counsel for the Railways, submits that apart from other reasons recorded by the tender committee, the petitioner had also sent the complete tender form which carries a defect. Thus, the petitioner was not found to be qualified in the terms and conditions for the technical bid vide notification no. 4/200[SECTION] for a period from 200[SECTION]-20[SECTION]. He also relied on the ratio laid down in the following cases:-
1.AIR [SECTION]96 SC [SECTION] (Tata Cellular v. Union of India),
2.AIR [SECTION]96 SC 51 (Sterling Computers Ltd. v. M.& N Publications Ltd.),
[PRECEDENT],
4.AIR [SECTION]95 Kerala 354 (C. Sivanandan v. State of Kerala and others),
5.AIR 2000 Gauhati [SECTION]4 (R.N.Ghosh v. State of Tripura and others), and
[PRECEDENT] On specific query from the Bench, learned counsel submits that railways provide free electricity, water and space to the contractor who will have to instal its infrastructure and man power.
Lastly, he made a request to dismiss the petition.
We have heard learned counsels for the parties at length and gone through the material available on record.
From the record, it appears that the petitioner no.1 is engaged in the laundry business since [SECTION]70 and is a qualified tenderer with opposite-parties no.1 and 2 for mechanized washing, cleaning, drying, pressing of bed rolls including linen and their collection and delivery to the railway administration in the North-Eastern Railway. Earlier, the petitioner was working for the railway for a period of three years i.e. 2004-2007, which was extended up to 15.[SECTION].200[SECTION]. The fresh tenders were invited vide notification No. 4/200[SECTION] and petitioner had applied but the tender was not awarded in its favour mainly for the reasons as stated in the affidavit filed by opposite-parties no.1 and 2. Accordingly, the work done by the petitioner earlier was found unsatisfactory. During the period of petitioner's contract, several complaints with respect to the sub-standard and poor cleaning of bed rolls including linen provided to the passengers, had been received. Earlier, the petitioner was punished for more than 50 times and has deposited more than Rs. 90,000 as penalty for its blemished work and service.
The tender in question was in the form of two packets i.e. packet 'A' and packet 'B'. Packet 'A' was the technical bid and packet 'B' was the financial bid. For technical bid, PAN card, experience certificate for mechanized washing and attested copy of the documents of earnest money along with complete form were to be submitted, then only the technical bid was eligible to be considered for the financial bid.
This Court vide order dated 10.3.2010 has observed that in the instant case, two new questions cropped up for resolution, namely as to whether there is any column in the tender form for seeking an information about disqualification or punishment etc. particularly with reference to government contracts and, secondly, had such a column been there, whether the petitioner could have still submitted the Tender Form. If such questions are not answered, then perhaps the contract in question may not survive on the ground of arbitrariness.
To answer the above question on behalf of the opposite-parties no.1 and 2, an affidavit has been filed wherein it is mentioned that there is no specific column in the tender form requiring the tenderer to furnish the information for the disqualification or punishment but there are clauses in the tender form i.e. [SECTION] and [SECTION] of the general conditions of contract requiring the tenderer to furnish the details and documents testing the credentials and previous experience of the work etc. There is procedure of two packets system- one technical bid and another financial bid known as packet A' and packet B' respectively. Accordingly, the tender committee considered the technical bid of the tenderer including the petitioner. After examining the petitioner's case it was found that the same was not up to the mark mainly for reason that more than 50 times penalties were imposed for its blemished and poor service. So, the tender committee declared the petitioner as disqualified.
It is a matter of common knowledge that in railways, bed rolls and linen are always found in a shabby conditions. During the course of arguments, Sri [ENTITY], learned counsel for the railways submitted that earlier Rs. 25 per passenger was given to Indian Railway Catering Tourism Corporation (hereinafter referred to as IRCTC) for the cost of purchasing the bedrolls as well as its maintenance, washing and pressing etc. Presently, the railway is paying about Rs. 5 per passenger to the contractor only for washing and pressing. The railways also provide free electricity, water and space to the contractor who will have to instal its infrastructure and use its own detergent, man power etc. In this meager amount, it is expected that the contractor may not be able to provide bedrolls and linen in a hygienic condition. Therefore, the meager amount given to the tenderer cannot cover the cost of cleaning the bedrolls etc. Therefore, we are of the view that for the welfare of the passengers and to get them best services pertaining to the bedrolls and linen etc. during their journey, some drastic steps are needed. We, therefore, direct that following steps be taken immediately to improve the pathetic conditions:-
(1)That each and every packet of the bed rolls will be sealed by the contractor under the supervision of an authorised officer of the railways before handing over to the railway coach attendant.
(2)That on the top of envelope, items must be mentioned which are kept in the packet. After sealing it, a feedback card must be stapled bearing the serial number with each packet. The names of Railway Division and contractor along with their contact number as well as address must be mentioned in the card.
(3)That to encourage the passengers to provide feed back, it must be mentioned that every month there will be two lucky draws of Rs. 1000 and Rs. 500 for giving comments/complaints/suggestions, if any, for improving the service. Every month, the lucky draw can be performed through computer amongst the feed back cards received.
(4)That after giving the bed rolls, the attendant will collect the feed back cards from the passengers. For the purpose, the attendant will provide a pen, if demanded.
(5)That the said card collected by the attendant will be handed over to an authorised officer under the supervision of the Station Master at the station where the bed rolls and linen have to be returned.
(6)That the Station Master and an authorised officer after checking the serial numbers and quantity will seal all the feed back cards and will hand over the same to the computer section of the railways who maintains the record of the contractor supplying the bedrolls and linen. For that purpose, a software will have to be developed at the earliest.
(7)That in the feed back card, it is expected that there must be columns pertaining to the name, address and contact number of the passengers, berth/seat, train number, PNR as well as some space for comments/suggestions/complaints (if any), date and signature, must be provided in the card.
([SECTION])That apart from it, in various columns, the grading about service may be asked by having a tick mark'- very poor, poor, good, satisfactory, excellent. The cost of the feed back cards shall be borne by the contractor who has supplied the bed rolls and linen to the railways.
These datas can be utilized at the time of next tender or in awarding the punishment as per rules by the railways.
For the purpose mentioned above, it is directed to the railways not to confine the contract to the lowest bidder only but must be awarded to the contractor(s) who can provide satisfactory service to the passengers regardless the amount. Necessary change may also be carried out in the tender forms/procedure. The penalty to the contractor(s) shall be imposed as per the feed back card. Apart from it, the railway will also utilize its own machinery to put a check on the contractor and impose penalty, if required as per railways rules.
In view of above, we hope that in future the passengers will get better service pertaining to the bedrolls and linen during their rail journey.
In the instant writ petition, it appears that there was a blemishing service provided by the petitioner on the earlier occasion, so the contract was not awarded to the petitioner, it was one of the main reasons. Further, it appears from the record that the tender committee did not find the technical bid of the petitioner as qualified on the basis of the material/record forming part of the tender form submitted by the petitioner. The Tender Committee did not find the tender form suitable for accepting the technical bid made by the petitioner and hence the tender form of the petitioner was not rightly considered for the next process i.e. financial bid. It appears that the petitioner was fined in the past for more than fifty times and about Rs. 90,000 was deposited as penalty. Further, another reason for rejecting the tender form was that the petitioner did not sign the complete tender form and has not signed each and every page of tender documents, as mentioned by the Railway Counsel during the course of arguments. So, the petitioner was not rightly awarded the contract but fact remains that awarding the penalty does not mean that the petitioner is disqualified. The petitioner was never blacklisted nor any show-cause notice was issued to it. Therefore, it does not disqualify the petitioner or to be declared blacklisted. Further, in the instant case, the tender was supposed from 1st April, 200[SECTION] to 31st March, 20[SECTION]. But the Tender No. 2/200[SECTION] was challenged before this Court and the matter was delayed. The tender in question was invited again vide notification no. 4/200[SECTION], so the period of the tender was finally extended up to 14th November, 20[SECTION].
For the next tender, we direct strictly to maintain period of contract on the basis of financial year as it was earlier. By making necessary adjustment, the tender process must be finalised latest by December so that the contractor can start its work w.e.f. 1st April.
In the instant case, the opposite-party no.3 has received the contract and has built up the infrastructure by investing the huge amount in installing the machines on the place provided by the opposite-parties no.1 and 2 as per the contract. The opposite-party no.3 had fulfilled all the conditions as laid down in the tender procedure and accordingly after fulfilling all the eligibility conditions & qualifications and in pursuance of the work order, has started working since 15.[SECTION].200[SECTION] and agreement has also been executed between the railway authorities and respondent no.3 on 20th January, 2009 and now the vested right of the petitioner has accrued till 14th November, 20[SECTION]. So, a very small period has left now, therefore, without disturbing the present contract, we feel no necessity to examine the validity of the contract awarded in favour of respondent no.3. Let him complete the present contract.
Soon after receiving the certified copy of this order, fresh tender procedure should be started for the next term where the respondent no.3 as well as petitioner may also be eligible to participate. The authorities will finalize the contracts strictly on merits, as observed above.
The writ petition is, thus, disposed of.
Order Date :- 31.3.20[SECTION] VB/-