WP(C) 114/2008 BEFORE THE HON’BLE MR. JUSTICE B.K. SHARMA JUDGMENT AND ORDER The petitioner, a registered partnership firm is aggrieved by awarding o f the contract relating to security and housekeeping (cleaning) services to the respondent No. 4 by the respondent University. 2. The petitioner, in response to the Annexure-1 NIT dated 27.11.2007 float ed by the Tezpur University responded to the same by offering its bid. The contr act is for a period of one year extendable by another year. The tender consisted of two bid system - (i) Technical bid and (ii) Financial bid. As per the requir ement of the NIT, the bidders were to have permission/licence from Central/State Government authority to operate as security and house keeping Agency with at le ast 5 years experience. The qualifying criteria laid down were the certificates of registration for EPF, ESI, Service Tax, PAN for Income Tax and atleast one or two clients of Central Government/State Government/Autonomous Bodies, PSUs in I ndia with sufficient strength of security guard (Ex-service man). 3. As per the terms and conditions of the tender, the requirement for the j ob was security and cleaning personnel. The price to be quoted was the salary/wa ges of such personnel and also rate of the equipments like walki-talki, GSM Mobi le Phone, Bicycles, Motor Cycles, Torch Light with battery and search light with Hellogene lamp. The total number of personnel was to be intimated in the offer letter at the time of awarding the contract. The petitioner being eligible, resp onded to the NIT. Two other agencies i.e. the respondent No. 4 and one Surakhsa Security Service (P) Ltd. also responded to the NIT by submitting tenders. 4. The Technical bids were opened on 12.12.2007 and all the three bidders w ere found to be technically qualified and consequently their price bids were ope ned on 20.12.2007 in presence of their representatives. It is the case of the pe titioner that the financial bids revealed that the bid offered by the petitioner was the lowest with agency charge @ 6.5 % as against 10% quoted by the responde nt No. 4. Other rates quoted by the said respondent were also higher than that o f the rates quoted by the petitioner. Be it stated here that the financial bid o ffered by Surakhsa Security Service Pvt. Ltd. being incomplete, same was rejecte d and accordingly it was the petitioner and the respondent No. 4 which remained in the fray. 5. In paragraph 10 of the writ petition, the petitioner has given the compa rative chart of the prices quoted by the petitioner and the respondent No. 4, wh ich indicates difference in price of Rs. 6,03,714.77 taking into account the num ber of personnel to be engaged as 52. The petitioner being the lowest eligible b idder, it was its expectation that the contract would be awarded to it. However, the petitioner was called for a discussion on 27.12.2007. The representative of the petitioner visited the office of the respondents on 27.12.2007 and found th e representative of the respondent No. 4 present in the office. According to the petitioner, during discussion certain questions were put to the representative of the petitioner relating to back ground and performance of the petitioner’s fi rm. Further stand of the petitioner is that there was no negotiation relating to the price quoted by the petitioner. 6. After the aforesaid developments, the petitioner could come to know that the contract was awarded to the respondent No. 4. Being aggrieved, the petition er made Annexure-4 application dated 3.1.2008 to the Vice Chancellor of the Univ ersity to intervene in the matter. In response to the application, the petitione r was intimated vide Annexure-V letter dated 3.1.2008 that no injustice was done to it while awarding the contract to the respondent No. 4. The letter reads as follows: To The Managing Director, North Eastern Security Service Thakuria Building, Suraj Nagar Six Mile, P.O. Khanapara Guwahati-781022. Sub: Contract for security service at Tezpur University Ref: Your letter No. NESS/2007-08/272 dated 03/01/08 Sir, We acknowledge receipt of your letter above by Fax with reference to your letter above, I am to state as under. (i) We are thankful to you for taking part in the bidding for providing Secu rity Services to Tezpur University. (ii) We considered all the 3 parties i.e. North Eastern Security Service, Sun Security Service and Suraksha qualified in the technical bid. (iii) We opened the financial bid of all the above three parties qualified in technical bid. (iv) The Security Committee of the University, while negotiating with the par ties, took into consideration the Government approved rates quoted by the partie s including you. After a thorough examination of the relative capabilities of th e parties, the Tezpur University authority has decided to engage the Sub Securit y Services, an ISO certified and DGR sponsored Security Service provider for pro viding security service at this University at a negotiated ate on service charge . (v) The points raised at para 4 in your letter is untenable and cannot be ac cepted. (vi) Considering all aspects, Tezpur University has decided to offer the cont ract to M/S Sun Security Services as they are found qualified in both technical bid and also in financial bid on negotiation. (vii) On the basis of above we are sure that no injustice was done to you. Thanking you Yours sincerely (M. Ahom) Registrar 7. Since the aforesaid letter refers to paragraph 4 of the application date d 3.1.2008 submitted by the petitioner as untenable and not acceptable, same is also quoted below: To The Hon’ble Vice Chancellor Tezpur University, Napaam Tezpur, Assam Sub: Cordial prayer for justice on selection for providing round the clock ca mpus security and housekeeping (cleaning) services at Tezpur University, Napaam, Tezpur. Ref: Tender No. F.12-12/98 (vol-111), (GA-11) Security/1 Hon’ble Sir, At first we wish to convey from our Agency A VERY HAPPY NEW YEAR. That Hon’ble Sir, Self on behalf of our firm, most humbly and with profound resp ect wish to pray your honour for justice on the following mentioned points. (1) That Sir, we have submitted our tender for security and cleaning service on 11/12/2007. (2) That Sir, on 12/12/2007 at the time of opening the technical Bid we were stand on first position depending on all and every documents required on tender paper than the other two tender quoting parties, i.e. Sub Security Service, Guw ahati and Suraksha Security Service Pvt. Ltd. Dibrugarh. (3) That Sir, on 20/12/2007, Financial Bid opened and we have seen that cove ring govt. norms including all, our firm was in first position quoting lowest ra te with minimum 6.5% of agency charge where the other part quoted the rate follo wing a circular which is not specified for Security Service by labuor dept. with 10% agency charge. (4) That Sir, our Agency were asked for discussion on 27/12/2007 and discuss ion meeting was held in the office room of Hon’ble Registrar, Tezpur University. The topic of discussion with our agency was our background performance and deve lopment criteria of Security Service and we have not asked any quotation for rat e negotiation from the chairman of the committee. That Sir, other present member s were trying to quoting quotation on the matter of rate negotiation, but respec ted Chairman were seen to avoid the same by saying that it will be latter on and all. (5) That Sir, we have came to know over telephone of Tezpur University that finally the other part have selected for providing service. That Hon’ble Sir, we became so much astonished how this selection was made. For the mentioned points of view, we cordially wish to pray your honour to kindl y give our agency the way of justice. Thanking you with keen anticipation. Yours faithfully NORTH EASTERN SECURITY SERVICE 8. As per the aforesaid reply dated 3.1.2008, the University decided to awa rd the contract to the respondent No. 4 at a negotiated rate on service charge. The reply also indicates that the fact that the respondent No. 4 is an ISO certi fied and DGR sponsored security service, also carried weight, which according to the petitioner could not have been taken into account, as the NIT no where spec ified that ISO certified and DGR sponsored security service provider would be pr eferred over others. 9. The respondent No. 4 as well as the respondent University have filed the ir affidavit-in-opposition. According to the respondent No. 4, the petitioner qu oted rates of wages below the revised minimum rates. In this connection, it has referred to the letter dated 15.2.2003 and 1.9.2004 issued by Labour Commissione r, Assam. Further stand of the respondent is that 13.61 %; 4.7% and 25.2% respec tively are to be added to the rate of basic wages as employees provident fund co ntribution, contribution for employees state insurance and leave reserved charge s respectively. 10. In the affidavit-in-opposition filed by the University, it is the stand that the wage structure should adhere to the Minimum Wages Act and as such quoti ng higher or lower rate than what is prescribed in the Minimum Wages Act is imma terial. According to the University, both the parties were called for negotiatio n and during discussion the respondent No. 4 was apprised of its lapses during t he earlier engagement pertaining to the period from 1.9.2003 to 15.2.2005. On a total reading of the affidavit-in-opposition filed by the University, no definit e stand towards awarding the contract to the respondent No. 4 is discernible. 11. In the affidavit-in-reply filed by the petitioner, it has specifically d ealt with the contention of the respondent No. 4 relating to rate of wages at th e prescribed rate. The petitioner has denied that the rate quoted by it is below the minimum wages prescribed under the law. The petitioner has denied the appli cability of the letter dated 15.2.2003 on which the respondent No. 4 has placed reliance. Further stand of the petitioner is that the letter dated 1.9.2004 bein g in respect of contract labourers and having been issued by the authority of th e State Government, same is not applicable, the University being a Central Unive rsity. According to the petitioner, even otherwise also since the petitioner quo ted rates more than the rates prescribed in the letter dated 1.9.2004, the plea of the respondent No. 4 that the rates offered by it do not conform to the presc ribed rates falls through. 12. The petitioner has referred to the Annexure-P-1, P-2, P-3 and P-4 letter s dated 7.9.2002, 26.11.2002, 14.12.2004 and 26.2.2004 issued by the Government of Assam in the Labour and Employment Department categorizing security guards as skilled workers and other workers as un-skilled workers and for payment of minimum wages on that basis. The petitioner has also referred to the Annexure-P- 5 letter dated 3.8.2007 issued by the Government of Assam in the Labour and Empl oyment Department indicating the latest rates of minimum wages, which include th e variable dearness allowances (VDA). According to the petitioner, the rates quo ted by it having conformed to the requirements indicated in the letter, it canno t be said that the rates quoted by it were below the minimum rates envisaged und er the Minimum Wages Act. It has also referred to the Annexure-P-6 circular date d 7.11.2007 issued by the Government of India in the Ministry of Labour and Empl oyment specifying the minimum wages for highly skilled, skilled/clerical, semi s killed/ unskilled supervisory and unskilled workers. According to the petitioner it has conformed to the requirements of minimum wages as fixed by the Central G overnment and the University being a Central University is bound by the Central Government wage structure. 13. I have heard Mr. J.M. Choudhury, learned Sr. Counsel assisted by Mr. N. Deka, learned counsel for the petitioner as well as Mr. S.S. Dey alongwith Mr. M . Nath, learned counsel representing the respondent No. 4. I have also heard Mr. N.C. Das, learned Sr. Counsel assisted by Mr. B. Choudhury, learned counsel rep resenting the University. Learned counsel for the parties exclusively referred t o the rates quoted by the petitioner and the respondent No. 4 to justify their r espective claim of conforming to the requirements of the Minimum Wages Act. Mr. Das, learned Sr. Counsel representing the University upon a reference to the rec ords produced, submitted that there was nothing wrong in taking into account the added qualification of ISO certificate and DGR sponsorship of the respondent No . 4. He further submitted that the service charge initially quoted by the respon dent No. 4 as 10% having been reduced to 6.5% upon negotiation, the rate quoted by it cannot be said to be in the higher side. 14. I have given my anxious consideration to the submissions made by the lea rned counsel for the parties. I have also perused the materials on record. The r ecords have revealed that the committee (Security Committee) in its meeting held on 27.12.2007 decided to award the contract to the respondent No. 4 at the nego tiated rate on service charge, which was 8%, admittedly higher than the rate quo ted by the petitioner, which is 6.5%. The minutes of the meeting refer to assura nce furnished by the respondent No. 4 upon negotiation to come to negotiated rat es on service charge, charge allowances to Security Officer in-charge and Assist ant Security officer. On the other hand, the Committee noted the assurance of th e petitioner to provide services as per terms and conditions prescribed. For a r eady reference, the minutes of the meeting are quoted below: The committee held discussion with the two short listed quotationers vice North Eastern Security Services and Sun Security Services. During discussion both the quotationer expressed their readiness to provide secu rity services to the University if the contract is awarded. M/s. North Eastern Security Services assure to provide services as per term & co ndition prescribed. M/s. Sun Security assured to come to negotiated rate on service charge, charge a llowances to Security Officer in-charge and Assistant Security Officer. The Committee after considering all aspects and also in view of the ISO certific ate held by the Sun Security Services, decided to offer the contract of security service for one year on first chance to M/s. Sun Security Service. Rates be paid as per Govt. rates wherever applicable. If the firm does not accep t the offer of modified rates as negotiated, the offer be awarded to the other a gency, M/s. North Eastern Security Service. Rates recommended by the committee are as follows: Rs. Per month Security Officer in-charge 5831/- Assistant Security in-charge 4838/- Security Guard (Ex-service man) 4401/- Security Guard (Trained) 4312/- In Addition Service charge @ 8% of total emolument Service tax @ 12.36% Wage as and when revised by the Government. 15. The Committee once again met on 31.12.2007 for further discussion in the matter and it reviewed its earlier decision. On a review it decided to offer th e contract to the respondent No. 4 with charge allowances of Rs. 700/- and Rs. 5 00/- respectively for Security Officer in-charge and Assistant Security in-charg e and at a reduced service charge of 6.5%. The committee also decided that the o ther rates would be as per Govt. rates in force. It was observed that if the rat e was not acceptable to the respondent No. 4, the contract should be awarded to the petitioner. 16. After the aforesaid meetings of the Security Committee, the University a uthority made the offer to the respondent No. 4 to award the contract on the ter ms and conditions specified. The offer was made by letter dated 1.1.2008. In res ponse to the letter, the respondent No. 4 by its letter dated 2.1.2008 accepted the offer. 17. The records produced by the University authority have revealed that the matter relating awarding of contract was processed by office note dated 24.12.20 07 intimating that the comparative statement reflected merits/demerits of the ra tes quoted by the parties. Thereafter, it was decided to call the parties for di scussion on 27.12.2007. Immediately after the discussion, the committee held its meeting on the same date. The minutes of the meeting have been quoted above. Si nce the comparative statement, which was placed before the authority with the no te appended thereto was the foundation of the entire process and has a bearing, same is quoted below: NOTES :: 1. Service charges quoted by M/s North Eastern Security Service is the lowe st (6.5%) compared to other two parties i.e. M/s. Sun Security Services and M/s. Surakhsa (both have quoted as 10%) 2. Rates for security personnel and cleaning staff quoted by M/s. North Eas tern Security Service are lowest and commensurate to Govt. Rules (D/W rates as p er Labour laws) 3. Rates for security staff quoted by M/s. Sun Security Service are higher and rates for cleaning staff are not as per Govt. D/W rules. The leave reserve r ates for cleaning staff should be 7.32% instead of 25.21% 4. Rates quoted by M/s. Surakhsa for security and cleaning staff are not as per Govt. norms. 5. Rate (others) for insurance/convenience quoted by M/s. North Eastern Sec urity Service not acceptable and is to be settled through discussion. 6. Rates for security equipments quoted by M/s North Easter Security Servic e are lowest for all items in total quantity but unit cost for Motor Cycle is hi gher. This is to be negotiated for Rs. 300/- per month per unit. On the basis of C/S on rates quoted by the three firms, rates quoted by M/s. Nor th Eastern Security Service may perhaps be accepted with negotiation as mentione d in 5 and 6 above for security service and cleaning service. 18. It was on the basis of the aforesaid C/S and the note thereto the matter was processed and the parties were invited for negotiation. The meeting held on 27.12.2007, although observed that the petitioner expressed its readiness to pr ovide security services to the University as per terms and conditions prescribed , but decided to award the contract to the respondent No. 4 on the negotiated ra tes on service charge, charge allowances etc. with further recommendation of rat es noted above. As against the service charge of 6.5% quoted by the petitioner, the committee recommended 8% in respect of the respondent No. 4. However, later on same was further reduced to 6.5%, which is the rate offered by the petitioner . Thus, naturally the petitioner has felt aggrieved. Further the rates recommend ed by the Committee in respect of the Security Officer in-charge, Assistant Secu rity in-charge, Security Guard (Ex-service man) and Security Guard (Trained), wh ich are Rs. 5831/-, 4838/-, 4401/- and 4312/- respectively are on the higher sid e than the rates quoted by the petitioner, which are Rs. 5381/- 4638/-, 3676/- a nd 3676/- respectively. Negotiation to be had with the petitioner in respect of the items was indicated in the aforesaid note, but no such negotiation was held with it, although, it was the lowest bidder. 19. Even after the aforesaid position, the Security Committee struck the dea l with the respondent No. 4 on the negotiated rates. There is nothing to indicat e that any such meaningful negotiation was carried out with the petitioner, whic h admittedly was the lowest bidder. It is also not discernible from the material s on record, more particularly, the minutes of the Security Committee meeting th at the rates offered by the petitioner were not viable and/or did not conform to the requirement the Minimum Wages Act, rather it was noted that the petitioner was ready to provide services as per terms and conditions prescribed. Even after such a position, the committee recorded the assurance of the respondent No. 4 t o come to negotiated rate on service charge, charge allowances to Security Offic er in-charge and Assistant Security Officer. It was on that basis, the responden t No. 4 was recommended alongwith further recommendation regarding rates noted a bove. 20. The case of the petitioner was not treated at par with that of the respo ndent No. 4. It was not the finding of the committee that the petitioner was not ready to accept the negotiated terms. Moreover, question of such negotiated ter ms would have arisen only in the event of making the terms known to the petition er. The minutes of the meeting also do not reflect any negotiation with the peti tioner as per the suggestion made in the note appended to C/S. 21. For what has revealed from the records, it is really not necessary to ad dress to the arguments advanced relating to the prescription of rates under Mini mum Wages Act. The bid offered by the petitioner has not been rejected on the gr ound of being not viable and/or not conforming to the requirement of the Minimum Wages Act. In fact, no ground has been assigned by the Security Committee as to why the respondent No. 4, which admittedly offered higher bid than that of the petitioner should be preferred over the petitioner. It is true that the Committe e took note of the fact that the respondent No. 4 is a ISO certificate holder, b ut that aspect of the matter, when considered with the other attending circumsta nces discussed above, cannot give any weightage to the respondent No. 4. It was also not indicated in the NIT that ISO certificate holder would be preferred and /or such a certificate is a condition precedent for getting the contract. 22. Mr. Dey, learned counsel for the respondent No. 4 referred to Clause 2.6 of the instructions to the bidder so as to argue that the ISO certificate being an added qualification, the tender committee was within its domain and jurisdic tion to prefer the respondent No. 4 on that count. Clause 2.6 relates to furnish ing of any additional information in separate sheet, which in the opinion of the bidder will highlight the added qualification and experience. I am of the consi dered opinion that the said clause cannot be said to have taken into its fold th e ISO certificate. Had it been the intention of the authority to invite tenders only from the parties having had ISO certificate, same would have been clearly i ndicated in the NIT. The requirements of the NIT have been noted above. Clause 2 .6 does not take into its fold the ISO certificate. The clause only entitles the tenderers to furnish additional information, which might be considered to be ad ded qualification and experience. 23. The minutes of the Security Committee nowhere reflect that the responden t No. 4 was preferred over the petitioner because of the ISO certificate and/or the petitioner could not be considered since it did not possess the ISO certific ate. Although, nothing adverse was recorded against the petitioner and rather it was recorded that the petitioner expressed its readiness to provide security se rvice as per terms and conditions prescribed, but yet the recommendation was mad e in favour of the respondent No. 4 with further recommendation in respect of th e rates to be provided. It was a one-sided affair, inspite of the fact that the petitioner was also invited for negotiation. In case of disagreement with the ra tes quoted by the petitioner in any of the items, same could have been sorted ou t through negotiation, its tender being the lowest, as was done with the highest bidder i.e. the respondent No. 4. In fact, the respondent No. 4 was chosen at t he rate of service charge offered by the petitioner. 24. In the affidavit-in-opposition filed by the respondent University, certa in observations have been made in