-)) IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 448 of 2001 For Approval and Signature: Hon'ble MR.JUSTICE KUNDAN SINGH ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- GUJARAT SECURITY GUARDS SERVICS Versus O N G C LTD -------------------------------------------------------------- Appearance: MR MH THAKORE FOR MR AK CLERK for Petitioner M/S TRIVEDI & GUPTA for Respondent No. 1 MR KRISHNA G PILLAI for Respondent No. 2 -------------------------------------------------------------- CORAM : MR.JUSTICE KUNDAN SINGH Date of decision:- 04/05/2001 ORAL JUDGEMENT Rule. 2. This petition has been filed for declaring clause 1 (k) of the technical bid, 2 (b) & (d) of the commercial bid as illegal, null and void and also for declaring the action of the respondent - Oil & Natural Gas Corporation Limited (hereinafter referred to as the respondent Corporation for brevity and convenience) in treating the petitioner as disqualified in the technical bid pursuant to the tender document dated 6-11-2000 as illegal, null and void and for restraining the respondent Corporation from accepting the price bid of any party other than the petitioner and further restraining the respondent Corporation from awarding the contract or work order to any party other than the petitioner. 3. The respondent Corporation invited the tenders 1994 for security arrangement under Ahmedabad Project and the petitioner had filled up the tender with the necessary EMD of Rs.2 lacs and the petitioner was found to be qualified in the technical bid. However, pursuant to the said tender the contract could not be awarded to the petitioner due to interim order passed by the competent Court. The respondent Corporation again invited the tenders in the year 1999 which were to be sold from 12-7-1999 till 2-8-1999 and the closing date of the tender was 2-8-1999 in respect of the job contract for a period of two years for executing the job of intelligence, surveillance, patrolling and protection to ONGC installations and Personnel, Store Yards, Moving Drilling Rigs/Work-over rigs, Wells, Workshops, Oil Field etc. situated in Ahmedabad, Gandhinagar, Mehsana, Kheda and Anand Districts of Gujarat under the jurisdiction of Ahmedabad Project of ONGC. The EMD for the tender was Rs.10,24,000/- and hence the petitioner filled in the tender by giving a Bank guarantee of Rs.10,24,000/- as required under the terms conditions of the tender. The petitioner was qualified for the technical bid according to BEC. The conditions of the regarding the minimum wages was as under : "22 - MINIMUM WAGES : - The minimum wages mentioned in the Tender Documents are the same as issued from the office of the Regional Labour Commissioner, Government of India, Ministry of Labour, Ahemdabad, from time to time/State Government whichever is higher for different categories." 3. At the relevant time, the circular dated 5-4-1999 issued by the Regional Labour Commissioner (Central), Ministry of Labour, Government of India, Shram Bhavan, Near Gun House, Khanpur, Ahmedabad providing for minimum wages with effect from 1-4-1999 was in force and that circular divided the areas into three zones. The municipal corporation area of the city of Ahmedabad was in Zone-A, Baroda, Surat, Rajkot and Bhavnagar were included in Zone-B and the remaining areas of Gujarat were included in Zone-C. The contract was in respect of the areas situated in Ahmedabad, Gandhinagar, Mehsana Kheda and Anand Districts of Gujarat and these areas falling within ZONE-C of the circular dated 5-4-1999. Therefore, the petitioner filled in the rates of minimum wages as prescribed and prevailing at the relevant time. The price bid or the commercial bid for the said tender was opened on 2-3-2000 and the petitioner was found to be lowest. Hence, the petitioner ought to have awarded the contract as he was found qualified in the technical bid and lowest in the price bid. But the respondent Corporation arbitrarily and illegally cancelled the tender of the petitioner and did not award the contract to the petitioner. On the basis of the letter dated 5-5-2000 regarding the uniform minimum wages applicable to all the zones is produced by the respondent no. 2 before the respondent Corporation. At the relevant time, uniform minimum wages were not applicable and the circular of the Regional Commissioner dated 5-4-1999 was prevailing at the relevant time. Hence, the petitioner was entitled to get the contract with necessary revision in the minimum wages. But the clarification regarding the area was subsequently made by the respondent Corporation. Pursuant to Clause 42 (a) - Escalation Clause - on account of revision of minimum wages as and when revised and notified from time to time by RLC(C)/ALL(C)/Ahmedabad/State Government, which ever is higher will be reimbursed to the contractor. The petitioner's tender was cancelled arbitrarily by the respondent Corporation and the respondent Corporation returned EMD of Rs.10,24,000/- collected from the petitioner in respect of the tender. Thereafter, the respondent Corporation again invited the tenders for the same work of providing securing arrangements for the same areas under Ahmedabad Project of respondent. The tenders were sold between 6-11-2000 to 27-11-2000 and the technical bid was to be opened on 27-11-2000. EMD for this tender was Rs.10,60,000/- and the petitioner paid the same. Clause regarding minimum wages as mentioned in Clause 22 is reproduced below : "The minimum wages mentioned in the Tender Documents are the same as issued from the office of the Regional Labour Commissioner, Govt. of India, Ministry of Labour, Ahmedabad from time to time/State Govt. whichever is higher for different categories based on the Minimum wages given for Ahmedabad area "A" in Highly Skilled, Skilled and Semi Skilled Categories. Entire area of development of security points will be considered as falling under Area "A" as clarified by RLC (C)vide his letter No.AH/95 (2)2000-RLC dated 05-05-2000 and payment of wages will be regulated accordingly." 4. It is also stated by the petitioner that earlier tender dated 12-7-1999 was cancelled only on the ground of clarification of the areas by the Regional Labour Commissioner vide its letter dated 5-5-2000. The only change in the tender form should have been in the condition regarding minimum wages since the tender was for the security arrangement for the same area. The value of the tender for two years is approximately Rs.543 lacs which is the same as in the cancelled tender. EMD for the tender dated 6-11-2000 is Rs.10,60,000/- which is only marginally higher than Rs. 10,24,000/- for the tender dated 12-7-1999. Since, the petitioner was qualified in the technical bid for the year 1994-95 as well as for the year 1999-2000 in the tender dated 12-7-1999, the respondent Corporation came to know about the capacity, turnover and other details of the petitioner and also knew that the petitioner was lowest in the tender dated 12-7-1999. With a view to eliminating the petitioner from the competition and with a view to select only one particular person/party i.e. the respondent no. 2 for awarding the contract made following changes in the tender which are incorporated malafide and are tailor made to suit a particularly party. " Clause :- 2 (b) of the tender dated 12-07-1999 requires solvency certificate of Rs. 50 lacs whereas the same clause in the tender dated 06-11-2000 requires solvency certificate of Rs. 1 Crore. Clause :- 2 (d) the commercial bid of the tender form dated 12-07-1999 requires the annual turn over of Rs.68,87,000/- (3 % of the value of one year) in any two years of the last three financial years whereas the same paragraph for the tender dated 06-11-2000 requires the annual turn over of Rs. 2 crores. Clause 1(1) of the Technical Bid in the tender form dated 12-07-1999 requires a single contract of annual value of not less than Rs.35 lacs whereas the condition no. 1 (k) of the technical bid of the tender form dated 06-11-2000 requires a single contract of the annual value of not less than Rs.1 crore. 5. On comparison of the terms of two tenders dated 12-7-1999 and 6-11-2000, it is apparent that the requirement of single contract has been increased from Rs.35 lacs to Rs.1 crore. Requirement of insolvency certificate has been increased from Rs.50 lacs to Rs.1 crore. Whereas, annual turn over was Rs.68,87,000/- to Rs.2 crores. Thus, there is three times increase in the requirement of annual value of the single contract and the requirement of annual turn over and increase of two times in the requirement of solvency certificate, have been changed in the subsequent tender dated 6-11-2000. 6. Five parties have filed the tender forms and out of them, only one party was qualified for technical bid which was opened on 27-11-2000, as per the information of the petitioner and this was done only to qualify only one party in technical bid and there is no competition in the commercial bid or price bid and the contract can be awarded to that party i.e. the respondent no. 2. Price bid or the commercial bid of any tenderer for the tender dated 6-11-2000 has not been opened so far and no contract or work order has been awarded to any party till the date of filing of this petition. The petitioner addressed letter dated 20-11-2000 to the Executive Director of the respondent Corporation pointing out the injustice meted out to the petitioner as well as other tenders in the competition. The petitioner challenged the changes made in the subsequent tender dated 6-11-2000 on the ground that the petitioner was qualified for the technical bid for the year 1994-95 and the petitioner was again qualified for the yea 1999-2000 and the petitioner is qualified in the technical bid as well as lowest in the price bid opened on 2-3-2000. Thus, the act of the respondent Corporation cancelling the petitioner's tender which was opened on 2-3-2000 and in not awarding the contract to the petitioner only on the basis of qualifications issued by the Regional Labour Commissioner regarding the areas by the letter dated 5-5-2000 which was produced subsequent to opening of the price bid by the respondent no.2 is illegal, arbitrary and unconstitutional. Hence, the tender of the petitioner could not have been cancelled arbitrarily, unreasonably or illegally as there is a clear term in the tender form that all the statutory payments are to be reimbursed by the respondent Corporation and the change in minimum wages if any ought to have been reimbursed by the respondent Corporation to the petitioner in the tender dated 12-7-1999. The subsequent letter dated 5-5-2000 of the Regional Labour Commissioner was brought to the notice of the respondent Corporation by a private party who was interested in getting the contract and now that party is the respondent no.2 in this petition. 7. The tender dated 12-7-1999 was cancelled only on account of specification of the areas for the purpose of minimum wages by the Regional Labour Commissioner after opening of the tenders, commercial, technical and price bid of the tender dated 12-7-1999, the respondent Corporation came to know about the turn over capacity of the petitioner in the last two tenders of 1994-95 and 1999-2000 the respondent Corporation in order to eliminate the petitioner made changes and increased BEC by three times and two times so as to eliminate competition and to see that only one party would qualify in the technical bid so that there will be no competition in the commercial bid and the contract can be awarded to only one party who has qualified in the technical bid. Increase in requirement of annual turn over, solvency certificate and single contract the annual value by three times and two times in the tender dated 6-11-2000 is clear malafide and with ulterior motive of eliminating the petitioner and others tenders out of the competition and suit the condition for only one party. Therefore, the impugned action of the respondent Corporation is illegal, arbitrary and is violative of principles of natural justice and defeating the very purpose of flouting the tender namely to invite more competition and to get the lowest and the best offer for the contract. 8. The respondent Corporation has filed the affidavit-in-reply and it is stated therein that this Court cannot appreciate the question of facts within the purview of Article 226 of the Constitution of India and hence the petition deserves to be dismissed. Moreover, no prejudice is caused to the petitioner by noncompliance of the procedure required to be followed by the respondent Corporation under the law. The policy decision taken by the concerned authorities of respondent Corporation cannot be challenged before this Court and that is not violative of principles of natural justice or the procedure to be followed under the law. This petition has been filed by making false, frivolous and vexatious allegations against the respondent authorities and the petitioner has tried to prejudice the mind of the Court in order of take favourable orders by bringing undue pressure so that the tender submitted by him be accepted in contravention with the norms as well as criteria that may be required to be considered while accepting the bids. The petitioner has approached this Court at highly belated stage after cancellation of the earlier tender and the re-invitation of fresh tender. The petitioner also participated in the tender dated 6-11-2000 after accepting the terms and conditions fixed by the respondent Corporation knowing fully well that it does not qualify for the said tender and having failed after resorting to all kind of pressure tactics. This petition has been filed by making all sorts of frivolous and vexatious allegation against the respondent Corporation. The challenge of the petitioner regarding the modification of the terms and conditions by changing the criteria with regard to EMD Solvency, Turn Over, Contract value is a policy decision taken by the respondent Corporation after assessing the present scenario including prevalent rates in comparison with previous tenders. As such, insertions of such terms and conditions being necessary, based on past experience, overall assessment cannot be said to be arbitrary, violative of Article 14 of the Constitution of India, malafide, allegations with a view to achieve ulterior motive, contrary to policy of the respondent Corporation are absolutely baseless and devoid of merits. In the the tender dated 12-7-1999, after opening 23 tender documents purchased, only 7 bidders submitted the bids and 4 bidders were shortlisted as qualified technically prima faice. However, the tender committee after examining the tender documents found that only one of the bidder had quoted the rates, not covering the minimum wages, which were not applicable to the some security points covering the Ahmedabad and Gandhinagar districts. Therefore, they were against the norms fixed by the BEC. The Tender Committee placed its proceedings for consideration before the competent authority and the competent authority after going through the said proceedings suggested to the Tender Committee to deliberate once again and gave their recommendations. After due deliberation on 14-6-2000, the Tender Committee finally recommended for re-tendering after modifying the following major clauses in order to have more transparency in the bid evaluation as well as to give equal opportunity to all the bidders to furnish their tender forms as per the terms and conditions decided by the respondent Corporation. Due to the interchangeability of personnel from one place to another, the said personnel are at times required to be shifted along with the rigs irrespective of the areas falling under different categories mentioned in the circular dated 5-4-1999 and to have uniformity of wages the tender requires to be reinvited. After the circular dated 5-5-2000, it was clarified that the rates of wages payable on the basis of area comprising A, B & C Zone-I or II as per the Government Notification, all the employees engaged from Avanibhavan (Chandkheda) and having duties on rotation from various places shall be paid wages as payable at Ahmedabad fixed for area - A and the rates of wages cannot be reduced because of change in location. The allegations made by the petitioner of picking and choosing a person on the ground of arbitrariness, unreasonableness in violation of Article 14 of the Constitution of India based on extraneous and irrelevant consideration is absolutely devoid of merits more so when the dispute sought to be raised is in the form of a dispute of civil nature that cannot be decided by this Court within its extra ordinary jurisdiction under Article 226 of the Constitution of India. In the tender floated by the respondent Corporation having the modified terms and conditions were submitted by in all five bidders and such conditions mentioned in the Bid Evaluation Criteria (BEC) were required to be complied with by each bidder and the petitioner is not the only person that was required to comply with the terms of Bid Evaluation Criteria. 9. The petitioner quoted the rates which may appear lower on the comparison to the rates quoted by the other bidders. But the same were found not workable as minimum wages paid for Area/Zone "C" are too less as compared to the minimum wages applicable to Area/Zone A. As per tender specification (M.W. + 35.33% + Labilities + Service Charges) for security Supervisor (Skilled) and Armed Security Guard (Skilled) was Rs.11065.93 per point per month but the petitioner had quoted Rs.9723.96 per point for Security Supervisor & Armed Security Guard and the petitioner quoted Rs.1341.97 per point less than the workable rate. Hence, the tender of the petitioner was not considered and was finalized and cancelled. The tender that was invited by the respondent Corporation was related to various points under the respondent Corporation's A Project. Therefore, there was no question of awarding the contract to the bidder and the petitioner who had quoted the rates applicable to the Area/Zone C instead of Area/Zone A. 10. The contention that the petitioner ought to have been awarded contract with necessary revision of minimum wages is not sustainable in the eye of law because that revision is not at all permitted under the law. That action would amount to arbitrary and not in consonance with Article 14 of the Constitution of India. It was denied that the earlier tender dated 12-7-1999 was cancelled only on the ground of clarification of the areas by the Regional Labour Commissioner (C). In fact, the petitioner along with other bidders failed to qualify for the contract having quoted lower wages which were not at all workable and the petitioner cannot blame the respondent Corporation for cancelling the aforesaid tender. The petitioner is fully aware about the terms and conditions of the tender dated 6-11-2000 and apprehending failure to qualify for the contract has chosen to approach before this Court by making false allegations by way of challenging the terms and conditions of the tender. The petitioner himself has accepted the fact that he did not qualify for the technical bid and hence there was no question of considering the aforesaid communications when the petitioner himself failed to fulfil the terms and conditions necessary for qualifying the BEC. There is no malafide intention or any reason to eliminate the petitioner from participating in the contract and the allegations made by the petitioner are baseless. 11. The respondent Corporation has filed Sur-Rejoinder affidavit, wherein it is stated that after having due deliberations, finally recommended for retendering after considering the relevant aspects new tender was issued on 6-11-2000, with the justification that was realized that clause 22 of the earlier tender notice relating to minimum wages was not very clear more particularly when substantial number out of the total 233 security points to be taken care of by the successful bidder are situated within a distance of 15 km. from the periphery of Ahmedabad Municipal Corporation where wages payable are as per the rates fixed for Ahmedabad, which comes under area 'A' due to interchangeability of the personnel from one place to another and the uniformity in the wages payable to them at the same rate of minimum wages to all the employees of the contractor without any discrimination is ensured. It is further stated that the respondent Corporation has stipulated that a bidder may opt to bid for 50% of the Security Points and it was open for the bidder not to submit the tender in respect of all 233 security points but for less number of security points. Hence, option was also given to the bidder to submit EMD of Rs.5,12,000/- in case of those who wanted to offer Security Services for 50% of security points and an EMD of Rs.10,24,000/- for those who wanted to offer for full requirement of security points. It was also considered that more number of contractors operating at the same time in respect same tender/contract may also result into more administrative problems and/or discrepancies in services conditions of contract labourers. Hence it was considered fit to have one contractor as far as possible or a few contractors in respect of all the 233 security points. Accordingly, in clause 2 (a) relating to commercial bid dated 12-7-1999 was modified in new clause 2 (a). The idea behind the said modification was also that the bidder who would be ready and willing and capable to bid for all 233 points would be a well established and reputed organization in a position to shoulder and discharge all legal obligations including those under various applicable labour legislations, particularly the obligation towards payment of minimum wages. On the basis of the changes the consequential modification in respect of clause 2 (d) relating to annual turn over was fixed at Rs.2 crores in place of annual turn over of Rs.68,87,000/- in the earlier clause 2 (b) as well as in respect of clause 1 (k) providing to the effect that bidder must have executed at least one contract of the annual value of not less than Rs.1 crore in place of Rs.35 lakhs as provided in clause 1 (i) of the earlier tender notice. Thus, the policy decision was taken by the respondent Corporation to give go-bye to the earlier tender notice and reinviting the same by new tender notice containing modified terms for safeguarding its interests, would not be subject to judicial scrutiny. The petitioner having participated in response to the new tender dated 6-11-2000 should not have come out with a present petition for declaring to the effect that change in the conditions of NIT are illegal and null and void and declaring the petitioner as qualified pursuant to the new tender notice dated 6-11-2000 and the said revision cannot be subject to judicial scrutiny merely because the said revision is not suiting to the petitioner. 12. The contention of the learned counsel for the petitioner is that the whole object of the revising the terms which have been challenged in this petition in the new tender dated 6-11-2000 is tailor made and only to give contract to the respondent no. 2 as appears from the intention of the respondent Corporation form its surrejoinder affidavit. 13. The respondent no. 2 is working as a contractor since 1993 and though the petitioner was qualified in the year 1994 and then in the year 2000 the petitioner was not given contract. The modification in the terms and conditions of the tender of 1999 has made only to give monopoly of the contract to the respondent no. 2 by the respondent Corporation as the respondent no. 2 is working from 1993 as contractor for doing the same job. 14. On the other hand, the learned counsel for the respondent Corporation contended that this Court has no jurisdiction to review the terms and conditions of the tender and has relied on the decision of the Supreme Court reported