KESHAV SECURITY SERVICE Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioners are private security agencies providing security sevices to various establishments. They were doing so to Bharat Sanchar Nigam Limited (BSNL)'s establishments also but their run was cut short after the Government's directive to public sector undertakings to engage contract security services from DGR (directorate General Resettlement) approved security agencies only. This was first done through OM dated 1.2.1999 issued by the Department of Public Enterprises which was later followed by Defence Ministry's circular dated 26.4.2001 and the BSNL Memorandum dated 3.4.2002 whereby all BSNL establishments were instructed to engage security personnel from DGR sponsored agencies only. They challenge this and also clause 14(d) of BSNL Guidelines which stipulates a retired Gazetted Officer to be on the Board of Directors of private limited companies running these security agencies and which allegedly renders them ineligible to be on the BSNL panel.

(2.) Petitioner's case is that as per past practice, the BSNL was engaging security services through open tender in which both private agencies and those approved by the DGR would compete and of which the best and the lowest would be selected. They would also invariably make the grade through this competitive process and obtain the BSNL contract. They would also deposit 10% or the security money of the tender amount to cover the loss/pilferage, if any, occurring in the BSNL premises due to any lapse of their personnel while executing the contract. But now BSNL had closed the door on them by discarding the open tender system and by deciding to draw from DGR approved agencies only. This according to them was violative of Rule 28 of General Financial Power and Procedure which provided that open tender system must be adopted as a general rule. It was also discriminatory and arbitrary infringing their rights under Article 14 of the Constitution. It also caused loss to public exchequer inasmuch as DGR approved agencies were not required to deposit lot security cost and were otherwise turning out to be expensive as against private agencies. Clause 14(d) of the BSNL "Guidelines for Functioning of Security Agencies" was also no less reasonable as it excluded them from seeking equal treatment and rendered them ineligible to be on the BSNL panel.

(3.) Reliance for all this is placed by the petitioners on a host of Supreme Court judgments, more particularly M.P.Oil Extraction Vs. State of M.P., (1997) 7 SCC 592, Chairman, Sipcot Vs. Contromix Pvt. Ltd, (1995) 4 SCC 595. Tata Cellular Vs. Union of India (1994) 6 SCC 651, Shrilekha Vidvarthi Vs. State of U.P.(1991) 1 SCC 212, Union of India vs. Dinesh Engineering Corporation, (2001) 8 SCC 491, H.D.Shety vs. International Airport Authority, (1979) 3 SCC 489 to show that calling of open tenders was necessary and that the action of respondents was arbitrary, discriminatory and unreasonable offending Article 14 of the Constitution.