INTELLIGENCE SECURITY OF INDIA Vs. STATE OF JHARKHAND

JUDGEMENT

(1.) The present writ petition has been filed for quashing letter No. 2863 dated 25.10.2019 (Annexure-11 to the writ petition) whereby the work order issued to the petitioner vide letter No. 2750 dated 12.10.2019 pursuant to the Notice Inviting Tender (NIT) dated 01.12.2018 (published on website on 02.12.2018) for providing security services in Ranchi Institute of Neuro-Psychiatry and Allied Sciences (RINPAS), Kanke, Ranchi has been cancelled by the respondent No.3 on the basis of the direction issued by the respondent No.2. Further prayer has been made for quashing letter No. 1102(6) dated 23.10.2019 (Annexure-12 to the writ petition) issued by the respondent No.2 whereby a direction was issued to the respondent No.3 to cancel the said work order issued in favour of the petitioner and consequently to cancel the NIT issued vide Bidding Document No. DIR/09/11/2018-19 dated 01.12.2018 by the respondent No.3 for selection of agency to provide security services in RINPAS, Ranchi. Further prayer has been made for issuance of direction upon the respondent No.3 to allow the petitioner to act as an agency for providing security services in RINPAS, Ranchi especially in view of the fact that the petitioner was duly selected pursuant to a valid tender process and an agreement dated 10.10.2019 to that effect was already executed between the petitioner and the respondent No.3. The petitioner has also prayed for quashing the fresh NIT dated 01.11.2019 which has been issued by the respondent No.3 for selection of an agency to provide security services in RINPAS, Ranchi.

(2.) The factual background of the case, as stated in the writ petition, is that the respondent No.3 issued NIT dated 01.12.2018 (published on website on 02.12.2018) for selection of an agency to provide security services in RINPAS, Ranchi. The petitioner along with the other two bidders (the respondent Nos. 4 and 5) participated in the said tender process and all the three bidders were declared technically qualified. Thereafter, a decision was taken to open the price bids of the successful bidders. Subsequently, in the meeting of the Purchase Sub-Committee, RINPAS, Ranchi held on 28.02.2019, the petitioner was found to be the lowest bidder. However, the respondent No.5 raised objection with respect to declaration of the petitioner as L-l bidder whereupon the Purchase Sub-Committee took a decision to seek clarifications from the respondent Nos. 4 and 5. Accordingly, two separate letters were issued by the respondent No.3 vide letter Nos. 725 and 726 (both dated 06.03.2019) to the respondent Nos. 4 and 5 respectively directing them to submit their justifications as to on what ground they were claiming that the petitioner was not the lowest bidder. In the said letters, the respondent No.3 also directed the respondent Nos. 4 and 5 to give breakup of the rates quoted by them including the contribution of employer share as well as employee share towards EPF and ESIC. Further, explanations were sought vide aforesaid letters from the respondent Nos. 4 and 5 as to why they had not filled the mandatory column of 'Other Charges' in the Price Bid. Pursuant to the said letters, the respondent No.5 submitted its reply admitting that it had not separately quoted the amounts pertaining to the contributions towards EPF and ESIC and claimed that the rate quoted by it was an inclusive rate adding the said EPF and ESIC contribution in Price Bid as total cost per head / per month. Thereafter, the Purchase Sub-Committee held a meeting on 25.07.2019 and unanimously declared the petitioner as L-l bidder stating inter alia that the respondent Nos. 4 and 5 had not separately quoted the charges towards EPF and ESIC contributions in the Price Bid and had also not filled up the column of 'Other Charges'. The respondent No.5 made certain complains before the Secretary, Health, Education and Family Welfare Department, Government of Jharkhand, Ranchi-respondent No.l alleging that the petitioner was not the lowest bidder and pursuant thereto, a clarification was sought from the respondent No.3 regarding the declaration of the petitioner as the lowest bidder whereupon the respondent No.3 vide letter No 2568 dated 13.09.2019, submitted a detailed reply to the respondent No.l stating inter alia that the rate quoted by the petitioner was the lowest rate as it had separately shown the amounts towards EPF and ESIC contributions in the price bid column which was not shown deliberately by the other two bidders. The respondent No.3 further clarified in his letter that the tender documents of the NIT specifically mentioned that the rate to be quoted by the bidder should be inclusive of wages, statutory liabilities, applicable taxes as well as service charges and if the statutory liability towards EPF and ESIC contributions was added to the rate quoted by the other two bidders, their rates would go higher than the rate quoted by the petitioner and thus the petitioner was rightly declared as the lowest bidder. Having considered the said clarification, the respondent No.l directed the respondent No.3 to immediately execute the agreement and to issue necessary work order to the lowest bidder. Thereafter, the respondent No.3 vide letter dated 04.10.2019, informed the petitioner that it was declared as the lowest bidder by the Purchase Sub-Committee and accordingly it was directed to execute the necessary agreement for the said tender with the respondent No.3 within a period of 10 days. Pursuant to the said direction issued by the respondent No.3, the petitioner took steps for execution of agreement to provide security services in RINPAS, Ranchi and accordingly on 10.10.2019, an agreement was duly executed between the petitioner and the respondent No.3 appointing the petitioner as an agency to provide security services in RINPAS, Ranchi. Subsequently, vide letter No. 2750 dated 12.10.2019, the petitioner was directed to deploy its security personnel-220 in total as per the NIT at RINPAS, Ranchi w.e.f. 01.11.2019 morning. As per the terms of the NIT dated 01.12.2018 and the agreement dated 10.10.2019, the petitioner was further directed to deposit the Bank Guarantee amount as Performance Security and accordingly the petitioner vide its letter dated 19.10.2019, deposited the Bank Guarantee of Rs.23 Lakhs in favour of the respondent No.3. Pursuant to execution of the agreement and issuance of the work order in its favour, the petitioner mobilized its resources for deployment of 220 security personnel in RINPAS, Ranchi and necessary steps were taken by it to ensure that its fleet of security personnel should be stationed at Ranchi so that they could be deployed w.e.f. 01.11.2019 in RINPAS, Ranchi. However, suddenly the petitioner was served with a copy of the impugned letter No. 2863 dated 25.10.2019 issued by the respondent No.3 informing that in view of the direction issued by the respondent No.2 vide the impugned letter No. 1102(6) dated 23.10.2019, a decision has been taken to cancel the work order dated 12.10.2019 issued in favour of the petitioner. Thereafter, a fresh NIT dated 01.11.2019 has been issued for the said work. Hence, the present writ petition.

(3.) Learned counsel for the petitioner submits that pursuant to NIT dated 01.12.2018, the petitioner along with the other two bidders participated in the said NIT process. Clauses 18, 32 and 35 of the NIT specifically provide that the rates quoted should be inclusive of wages, statutory liabilities, applicable taxes as well as service charges and that the agency providing security services shall fulfill all the statutory liabilities including the liability towards minimum wages as per the State Government Rules. As per Clause 35 of the NIT, the contributions towards EPF and ESIC, being the employees' share, are required to be deducted by the agency and to be deposited in the concerned fund with applicable matching contribution. Admittedly, there was a separate column in the Price Bid under the heading 'Other Charges' wherein the amounts towards EPF and ESIC contributions were required to be quoted by the bidders, but the respondent Nos. 4 and 5 did not fill the said column. It is further submitted that upon seeking clarification by the respondent No.3 from the respondent Nos. 4 and 5 regarding the price quoted by them including non-filling of the column of 'Other Charges', which was relating to deduction of the employees' share by the agency towards EPF and ESIC, both the bidders informed that the rates quoted were inclusive of EPF and ESIC contributions and as such a detailed analysis of the rate was done by the Purchase Sub-Committee and it was found that if EPF and ESIC contributions were treated to be deducted from the rates quoted by the respondent No.5 from security guard and Supervisor (skilled worker), the same would be lower than the minimum wages prescribed to be paid for such security personnel. So far as the respondent No.4 is concerned, even if EPF and ESIC contributions were included in the rate quoted by it, its rate was higher than that of the petitioner and accordingly the petitioner was declared as the lowest bidder. It is further submitted that by way of an abundant precaution, a clarification was sought by the Purchase Sub-Committee of RIN PAS, Ranchi from the Department of Labour, Employment and Training, Government of Jharkhand regarding applicability of the Minimum Wages Notification in the institution of the respondent-RINPAS. After receiving the clarifications from the Department of Labour, Employment and Training, Government of Jharkhand, the petitioner was again treated by the said Purchase Sub-Committee as the lowest bidder in its meeting held on 25.07.2019. The respondent No.3 also sent a detailed clarification to the respondent No.l stating the manners in which the petitioner was declared as the lowest bidder and only after the direction of the respondent No.l vide its letter No. 1058(6) dated 04.10.2019, an agreement was executed with the petitioner and the work order was issued in its favour. The petitioner also deposited the Performance Bank Guarantee and mobilized its resources including fleet of security personnel for deployment in the RINPAS, Ranchi. On perusal of the impugned letter dated 23.10.2019 issued by the respondent No.2, it would appear that the said letter was issued on the ground that the said work was allotted to the petitioner by the respondent-RINPAS despite the fact that it was not the lowest bidder, rather it was L-3 bidder. The said letter, on the face of it, clearly demonstrates complete non-application of mind on the part of the respondent-authority as the earlier communication made between the respondent-RINPAS and the State Government clearly declaring the petitioner as L-l bidder was ignored. It is further submitted that the impugned letter dated 23.10.2019 issued by the respondent No. 2 is contrary to the letter and spirit of the judgment of the Hon'ble Apex Court rendered in the case of Rakesh Chandra Narayan Vs. State of Bihar and Ors. reported in 1994 Supp (3) SCC 47 wherein the respondent-RINPAS has been declared as an Autonomous Body and certain guidelines for administration, control and functioning of RINPAS, Ranchi have also been laid down. Further, Mansik Arogyashala Rules, 1994 (hereinafter referred to as 'the Rules, 19947), it would appear that the Purchase Sub-Committee, which has been constituted under the Rules, 1994, is entitled to take decision independently in the matter pertaining to availing of one or the other services for carrying out the functioning of RINPAS, Ranchi. The Rules, 1994 do not empower the State Government to interfere with the functioning of the Respondent-RINPAS. As per Rule 10 of the Rules, 1994, the Chairman of the Managing Committee i.e. the Development Commissioner of the State of Jharkhand has been empowered to take any decision in emergent circumstances, if in his opinion, any decision taken by the Managing Committee and/or Sub-Committee is detrimental to the fulfillment of the objectives of the respondent-RINPAS. It further provides that the said emergent decision taken by the Development Commissioner, State of Jharkhand is required to be placed before the Managing Committee for its ratification in its subsequent meeting. Admittedly, no power under Rule 10 of the Rules, 1994 has been exercised by the Development Commissioner and the impugned letter dated 23.10.2019 has been issued by the respondent No.2 which is wholly without jurisdiction and contrary to the Rules, 1994 as well as the aforesaid judgment of the Hon'ble Apex Court, hence the same is liable to be quashed. The impugned letter dated 25.10.2019 issued by the respondent No.3 is also wholly illegal and arbitrary and the same is liable to be quashed. It is further submitted that the petitioner was selected as L-l bidder pursuant to a valid tender process and even an agreement was executed between the petitioner and the respondent-RINPAS. However, without cancelling the said agreement and without providing any opportunity of hearing to the petitioner, the respondent No.3 cancelled the said tender merely on the direction of the respondent No.2 in a most arbitrary and illegal manner as well as in utter violation of the principles of natural justice.