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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vipin Sanghi, Rekha Palli, JJ.
M/s. Kushal Suraksha And Allied Services Pvt. Ltd. - Appellant
Versus
Delhi Development Authority & Ors. - Respondents
Writ Petition (Civil) No. 4397 of 2020, 5168 of 2020; Civil Miscellaneous Appeal No. 15837 of 2020
Decided On : 25-01-2021
Tender Disqualification - Minimum Wage Discrepancy - NIT NO. 01/EE(P)-II/SE/ECC-I/2020-21 - [Note (5) of NIT] - The court found that the NIT required bidders to calculate minimum wages as per rates prescribed by GNCTD, creating ambiguity. The respondent no.1 cancelled the tender due to a mix-up arising from the ambiguous language used in the NIT. The court set aside the directions debarring the petitioner from participating in the de novo tender process and ordered the refund of EMD. The petition filed by M/s Stallion Security was rejected, and both parties were allowed to submit bids in the de novo tender process.
Fact of the Case:
M/s Kushal Suraksha, initially the lowest bidder, was disqualified due to a minimum wage discrepancy. The entire tender was recalled, and M/s Stallion Security, the second lowest bidder, filed a petition against the decision.
Finding of the Court:
The court found that the NIT created ambiguity regarding the calculation of minimum wages, leading to a mix-up in the bid. The cancellation of the tender and debarring of M/s Kushal Suraksha were deemed unjustified. However, the petition filed by M/s Stallion Security was rejected.
Issues: Disqualification of lowest bidder, cancellation of entire tender, entitlement of L-2 bidder, and ambiguity in NIT terms.
Ratio Decidendi: The court set aside the directions debarring M/s Kushal Suraksha from participating in the de novo tender process and ordered the refund of EMD. The petition filed by M/s Stallion Security was rejected, and both parties were allowed to submit bids in the de novo tender process.
Final Decision: The writ petition filed by M/s Kushal Suraksha was allowed to the extent that the directions debarring the petitioner from participating in the de novo tender process were set aside, and the order to forfeit its EMD was also set aside. The EMD was ordered to be refunded to the petitioner within two weeks. The petition filed by M/s Stallion Security was rejected, but both parties were allowed to submit bids in the de novo tender process.
JUDGMENT
Rekha Palli, J. - The present decision disposes of two petitions, one filed by M/s Kushal Suraksha and Allied Services Pvt. Ltd, who was initially the lowest bidder (L-1) but was subsequently disqualified for reasons that are detailed hereinafter, and the other filed by M/s Stallion Security who was the second lowest bidder (L-2) in the tender issued by the respondent no.1 on 10.06.2020 for the purpose of engaging security personnel on an annual basis to guard the portion of Yamuna river plains falling between the Wazirabad Barrage to ITO barrage. Both the petitioners are essentially aggrieved by the letter dated 16.07.2020 which rejected the bid of M/s Kushal Suraksha (the petitioner in WP(C) 4397/2020), and recalled the entire tender for de-novo issuance thereof.
2. Before dealing with the grievances of the parties in relation to this order, the factual matrix concerning the impugned decision may be noted. The tender in question was the Notice Inviting Tender issued on 10.06.2020 (hereinafter referred to as 'the NIT') for providing security personnel falling in the following categories:
| NIT NO. 01/EE(P)-II/SE/ECC-I/2020-21 | ||||||
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| Schedule of Quantities | |||||
| Name of Work: | Protection of DDA land under East Zone | |||||
| Sub head : | Deployment of Private Secretary Guards for the watch and ward of Yamuna River Flood Plain Area from Wazirabad Barrage to ITO Barrage (EASTERN and Western Bank) | |||||
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| S.No | Description | Qty. | Unit | Rate | Amount | |
| 1. | Providing and running well equipped Patrolling GPS enabled vehicle like Mahindra Jeep, Bollero, Scorpio or equivalent including cost of services of operating staff, cost of lubricating oil, Diesel/ Petrol/ kerosene oil, other consumables for running the Patrolling vehicle. The hire charges of per day basis )for the single shift of eight working hours.) | 72 | Each Vehicle per month per shift | 48,166.00 |
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| 2. | Providing round the clock security guards without gun for watch and ward of Government premises, Yamuna River Flood Plain Area and its all its belongings by deploying neatly dressed security guards in 8 hours shift including necessary T&B like torch, lathi and uniform etc. Complete, as per the direction of Engineer-in-charge. (One job mans 8 hours duty). | 20805 | One job | 817.30 | 1,70,03,927.00 | |
| 3. | Providing around the clock Ex Serviceman security guards (Highly Skilled) from DGR without gun for watch and ward of Government premises, Yamuna River Flood Plain Area and all its belongings by deploying neatly dressed security guards in 8 hours shift including necessary T&P like torch, lathi and uniform etc. Complete, as per direction of Engineer-in-Charge.(One job means 8 hours duty). | 2190 | One job | 2326.95 | 50,96,021.00 | |
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| Total |
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| 2,55,67,900.00 | |
3. Both M/s Kushal Suraksha and M/s Stallion Security, who provide security services, submitted their bids in response to the NIT. The technical bid of M/s Kushal Suraksha was accepted by the respondent no.1 on 12.06.2020, and its financial bid was accepted on 23.06.2020. However, on 16.07.2020, M/s Kushal Suraksha received a letter from the Executive Engineer of respondent no.1, which has been impleaded in these petitions as well, stating that its bid suffered from a costing discrepancy since it had erroneously calculated the minimum wage component therein at INR 1,61,15,447/- whereas the rate prescribed by the Director General of Resettlement (DGR), Ministry of Defence, who was the determining authority in the matter as per the tender notification, placed the same at INR 1,65,98,864/-. As per the respondent no.1/DDA, this obviously meant that the bid of M/s Kushal Suraksha, being the lowest one at the time, was invalid and was consequently, disqualified. As a
AI
Ambiguity in tender terms and conditions led to the cancellation of the tender and disqualification of the lowest bidder. The court emphasized the importance of clear and unambiguous tender condition....
The court ruled that disqualification of a bidder without opportunity to respond violates principles of natural justice, and tender ambiguity necessitates careful clarifications to avoid unfair resul....
Tender conditions mandating compliance with minimum wage must strictly be followed; non-compliance voids bid eligibility.
Judicial review in tender matters is limited to cases of arbitrariness or fundamental legal errors; ambiguity in tender specifications justifies cancellation.
Tender disqualification must be reasonable and justified; arbitrary rejections violate principles of fair competition.
The decision-making process of the authority can be subject to judicial review, and interference is warranted if the decision is found to be palpably arbitrary and unreasonable.
Public authorities cannot disqualify tender participants based on undeclared criteria absent from the tender notification. Doing so violates principles of fairness and non-arbitrariness, as administr....
The court ruled that bids below the justified rate are non-responsive, emphasizing judicial respect for expert evaluations in tendering processes.
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