Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2016 Supreme(Online)(SC) 843

R.F. Nariman, Dipak Misra, JJ
BAKSHI SECURITY AND PERSONNEL SERVICES PVT. LTD. – Appellant
Versus
DEVKISHAN COMPUTED PVT. LTD. – Respondent
CIVIL APPEAL NO._____________ of 2016 | SLP (CIVIL) NO.5695 OF 2016

Advocates:
For the Appellants/Petitioners: Mr. H.P. Rawal, Sr. Adv., Mr. Anirudh Sharma, Adv., Mr. Anand Mukharji, Adv., Mr. Nipun Saxena, Adv., Ms. Divya Anand, Adv.
For the Respondents: Mr. Shyam Divan, Sr. Adv., Ms. Madhavi Divan, Adv., Mr. Nikhil Goel, Adv., Ms. Naveen Goel, Adv., Mr. Ashutosh Ghade, Adv., Ms. Hemantika Wahi, AOR, Mr. Pritesh Kapoor, Adv., Ms. Aagam Kaur, Adv., Ms. Puja Singh, Adv.

Tender conditions mandating compliance with minimum wage must strictly be followed; non-compliance voids bid eligibility.

Headnote:(A) Labour Welfare Legislation - Essential Conditions of Tender - Minimum Wages Act - The tender document required bidders to quote a fixed price that meets or exceeds the minimum wage established by law, and bids below this threshold were subject to rejection - The Respondent's bid was both below the calculated minimum wage and open-ended, rendering it non-compliant with the tender criteria (Paras 12-14).

(B) Public Interest in Tender Process - Courts should not interfere with administrative decisions regarding tenders unless there is evidence of mala fides or arbitrary actions - The essence of business is preserved when bids are evaluated based on clear, articulated conditions (Paras 20-21).

Facts of the case:
Tender for manpower services required strict adherence to minimum wage provisions; both Appellant and Respondent submitted bids below the initially established minimum wage, resulting in the tender being awarded to a third party - Respondent challenged the decision in court, leading to a controversial ruling favoring an adjustment of their bid (Paras 4-8).

Findings of Court:
The court reaffirmed that the Respondent's bid did not conform to the mandatory tender conditions and that the High Court erred in allowing an adjustment to their bid contrary to the specified fixed price conditions (Paras 12-14).

Issues: The critical issue was whether the Respondent's bid conformed to the essential terms of the tender concerning minimum wage and fixed pricing (Paras 10, 13).

Ratio Decidendi: The requirement for strict compliance with tender conditions was reiterated, emphasizing that non-conformity must lead to rejection - The principle of transparency in tendering processes must prevail, and the court cannot craft new contracts from existing tender documents (Paras 15-19).

Result: Appeal allowed; the High Court's order set aside, and the tendering process reinstated in favor of the Appellant.

Table of Content
1. tender process and minimum wage requirements (Para 2 , 3 , 4)
2. court's directive on opportunity for bidders (Para 6 , 7 , 8)
3. arguments on eligibility of bids (Para 10 , 11)
4. analysis of tender conditions compliance (Para 12 , 13 , 14)
5. strict adherence to essential tender conditions (Para 15 , 16 , 17 , 18)
6. (Para 19 , 20 , 21)

R.F. Nariman, J.

1. Leave granted.

2. On 20.11.2014, the Commissioner of Transport, Government of Gujarat, floated a tender seeking bids for services inter alia of supervisors, computer programmers, data entry operators, and electrician staff at 11 RTO check-posts. A few material clauses of the tender are set out hereinbelow:-

“2.5.5 Commercials The Commercial Bids should strictly conform to the formats provided in Annexure 2 of this tender document.

2.5.6 Fixed Price Prices quoted by the Bidder shall be fixed and no variation will be allowed under any circumstances during the entire period of the project. No open-ended Bid shall be entertained and the same is liable to be rejected straightaway

2.8.3 Rejection of Bid The hard-bound copy of Technical Bid Document shall be submitted in the form of printed document. Bids submitted by Telex, fax or email shall not be entertained. Any bid not secured in accordance with Clause 2.8 mentioned above, shall be rejected by COT without any further correspondence, as non-responsive. A bid that does not meet all pre-qualification criteria or is not responsive or not fulfilling technical evaluation shall be rejected by COT, and may not subsequently be made responsive by correction or withdrawal of the non-conforming deviation or reservation by the Bidder.

3.4.5 It shall be the responsibility of the Bidder to abide by the provisions of the labour welfare legislations, like The Payment of Wages Act , 1936, The Payment of Bonus Act , 1965, The Minimum Wages Act , 1948, The Equal Remuneration Act , 1976, The Payment of Gratuity Act , 1972, The Employees’ State Insurance Act , 1948, Contract Labor Act , 1970, The Workmen’s Compensation Act , 1923 and other similar legislations, rules, and orders as issued from time to time.

Annexure – 2 (Financial Bid)

Format for Financial Bid Price Bid: (Financial/Commercial Bid submitted in physical form shall be liable for rejection. It should be submitted online only at https://www.nprocure.com)

Please provide price bid for supply of Man Power to be deployed at different Check-posts/CMC.

1. Salary paid to the deployed manpower should not be less than the minimum wages published as per the notification issued by state govt. labour department or other statutory benefits applicable. In case of revision of minimum wages/DA by the labour department, agency would be entitled to get the revised rates from Commissioner of transport.

2. Break-up of salary for each category of employee should be provided indicating clearly the wages, DA, other mandatory statutory benefits & the service charges.

3. If the component of salary quoted is less than the minimum wages prescribed or the components of mandatory statutory benefits are not included in the break-up, the bid is liable to be rejected.

4. The quantity of manpower required may vary and the supplier may be asked to supply upto 25% extra manpower at the rate quoted above.

5. L1 will be decided on grand total.

Signature: Date: Designation: Seal:”

3. The financial bids were opened on 10.12.2014. 9 bidders gave financial bids of which only three were qualified. The Appellant bid for a total amount of Rs.2,92,93,944/-; Respondent No.1 bid for Rs.2,77,68,000/-, and one Airan Consultants Pvt. Ltd. made a bid for Rs.3,03,83,184/-.

4. On 26.2.2015, the Technical Evaluation Committee, after taking into account the opinion of the Labour Department, arrived at a minimum wage figure of Rs.3,00,92,346/-. Inasmuch as both the Appellant as well as Respondent No.1 gave bids which were below this figure, (which would, therefore, be less than the amount required as minimum wages, in accordance with th

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2016 Supreme(Online)(SC) 843

R.F. Nariman, Dipak Misra, JJBAKSHI SECURITY AND PERSONNEL SERVICES PVT. LTD. – AppellantVersusDEVKISHAN COMPUTED PVT. LTD. – RespondentCIVIL APPEAL NO._____________ of 2016 | SLP (CIVIL) NO.5695 OF 2016

Tender conditions mandating compliance with minimum wage must strictly be followed; non-compliance voids bid eligibility.

Cases Referred (3)

R.F. Nariman, Dipak Misra, JJ
BAKSHI SECURITY AND PERSONNEL SERVICES PVT. LTD. – Appellant
Versus
DEVKISHAN COMPUTED PVT. LTD. – Respondent
CIVIL APPEAL NO._____________ of 2016 | SLP (CIVIL) NO.5695 OF 2016