M/S Kushal Suraksha And Allied Services Pvt Ltd & Anr vs Delhi Development Authority & Ors.

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",

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 hour’s shift including

necessary T&B like torch, lathi and uniform etc.

Complete, as per the direction of Engineer-in-

charge. (One job mans 8 hour’s 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 hour’s shift including

necessary T&P like torch, lathi and uniform etc.

Complete, as per direction of Engineer-

inCharge.(One job means 8 hour’s duty).",2190,One job,2326.95,"50,96,021.00

,Total,,,,"2,55,67,900.00

Before us today Mr. Bhupesh Narula, learned counsel for M/s Kushal Suraksha (also referred to as ‘the agency’) submits that the bid",,,,,

presented by the agency to respondent no.1/DDA had been made under the bonafide assumption that the minimum wages payable to the security,,,,,

personnel which it was deploying for carrying out the work had to be calculated as per the rates prescribed by the GNCTD. He submits that the,,,,,

petitioner had decided to calculate the minimum wages in this manner owing to the unambiguous terms of Note 5 on page 10 of the NIT, which stated",,,,,

that the minimum wage rates in the bids placed had to adhere to those notified by the Labour Department of the GNCTD at the time of submission of,,,,,

the bid, after considering the drivers, security guards under the semi-skilled category and ex-serviceman security guards as highly skilled, all of whom",,,,,

were serving 8 hours a day for the entire duration of 356 days for which the tender period subsisted. He further submits that although the bid of M/s,,,,,

Kushal Suraksha was initially accepted by the respondent no. 1, the same was erroneously cancelled later on, on the premise that the agency had",,,,,

deliberately quoted lower rates in respect of highly skilled ex-serviceman security guards. He submits that rather, M/s Kushal Suraksha had quoted the",,,,,

correct rates prescribed by the GNCTD, as per a precondition in the NIT, yet the respondent no.1 has now swerved around to arbitrarily make the",,,,,

minimum wage rate prescribed by the DGR applicable to the category of ex-serviceman security guards (highly skilled). Consequently, by the",,,,,

impugned order, not only has the bid placed by Ms/ Kushal Suraksha been cancelled, but its earnest money deposit forfeited and it has also been",,,,,

debarred from participating in the re-tendering process.,,,,,

Mr. Sanjeev Sagar, the learned standing counsel for DDA submits that the decision to reject the bid of M/s Kushal Suraksha, levy penalty upon it,",,,,,

cancel the tender and to initiate fresh tender process were arrived upon after a careful and thorough examination of the facts and circumstances of,,,,,

this case. He submits that notwithstanding the acceptance of the financial bid of M/s Kushal Suraksha on 23.06.2020, when the same was sent to the",,,,,

concerned authority for the purpose of assessing whether it was statutorily complaint in all respects, it was found that the minimum wage component",,,,,

in respect of highly skilled ex-servicemen security guards from the Directorate General of Resettlement, Ministry of Defence (DGR) had to be",,,,,

determined as per those set down by the DGR which the agency had failed to do by quoting lower rates prescribed by the GNCTD instead. He,,,,,

submits that in view of this position, the only acceptable way to remedy the situation was to reject the bid of M/s Kushal Suraksha considering that the",,,,,

price it had quoted, despite being the lowest, arose out of a complete disregard for the statutorily prescribed minimum wage rate and was void ab",,,,,

initio. He further submits that in these circumstances, even though M/s Stallion Security had qualified as the L-2 bidder, the respondent rightly took a",,,,,

decision to retender the work, especially in the light of the guidelines issued by the Central Vigilance Commission on 03.03.2007 read with the",,,,,

clarification contained in the Circular dated 20.01.2010 which clearly prohibited such a course of action. In fact, the directions of the CVC clearly",,,,,

state that, normally, no post-tendering negotiations are permitted between a bidder and the tenderer.",,,,,

Learned counsel for M/s Stallion Security, Mr. Pankaj Vivek vehemently opposes the scrapping of the tender process in entirety and submits that",,,,,

the same was wholly unjustified. He submits that once the discrepancy in the bid of M/s Kushal Suraksha came to light, a necessary corollary thereof",,,,,

was that M/s Stallion Security, who was the L-2 bidder in the tender process, would automatically be entitled to the award of tender. In fact,",,,,,

considering that no such discrepancy or misinterpretation marred the bid placed by M/s Stallion Security, who had correctly estimated the minimum",,,,,

wage rate applicable in respect of their bid, it could not be said that the only possible recourse for respondent no. 1 was to scrap the tender. He",,,,,

submits that as much as holding the tender afresh was an expensive process, even as per due process of law, the same was unsustainable and served",,,,,

to the detriment of M/s Stallion Security. He also submits that there is a clear bias with which the respondent has dealt with this entire situation, after",,,,,

accepting what was a manifestly non-responsive bid at the time of submission by M/s Kushal Suraksha, the respondent no.1 has chosen to remedy the",,,,,

situation by overlooking all other bidders and their rights under the tender and subjecting them to the ordeal of participating in the tender process all,,,,,

over again.,,,,,

We have heard learned counsel for the parties. From the submissions at the Bar, it is evident both the respondent no.1 and M/s Kushal Suraksha",,,,,

admit to the fact that the financial bid submitted on 23.06.2020, suffered from the infirmity of having miscalculated the minimum wage component in",,,,,

respect of the third category of security personnel requisitioned under the tender, i.e., Ex Serviceman Security Guard (highly skilled from DGR). It is",,,,,

also undisputed before us that under the tender documents, the bidders were required to take into account minimum wages as prescribed by the",,,,,

GNCTD, which is evident from the following extract of the NIT, namely Note 5 thereof:",,,,,

“Note (5): The rate quoted by bidder shall not be less than the minimum wages as notified by Labour Department of Govt. Of NCT of,,,,,

Delhi at the time of submission of tender. In case, if quoted rates of bidder found less than the minimum wages as notified by the Labour",,,,,

Department of Govt. of NCT of Delhi, then financial bid of the bidder will be rejected out rightly and his EMD will be forfeited, in addition",,,,,

bidder will be debarred from further tendering in DDA.,,,,,

The bidder will evaluate minimum wages by considering driver and security guards under semi-skilled category. The duty periods for semi-,,,,,

skilled categories will remain uniformly 8 hours for full 365 of the time period put to tender.â€​ (emphasis supplied),,,,,

This note reveals that there is merit in the contention of M/s Kushal Suraksha that the language of the NIT expressly required the bidders to,,,,,

calculate the minimum wages as per the rates prescribed by GNCTD for semi-skilled workers. However, it is equally true that as a general rule, once",,,,,

the category of ex-serviceman or Category 3 security personnel requisitioned under the NIT had to be appointed from the DGR, then the only",,,,,

minimum wage rate applicable would be that prescribed by the DGR thus, it was incumbent upon all bidders to resort to the minimum wage rates",,,,,

prescribed by DGR in respect of the Category 3 security personnel, which was higher than the stipulation contained in the petitioner’s tender",,,,,

documents. However, the fact remains that once the note within the NIT specifically directed the bidders to heed the minimum wages prescribed by",,,,,

the GNCTD at the time of arriving upon their estimates, an ambiguity arose in respect of the minimum wage rate applicable. We may also note the",,,,,

petitioner’s submission that the NIT merely prescribed that the Category 3 security personnel had to be appointed from the DGR, without",,,,,

expressly stating that they would have to be paid wages at rates prescribed by the DGR and this omission coupled with the prescription in Note (5),,,,,

created an anomaly. In these circumstances, once the tender document itself created the ambiguity, the petitioner cannot really be faulted for quoting",,,,,

rates by taking into account the minimum wages prescribed by the GNCTD. On the other hand, if the award of tender in favour of M/s Kushal",,,,,

Suraksha at the rates quoted by it in respect of category 3 were allowed to subsist, that would necessarily imply that the wages prescribed by DGR",,,,,

would be given a go-by, which is impermissible. Therefore, the respondent no. 1 cannot be faulted for having cancelled the tender. At the same time,",,,,,

this was not an instance where the agency had deliberately and wilfully attempted to hoodwink respondent no. 1. rather it was just a mix up arising out,,,,,

of a misunderstanding of the terms and conditions of the tender on account of the ambiguous language used by the respondent no.1 in the NIT itself.,,,,,

Strictly speaking, it cannot even be claimed that the conditions in Note (5) had been breached, since the petitioner had not quoted rates lower than",,,,,

those prescribed by the GNCTD. Our attention has also been drawn to the file notings in the record of the DDA which amply demonstrate that even,,,,,

the DDA recognised the position that there was ambiguity in the terms contained in the tender. When the mistake was bonafide, there was absolutely",,,,,

no reason for the respondent no.1 to levy penalty upon M/s Kushal Suraksha, let alone going so far as to debar it from participating in the re-tender",,,,,

process in entirety. We also find that the entire exercise of debarring M/s Kushal Suraksha and automatic forfeiting of its EMD took place without,,,,,

affording it an opportunity to even show cause, which action itself is in violation of the principles of natural justice and therefore cannot be sustained.",,,,,

We have also considered the submission of M/s Stallion Security that the scrapping of the entire bid was illegal since, being the L-2 bidder, it was",,,,,

automatically entitled to the award of the bid and find ourselves unable to agree with this contention. When we have already found that there is an,,,,,

ambiguity in the language of the NIT, which has done away with a level playing field, any extension of benefits therefrom would be to the prejudice of",,,,,

other bidders. Additionally, it is clear that the mandate of the CVC set out in its order dated 03.03.2007 read with the clarification contained in the",,,,,

Circular dated 20.01.2010 prohibits any form of post-tendering negotiations with the enderers. This accommodation sought by M/s Stallion Security in,,,,,

its capacity as a L-2 bidder, therefore, is in violation of this direction and certainly cannot be granted. Thus, we do not see any infirmity in the decision",,,,,

of respondent no.1 to scrap the entire tender and begin the process of engaging the security personnel by issuing a fresh tender.,,,,,

That being said, we hope that in the future, respondent no.1 will exercise adequate caution and care at the time of releasing Notices Inviting",,,,,

Tender and ensure that all the conditions therein are clear and unambiguous. This would certainly save a lot of time and prevent unnecessary wastage,,,,,

of resources for authorities and the bidders, as we have observed to have taken place in the facts and circumstances of this case.",,,,,

Accordingly, for the aforesaid reasons, the writ petition being WP(C) 4397/2020 is allowed to the extent that the directions debarring the petitioner",,,,,

from participating in the de novo tender process is set aside. The order to forfeit its EMD of INR 5, 11,358/- made on 12.06.2020 is also set aside.",,,,,

The EMD be refunded to the petitioner within two weeks. Insofar as WP(C) No. 5168/2020 filed by M/s Stallion Security is concerned, the same is",,,,,

rejected. However, it is made clear that whenever the respondent no.1 chooses to go ahead with the de novo tender process for the same purpose",,,,,

which was set out in NIT NO. 01/EE(P)-II/SE/ECC-I/2020-21, both parties will be at liberty to submit their bids in accordance with the terms and",,,,,

conditions thereof,,,,,