M/S Global Facilities vs. State Of Punjab & Ors

Held

The Court held that it found no grounds to interfere with the impugned order dated November 10, 2017, and the award of the contract to respondent No. 5. The reasoning was based on established legal principles regarding the scope of judicial review in contractual matters. The Court cited several Supreme Court judgments, including BSN Joshi v. Nair Coal Services Ltd., Jagdish Mandal v. State of Orissa and Others, and Michigan Rubber (India) Ltd. v. State of Karnataka and Ors. These judgments emphasize that the employer is the best judge in contractual matters, and judicial interference should be minimal unless the action is demonstrably arbitrary, malafide, or unreasonable. The Court noted that respondent No. 5 was allowed to produce the GST challan later because its payment date was subsequent to the bid opening, and it was submitted before the contract award. The Court found that the decision to award the contract to respondent No. 5, whose bid was more beneficial, was taken after examining the facts and circumstances and was not arbitrary or unreasonable. The ratio decidendi is that courts should exercise judicial restraint in contractual matters unless illegality or arbitrariness is apparent, and the decision-making authority has greater latitude in formulating tender conditions and awarding contracts in the public interest.

Facts

The petitioner, M/s Global Facilities, a partnership firm providing housekeeping and security services, challenged the award of a contract for these services to respondent No. 5, M/s Friend Associates, for the period from September 16, 2017, to March 31, 2018. The petitioner had previously held the contract, which expired on September 15, 2017. The petitioner alleged that respondent No. 5 was not technically qualified as it failed to submit the latest challan for deposit of EPF, ESI, and GST, a mandatory condition. The petitioner also claimed that no pre-bid meeting was held and their representations were ignored. The impugned order dated November 10, 2017, rejected the petitioner's representations, leading to the present writ petition.

Key Issues

1. Whether the award of the contract to respondent No. 5 was arbitrary, unreasonable, or malafide, violating the principles of fairness in public procurement, particularly concerning the submission of GST challans? Petitioner's arguments: The petitioner contended that respondent No. 5 was not technically qualified because it did not submit the latest challan for deposit of EPF, ESI, and GST, which was a mandatory condition as per the Central Vigilance Commission guidelines and the tender notice. They argued that the committee should not have waived this requirement without proper justification and that their representations were not considered. They relied on the principle that tender conditions must be strictly adhered to. Revenue/State's arguments: The respondents did not explicitly detail their arguments in the judgment, but the court's findings suggest they argued that respondent No. 5 was not ineligible on technical grounds. The impugned order indicated that respondent No. 5 was allowed to produce the GST challan later as the last date for payment was September 20, 2017, and it was submitted on September 19, 2017. The court noted that GST was implemented from July 1, 2017. The respondents likely argued that the decision was taken in the overall interest of the public and that the bid of respondent No. 5 was more beneficial.