M/S Sri Raja Rajeswari Security Services vs. The State Of Ap

Held

The Court held that the contention raised by the writ petitioner regarding the mandatory payment of 3.25% ESI was devoid of merit. The respondents' argument that ESI is optional if the salary exceeds Rs. 21,000/- per month was accepted by the Court. The Court found no arbitrariness in confirming the tender to the Fourth Respondent, stating that quoting ESI as optional did not amount to arbitrariness. Relying on the judgments of the Apex Court in Bakshi Security and Personnel Services Private Limited and Siemens Public Communication Networks Pvt. Ltd. & Anr. Vs. Union of India & Ors., the Court concluded that the decision-making process was not arbitrary or irrational. The Court noted that the petitioner's financial bid was higher than the Fourth Respondent's, even after considering the ESI component. The Court found no illegality or arbitrariness in the confirmation of the tender to the Fourth Respondent. Therefore, the writ petition was dismissed.

Facts

The petitioner, M/s Sri Raja Rajeswari Security Services, filed a writ petition challenging the tender awarded by the Andhra Pradesh Co-operative Oil Seeds Grower’s Federation Limited (2nd respondent) to the Fourth Respondent (M/s MYB Security Services) for providing security services. The tender notice was issued on 05.08.2024 for a period of one year. The petitioner alleged that the Fourth Respondent was not qualified and that its tender was accepted contrary to the tender conditions, specifically regarding the mandatory inclusion of ESI at 3.25% on basic pay. The petitioner's tender was technically and financially accepted, while the Fourth Respondent's tender, despite not quoting the full ESI amount, was declared the successful bid. The petitioner argued that the Fourth Respondent's tender was under-quoted and should have been rejected.

Key Issues

1. Whether the Fourth Respondent's tender, which did not quote ESI at 3.25% on basic pay, was compliant with the tender conditions, particularly in light of the Employees’ State Insurance Act, 1948, and the principle that essential tender conditions must be strictly complied with? 2. Whether the decision to award the tender to the Fourth Respondent was arbitrary, illegal, or violative of the principles of natural justice and constitutional provisions, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the tender condition requiring ESI at 3.25% on basic pay was mandatory and essential. They relied on the judgment in Bakshi Security and Personnel Services Private Limited Vs. Devakishan Computed Private limited and others to assert that essential conditions cannot be relaxed. The petitioner highlighted that the Fourth Respondent's financial bid showed ESI as Rs. 0.00 for Ex-serviceman Supervisor, which was contrary to the tender terms and statutory requirements, rendering the tender liable for rejection. Respondents' Arguments: The respondents contended that as per current norms, ESI is optional if the salary limit exceeds Rs. 21,000/- per month. They argued that the Fourth Respondent's quoted rates were lower than the petitioner's, and the petitioner had not filed a reply denying this, which could be construed as an admission. They further argued that the petitioner quoted service charges, while the Fourth Respondent did not, making the latter's bid more competitive. The respondents relied on Supreme Court judgments in Siemens Public Communication Networks Pvt. Ltd. & Anr. Vs. Union of India & Ors. to argue that courts should not interfere in tender matters unless the process is malafide, arbitrary, or irrational.