Zeealert Services Private Limited Through Its Director Rajiv Ranjan Singh vs. The State Of Jharkhand
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The petitioner, Zeealert Services Private Limited, challenged the award of a contract for outsourcing Para-Medical/Technical Staffs to respondent no.4, M/s Samanta Security and Intelligence Services Pvt. Ltd. The petitioner alleged that respondent no.4 submitted a false character certificate, violating Clause 6.1.4(h) of the Notice Inviting Tender (NIT). The NIT required bidders to be registered with statutory authorities and provide supporting documents, including a character certificate issued by the DC/DM. The petitioner and respondent no.4 were declared successful in the technical bids and both were L-1 bidders in the Para-Medical category. The contract was awarded to respondent no.4 on September 21, 2022. The respondent-State contended that modifications were made to the NIT, the petitioner was present and raised no objection. They also stated that respondent no.4's Managing Director is a resident of Patna, Bihar, and the character certificate was issued by the Senior Superintendent of Police, Patna. The petitioner later received information about the cancellation of this character certificate on January 25, 2023, a date after the Tender Committee's recommendation.
Held
The Court held that it cannot issue a mandamus to the employer to take punitive action against respondent no.4 for allegedly submitting a false character certificate. The Court reasoned that the information regarding the cancellation of the character certificate was received by the petitioner on January 25, 2023, which was after the Tender Committee had made its recommendation on September 14, 2022, and the contract was awarded on September 21, 2022. The Court emphasized that the employer has the power to decide whether or not to award a work, and minor deviations can be ignored. Citing the Supreme Court in Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), the Court stated that while the decision-making process can be judicially reviewed, the soundness of the decision itself should not be questioned unless it is irrational, mala fide, or intended to favor someone. The Court found no reason to interfere with the award of the work to respondent no.4. The issue of whether the employer should take punitive action against respondent no.4 was left to the authorities to act in accordance with the terms of the NIT.
Key Issues
1. Whether the writ Court, in exercise of its powers under Article 226 of the Constitution of India, can issue a mandamus to the employer to take punitive action against a bidder (respondent no.4) for allegedly submitting a false character certificate, thereby challenging the award of contract? Petitioner's Arguments: The petitioner argued that respondent no.4 made a false declaration by submitting a false character certificate, which should have led to its disqualification and prevented the award of the contract. They relied on the principle that terms of the NIT cannot be ignored and must be given significance. Revenue/State's Arguments: The State argued that modifications and clarifications were made to the NIT, and the petitioner was present during the pre-bid meeting and raised no objections. They also contended that the character certificate was issued by the appropriate authority given the bidder's residence and that the petitioner's information regarding the cancellation of the certificate was received after the Tender Committee's decision.
Sections Cited
Section 6.1.4(h)
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Cause title — parties, addresses and appearances
O R D E R 21st February 2023 Per, Shree Chandrashekhar, J. Zeealert Services Private Limited has approached this Court seeking interference with the decision of the Tender Committee dated 14th September 2022 and, consequently, the award of contract to the respondent no.4 through Memo No.4444 dated 21st September 2022 on the ground that the respondent no.4 has made a false declaration under Clause 6.1.4(h) of the Notice Inviting Tender (in short, “NIT”).
The petitioner-Company which is engaged in the business of outsourcing of Para-Medical/Technical Staffs in the hospitals has also been providing housekeeping services to the hospitals. Pursuant to e-Tender vide Bidding Document No.3304 dated 25th June 2022, twelve bidders submitted their proposals under Para-Medical category out of which the 2 W.P(C) No.4865 of 2022 petitioner-Company and the respondent no.4 were declared successful in the technical bids. It is stated that the works under the Para-Medical category were divided into four groups one of which was supply of skilled Para- Medics in which category the petitioner-Company and the respondent no.4 both were declared L-1 bidders. As noticed above, based on the decision of the Tender Committee, the subject works were awarded to the respondent no.4 on 21st September 2022. 3. The grievance of the petitioner-Company is that a bidder which has submitted a false character-certificate could not have been awarded the subject works vide work order dated 21st September 2022. 4. The stipulations under Clause 6.1.4 of the NIT read as under: “6.1.4 The Bidder must be registered with the following statutory authorities and must also furnish self attested copies of supporting documents:- a) ESIC & EPF - Registration No. With last 3 month paid challan, ECR copy minimum 300 staff. b) ITR Copy last 3 Financial years. c) Must be valid ISO Certificates 9001:2015 and 45001:2018 & UDYAN Certificates. d) Trade license issued by Municipal Corporation. e) GST Registration No. Update GST return copy-June 2022 f) Valid Registration No. of the Agency/Firm; g) Any other registration/License which is mandatory for such agencies stipulated by concerned authorities from time to time. h) Character-Certificate issued by DC/DM. Concerned Bidders/ Contractors/Directors. i) The bidder must have rent lease/proof of the Registration office must be located in Jharkhand.”
The respondent-State of Jharkhand has filed a counter-affidavit dated 14th October 2022 controverting the claim of the petitioner-Company. It is pleaded that certain modifications/clarifications/amendments were done vide Corrigendum No.3638 dated 21st July 2022 in the pre-bid meeting dated 25th June 2022 in which the petitioner was present and raised no objection. It is further pleaded that in the meeting dated 14th September 2022 of the District Purchase Committee under the Chairmanship of Civil Surgeon, Ranchi, the petitioner and other nine bidders were present in which the respondent no.4 was declared successful. It is stated that the Managing Director of the respondent no.4 is a resident of Patna, Bihar and, therefore, the character-certificate submitted by the respondent no.4 was issued by the office of the concerned Senior Superintendent of Police, Patna. Furthermore, the respondent no.4 has produced all requisite documents including the ECR
3 W.P(C) No.4865 of 2022 of minimum 300 working staffs and, that, the annual turnover of the respondent no.4 is more than the petitioner-Company for the financial year 2018-19, 2019-20 and 2020-21. 6. This is also not in dispute that the character-certificate which the respondent no.4 has submitted was issued on 31st May 2022 and an information regarding cancellation of the said character-certificate has been received by the petitioner-Company through communication dated 25th January 2023. 7. While so, this document on the basis of which the writ petition is primarily based was not before the Tender Committee which made a recommendation dated 14th September 2022 for award of the subject works to the respondent no.4. 8. The principle which has been applied by the Courts in the matters of award of tender seems to be that the decision of the employer should be given prominence over any claim made about disqualification of others by a bidder which has been disqualified or failed in the final race. This is by now no longer a matter of debate that the employer has powers to take a decision whether or not to award the work to a particular bidder, which even if has been declared L-1 bidder. This is also not in dispute that minor deviations/deficiencies can be ignored or condoned by the employer while deciding whom to award the work under the tender.
In a catena of judgments including the one in “Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium)” (2016) 8 SCC 622, the Hon'ble Supreme Court has observed as under:
“47. The result of this discussion is that the issue of the acceptance or rejection of a bid or a bidder should be looked at not only from the point of view of the unsuccessful party but also from the point of view of the employer. As held in Ramana Dayaram Shetty the terms of NIT cannot be ignored as being redundant or superfluous. They must be given a meaning and the necessary significance. As pointed out in Tata Cellular there must be judicial restraint in interfering with administrative action. Ordinarily, the soundness of the decision taken by the employer ought not to be questioned but the decision-making process can certainly be subject to judicial review. The soundness of the decision may be questioned if it is irrational or mala fide or intended to favour someone or a decision “that no responsible authority acting reasonably and in accordance with relevant law could have reached” as held in Jagdish Mandal followed in Michigan Rubber.”
4 W.P(C) No.4865 of 2022
Now the issue which falls for consideration before this Court is whether in exercise of powers under Article 226 of the Constitution of India the writ Court can issue a mandamus to the employer to take punitive action against the respondent no.4, which according to the petitioner-Company has submitted a false character-certificate.
In our opinion, the answer must be an emphatic “No”. The matter must be left with the authorities which it is expected shall act in accordance with the terms of the NIT.
Having regard to the aforesaid facts and circumstances, finding no reason to interfere with the award of work to the respondent no.4 on 21st September 2022, W.P(C) No.4865 of 2022 is dismissed.
(Shree Chandrashekhar, J.) (Ratnaker Bhengra, J.) Jharkhand High Court, Ranchi Dated : 21st February 2023 sudhir/N.A.F.R.
Reproduced from the public record of the Jharkhand High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.