Onkareshwar Sushikshit Berojgar Seva Sahkari Sanstha Through Its Chairman V K Wagh vs. City And Industrial Development Corporation Maharashtra LTD Through Its Chief Administrator And Ors

Held

The Court held that its jurisdiction under Article 226 of the Constitution in tender/contract matters is not appellate and is limited to scrutinizing the decision-making process, not the final decision. Respondents No. 1 and 2, as experts, are entrusted with considering quoted rates, adherence to the Minimum Wages Act, and other contractual conditions. The Court found that the respondents No. 1 and 2 had provided calculations on affidavit demonstrating that the rates quoted by respondent No. 3 would comply with the Minimum Wages Act, attributing the difference in rates to changes in special wages and dearness allowance. Regarding GST, the respondents stated it was not applicable or would be borne by them. The Court concluded that the decision-making process did not appear to be faulted and that in contractual matters, the principal is given leverage. Therefore, no case for interference was made out, and the writ petition was dismissed.

Facts

The petitioner, Onkareshwar Sushikshit Berojgar Seva Sahakari Sanstha (Ltd.), participated in a tender floated by respondents No. 1 and 2 (City & Industrial Development Corporation Maharashtra Limited and others) for solid waste collection. The petitioner claims to be the successful bidder in the first tender due to quoting minimum rates. However, the respondents allegedly raised frivolous queries regarding adherence to the Minimum Wages Act and did not accept the tender mala fide, subsequently floating a fresh tender in September 2017. This second tender included provisions for drivers and GST applicability. The petitioner contends that the respondents are favoring other contractors and arbitrarily eliminating them, particularly noting that respondent No. 3's lower quoted rates would not allow for adherence to minimum wages, a stance contradicted by the respondents' position on the petitioner's earlier bid.

Key Issues

1. Whether the decision-making process of respondents No. 1 and 2 in not accepting the petitioner's tender in the first instance and subsequently floating a new tender was arbitrary and mala fide, particularly concerning adherence to the Minimum Wages Act and GST provisions? Petitioner's arguments: The respondents acted arbitrarily and mala fide by not accepting the petitioner's lowest bid in the first tender, raising frivolous queries about minimum wages, and then floating a new tender with different conditions. They argue that respondent No. 3's quoted rates are insufficient to comply with the Minimum Wages Act, citing a significant difference between the calculated minimum wage expenditure and respondent No. 3's bid. The petitioner also contends that the respondents have taken a contrary stand regarding the feasibility of quoted rates for minimum wage compliance compared to the first tender. The applicability of GST has also not been properly considered. Respondents' arguments: The respondents No. 1 and 2 argue that there has been a change in special and dearness allowances for minimum wages, making respondent No. 3's quoted rates feasible, while the petitioner's rates are higher. They also assert that GST is not applicable, and even if it were, respondents No. 1 and 2 would bear the charges, not the contractor. Respondent No. 3 accepts the arguments made by respondents No. 1 and 2.