Delhi High Court
M/S Well Protect Manpower Services Pvt. ... vs Mcd & Ors. on 2 March, 2012
Author: Sanjay Kishan Kaul
Bench: Sanjay Kishan Kaul, Rajiv Shakdher
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved On : 23.02.2012
Date of decision : 02.03.2012
+ W.P.(C) 5437/2011
M/S WELL PROTECT MANPOWER SERVICES PVT. LTD
...... Petitioner
Through : Mr.Sunil Mittal, Mr.D.K.Sharma,
Mr.S.K.Vashishtha, Mr.D.K.Mittal,
Mr.Pranav Rishi and Mr.Kshitij Mittal,
Advocates.
versus
MCD & ORS. ..... Respondents
Through : Ms.Maninder Acharya, Advocate
for R-1 and R-2.
Mr.Rakesh Khanna, Sr.Adv. with Mr.Rajesh
Gogna and Ms.Jyotika Kalra, Advocates
for R-3.
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE RAJIV SHAKDHER
1. A public notice was issued on 13.06.2009 by R-1/MCD,
inviting tenders from the reputed/specialized watch and ward
agencies/contractors having capacity to provide required
number of uniformed trained manpower for security services for
the hospitals to protect its assets and to regulate public in
OPD/Indoor etc. The petitioner claims that this was in breach of
the Circular dated 09.05.2006 stipulating that all the tenders
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WP (C) No.5437 of 2011 Page 1 of 21
after 30.09.2006 would be processed only through the e-
tendering process.
2. The tender floated had two stages - the technical bid and the
price bid. It is only on qualifying the technical bid, was the
price bid liable to be opened. The technical bids were opened
on 15.07.2009 and four bidders qualified including the
petitioner and R-3 (M/s Prehari Protection System Private
Limited). The price bids were opened on 10.08.2009 and
evaluated by the Price Evaluation Committee. On 24.08.2009,
the MCD asked the technically qualified bidders to provide the
complete bifurcation of the quoted price. The MCD on
11.09.2009 concluded that the price bid only of R-3 was valid
and responsive. We may notice that it is the say of the petitioner
that R-3 used forged and false documents for qualifying the
technical bid since the performance certificate stated to be
issued by M/s NTPC Limited was forged and fabricated. The
Price Evaluation Committee called R-3 for negotiation on
25.09.2009. There were complaints of irregularities including to
the Central Vigilance Commission, but the tender was awarded
to R-3 on 26.04.2010.
3. The petitioner claims that the Chief Vigilance Officer („CVO‟
for short), MCD on the basis of the complaints received with
regard to irregularities in awarding the contract to R-3 requested
the Commissioner, MCD for initiating action against R-3 and
further recommended to call for an explanation from all the
members of the Technical Evaluation Committee („TEC‟ for
short) which was to be forwarded to the Vigilance Department
along with relevant comments and the action taken report. In
pursuance to the said decision dated 22.09.2010, reply was
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WP (C) No.5437 of 2011 Page 2 of 21
submitted by the Health Department, but the explanation of the
TEC was found unsatisfactory by the CVO on 27.10.2010 and a
recommendation was made for cancellation of the tender
awarded to R-3 along with recommendation for suitable action
against the Technical Evaluation Committee Members. It is the
further claim of the petitioner that the MCD took a decision on
02.11.2010 for cancellation of the tender of R-3 and issued a
show cause notice on 11.11.2010 to R-3.
4. The R-3 aggrieved by the action of the MCD preferred WP(C)
No.424/2011 claiming various reliefs but did not succeed and
the learned Single Judge in terms of the order dated 24.01.2011
while disposing of the writ petition only fixed a time-bound
schedule for a decision pursuant to the show cause notice after
giving a personal hearing to R-3.
5. The petitioner has, thus, filed the present writ petition under
Article 226 of the Constitution of India seeking quashing of the
tender awarded on 26.04.2010 and a direction to the
respondents to call the petitioner for re-negotiations and award
of contract.
6. On the first date of hearing on 01.08.2011, learned counsel for
the petitioner made a three-fold submission:
i. The recommendation of the Chief Vigilance
Officer, MCD for cancellation of the tender
awarded to respondent No.3 on the Performance
Certificate issued by NTPC Limited having been
found forged has not been acted upon and thus
respondent No.3 continues to work the tender.
ii. If respondent No.3 has obtained the tender
through a forged Performance Certificate, the said
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WP (C) No.5437 of 2011 Page 3 of 21
respondent cannot count the time period spent
towards working the tender in question as part of
experience.
iii. On cancellation, the tender should be awarded
to the petitioner.
7. The order after recording the aforesaid three submissions,
further proceeds to record that the counsel for the petitioner
fairly stated that out of the three pleas, the last one was not
being pressed by him as the tender was only for a period of 2
years and it was open to the MCD to invite fresh tenders. The
writ petition is naturally contested by the respondents who have
filed their counter affidavits.
8. In the course of hearing, on 13.10.2011, it transpired that R-
2/Additional Director (Health), MCD, had got verified the
Performance Certificate issued by the NTPC, which as per the
CVO, MCD had been found to be forged, and the NTPC had
given a response stating that R-3 had actually carried out the
work. These documents had not been placed on record. In
fact, the MCD pleaded that even if the certificate issued by
NTPC is not taken into account, the R-3 met the requirements
as per the tender conditions. We, thus, called upon R-2 to file an
affidavit in this behalf.
9. Learned counsel for the petitioner drew our attention to the
notings dated 22.09.2010 of the CVO of the MCD. The notings
show that a detailed inquiry on the allegations made in the
complaints was carried out and it was found that R-3 did not
fulfil the eligibility conditions mentioned in Clause 2 r/w Clause
8.2.5 of the Tender Form. The financial bid was found not to be
signed by all the members of the Tender Opening Committee,
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WP (C) No.5437 of 2011 Page 4 of 21
the check list of technical bid was left blank by the agency and
was also not signed by members of TEC and the experience
certificates furnished by the firms were also not verified by the
members of the TEC before awarding the work. A further
aspect of the complaints was that R-3 was not deploying Ex-
servicemen as per the terms and conditions of the contract
requiring employment of at least 33% of manpower from the
category of Ex-servicemen i.e. it was alleged that only 6 of the
107 employees of R-3 were Ex-servicemen. The action was,
thus, proposed against R-3.
10. The second noting dated 27.10.2010 referred to the explanation
given by the TEC and the CVO, MCD came to the conclusion
that the interpretation of the clauses by the TEC while
evaluating the bids was not correct. On most other matters also,
the finding has been adverse including regarding experience
certificate. Having found the explanation given by the TEC as
unsatisfactory, a recommendation was made that the tender
awarded to R-3 may be cancelled and a fresh tender be called
for. A suitable action against the TEC members was suggested.
11. Learned counsel for the petitioner fairly conceded that the
tender invited was for a period of two years and the said period
would come to an end in April, 2012 and, thus, no purpose
would be served by terminating the contract awarded to R-3.
He, however, submitted that if his plea is correct that R-3 was
awarded the tender, though it was not qualified, then at least R-
3 should not be permitted to use the experience of having
executed the tender in question for purposes of obtaining any
fresh tender from any party. In a nutshell, the plea raised was
that providing of services under the contract in question should
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WP (C) No.5437 of 2011 Page 5 of 21
not give experience benefit to R-3 and that could be the
effective relief.
12. Learned counsel for the petitioner vehemently contended that
the present case is one of interference by the political wing of
the MCD to support the illegality of the award of the contract to
R-3 despite the said respondent not being eligible. In this
behalf, learned counsel drew our attention to a report filed along
with the counter affidavit of R-1 and R-2 (Annexure R-7). This
report is of a committee of five members constituted by the
Hon‟ble Mayor of MCD comprising of a Chairman (Chairman
of MRPH Committee), three members (councilors of MCD)
and Additional Commissioner, IT as the convenor, to decide the
case of continuance/cancellation of contract awarded to R-3 in
the wake of Commissioner‟s recommendation to cancel the
contract based on the report of the Vigilance Department of the
MCD. The committee in para 4 of the report noted that it
should assess the entire matter holistically keeping public
interest, patient care and credibility of the MCD uppermost in
its mind while making its recommendations rather than
analyzing it with the perspective of legal complexities.
13. We must observe that we fail to appreciate as to how the legal
parameters in an award of contract could have been given a go-
by to preserve the credibility of the MCD. The Committee
found that defects pointed out by the Vigilance Department,
even if they existed, could not have been detected by any
reasonable person or they are too insignificant observations
which would not be material to disqualify R-3 technically. Para
5 of the report contains the operative portion, which reads as
under:
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WP (C) No.5437 of 2011 Page 6 of 21
"5. Having regard to the facts and
circumstances, the Committee has concluded:-
a) That, there was inherently no problem with
the tender process - there was wide publicity
and enough competition;
b) That, the TEC and PEC have followed
transparent and fair procedures in their
decisions as would appear to a rational and
reasonable observer:
c) That, the objections raised by the Vigilance
Department are tenuous and pedantic, which
they themselves could not detect or point out
before awarding the contract in spite of they
having had access to the full documents;
d) That, the abrupt cancellation of the contract
would not be in the interest of the MCD nor in
the interest of citizens of Delhi especially in
view of the performance of the firm, which has
been found to be quite satisfactory to the user
health units.
The Committee therefore is of the considered
view that the cancellation of the contract, at
this juncture, on the grounds raised by the
Vigilance Department is not cancelled for and
recommends continuation of the contract as
per the agreement signed between the
Municipal Corporation of Delhi and the firm."
14. We may, however, notice that the submission of learned counsel
for R-1 and R-2 is that the said respondents have not been
influenced by the said report of the political wing, but the
matter had been examined by the Additional Commissioner
(Health) as per the order 29.03.2011, which has received the
imprimatur of the Commissioner, MCD. A copy of this order
has also been annexed to the counter affidavit of R-1 and R-2.
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WP (C) No.5437 of 2011 Page 7 of 21
The order notes that the show cause notice dated 11.11.2010
issued to R-3 was on two grounds: Firstly, the criteria laid
down under Clause 2 r/w Clause 8.2.5 of the Tender Form had
not been fulfilled and Secondly, the condition no.43 of the
terms and conditions of the contract requiring employment of at
least 33% manpower from the category of Ex-servicemen was
also not fulfilled. Insofar as the second issue is concerned, it
was admitted by R-3 that for a certain period of time this
condition had been breached but that was on account of
scarcity of Ex-servicemen due to Commonwealth Games.
15. The other important aspect noticed is that the petitioner himself
had filed WP(C) No.2329/2010 aggrieved by its financial bid
being declined as non responsive, which was dismissed on
09.04.2010 with costs of Rs.20,000/- to be paid to R-3. The SLP
preferred by the petitioner being SLP(Civil) No.11677/2010
was also dismissed on26.04.2010 only reducing the costs from
Rs.20,000/- to Rs.5,000/-. The Additional Commissioner
(Health) as per its order dated 29.03.2011 found that the
condition with regard to deployment of 33% of Ex-servicemen
had been fulfilled and that said issue did not affect the eligibility
criteria for the award of the tender. The list of Ex-servicemen
along with their deployment at various hospitals and poly-
clinics had been submitted and no complaint/objection had been
received from any health institutions in this regard. However,
the question of compliance of Clause 2 read with Clause 8.2.5
of the Tender Form was examined and it was found that while
Clause 2.2 provided the „eligibility criteria‟, Clause 8.2.5 only
provided for the „documents to be submitted by the bidder‟.
These two clauses were held to be independent and thus if the
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WP (C) No.5437 of 2011 Page 8 of 21
contracting agency met the requirement of Clause 2 during any
preceding period, then it could be reasonably concluded that the
conditions of the tender had been complied with whereas the
purpose of Clause 8.2.5 was to ensure that the bidder had been
providing similar kind of services for at least five consecutive
years i.e. in support of Clause 2.1 of the Tender Form and not in
relation to Clause 2.2. Even if, Clause 8.2.5 was subject to
Clause 2.2, it was found on a perusal of the record produced
that R-3 had complied with the requirement of Clause 2 and
Clause 8.2.5 of the Tender Form at the time of the award of the
tender. R-3 had submitted an affidavit declaring that all the
contents of the experience certificate were genuine and there
was no reason to doubt the same. In a nutshell, R-1 and R-2
contended that on re-visiting the issue, it was found that R-3
had complied with the tender conditions. This plea is, of course,
supported by R-3. We may notice that in view of the limited
plea sought to be advanced by the petitioner that the experience
gained by R-3 from the contract in question should not enure for
the benefit of R-3, R-1 and R-2 had no objection to the same as
the contract would stand executed by April, 2012, but they
defended their decision which concluded that R-3 was not
ineligible. R-3 was not willing to concede to its ineligibility.
Thus, the question of eligibility/ineligibility of R-3 is required
to be gone into.
16. In order to appreciate the relevant terms and conditions, we
consider it necessary to reproduce both Clause 2 and Clause
8.2.5 of the Tender Form, which are as under:
" 2. ELIGIBLE BIDDERS : -
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WP (C) No.5437 of 2011 Page 9 of 21
2.1 All security agencies who are providing similar
kind of services for at least last five consecutive
years and having annual average turnover of Rs.100
Lac (30% of the estimated value of the contract)
during the last three financial years in the books of
accounts and being run by the ExServicemen/Ex-
Para-military men or reputed firms.
2.2 The bidder should have the experience of
competition of similar works in any of the
Departments/Autonomous Institutions/ Universities/
Public Sector Undertakings of the Government of
India or Government of NCT of Delhi or any other
State Government or Public Sector Banks or Local
Bodies/Municipalities as follows:
a) Three similar completed works costing not less
than amount equal to 30% of the estimated cost; or
b) Two similar completed works costing not less
than the amount equal to 50% of the estimated cost.
*******************
8.2 DOCUMENTS COMPRISING THE BID
(TO BE SUBMITTED IN TECHNICAL
ENVELOPE)
...
...
8.2.5 The bidder shall furnish the details regarding
total number of works, as stated in Clause A.2.2.(a)
(b) and (c), completed in preceding five years, which
were similar in nature and complexity as in the
present contract requiring supply of trained man
power to provide Security Services."
(Note: It is agreed that in Clause 8.2.5, the
reference to Clause A and (c) is by mistake as there
is no such clause)
17. If we scrutinize the aforesaid clauses, it emerges that there are
three stipulations in Clause 2.1 forming part of the eligibility
conditions: Firstly, the security agency should have provided
similar kind of services for at least last five consecutive years;
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WP (C) No.5437 of 2011 Page 10 of 21
Secondly, the security agency should have annual average
turnover of Rs.100 lac (30% of the estimated value of the
contract) during the last three financial years in the books of
accounts and Thirdly, the security agency should be run by
ExServicemen/Ex-Para-military men or reputed firms.
18. The Clause 2.2 provides for experience of completion of similar
works in Government Departments, Autonomous Institutions,
etc. We may notice that the expression used in Clause 2.1(First
Part) is "similar kind of services" while Clause 2.2 refers to
"similar works" i.e. the expressions are more or less identical.
The experience of completion of similar works requires either
of the criteria to be complied with: Three similar completed
works, each costing not less than the amount equal to 30% of
the estimated cost (which in the present case would be three
contracts of Rs.1.05 crores each) or Two similar completed
works, each costing not less than the amount equal to 50% of
the estimated cost (which in the present case would be Rs.1.75
crores per work).
19. Clause 8.2.5 requires the bidders to furnish details regarding
total number of works as stated in Clause 2.2(a)(b) completed in
five years which were similar in nature and complexity as in the
present contract requiring supply of trained manpower to
provide security services.
20. The interpretation sought to be adopted by the Additional
Commissioner (Health) and as canvassed by the respondents is
that though the first part of Clause 2.1 requires experience of
similar kind of services for at least last five consecutive years,
Clause 2.2 requires completed works of requisite value which
does not provide for any time limit i.e. the experience required
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WP (C) No.5437 of 2011 Page 11 of 21
as per Clause 2.2 has no co-relation with the time period of five
years stipulated in Clause 2.1. To support this plea, the
Additional Commissioner (Health) held that Clause 8.2.5,
where once again the reference was to the period of 5 years,
provides for documents to be furnished and has to be read de
hors Clause 2. We find such an interpretation completely
unacceptable. It is crystal clear that Clause 2.1 (First Part)
requires past experience of similar kind of services with
reference to last five consecutive years. The financial turnover
condition for the last three financial years of Rs.100 lakhs is
Second Part of Clause 2.1. Clause 2.2 refers to Institutions
where such experience as per Clause 2.1 (First Part) had to be
obtained, qua similar works, gives two alternatives to satisfy the
condition of such past experience i.e.three works of Rs.1.05
crores each or two works of Rs.1.75 crore each. This is
naturally in the last five consecutive years which is further
made clear by Clause 8.2.5 which refers to the documents to be
submitted as per Clause 2.2(a)(b) for the last preceding five
years. It could hardly be the intent of the drafters of the contract
that the similar experience gained decades ago of the requisite
value as per Clause 2.2 would satisfy the requirement of the
First Part of Clause 2.1. This is a completely stretched
interpretation sought to be given by the Additional
Commissioner (Health).
21. We cannot but notice the complete turnaround in the stand of
the respondents over the passage of time. The Chief Vigilance
Officer of the MCD having found various infirmities in the
award of the contract to R-3, required a show cause notice to be
issued. That such infirmity prima facie existed is apparent from
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WP (C) No.5437 of 2011 Page 12 of 21
the fact that the Commissioner, MCD gave his imprimatur to
the issuance of such a show cause notice. This was interceded
in between by the decision of the political wing of the MCD to
constitute its own committee which apparently sought to
influence the scrutiny of the award of the tender to R-3. The
infirmities in the award of the tender to R-3 were sought to be
explained away in the report of the Committee by using the
adjectives such as "tenuous", "pedantic" "assess the entire
matter holistically keeping public interest" apart from issues of
"patient care" and "credibility of the MCD uppermost in its
mind" rather than "analyzing it with the perspective of legal
complexities". This approach is completely fallacious and a
cover-up operation to give credibility to the award of the
contract to R-3 by seeking to ignore the legal principles by
calling them "legal complexities". The object is clear that the
MCD having awarded the tender to R-3, despite infirmities
found, must not backtrack. The endeavour of the Additional
Commissioner (Health) in its order is also towards this objective
by seeking to give a tenuous interpretation to Clause 2 and
Clause 8.2.5. We are, thus, clearly of the view that the
interpretation of the contract sought to be given by the
respondents is completely unacceptable and the current
interpretation is as set out hereinabove.
22. Now coming to the alternative conclusion contained in the order
of the Additional Commissioner (Health) that even if Clause
2.1, Clause 2.2 and Clause 8.2.5 are read together, R-3 had
complied with the requirements. Such a conclusion is based on
the consideration of the work experience of R-3 as discussed in
the additional affidavit of R-1 and R-2 affirmed on 14.11.2011.
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WP (C) No.5437 of 2011 Page 13 of 21
The work experience certificate submitted by R-3 has been
discussed in para 4 of the affidavit which reads as under:
S.NO. NAME OF INSTITUTION PERIOD OF VALUE OF
WORK WORK
1. M/s Punjab State i) 01.04.2002 to Approximately
Cooperative Supply and 23.02.2006 Rs.21,00,000/- lacs
Marketing Federation Ltd., per month i.e.
Chandigarh. „Markfed‟ Rs.9,66,00,000/- is
the approximate
value of the
completed work.
ii) 01.11.1998 for Rs.18,00,000/- per
one year month i.e.
Rs.2,16,00,000/-
2. NTPC Talcher, Thermal 01.10.2003 to Rs.1,05,08,196/-
Power Station, Angul, 30.09.2005
Orissa.
3. M/s Hafed, Haryana, Kaithal i) 10.10.2006 to Rs.74,50,000/-
Unit, Panipat Unit 31.10.2008
ii) 2006 to 2009 Rs. 62,26,719/
Total Rs.1,36,76,719/-
4. Post Graduate Institute of 01.10.1999 to Approx.
Medical Research, 30.04.2002 Rs.5,30,000/- per
Chandigarh month
i.e.Rs.1,59,00,000/-
approx.
5. AIIMS, New Delhi 01.01.2009 for Rs.4,00,00,000/-
one year
6. Safderjung Hospital, New 01.06.2009 for Rs.9,00,000/-
Delhi one year
7. NTPC Anta 07.02.2004 to Rs.17,68,130/-
06.02.2005
8. Ludhiana Distt. Co-op Milk 15.12.2008 to
Producers UnionLtd., Verka 14.12.2009
23. It is the submission of learned counsel for R-1 and R-2 that the
first three contracts have been taken into consideration for
purposes of work experience of R-3 where the test as per Clause
2.2(a) has been applied of completed work of Rs.1.05 crore
each. If the experience of the last five years is taken into
account, the relevant period would be 01.06.2004 to 31.05.2009
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WP (C) No.5437 of 2011 Page 14 of 21
as confessed by learned counsel for the respondents. The tender
at serial no.8 has no figures mentioned, the tender at serial nos.
6 & 7 are below the bench mark of Rs.1.05 crore per tender and
tender at serial no.4 was granted and executed much prior to
this period. Even otherwise, these tenders have not been taken
into account in the own wisdom of R-1 and R-2 for determining
the experience as canvassed by learned counsel for R-1 and R-2.
The first tender was awarded much prior to the relevant period
though a part of it was executed during the period of 5 years.
The position is the same qua the second tender. The argument
of learned counsel for R-1 and R-2 is that it is the date of the
completion of the tender which would be relevant i.e. as long as
the tender is completed within a period of 5 years, the past
experience, irrespective of the period of that tender falling prior
to the stipulated period of five years, is to be counted. This, in
our considered view, is completely unacceptable. In fact, the
tender ought to have commenced and completed within a period
of five years. We may notice that these are not tenders for
erection or supply of material, but for providing services as
security agency. Even if the beneficial interpretation is given,
the proportionate value of the tender(s) completed within the
last five years is taken into account; the value of the work for
the first tender would be about Rs.5.04 crores, the value of the
work for the second tender would be Rs. 65 lakhs and value of
the work of the third tender would be Rs.1.36 crores. The
benchmark qua the three tenders is Rs.1.05 crores in the present
case and the second tender falls below that value. The test is,
thus, not satisfied. If the alternative test of two tenders of
Rs.1.75 crores is applied, then the second and third tenders fall
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WP (C) No.5437 of 2011 Page 15 of 21
outside this value and only the first tender would fall within the
value and, thus, once again the parameter is not met.
24. We have gone into these details only to show that in whatever
manner the calculations are made, R-3 does not meet the
requirements of the tender insofar as the past experience is
concerned and thus ought not to have been awarded the tender.
25. Learned counsel for the petitioner has also referred to the other
documents filed with the affidavit of R-1 and R-2 affirmed on
14.11.2011 which include the information sought by R-1 and R-
2 from NTPC qua the work experience of R-3. The information
sent by NTPC shows that the contractor had committed
violation of the labour rules and after deducting the provident
fund of the workers and adding the contribution of the
employer, the same had not been got deposited in the provident
fund account. It has also been mentioned that the entity which
worked with NTPC Limited was M/s Prahari Security Services
& Detective Services Pvt.Ltd. The tender qua MCD was
applied for by M/s Prehari Protection System Private Limited
(R-3 herein). This fact has been pointed out only to show the
non-performance of R-3 which conducts business under
different names, but in our view, this does not affect the
principal controversy i.e. whether R-3 meets the requirements
of the tender.
26. Another aspect pointed out by learned counsel for the petitioner
is that the information sought under RTI from NTPC Limited
where query was raised whether M/s Prahari Security Services
& Detective Services Pvt.Ltd was awarded the security services
contract with effect from 01.09.2006 and the number of security
guards engaged per day, the answer to this is "no". In respect of
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WP (C) No.5437 of 2011 Page 16 of 21
the date of termination, it was informed that the date of
termination was 06.04.2006. It was, thus, submitted that a
wrong information had been furnished by R-3. The aforesaid
has been explained by learned counsel for R-1 and R-2 as the
information was sought qua specific period while the period
taken into account, in our considered view (erroneously), is
prior to that. We may notice that the petitioner had proceeded
on the basis that as per clause 2.2, three similar completed
works or two similar completed works of requisite turnover had
to be executed in the last three financial years based on the
second parameter of clause 2.1 providing for an annual average
turnover of Rs.100 lakhs during the last three financial years.
However, as we have observed aforesaid, the correct
interpretation of the tender is that the past experience of last five
consecutive years is to be taken into account as per the first
requirement of Clause 2.1 and, thus, the requisite three or two
completed works has to be with reference to this five years
period for which documents had to be submitted as per Clause
8.2.5 also for the last preceding five years.
27. We are, thus, of the unequivocal view that R-3 did not meet the
tender conditions qua the past experience. We may add that
though due credence must be given to interpretation of a tender
as envisaged by the drafters of the tender, the endeavour in the
present case, is to interpret the tender conditions tenuously to
somehow justify the action of R-3 being awarded the tender
despite the earlier prima facie conclusions to the contrary only
as a cover-up operation. Thus, the interpretation sought to be
given to the tender is completely contrary to the very terms of
the tender.
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WP (C) No.5437 of 2011 Page 17 of 21
28. Learned counsel for R-3, towards the end of the arguments,
sought to raise an objection about the maintainability of the
petition on the principles of constructive res judicata by relying
on the Constitution Bench Judgment of the Supreme Court in
The Direct Recruit Class-II Engineering Officers‟ Association
and Ors v. State of Maharashtra and Ors.; AIR 1990 SC 1607.
In this behalf, a reference was made to para 35, the relevant
portion of which reads as under:
"It is well established that the principles of res judicata
are applicable to writ petitions. The relief prayed for on
behalf of the petitioner in the present case is the same as
he would have, in the event of his success, obtained in
the earlier writ petition before the High Court. The
petitioner in reply contended that since the special 'leave
petition before this Court was dismissed in limine
without giving any reason, the order cannot be relied
upon for a plea of res judicata. The answer is that it is
not the order of this Court dismissing the special leave
petition which is being relied upon; the plea of res
judicata has been pressed on the basis of the High
Court's judgment which became final after the dismissal
of the special leave petition. In similar situation a Con-
stitution Bench of this Court in Daryao and Others v.
The State of U.P. and Others,[1962] 1 SCR 574 : (AIR
1961 SC 1457), held that where the High Court dismisses
a writ petition under article 226 of the Constitution after
hearing the matter on the merits, a subsequent petition
in the Supreme Court under Article 32 on the same facts
and for the same reliefs filed by the same parties will be
barred by the general principle of res judicata. The
binding character of judgments of courts of competent
jurisdiction is in essence a part of the rule of law on
which the administration of justice, so much emphasised
by the Constitution, is founded and a judgment of the
High Court under article 226 passed after a hearing on
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WP (C) No.5437 of 2011 Page 18 of 21
the merits must bind the parties till set aside in appeal as
provided by the Constitution and cannot be permitted to
be circumvented by a petition under Article 32. An
attempted change in the form of the petition or the
grounds cannot be allowed to defeat the plea as was
observed at page 595 (of SCR) (at p.1467 of AIR) of the
reported judgment, thus:
"We are satisfied that a change in the form of
attack against the impugned statute would
make no difference to the true legal position
that the writ petition in the High Court and
the present writ petition are directed against
the same statute and the grounds raised by
the petitioner in that behalf are substantially
the same."
The decision in Forward Construction Co. and others v.
Prabhat Mandal (Regd.), Andheri and Others, [1986] 1
SCC 100 : (AIR 1986 SC 391), further clarified the
position by holding that an adjudication is conclusive
and final not only as to the actual matter determined but
as to every other matter which the parties might and
ought to have litigated and have had decided as
incidental to or essentially connected with subject
matter of the litigation and every matter coming into the
legitimate purview of the original action both in respect
of the matters of claim and defence. Thus, the principle
of constructive res judicata underlying Explanation IV of
s. 11 of the Code of Civil Procedure was applied to writ
case. We, accordingly hold that the writ case is fit to be
dismissed on the ground of res judicata."
29. The aforesaid principle is sought to be applied to the facts of the
present case on the ground that the writ petition filed by the
petitioner earlier being WP(C) No.2329/2010 was dismissed on
09.04.2010. It was pleaded that if there were any other pleas
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WP (C) No.5437 of 2011 Page 19 of 21
available to the petitioner, they should have been raised in that
petition and not by filing the present writ petition.
30. We are unable to accept the aforesaid plea as the contours of the
controversy in that writ petition and in the present writ petition
are completely different. The WP(C) No.2329/2010 was
concerned with the challenge laid by the petitioner to his
financial bid being declared as non-responsive. The subject
matter of the present writ petition arises from the ineligibility of
R-3. The order passed by the concerned authorities of R-1 and
R-2 on the basis of which the award of tender to R-3 is sought
to be justified are much post the decision in that writ petition.
As noticed, the show cause notice issued to R-3 was
unsuccessfully challenged by R-3 in WP(C) No.424/2011,
decided on 24.01.2011.
31. As long as R-1 and R-2 were proceeding against the award of
tender to R-3 on account of prima facie view of its ineligibility,
the process was on and the petitioner was entitled to wait for
that process to end. This process only ended with the order of
the Additional Commissioner (Health) dated 29.03.2011 which
is stated to have received the imprimatur of the Commissioner,
MCD. Thus, the principles of res judicata or constructive res
judicata do not bar the present writ petition.
RELIEF
32. We are of the considered view that the limited relief prayed for
by the petitioner in the present case ought to be granted i.e.
without the tender awarded in favour of R-3 being cancelled, as
the same is stated to be coming to an end in April, 2012, R-3 is
held dis-entitled to use the experience gained by execution of
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WP (C) No.5437 of 2011 Page 20 of 21
the contract in the form of past experience for any future tenders
and thus R-1 and R-2 will not issue any certificate of past
experience to R-3 based on the contract in question.
33. The writ petition is accordingly allowed with costs of Rs.5,000/-
each against R-1 & R-2 and R-3 respectively.
SANJAY KISHAN KAUL, J.
MARCH 02 , 2012 RAJIV SHAKDHER, J. dm
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