M/S STALLION SECURITY  Vs DELHI DEVELOPMENT AUTHORITY & ORS.

W.P.(C) 4397/2020 & W.P.(C) 5168/2020 Page 1 of 11
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: – 25.01.2021
+ W.P.(C) 4397/2020 & CM APPL. 15837/2020
M/S KUSHAL SURAKSHA AND ALLIED SERVICES PVT LTD
….. Petitioner
Through: Mr.Bhupesh Narula, Adv.
versus
DELHI DEVELOPME NT AUTHORITY & ORS.
….. Respondents
Through: Mr.Sanjeev Sagar, Standing Counsel
with Ms.Nazia Parveen, Adv. for
DDA.
+ W.P.(C) 5168/2020
M/S STALLION SECURITY ….. Petitioner
Through: Mr.Pankaj Vivek with Mr.Harshit
Chopra & Mr.Yash Saini, Advs.
versus
DELHI DEVELOPMENT AUTHORITY & ORS. ….. Respondents
Through: Mr.Sanjeev Sagar, Standing Counsel
with Ms.Nazia Parveen, Adv. for
DDA.

CORAM:
HON’BLE MR. JUSTICE VIPIN SANGHI
HON’BLE MS. JUSTICE REKHA PALLI

REKHA PALLI , J (ORAL)

1. The present decision disposes of two petitions, one filed by M/s
Kushal Suraksha a nd Allied Services Pvt . Ltd, who was initially the lowest
bidder (L-1) but was subsequently disqualified for reasons that are detailed
hereinafter, and the other filed by M/s Stallion Security wh o was the
second lowest bidder (L-2) in the tender issued by the respondent no.1 on
10.06.2020 for the purpose of engaging security personnel on an annual
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basis to guard the portion of Yamuna river plains falling between the
Wazirabad Barrage to ITO barrage. Both the petitioners are essentially
aggrieved by the letter dated 16.07.2020 which rejected the bid of M/s
Kushal Suraksha (the petitioner in WP(C) 43 97/2020), and recalled the
entire tender for de -novo issuance thereof .
2. Before dealing with the grievances of the parties in relation to this
order, the fact ual matrix concerning the impugned decision may be noted.
The tender in question was the Notice Inviting Tender issued on
10.06.2020 (hereinafter referred to as ‘the NIT’) for providing secur ity
personnel falling in the following categories:

NIT NO. 01/EE(P) -II/SE/ECC -I/2020 -21

Schedule of Quantities
Name of Work: Protection of DDA land under East Zone
Sub head : Deployment of Private Secretary Guards for the watch
and ward of Yamuna River F lood Plain Area from Wazirabad Barrage to
ITO Barrage (EASTERN and Western Bank)

S.
No
. Description Qty. Unit Rate Amount
1. Providing and running
well equipped Patrolling
GPS enabled vehicle like
Mahindra Jeep, Bollero,
Scorpio or equivalent
including co st of services
of operating staff, cost of
lubricating oil, Diesel/
Petrol/ kerosene oil, other
consumables for running
the Patrolling vehicle.
The hire charges of per
day basis )for the single
shift of eight working 72 Each
Vehicle
per
month
per
shift 48,166.0
0
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hours.)
2. Providing round the clock
security guards without
gun for watch and ward
of Government premises,
Yamuna River Flood
Plain Area and its all its
belongings by deploying
neatly dressed security
guards in 8 hour’s shift
including necessar y T&B
like torch, lathi and
uniform etc. Complete, as
per the direction of
Engineer -in-charge. (One
job mans 8 hour’s duty). 20805 One
job 817.30 1,70,03,92
7.00
3. Providing around the
clock Ex Serviceman
security guards (Highly
Skilled) from DGR
without gun for watch and
ward of Government
premises, Yamuna River
Flood Plain Area and all
its belongings by
deploying neatly dressed
security guards in 8
hour’s shift including
necessary T&P like torch,
lathi and uniform etc.
Complete, as per
direction of Engin eer-in-
Charge.(One job means 8
hour’s duty). 2190 One
job 2326.95 50,96,021.
00
Total 2,55,67,90
0.00

3. Both M/s Kushal Suraksha and M /s Stallion Security , who provide
security services, submitted their bids in response to the NIT . The technical
bid of M/s Kushal Suraksha was accepted by the respondent no.1 on
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12.06.2020 , and its financial bid was accepted on 23.06.2020. However,
on 16.07.2020, M/s Kushal Suraksha received a letter from the Executive
Engineer of respondent no.1, wh ich has been impleaded in these petitions
as well, stating that its bid suffered from a costing discrepancy since it had
erroneously calculated the minimum wage component therein at INR
1,61,15,447/ – whereas the rate prescribed by the Director General of
Resettlement (DGR) , Min istry of Defence, who was the determining
authority in the matter as per the tender notification, placed the same at
INR 1,65,98,864/ -. As per the respondent no.1/DDA, this obviously meant
that the bid of M/s Kushal Suraksha, being the lowest one at the ti me, was
invalid and was consequently, disqualified . As a result, the earnest money
deposit ed by M/s Kushal Suraksha was directed to be forfeited.
Respondent no. 1 further held, while recalling the tender for fresh issuance
thereof, that M/s Kushal Suraksh a was to be debarred from participating in
the fre sh tender process. In response to this letter , M/s Kushal Suraksha
denied any such discrepancy and claimed that the rate of minimum wages
adopted by it in its calculations adhered to those notified by the
Government of National Capital Territory of Delhi (GNCTD) for ex –
servicem an security guards, which was stated to be INR 764 per day, and
were therefore legal in all respects . Even M/s Stallion Security raised its
own opposition to this letter on the prima ry ground that mere
disqualification of M/s Kushal Suraksha could not lead to cancellation of
the entire tender process and , in fact , the tender ought to have been
awarded in its favour, since it was the L-2 bidder .
4. On 20.07.2020, WP(C) 4397/2020 was file d by M/s Kushal Suraksha
impugning the aforesaid letter of respondent no.1 on the ground that its
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disqualification was illegal and contrived ; notice in the petition was issued
on 28.07.2020. On that very date, the respondent no. 1/DDA was directed
by this Court to refrain from issuing a fresh tender in lieu of the scrapped
tender pending decision in that petition. Subsequently, on 06.08.2020 , M/s
Stallion Security filed W.P. (C) 5168/2020 against the same order , insofar
as it scrapped the tender and direct ed the issuance of a fresh tender process;
this petition was tagged with WP (C) 4397/2020 on 11.08.2020 .
5. Before us today Mr. Bhupesh Narula, learned counsel for M/s Kushal
Suraksha (also referred to as ‘the agency’) submits that the bid presented
by the age ncy to respondent no.1/DDA had been made under the bonafide
assumption that the minimum wages payable to the security personnel
which it was deploying for carrying out the work had to be calculated as
per the rates prescribed by the GNCTD . He submits that the petitioner had
decided to calculate the minimum wages in this manner owing to the
unambiguous terms of Note 5 on page 10 of the NIT , which stated that the
minimum wage rates in the bids placed had to adhere to those notified by
the Labour Department of the GNCTD at the time of submission of t he bid,
after considering the drivers, security guards under the semi -skilled
category and ex -servicem an security guards as highly skilled , all of whom
were serving 8 hours a day for the entire duration of 356 day s for which the
tender period subsisted. He further su bmits that although the bid of M/s
Kushal Suraksha was initially accepted by the respondent no. 1, the same
was erroneously cancelled later on, on the premise that the agency had
deliberately quoted lower rates in respect of highly skilled ex -servicem an
security guards. He submits that rather, M/s Kushal Suraksha had quoted
the correct rates prescribed by the GNCTD , as per a precondition in the
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NIT, yet the respondent no.1 has now swerved around to arbitra rily make
the minimum wage rate prescribed by the DGR applicable to the category
of ex -servicem an security guards (highly skilled). Consequently, by the
impugned order, not only has the bid placed by Ms/ Kushal Suraksha been
cancelled , but its earnest mone y deposit forfeited and it has also been
debarred from participating in the re -tendering process.
6. Mr. Sanjeev Sagar, the learned standing counsel for D DA submits
that the decision to reject the bid of M/s Kushal Suraksha, levy penalty
upon it, cancel the tender and to initiate fresh tender process were arrived
upon after a careful and thorough examination of the facts and
circumstances of this case. He submits that notwithstanding the acceptance
of the financial bid of M/s Kushal Suraksha on 23.06.2020, w hen the same
was sent to the concerned authority for the purpose of assessing whether it
was statutorily complaint in all respects, it was found that the minimum
wage component in respect of highly skilled ex -servicemen security guards
from the Directorate General of Resettlement, Ministry of Defence (DGR)
had to be determined as per those set down by the DGR which the agency
had failed to do by quoting lower rates prescribed by the GNCTD instead.
He submits that in view of this position , the only acceptab le way to remedy
the situation was to reject the bid of M/s Kushal Suraksha considering that
the price it had quoted, despite being the lowest, arose out of a complete
disregard for the statutorily prescribed minimum wage rate and was void ab
initio. He f urther submits that in these circumstances, even though M/s
Stallion Security had qualified as the L -2 bidder , the respondent rightly
took a decision to retender the work , especially in the light of the
guidelines issued by the Central Vigilance Commission on 03.03.2007 read
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with the clarification contained in the Circular dated 20.01.2010 which
clearly prohibited such a course of action . In fact, the directions of the
CVC clearly state that , normally, no post-tendering negotiations are
permitted between a bidder and the tender er.
7. Learned counsel for M/s Stallion Security, Mr. Pankaj Vivek
vehemently opposes the scrapping of the tender process in entirety and
submits that the same was wholly unjustified . He submits that once the
discrepancy in the bid of M /s Kushal Suraksha came to light, a necessary
corollary thereof was that M/s Stallion Security, wh o was the L-2 bidder in
the tender process, would automatically be entitled to the award of tender.
In fact, considering that no such discrepancy or misinterp retation marred
the bid placed by M/s Stallion Security, wh o had correctly estimated the
minimum wage rate applicable in respect of their bid, it could not be said
that the only possible recourse for respondent no. 1 was to scrap the tender.
He submits tha t as much as holding the tender afresh was an expensive
process, even as per due process of law, the same was unsustainable and
served to the detriment of M/s Stallion Security. He also submits that there
is a clear bias with which the respondent has dealt with this entire situation,
after accepting what was a manifestly non -responsive bid at the time of
submission by M/s Kushal Suraksha, the respondent no.1 has chosen to
remedy the situation by overlooking all other bidders and their rights under
the tende r and subjecting them to the ordeal of participating in the tender
process all over again .
8. We have heard learned counsel for the parties. From the submissions
at the Bar, it is evident both the respondent no.1 and M/s Kushal Suraksha
admit to the fact tha t the financial bid submitted on 23.06.2020, suffered
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from the infirmity of having miscalculated the minimum wage component
in respect of the third category of security personnel requisitioned under
the tender, i.e., Ex Serviceman Security Guard (highly sk illed from DGR).
It is also undisputed before us that under the tender documents , the bidders
were required to take into account minimum wages as prescribed by the
GNCTD, which is evident from the following extract of the NIT, namely
Note 5 there of:
“Note (5): The rate quoted by bidder shall not be less
than the minimum wages as notified by Labour
Department of Govt. Of NCT of Delhi at the time of
submission of tender. In case, if quoted rates of bidder
found less than the minimum wages as notified by the
Labour Department of Govt. of NCT of Delhi, then
financial bid of the bidder will be rejected out rightly and
his EMD will be forfeited, in addition bidder will be
debarred from further tendering in DDA .

The bidder will evaluate minimum wages by consider ing
driver and security guards under semi -skilled category. The
duty periods for semi -skilled categories will remain
uniformly 8 hours for full 365 of the time period put to
tender. ” (emphasis supplied)

9. This note reveals that there is merit in the conte ntion of M/s Kushal
Suraksha that the language of the NIT expressly required the bidders to
calculate the minimum wages as per the rates prescribed by GNCTD for
semi -skilled workers . However, it is equally true that as a general rule,
once the category of ex-serviceman or Category 3 security personnel
requisitioned under the NIT had to be appointed from the DGR, then the
only minimum wage rate applicable would be that prescribed by the DGR
thus, it was incumbent upon all bidders to resort to the minimum wag e
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rates prescribed by DGR in respect of the Category 3 security personnel,
which was higher than the stipulation contained in the petitioner’s tender
documents . However, the fact remains that once the note within the NIT
specifically directed the bidders t o heed the minim um wage s prescribed by
the GNCTD at the time of arriving upon their estimates, an ambiguity
arose in respect of the minimum wage rate applicable. We may also note
the petitioner’s submission that the NIT merely prescribed that the
Category 3 security personnel had to be appointed from the DGR, without
expressly stating that they would have to be paid wages at rates prescribed
by the DGR and this omission coupled with the prescription in Note (5)
created an anomaly. In these circumstances, on ce the tender document
itself created the ambiguity , the petitioner cannot really be faulted for
quoting rates by taking into account the minimum wages prescribed by the
GNCTD. On the other hand, if the award of tender in favour of M/s
Kushal Suraksha at the rates quoted by it in respect of category 3 were
allowed to subsist, that would necessarily imply that the wages prescribed
by DGR would be given a go -by, which is impermissible. Therefore, the
respondent no. 1 cannot be faulted for having cancelled th e tender. At the
same time , this was not an instance where the agency had deliberately and
wilfully attempted to hoodwink respondent no. 1 . rather it was just a mix
up arising out of a misunderstanding of the terms and conditions of the
tender on account o f the ambiguous language used by the respondent no.1
in the NIT itself . Strictly speaking, it cannot even be claimed that the
conditions in Note (5) had been breached, since the petitioner had not
quoted rates lower than those prescribed by the GNCTD. Our attention has
also been drawn to the file notings in the record of the DDA which amply
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demonstrate that even the DDA recognised the position that there was
ambiguity in the terms contained in the tender. When the mistake was
bonafide , there was absolutely no reason for the respondent no.1 to levy
penalty upon M/s Kushal Suraksha , let alone going so far as to debar it
from participating in the re -tender process in entirety. We also find that the
entire exercise of debarring M/s Kushal Suraksha and automatic forfeiting
of its EMD took place without affording it an opportunity to even show
cause, which action itself is in violation of the principles of natural justice
and therefore cannot be sustained .
10. We have also considered the submission of M/s Stallion Sec urity that
the scrapping of the entire bid was illegal since, being the L-2 bidder, it
was automatically entitled to the award of the bid and find ourselves unable
to agree with this contention. When we have already found that there is an
ambiguity in the language of the NIT , which has done away with a level
playing field, any extension of benefits therefrom would be to the prejudice
of other bidders . Additionally, it is clear that the mandate of the CVC set
out in its order dated 03.03.2007 read with the c larification contained in the
Circular dated 20.01.2010 prohibit s any form of post-tendering
negotiations with the enderer s. This accommodation sought by M/s Stallion
Security in its capacity as a L -2 bidder , therefore, is in violation of this
direction an d certainly cannot be granted. Thus, we do not see any
infirmity in the decision of respondent no.1 to scrap the entire tender and
begin the process of engaging the security personnel by issuing a fresh
tender.
11. That being said, we hope that in the future, respondent no.1 will
exercise adequate caution and care at the time of releasing Notices Inviting
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Tender and ensure that all the conditions therein are clear and
unambiguous. This would certainly save a lot of time and prevent
unnecessary wastage of resour ces for authorities and the bidders , as w e
have observed to have taken place in the facts and circumstances of this
case.
12. Accordingly, for the aforesaid reasons, the writ petition being WP(C)
4397/2020 is allowed to the extent that the directions debarrin g the
petitioner from participating in the de n ovo tender process is set aside. T he
order to forfeit its EMD of INR 5 , 11,358 /- made on 12.06.2020 is also set
aside . The EMD be refunded to the petitioner within two weeks. Insofar as
WP(C) No. 5168 /2020 filed by M/s Stallion Security is concerned , the
same is rejected. However, it is made clear that whenever the respondent
no.1 chooses to go ahead with the de novo tender process for the same
purpose which was set out in NIT NO. 01/EE(P) -II/SE/ECC -I/2020 -21,
both parties will be at liberty to submit their bids in accordance with the
terms and conditions thereof

REKHA PALLI, J

VIPIN SANGHI, J

JANUARY 25, 2021
awm

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