Akil Kureshi, J.:— The petitioner has challenged the decision of the State authorities to recommend respondent no. 3 agency for awarding a contract for the purpose of providing services of supervisor, computer programmer, data entry operator, electrician staff at 11 RTO check-posts across the State of Gujarat and Central Monitoring centre. There is a history to this litigation. Briefly stated facts are as under:
2. The tender for above purpose was invited on 20.11.2014 The tender notice received response from three agencies. The petitioner was one of them. Relative offers of the three agencies for such work were as under:
Name of the bidderAmount (rate) quoted with service taxAmount(rate) quoted with service taxAIRAN Consultants Pvt. Ltd.Rs. 3,41,38,545.54Rs. 3,03,83,184/-Bakshi Security (Respondent no. 3)Rs. 3,29,14,675.48Rs. 2,92,93,944/-Devkishan Computers Pvt. Ltd. (petitioner)Rs. 3,12,00,124.80Rs. 2,77,68,000/-
3. Thus the petitioner had made the lowest offer, despite which, since the official respondents were not considering the case of the petitioner for awarding the contract, the petitioner approached the High Court by filing Special Civil Application No. 8324/2015. Case of the official respondents at that stage was that the offer of petitioner at Rs. 2.77 crores(rounded off) (exclusive of service tax) was lower than the wage bill that the petitioner would have to pay to the requisite number of staff to be deployed calculated at minimum wages plus bonus payable under the labour laws.
4. The Division Bench of this Court disposed of this petition by an order dated 11.8.2015 and provided as under:
“8. The learned AGP has not been able to show any condition of the tender about the verification of the figure quoted in the tender with the opinion of the Labour Department for compliance of Labour Welfare Legislation. Further, it is not at the time of technical evaluation of the tender, the tender of the petitioner came to be rejected. But after opening of the price bid, again technical evaluation is made of respondent no. 2 and thereafter, the decision is taken. It is true that the attempt should be made on the part of the competent authority to finalise the tender by accepting the competitive rates and there are also certain inbuilt discretion, but at the same time, after opening of the price bid, if as per the respondent no. 2 it was found that the amount quoted towards liability for payment of salary and others to the employee was not meeting with the requirement of Labour Welfare Legislation as per the opinion of the Labour Department, then also when it was not specified in the tender condition, the opportunity was required to be given to all tenderer to meet with the said aspect and after considering their reply or the explanation, as the case may be, the decision could have been taken. It is hardly required to be stated that in the submission of the tender, the commercial wisdom of each tenderer would be of relevance. It is not necessary that in every case, the tenderer may earn profit nor it can be said that the tenders are submitted only for suffering loses, but at the same time, such could be gathered only if opportunity was given by giving equal treatment to all the tenderer. Instead of that, on one sided manner, the decision has been taken to give contract to the respondent no. 3 which in our view can be said as arbitrary. Considering the importance of the work of the tender, we find that the matter can again be considered by respondent no. 2 by giving opportunity to L1, L2 and L3 and thereafter, a fresh decision may be taken. In the event it is found that the tender of respondent no. 3 cannot be accepted, the letter of intent already issued and the agreement already entered into pending the petition would be inconsequential.
9. In view of the aforesaid observations and discussions, following order -
1) The impugned decision of accepting the tender of respondent no. 3 is quashed and set aside with the further direction that respondent no. 2 shall give opportunity to L1, L2 and L3 in response to the opinion received by the Labour Department about the compliance of the Labour Welfare Legislation and the amount quoted towards wages and other benefits. After opportunity is given to L1, L2 and L3, they should be at the liberty to negotiate the prices already offered and thereafter, the respondent no. 2 shall take appropriate decision in accordance with law.
2) The aforesaid exercise shall be completed within a period of one month from the receipt of the order of this Court.”
1. The respondents thereupon supplied necessary details of the opinion of the Labour Commissioner on the total cost of wage bills on the basis of minimum wages and bonus payable, according to which the sum came to Rs. 30092346/- (Rs. 3 crores rounded off). The petitioner therefore, wrote a letter dated 3.9.2015 and conveyed to the department as under:
“6.3 Thus, it can be seen that according to the calculation, Minimum Wages and other statutory benefits payable to the employees for 730 days (2 years of contract) comes to Rs. 3,00,92,346/- (without service tax). The price at which I am ready to work is Rs. 2,77,68,000 (without service tax). Thus, against payment of wages and all statutory benefits of Rs. 3,00,92,346/- and service tax thereupon, I am ready and willing to accept Rs. 2,77,68,000 (plus service Tax) from the Government. This would enable the Government to save Rs. 23,24,346.00 and service tax thereon, and the ultimate beneficiary would be public exchequer.
6.6 Without prejudice to above, I am to state that I am ready to accept even Rs. 3,00,92,346/- + service tax, being the bare minimum wages payable to the employees during the life of the contract from the Government as calculated by the Technical Evaluation Committee based on the report of the Labour Commissioner. Such offer will result into ‘No Profit No loss’ business for me, but at the same time, it would create a burden of Rs. 23,24,346.00 on the State funds.”
2. It appears that after the opinion of the labour Commissioner on the wage bill, the department had certain issues about its calculation. The Commissioner of Transports, Government of Gujarat, therefore, wrote a letter dated 12.10.2015 to the Labour Commissioner and sought clarification on certain categories of workers. The Labour Commissioner thereupon under letters dated 6.10.2015 and 12.10.2015 accepted the suggestion of the Commissioner of Transports. It appears that on the basis of such further communication from the Labour department, the authorities of the Ministry of Transport have now worked out the minimum wage bill of Rs. 2.91 crores. It is undisputed that such revised calculations had not been communicated to the petitioner or to any of the other participants in the said tender process. Official respondents on the basis of such revised calculations proceeded to process the offers of all the three bidders. The offer of the petitioner was taken at Rs. 3 crores and that of respondent no. 3 at Rs. 2.92 crores which remained constant from the beginning. Now finding that the offer of Rs. 2.92 crores of respondent no. 3 was much lower than that of the petitioner at Rs. 3 crores and was also in the near vicinity of revised minimum wage bill of Rs. 2.91 crores, the authority decided to accept such tender. From the minutes of the the meeting of the committee which is made available for our perusal from the original file by the Government Pleader, we notice that what has weighed with the authorities is that the offer of respondent no. 3 was of Rs. 2.92 crores, minimum wage comes to Rs. 2.91 crores. There is thus a margin of Rs. 1.45 lakhs. The minutes also record the offer of the petitioner at Rs. 3 crores. Thus comparing the offer of the petitioner at Rs. 3 crores and respondent no. 3 at Rs. 2.92 crores, the same is recommended for acceptance.
3. In our opinion the respondents have committed a serious error in the decision making process. We may recall the petitioner's offer at the outset was Rs. 2.77 crores. He undertook to pay minimum wages and statutorily payable bonuses. When the department insisted that minimum wage bill would come to Rs. 3 crores, he made a simple offer sticking to his original offer of Rs. 2.77 crores but in the alternative suggested that if the department still insists, he may revise his offer to Rs. 3 crores, to match the minimum wage bill. This downward revision of the minimum wage plus bonus calculation of Rs. 2.91 crores was arrived through internal correspondence between the Ministry of Transport and the Commissioner of Labour. This was never put to the petitioner or to the private respondent. It was on the basis of this re-computation of the minimum wage bill that the authority compared the two offers, that of the petitioner and of the respondent no. 3. The offer of the petitioner was taken at Rs. 3 crores and that of respondent no. 3 was taken at Rs. 2.92 crores. Matching the offer of respondent no. 3 with the minimum wage bill of Rs. 2.91 crores, it was decided to accept.
4. First and foremost, internal exercise of taking a fresh opinion with the aid of the suggestions made by the Ministry of Transport to the Labour Commissioner and relying upon the same was itself impermissible. In the previous round of litigation, this Court had directed the authorities to give fresh opportunity to all the three tenderers in response to the opinion received by the Labour department/about the compliance of labour welfare legislations and the amount quoted therein towards wages and other benefits. The tenderers were given a liberty to negotiate the prices already offered and the authority would thereupon take a fresh decision in accordance with law. If this basis of the estimate of the minimum wage requirement underwent material change, the authority had to put the same to the contesting parties before relying upon the same. Any other methodology would defeat the directions issued by the High Court in such order. Quite apart from this lack of transparency, the authorities also, in our opinion, took a convenient interpretation of the relative offers of the two tenderers. Insofar as the petitioner is concerned, his offer was taken at Rs. 3 crores. In case of respondent no. 3 his original offer of Rs. 2.92 crores was taken as his final offer. We may recall the petitioner's initial offer was Rs. 2.77 crores. He, in fact, even after being pointed out the minimum wage requirements, stuck to the said figure but in the alternative stated that if the insistence is on tenderer quoting a price not lesser than the minimum wage bill, his offer may be treated to be one at Rs. 3 crores. In this context, we do not see how the authorities could have held the petitioner's offer of Rs. 2.77 crores as disqualification. The tender terms insist on minimum wage compliance. However, it is no where envisaged rejection of offer which may have the potential of causing loss to the tenderer. If therefore, the petitioner consistently held out a promise to comply with all labour welfare legislations, including the minimum wages and bonuses while still sticking to his offer of rs. 2.77 crores, we do not see any grounds on which the offer could have been held to be not competent.
5. Be that as it may, the petitioner's offer was clear. His upfront offer was of Rs. 2.77 cores and if the authorities insisted on matching with the minimum wage bill opined by the Commissioner, he would accept such offer. If therefore, revised calculations of the minimum wage bill was Rs. 2.91 crores, the petitioner cannot be knocked out of the competition by holding that he has made offer of Rs. 3 crores as against Rs. 2.92 crores by respondent no. 3.
6. Counsel for the petitioner would contend that there was a concentrated attempt on part of the authorities to single out the offer of respondent no. 3 for acceptance. Initial offer of the petitioner at Rs. 2.77 crores was found to be too low. The alternative offer of the petitioner at Rs. 3 crores was then found to be entirely matching with the minimum wage prescription but thereafter, found too high in view of the revised minimum wage calculations. Even if we may not accept the allegations of mala fide, surely, the entire process does leave much to be desired. Learned Government Pleader Ms. Manisha Shah however, clarified that the department has no preference between the petitioner and respondent no. 3. She categorically stated that respondent no. 3 was not chosen or preferred over the petitioner on account of any other advantages, benefits or superior experience or such like. In other words, therefore, there is hardly anything to chose between the petitioner and respondent no. 3 in terms of parameters other than price offered.
7. Learned counsel for the respondent no. 3, however, contended that the offer of the petitioner at Rs. 2.77 cores was liable to be rejected in terms of tender conditions. We may notice that in such conditions, it is provided that “salary paid to the deployed manpower should not be less than the minimum wages published as per the notification issued by State Government Labour Department or other statutory benefits applicable. In case of revision of minimum wages/DA by the labour department, agency would be entitled to get the revised rates from Commissioner of transport” and “if the component of salary quoted is less than the minimum wages prescribed or the components of mandatory statutory benefits are not included in the break-up, the bid is liable to be rejected”. What is thus required is that the contractor shall comply with the minimum wage prescription and, as noted above, there is no prescription that the offer which has a potential of causing loss to the tenderer would be disqualified. Second contention of the counsel is, the petitioner could not have made an alternative offer. However, the entire tender process underwent a major change with the intervention of the High Court when the Court itself granted liberty to all the parties to renegotiate the terms in view of communication from the Labour Commissioner. He lastly contended that the internal communication of the Labour Commissioner revising the minimum wage bill to Rs. 2.91 crores was merely an administrative exercise. Even if that be so, when the High Court had directed the authority to give fresh chance to all the parties in view of the minimum wage computed by the Ministry, then in facts of the case, the authorities ought to have followed the same course when the minimum wage calculations underwent major changes.
8. Under the circumstances, the decision of the authorities to shortlist respondent no. 3 for awarding the contract is set aside. The offer of the petitioner shall be treated as matching with the revised minimum wage calculation. The petitioner shall give such offer in clear writing and undertaking to the authorities latest by 25.2.2016 The respondent authorities, unless there is any other disqualification of the petitioner to carry out the contract, being the lowest, shall accept the same.
9. Petition is disposed of.
10. At this stage learned counsel for respondent no. 3, requested that this order may be stayed for a period of four weeks to enable the party to approach the Supreme Court. However, since no such request has come from the State authorities and we are informed that they are in urgency to finalise the tender, such request is refused.