APHC010423612024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3330] TUESDAY,THE TWENTY EIGHTH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE TARLADA RAJASEKHAR RAO WRIT PETITION No: 21532/2024 BETWEEN: M/s Sri Raja Rajeswari Security Services ...Petitioner AND The State Of Ap and Others ...Respondent(s) Counsel for the Petitioner: 1. M R K CHAKRAVARTHY Counsel for the Respondent(S): 1. N SIVA REDDY 2. GP FOR COOPERATION 3. P NAGENDRA REDDY The Court made the following: 2 ORDER: The Writ Petition is filed under Article 226 of Constitution of India for the following relief/s: “pleased to issue a writ or order or direction more particularly one in the nature of Writ of Mandamus declaring the action of the Respondents in awarding the Tender for providing Security Services at oil palm processing plant at Pedavegi, Eluru district, Oil packing Station, Kakinada, Kakinada District and Oil Packing Station, Sarvepalli, SPSR Nellore District in favour of the Fourth Respondent for one (01) year period vide Communication dated 20.09.2024 being contrary to the terms and conditions of the Tender Notice No.P&P/security services/3430/2024 dated 05.08.2024 and though the Fourth Respondent is not qualified as illegal and arbitrary and violative of principles of natural justice and Articles 14, 19(1)(g), 21 and 300-A of the Constitution of India and violative of the provisions of the Employees’ State Insurance Act, 1948 and quash the Tender awarded to the Fourth Respondent and the Communication dated 20.09.2024 and consequently confirm Petitioner’s Tender and award the Contract for supply of Security Personnel one (01) year to the Petitioner and pass such other order or orders….. 2. The 2nd respondent i.e. The Andhra Pradesh Co-operative Oil Seeds Grower’s Federation Limited, has floated tender notice No.P&P/Security services/3430/2024, dated 05.08.2024 for providing 3 security services at Oil Palm Processing Plant at Pedavegi, Eluru District, for a period of one year. The scope of the contract is that the agency should deploy security personnel to closely monitor the movement of men and machinery and safeguard the life of the personnel and property of the federation. As per the terms and conditions of the tender floated, the tenderer should register themselves with the statutory authorities like Provident Fund, Employees State Insurance, Labour and GST departments and other statutory departments. The rates quoted should include statutory benefits, rest days, reliever charges, minimum wages and all other monetary provisions, expenditure etc. Notwithstanding with the tender conditions, the 4th respondent’s tenderer considered without taking into consideration, the minimum wages and statutory provisions or under quoted, which is not to be allowed and ought to have been rejected, but the respondent Nos.2 and 3 have confirmed the tender of the 4th respondent-tenderer. 3. The petitioner’s tender was accepted at technical, financial level and there were no lapses on the part of the petitioner in this regard. The respondents in gross abuse of process law and the tender conditions also accepted the tender of the 4th respondent though it is not technically qualified and the said tender was filed without indicating the 3.25 % ESI payable on the basic pay to Ex-serviceman Supervisor. 4 The said condition is a statutory requirement and mandatory. Though the 4th respondent did not quote ESI amount, the respondents accepted its tender and unilaterally declared as successful tenderer. Hence, prayed to reject the said tender. 4. Adverting now to merits of the case in hand, while the petitioner relies on the tender condition of the financial bid. Which is extracted hereunder. Financial Bid filed by the petitioner: S. No. Pay details Ex serviceman Supervisor Trained Civilian Supervisor Trained Civilian guards 1 Basic pay (including VDA) 19084.00 13248.50 12248.50 2 EPF @ 13% on Sl.No.1 1950.00 1722.30 1592.30 3 ESI 2 3.25% on Sl.No.1 620.23 480.57 398.07 4 Sub Total (per 26 days) 21654.23 15401.37 14238.87 5 Rate per day (Sl.No.4/26) 832.85 592.36 547.64 6 Amount per month (Sl.No.5 x 30 days) 24985.50 17770.80 16429.20 7 Service Charge 0.01 0.01 0.01 8 Total Amount (Rs.) 24985.51 17770.81 16429.21 9 GST @ 18% 4497.39 3198.74 2957.25 10 Grand Total 29482.90 20969.55 19386.46 Financial bid filed by the 4th respondent S. No. Pay details Ex serviceman Supervisor Trained Civilian Supervisor Trained Civilian guards 1 Basic pay (including VDA) 19084.00 13248.50 12248.50 2 EPF @ 13% on Sl.No.1 1950.00 1722.30 1592.30 3 ESI 2 3.25% on Sl.No.1 0.00 430.57 398.07 4 Sub Total (per 26 days) 21034.23 15401.37 14238.87 5 Rate per day (Sl.No.4/26) 809.00 592.36 547.64 6 Amount per month (Sl.No.5 x 30 days) 24270.00 17770.80 16429.20 7 Service Charge 0.00 0.01 0.00 8 Total Amount (Rs.) 24270.00 17770.80 16429.20 9 GST @ 18% 4368.60 3198.74 2957.25 10 Grand Total 28638.60 20969.54 19386.45 5 5. As per the tender condition the tenderer has to pay ESI 3.25% on the Basic Pay [including Variable Dearness Allowance (VDA)]. However, the 4th respondent did not quote ESI at 3.25%, which is an essential component of the tender, confirmation of tender as L1 on the 4th respondent i.e., M/s. MYB Security Services, as L1 contrary to tender condition and it is stated the tender was confirmed arbitrarily and relied on the judgment of the Apex Court in Bakshi Security and Personnel Services Private Limited Vs. Devakishan Computed Private limited and other1 for the proposition “essential conditions of tender document are required to be strictly complied with and that the essential conditions cannot be relaxed or deviated from.” The counsel for the petitioner would contend that the 4th respondent has shown the salary as Rs.19,084/- being the minimum wage invariably the 4th respondent has to submit the tender by showing ESI @ 3.25%, hence argued that the tender of the 4th respondent is liable to be rejected. 6. The 4th respondent and 2nd and 3rd respondents have filed their respective counters. The substantial contention of respondents is one and the same. The contention raised by the respondents is that as per the current norms if the salary limit for ESIC is more than Rs.21,000/- per month the ESI is optional. 1 2016 (8) SCC 446 6 7. The principal employer is required under Section 40 of the ESI Act to pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer’s contribution and the employee’s contribution. This means it excludes the contribution of the employer if an employee’s salary exceeds Rs.21,000/- per month, the employee and the employer are not required to contribute to the ESIC fund. This Court is unable to understand when it is mentioned in the tender that minimum basic pay of Rs.19,084/- that the employee receives; however, there is no mention about the payment of salary of Rs. 21,000/- in the tender document submitted by 4th respondent to say that no obligation to pay ESI at the rate of 3.25% when the salary exceeds Rs. 21,000/-. 8. The 4th respondent counsel argues that whereas the writ petitioner quoted the ESI amount though it is optional and the petitioner has quoted service charge as 0.01 paisa, the 4th respondent has not quoted any service charges. The rates quoted by the 4th respondent is less than the rates quoted by the writ petitioner as such the tender was confirmed on the 4th respondent there is no illegality or arbitrariness in confirmation of the tender on the 4th respondent and the said contention was not denied by the writ petitioner by filing any reply, hence prayed to dismiss the writ petition. When no reply has 7 been filed by the petitioner denying or accepting, the same has an effect of admission in law. 9. Learned counsel for the petitioner has emphasised his argument on the aforesaid principle, payment of 3.25% of ESI as mandatory. It is the case of the 4th respondent 4th respondent has not quoted the ESI @ 3.25% for the Basic pay (including VDA Variable Dearness Allowance) on the ground that the ESI is optional when the salary is more that 21,000/-. 10. The grand total quoted by the petitioner is Rs.29,482.90 paisa and the grand total quoted by the 4th respondent is Rs.28,638.60 paisa. Petitioner has quoted Rs.844.30 paisa more than the 4th respondent in the bid quoted. The 4th respondent has quoted Rs.224/- less than the petitioner, even after adding the ESI component to Rs.620.03 paisa (calculating ESI @ 3.25%) which brings the total bid quoted by the petitioner and the 4th respondent. 11. The judgment cited by the petitioner has no application to the present facts of the case. In the said case the tenderer has not quoted the minimum wages to the labourer, in the present case the payment of ESI is optional. The Hon'ble Supreme Court in the judgment relied by the petitioner it is further spelt out that “a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions: 8 (i) Whether the process adopted or decision made by the authority is malafide or intended to favour someone: (ii) Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”. (iii) Whether the public interest is affected. 12. If the answers are in the negative, there should be no interference under Article 226 Constitution of India. 13. The Supreme Court, in the case of Siemens Public Communication Networks Pvt. Ltd. & Anr. Vs. Union of India & Ors.,2 while dealing with the scope of judicial review of the constitutional courts, held that in matters of highly technical nature, a high degree of care, precision and strict adherence to requirements of bid is necessary. Decision making process of Government or its instrumentality should exclude remotest possibility of discrimination, arbitrariness and favoritism. Power of judicial review can only be exercised when the decision making process is so arbitrary or irrational that no responsible authority acting reasonably or lawfully could have taken such decision, but if it is bona fide and in public interest, court will not interfere with the same in exercise of power of judicial review 2 (2008) 16 SCC 215 9 even if there is a procedural lacuna. Principles of equity and natural justice do not operate in the field of such commercial transactions. 14. This Court does not see any arbitrariness in confirming the tender to the 4th respondent, quoting that the ESI is only optional, hence it does not amount to any arbitrariness. And relying on the judgments of the Hon’ble Apex Court (supra 1 and 2), this Court is of the view that the contention that it was raised by the writ petitioner is devoid of merit; hence, the writ petition is liable to be dismissed. 15. Accordingly the writ petition is dismissed, however without costs. As a sequel, thereto, interlocutory applications pending, if any, in this Writ Petition, shall stand closed. ___________________________________ JUSTICE TARLADA RAJASEKHARA RAO Date: 28.01.2025 Harin 10 THE HON’BLE SRI JUSTICE TARLADA RAJASEKHARA RAO 9 WRIT PETITION No. 21532 of 2024 Date: 28.01.2025 Harin