Full Text
Present: Mr. Sudhir Nandrajog, Sr. Advocate with Mr. Abhay
Kumar, Advocates for the Petitioner
Ms. N. Chaudhary, Advocate and Mr. V.K. Tandon, Addl. Standing Counsel for R-1 & R-2
Mr. Sandeep Sethi, Sr. Adv. With Mr. Tarkeshwar Nath and Mr. Saurabh Kumar Tuteja, Advocates for R-3
+ WP(C) No.2844/2011
The petitioner is a registered partnership firm stating to be involved in the business activities of making available security and house keeping facilities. The petitioner claims to be running security services in different Government and private institutes.
Respondent no.2/Dr. Baba Saheb Ambedkar Hospital run under the aegis of Government of NCT of Delhi published a notice for inviting tender for providing security services by private security agency for two years. The requirement of respondent no.2 was for 130 security guards and 3 security supervisors. The tender had to be submitted through E-tendering process on or before 12.04.2011.
The petitioner also bid for the tender alongwith others and the bid was opened on 20.04.2011 as scheduled when the petitioner was found to be the L-1 having quoted the lowest rate.
The position of the petitioner and the other bidders is reflected in the writ petition in a tabular form as under
WP(C) No.2844/2011
2011:DHC:18098-DB
Name of Firm Security
Guard per day (8 hours)
Security
Supervisor
(8 hours)
Total
Good Year Security
Service (LI)
309.83 339.88 649.71
Survesh Security
Services (L3)
338.11 338.12 676.23
Gaurav Enterprises
(L4)
338.12 338.12 676.23
Eagle Hunter (1 7) 315.74 382.79 698.53
Wei Protect
Manpower (L5)
338.69 372.64 711.33
Gorkha Security
Services (L6)
349.42 383.37 732.79
It is the say of the petitioner that the calculations on the basis of which the petitioner submitted the tender, are as under
S.No. Description Security Guard Security
Supervisor
JUDGMENT
1 Basic 259.00 285.00 2 ESI 4.75% 12.30 13.54 3 Bonus Rs.3500/- for year/365 = 9.58
9.58 9.58
4 Total 280.88 308.12 5 Service Charge 0.02 0.02 6 Total 280.90 308.14
7 Service Tax (5) 10.30% 28.93 31.74 Total 309.83 339.88 The grievance of the petitioner is that the petitioner was not awarded the tender on the opening of the same or soon thereafter and thus the petitioner had addressed the letter dated 27.04.2011 justifying the rates and as to how the calculation was made. The letter contains the same format as reproduced aforesaid. The petitioner, however, further added the following two paragraphs in the letter "As per EPF (Amendment) Scheme 2001, Notification NGSR 326(E) dated 04.05.2001, an employ drawing salary upto Rs.6500/- per month is eligible for membership of the fund. Employ drawing more than Rs.6500/- p.m. is not entitled for membership of EPF. As per NIT, your demand for security guard has semiskilled category and as on date Minimum Wage of Semiskilled worker is Rs.6734/- per month (Rs.259 per day). In this connection, GNCT of Delhi vide order No.F12(142)/02/MW/Lab/5556 dated 09.03.2011 Effected from 01.02.2011 also refers (copy enclosed for ready reference). As such security guard and supervisor cannot be covered under EPF scheme. However, our quoted rate is genuine and full filing all statutory obligations." The petitioner thereafter filed the present writ petition under Article 226 of the Constitution of India seeking a direction against respondent no.2 for awarding the contract of providing security services to the petitioner. The notice was issued in the petition on 02.05.2011 returnable on 09.05.2011. The counsel for respondent nos.l & 2 had obtained instructions and made a statement that the tender has not been awarded to the petitioner and some other bidders as their rates were found to be below the justification rates. We have also noted that real controversy of the rates of the petitioner being below the justification rates arose as according to the petitioner EPF was not payable and thus ought not to have been taken into account. This in fact is the heart of the issue before us. The writ petition was admitted on 10.05.2011 and set down for hearing on 27.05.2011. While granting interim order, we noticed that respondent no.3 had been awarded the tender and had commenced the worl< and that the same will not create any special equities in favour of respondent no.3. The hearing was however, deferred as the counter affidavit was not filed by ^ respondent nos.l and 2 and the matter had been placed ^ thereafter before us today. We have heard the learned counsels for the parties at length. The only controversy which needs to be examined is whether EPF is payable on the wages of the personnel sought to be deployed by the petitioner. It is the say of the petitioner that ji" the EPF is not payable on account of the fact that as per a notification dated 04.05.2011 made effective from 01.06.2011, an employee drawing salary upto Rs.6500/- p.m. is eligible for membership of the fund, and thus there was no mandatory requirement of the petitioner to pay the EPF contribution since wages for both the personnel to be deployed was above the minimum wages prescribed in the notification for minimum wages dated 18.03.2011 for semi-skilled and skilled workers. We may \0 notice that security guards fall in the category of semi-skilled as per the tender itself while the supervisor falls in the category of skilled personnel. In order to substantiate this plea, learned senior counsel for the petitioner referred us to the Employees' Provident Funds Scheme, 1952 (hereinafter called the said scheme) which has been framed in exercise of power conferred under section 5 of the Employees' Provident Funds and Miscellaneous Provisions Act,
1952. Clause 2 (f) defines an "excluded employee" as under "Excluded employee means - (i). an employee who, having been a member of the Fund, withdrew the full amount of his accumulations in the fund under [clause (a) or (c) of] sub-paragraph (1) of paragraph (69);] (ii). an employee whose pay at the time he is otherwise entitled to become a member of the fund, exceeds [six thousand and five hundred rupees] per month;" The relevant portion is sub clause (ii) in terms whereof if an employee is entitled to remuneration over Rs.6500/-, he becomes an excluded employee. Learned counsel also referred us to Chapter IV of the scheme which deals with membership of the fund. The common thread which runs through various sub paras of clause 26 is that scheme would apply to employees "other than an excluded employee". Learned senior counsel for the petitioner also referred us to para 26 Aof the said scheme. The relevant portion of which is as under '26A Retention of l^^emberslnip (1) Amember of the fund sliall continue to be member until lie withdraws under paragraph 69 the amount standing to his credit in the fund or is covered by a notification of exemption under section 17 of the Act of an on^er of exemption under paragraph 27 of paragraph Learned counsel submitted that the sole defence raised by the respondents is based on the aforesaid paragraph i.e., even if the wages of an employee exceeds Rs.6500 p.m., if he is already a member of thefund then he will continue to be a member of the fund. It IS his say that the petitioner proposed to employ only new inductees who were not part of the scheme; though he does not dispute that while filling the tender, the registration number of EPF was required to be disclosed which the petitioner did disclose. Learned counsel submits that the occasion to bring information to the notice of respondent no.2 about the petitioner employing new inductees would arise only when the petitioner would have been called upon to do so but that occasion never arose as despite being L-1, the petitioner was not called for any discussion to justify his rates since the only reason for rejection of WP(C) No.2844/2011 Page 6of 11 L. the petitioner is that his rates were below the justification rates. We have perused the original records concerning evaluation of the bids. It is true that respondent no.2 failed to call the petitioner for a discussion on account of the rates quoted by the petitioner being below the justification rates. We may add that it would have been appropriate for respondent no.2 to have called the petitioner which could have clarified the position. The counter affidavit filed by respondent nos. 1 and 2 has given the break-up and the minimum wages calculated per day as under Basic wages for semi skilled workers 259.00 ESI contribution (g) 4.75% 12.30 EPF Contribution @ 13.61%
35.25 Total 306.55 Service Tax @ 10.3% 31.57 Grand Total 358.12 The rates for the various bidders are as under S.No. Firm Guard Supervisor Total
1. M/s. Eagle Flunter Solutions Ltd.
315.74 382.79 698.53
2. Gaurav Enterprises 338.12 338.12 676.24
3. M/s. Good Year Security Service
309.83 339.88 649.71 -y
4. M/s. Gorkha Security Services
349.42 383.37 732.79
5. M/s. Survesh Security Services
338.11 338,12 676.23 6 M/s. Well Protect Manpower Services
338.69 372.64 711.33 It is thus submitted that any rate below the justification rate of Rs.338.12 per day was not considered including that of M/s. Survesh Security Services who has quoted Rs.338.11 per day per guard. The award was based on most competitive bid which was above the justification rate. We find that though the respondent no.2 could have called the petitioner for a discussion, it cannot be said that the process «of decision making is so incongruously faulty as to require this tcourt to interfere under Article 226 of the Constitution of India. This is so as various clauses of the tender itself make it clear that EPF is something which is expected to be paid. In this behalf, we may refer to clause 8.3.[1] of the tender which reads as under "Bidder shall quote the rates in Indian Rupees for the entire contract on a 'single responsibility' basis such that the Tender price covers contractor's all obligations mentioned in or to be reasonably inferred from the Tender document in respect of the security services at Dr. BSA Hospital, Sector-6, Rohini, Delhi-85. This includes all the liabilities of the contractor such as cost of H uniform and identity cards of personnel deployed by the contractor and all other statutory liabilities like Minimum Wages, E^, PF contributions, service charges, all kinds of taxes etc. which should be clearly stated by the contractor. (emphasis applied) The terms and conditions of contract also include certain relevant paragraphs, which reads as under "1. The security personnel provided shall be the employees of the Contractor and all statutory liabilities Vv/ill be paid by the contractor such as ESI, PF, workmen's Compensation Act, etc. The list of staff going to be deployed shall be made available to the Department and if any change is required on part of the Department fresh list of staff shall be made available by the agency after each and every change.
3. As far as EPF is concerned, it shall be the duty of the Contractor to get PF code number allotted by RPFC against which the PF subscription, deducted from the payment of the personnel engaged and equal employer's amount of contribution should be deposited with the respective PF authorities within 7 days of close of every morith. Giving particulars of the employees engaged for the Department works, is required to be submitted to the ^.Department. In any eventuality, if the contractor failed to remit employee / employer's contribution towards PF subscription etc. within the stipulated time Department is entitled to recover the equal amount from any money due or accrue to the Contractor under this agreement or any other contract with RPFC, with an advice to the RPFC, duly furnishing particulars of personnel engaged for the Department.
23. The contractor shall abide by and comply with all the relevant laws and statutory requirements covered under various laws such as Laboour Act, Minimum Wages Act, Contract Labour (Regulation and abolition) Act, EPF, ESI and various other Acts as applicable from time to time with regard to the personnel engaged by the contractor for the Department. / \
54. The contractor will have to deposit the proof of depositing employee's contribution towards PF/ESI, etc. of each employee in every 3 months." A common thread which runs through all these clauses is EPF is an element to be taken into account by a party while submitting the tender. This is also apparent from the form which had to be filled in by the parties, whereby in column 9, the particulars of the provident fund account was to be given. We fail to appreciate the say of the petitioner that they proposed to deploy fresh inductees who were not part of the existing fund and that is why EPF amount was not included in their calculations which led to their rates being below the justification rates. No such information was disclosed in the tender. It is also interesting to note that in the letter dated 27.04.2011 (Annexure P-6), which was in th^e form of representation made by the petitioner, all that has been stated is that EPF is not payable as the minimum wages are Rs.6500/- and as such security guard and supervisor cannot be covered under EPF scheme. It is not the say of the petitioner that they are seeking to deploy new inductees who would not be covered under the EPF scheme and thus, EPF is not payable as undisputedly for persons who are already part of the scheme, EPF would be payable in view of para 26A of the said scheme on the amount of Rs.6500/- p.m. \)o Learned counsel for the petitioner contends that the reasons are not apparent from the file and the respondents cannot be permitted to improve their case now under legal advice. However, we find from the records that at least the basic fact; which weighed with respondent no.2 in taking the decision, which is, EPF is payable amongst other charges such as ESI, service tax, ^4 etc. was available on the record alongwith the calculations made on that basis in order to enable it to come to the conclusion that the rates quoted by the petitioner were below the justification rates. We thus dismiss the writ petition leaving the parties to bear their own costs.
SANJAY KISHAN KAUL,J. AUGUST 16, 2011 RAJIV SHAKDHER, J. yg