Bimla Human Resource LLP v. State Bank of India and Anr.

1. Petitioner, a start-up enterprise willing to participate in the tender process, finds itself restricted on account of tender conditions framed by the Respondents. Drawing strength from various governmental policies favouring start-ups, the Petitioner has filed the present petition, aiming to annul the tender process.

2. Incorporated in November 2021, the Petitioner is a nascent start-up, having an ISO 90001:2015 certification for offering workforce, facilities management, housekeeping, and security services. Petitioner’s grievance pertains to the eligibility criteria entailed in Request for Proposal [“RfP”] dated 24th August, 2023 issued by Respondent No. 1 – State Bank of India [“SBI”] for engagement of caretaker agencies to deploy their services in relation to Automated Teller Machines [“ATMs”] operated by SBI in the State of Delhi. The impugned eligibility conditions provided in Clause 3.1(iii) and Annexure 3 of the RfP read as under:

5. The Petitioner further argues that the SBI’s tender pertains to supply of caretaker services, for which no specialized requirements have been outlined in the RfP. Given this context of unskilled workforce, excluding start-ups such as the Petitioner, is entirely arbitrary and stands in clear contradiction and violation of the afore-mentioned OMs.

6. The Court has considered the afore-noted contentions. It is imperative to underscore the specific nature of procurement under the tender in question: caretaker services for SBI’s ATM sites within Delhi. The role of the caretaker agency is multifaceted and includes customer assistance, ATM site maintenance, and prompt communication with Branch Manager(s) concerning any anomalies, potential threats, theft, or other emergency situations. It also encompasses the recruitment of caretakers for designated ATM locations and assuring their consistent presence and performance. Keeping in view the fact that the tender pertains to the security and functioning of ATM sites, and the caretakers would be engaged in safeguarding the ATM sites, it is of paramount public interest to ensure that the chosen entity has a proven track record. The requirement of experience is to safeguard the public’s trust. Relaxing the criteria might expose the ATM sites to potential risks that can be avoided by relying on entities with the requisite experience in the field. Thus, it is only reasonable for SBI to require that the caretaker agency possesses a certain level of establishment in the market, backed by prior experience and turnover. Such prerequisites are not only reflective of SBI’s due diligence, but also its commitment to ensuring the safety and efficacy of its ATM operations. Evaluating the intricacies of this task, this Court finds SBI’s insistence on prior experience and turnover as rational and in alignment with the nature of the procurement.

7. The next question warranting our deliberation is the Petitioner’s claim that the OMs previously cited render it obligatory for SBI to ease the disputed conditions, thereby facilitating the participation of start-ups in the tender process. We have meticulously examined the afore-mentioned OMs. Indisputably, there is a manifest intent by the Government to encourage and support start-ups, recognizing the inherent challenges such entities face, particularly their lack of extensive track records, which often precludes them from satisfying qualification metrics related to prior experience and turnover. Acknowledging these challenges, the Government has, over time, enacted executive instructions aimed at granting relaxations to budding enterprises, including start-ups and MSEs. However, a careful reading of these policy decisions and executive instructions reveals that while the Central Ministries and Departments are granted the discretion to ease the criteria relating to prior experience and turnover, they are not unequivocally bound to do so. The autonomy granted to Departments and Central Public Sector Enterprises must be harmonized with the overarching objectives of public procurement, ensuring that standards and requirements are aligned with the greater public good and the core objectives of such procurements. The OMs have been issued with an understanding that every procurement or tender would have unique requirements, and those on the ground – the departments and institutions like SBI – are best equipped to gauge the practicalities involved.

8. After a thorough examination of the facts and circumstances of the case and the contentions presented, we find that our intervention is not warranted. In matters concerning contracts with State instrumentalities, it is well-established that courts ordinarily do not interfere. The authority responsible for issuing the tender is, more often than not, best placed to determine its prerequisites and requirements. They have the right to delineate certain standards to ensure the competence and capability of the potential contractors. Thus, the Court’s role in reviewing tender conditions is typically circumscribed, intervening only when there are manifest signs of arbitrariness, glaring irrationality, or gross perversity. Adhering to these principles, we opine that the impugned tender conditions, which stipulate requirements of prior experience and turnover, are not intrinsically flawed. On the contrary, such conditions may serve the interest of efficacy and reliability, thereby justifying their imposition.

9. For the foregoing reasons, there is no ground or reason to entertain the present petition.

10. Dismissed, along with other pending applications.

SANJEEV NARULA, J SATISH CHANDRA SHARMA, CJ SEPTEMBER 20, 2023 d.negi