M/S. WELL PROTECT MANPOWER SERVICES PRIVATE LIMITED v. GURU GOBIND SINGH GOVERNMENT HOSPITAL

(17) WP(C) 69^6/2015 M/S. WELL PROTECT MANPOWER SERVICES PRIVATE LIMITED Petitioner Through: Mr.TarkeshwarNath, Mr.OnkarNath, Advs.

VERSUS

GURU GOBIND SINGH GOVERNMENT HOSPITAL AND ORS. ^ Respondents GOVT.

OF NCT OF DELHI & ANR. Respondents Through: ^r.Peeyosh Kalra, Standing Counsel Ms.Aastha Jain, Ms.Sneha Singh, Ms.Jaskaran Kaur, Advs. for R-3 Mr.D.Rajeshwar Rao, Mr.Gyanendra Chaturvedi, Advs. for R-1-2 in WP(C) no.4288/2015 CORAM: HON'BLE MR.

JUSTICE S. RAVINDRA BHAT HON'BLE MR.

JUSTICE NAVIN CHAWLA ORDER % 15.05.2017

1. The controversy in these proceedings is with respect to the acceptance of the contesting/private respondents for providing security services to the Government of NCT of Delhi. The Government of NCT of Delhi had invited tenders from the willing bidders for providing security services. The services soughtwere for a year extendable by another year which is scheduled to end on 31^' May, 2017. 2017:DHC:8135-DB

2. In view of the order of this Court, a detailed analysis of the facts is not essential. The contention is with respect to whether the bidders had to quote rates inclusive ofEPF payment. The petitioner has common grievance that its bid was treated as 'non responsive and deemed to be higher than Lowest Tenderers-I (L-I). The private respondent was deemed to be responsive and the rates quoted by it were considered lowest to wan-ant the award of work. In short, the petitioner's grievance is that the second respondent's bid could not be treated as responsive because it excluded the payment to be deposite with the Employees Provident Fund Organisation (EPFO).

3. The second respondent /Govt. of NCT of Delhi urged that the notification applicable was covering employees that are paid as acut of the ceiling of ?6500/- per month and that the second respondent fell within that limit since the second respondent's bid was in respect of employees who were to be paid more than ^8554/- per month and hence, there was no question ofany contribution to the EPFO.

4. The petitioner relies upon the judgment of this Court,in MI2C Security and Facilities Pvt. Ltd. Vs. Govt ofNCT ofDelhi 20Q[5] 201 (2012) DLT 288, where an identical question arose for consideration. There too, the successful bidder was awarded the contract since "Se rates quoted were exclusive ofEPFO contributions. Likewise, in the present case, the successful bidder argued that the maximum amount for EPFO coverage was ?6,500/- and if any one received wages in excess, he stood excluded from coverage ofthe intimation. It is stated that the decision ofthis Court was tested before the Supreme Court in Page 2 of[5] a Special Leave Petition. It is pointed out that another Division Bench has questioned the rationale and referred the matter to a larger Bench, at the same time, the decision stands as oftoday.

5. This Court in MI2C Security and Facilities {supra) stated as foliows:- "20. The fourth aspect which was argued by the Petitioners pertained to Provident Fund and other benefits which werepayable by the bidders. This is embodiedin Clause 8.[3] ofthe NIT, which is reproduced again: "8.[3] The rate quoted shall be responsive and the same should be inclusive ofall Statutory obligations such as Minimum Wages, ESI, PF contributions, wages for leave reserve, service charges, all kinds oftaxes etc. The offers ofthose prospective bidders which do not meet the statutory requirements are liable to be rejected. " The GNCTand the private respondents argue that rates quoted by the successful bidders are in order and that any amount paid towards emoluments in excess of T6500 each month cannot be taken into consideration for calculation of EPF and related benefits. The petitioner, on the other hand, submits that a reading of clause 8.[3] clarifies that statutory obligations towards ESI and PF contributions are necessarily to be met by the bidder. It is argued that merely because minimum wages are notified to be in excess of ^6500 wouldnot mean that the whole minimum wages - which have to be statutorily paid by every employer - are not to be taken into considerationfor calculation ofEPF benefits.

22. It is evident that the statutory minimum wages notifiedfor the class of employment concededly is ^008 per month. The arguments of the respondents about the EPF benefits payable only to the extent of ^6500/- is because there has been no amendment in theprovisions ofthe Employees Provident Fund Act. The argument of the respondents, in this Court's opinion is unacceptable, to put it mildly. The compulsion to pay at least the minimum wage fixed statutorily is absolute. In other words, no employer can say that he will notpay such minimum wages. Ifhe does pay anything less, it is under pain of prosecution, because doing so would be committing an offence. In fact, a person who is asked to accept wages at less than the notified rates is considered in law and under the Constitution to be working as 'forced labour" (ref State of Rajasthan v Sanjit Roy AIR 1983 SC 328, "4....J where a person provides labour or service to anotherfor remuneration which is less than the minimum wag&, the labour or service provided by him clearly falls within the scope and ambit of the words forced labour' under Article 23 "). In these circumstances, for the state to countenance an argument that amounts towards providentfund contributions in excess of T6500/- may not be paid, despite no employer being able to actually employ anyone for less than T 8008, is indefensible. That the state becomes a party to such complicity in accepting a contractfor service in relation to maintenance or security ofpublic buildings, compounds the transgression manifold. It is, therefore, held that the rates which could properly have been considered towards contribution of PF benefits would be 13.61%of ^008/-, i.e ^1092.29/- per month, and not ^85/- per month. Thestate, therefore, in effectbecame a party to a patently unfair labour practice, in accepting the bids whichproposed topay lower than thepermissible rates as contribution to Provident Fund and Pension schemes. " •'1

6. To this Court, it appears logical that if an employer in the Govt. of NCT of Delhi cannot pay less than the statutory notified minimum rates of wages which at the relevant time were ^,554/- for the clause of workman, the question of coverage of EPFO being limited to only those drawing of ?5500/- or less, cannotarise. In that regard, M/2C Securityand Facilities (supra) covers the controversy. Equally, the Govt. of NCT of Delhi has apparently acted in ignorance of the judgment and certainly in violation of law declared in it. Under normal circumstances, the award of contract to the second respondent in these cases had to be quashed. However, the Court is of the opinion that since the contract awarded in WP(C) No.4288/2015 has been allowed to run its full course and in WP(C)6966/2015 it is to expire on 31.05.2017, the issue in such circumstances, would be academic.

7. The third respondent was served and was represented in Court during f theproceedings. Likewise, in WP(C) No.6966/2015, the second respondent /the successful bidder was represented and in the overall circumstances, the Court is of the view that the award of contract would not be treated as experience gained by such agencies for purpose of tendering with the Govt. of NCT of Delhi in future contracts, for which bids might be invited. The Govt. of NCT of Delhi is hereby directed to ensure that suitable instructions are issued to its agencies and departments, to ensure compliance with the law declared in MI2C Security and Facilities (supra) within four weeks from today. The Writ petitions are allowed to the above extent. ^ S.RAVINDRABHAT,J NAVIN CHAWLA, J MAY 15, 2017 RN Page 5 of[5]