Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Reserved on: 19 and 21 September, 2023
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Pronounced on: 27 September, 2023
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+ W.P.(C) 12314/2023
M/S BOMBAY INTELLIGENCE SECURITY INDIA LTD
..... Petitioner
Through: Mr. Pankaj Kumar and Ms. Shruti
Sharma, Advocates with AR of
Petitioner.
versus
GOVERNMENT OF NCT OF DELHI & ORS. ..... Respondents
Through: Ms. Hetu Arora Sethi, ASC for R-1.
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+ W.P.(C) 12445/2023, CM APPL. 49031/2023 & 49032/2023
M/S SCIENTIFIC SECURITY MANAGEMENT SERVICES PVT.
LTD. ..... Petitioner
Through: Ms. Shruti Sharma, Ms. Ritika
Srivastava and Mr. Pankaj Kumar,
Advocates.
versus
GOVERNMENT OF NCT OF DELHI (GNCTD) & ORS.
..... Respondents
Through: Appearance not given.
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+ W.P.(C) 12471/2023, CM APPL. 49177/2023 & 49178/2023
M/S SINGH INTELLIGENCE SECURITY PVT. LTD.
..... Petitioner
Through: Ms. Shruti Sharma, Ms. Ritika
Srivastava and Mr. Pankaj Kumar,
Advocates.
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Reserved on 19 September, 2023.
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Reserved on 21 September, 2023.
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Reserved on 21 September, 2023.
Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:27.09.2023
13:45:01
W.P.(C) 12314/2023 & connected matters Page 1 of 10
versus
GNCTD & ORS. ..... Respondent
Through: Mr. Avishkar Singhvi, Mr. Nipun
Katyal, Mr. Vivek Kumar Singh,
Mr.Naved Ahmed, Mr. Deokinandan
Sharma and Ms. Kismat Chauhan,
Advocates for respondent No.1 & 2.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJEEV NARULA
JUDGEMENT
SANJEEV NARULA, J.:
1. Bombay Intelligence Security (India) Ltd., Scientific Security
Management Services Pvt. Ltd., and M/s Singh Intelligence Security Pvt.
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Ltd., the Petitioners, emerged as the successful bidders in tenders issued by
Respondent – Directorate of Education [“DoE”], Government of NCT of
Delhi. Subsequently, DoE chose to annul the tender process, which resulted
in cancellation of contracts/ deployment orders issued in favour of the
Petitioners. Aggrieved by this adverse outcome, the Petitioners seek redress
from this Court, challenging the decision to cancel the tender.
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2. The writ petition W.P.(C) 12314/2023 was heard extensively on 19
September, 2023, and reserved for orders. Thereafter, W.P.(C) 12445/2023
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and W.P.(C) 12471/2023, urging similar issues, were heard on 21
September, 2023, and likewise reserved for orders. Given the congruence in
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Hereinafter referred to as Bombay Intelligence, Scientific Security, and Singh Intelligence, respectively.
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Digitally Signed
By:SAPNA SETHI
Signing Date:27.09.2023
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W.P.(C) 12314/2023 & connected matters Page 2 of 10
the facts and contentions raised, it is considered apposite to pronounce a
common judgement. For clarity and convenience, the Court shall
predominantly refer to the facts set out in W.P.(C) 12314/2023. The details,
where they deviate, are delineated in the judgement.
The Petitioners’ case
3. Mr. Pankaj Kumar, counsel for Petitioners, presented the following
facts and arguments:
3.1. The present controversy pertains to ten distinct tenders issued by DoE
in relation to deployment of security personnel in Government schools in
various clusters. Of these, eight were designated for unaided schools, and
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two for aided schools. The first round of tenders was issued on 04 January,
2022. Following the tenders’ announcement, Top Edge Security and
Services Pvt. Ltd. and Good Year Security Services lodged two writ
petitions [W.P.(C) 805/2022 and W.P.(C) 912/2022], questioning the legal
standing and validity of said tenders’ terms and conditions. In the ensuing
proceedings, the counsel for DoE conveyed an intent to retract the aforesaid
tenders, and affirmed that DoE would issue new tenders in line with the law,
post thorough deliberation.
3.2. Sequel to this, DoE released ten fresh tenders for the afore-noted
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purpose on 20 May, 2022. The Petitioner-companies, who specialize in
offering security and workforce services to various agencies, including
government bodies and public sector enterprises, submitted their bids for
four of such tenders, pertaining to different clusters. Bombay Intelligence
participated in the process for GEM/2022/B/2195447 and
GEM/2022/B/2195541, while Scientific Security and Singh Intelligence
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Signing Date:27.09.2023
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W.P.(C) 12314/2023 & connected matters Page 3 of 10
expressed interest in GEM/2022/B/2194834 and GEM/2022/B/2195769,
respectively. Notably, these tenders were again contested by Top Edge
Security and Services Pvt. Ltd. and Good Year Security Services, through
another set of writ petitions [W.P.(C) No. 8903/2022 and W.P.(C)
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9460/2022], wherein, this Court, on 01 June, 2022, passed an interim order
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placing the tender finalization process on hold. Later, on 27 July, 2022,
DoE sought permission to conclude the tender process, which was
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considered by this Court, and the interim order dated 01 June, 2022 was
modified as follows:
“This Court by order dated 01.06.2022 has directed the Respondents not
to finalise the tender.
Learned counsel for the Respondents has stated before this Court that the
Respondents be permitted to finalise the tender. The Respondents shall open the
tender of all the parties without prejudice to the rights of the Petitioners. However,
no LOI shall be issued in the matter. He has also stated that the Respondents shall
produce the entire record in respect of finalisation of tenders on the next date. He
is permitted to do so.
The interim order dated 01.06.2022 is modified. The Respondents are
permitted to proceed with the tender process. However, the Respondents shall not
issue LOI without leave of the Court. The Respondents shall produce the record in
respect of finalisation of the tenders on the next date.
List on 24.08.2022.”
3.3. Availing the afore-noted leave, DoE evaluated the bids received by
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them and published a letter on 17 March, 2023, unveiling the names of
those bidders who had successfully met the technical qualifications for all
ten bid clusters, including the Petitioners. Meanwhile, W.P.(C) No.
8903/2022 and W.P.(C) 9460/2022 came to be finally decided by this Court
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in DoE’s favour on 03 July, 2023, through a comprehensive order.
3.4. In the wake of afore-mentioned judgment, DoE proceeded to open the
financial bids for nine tenders on the GeM Portal. The process of choosing
the L-1 bidders was executed automatically using an auto-run method,
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Signing Date:27.09.2023
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W.P.(C) 12314/2023 & connected matters Page 4 of 10
which is devoid of manual intervention. In this procedure, Bombay
Intelligence was acknowledged as the winning bidder for two clusters
tendered under GEM/2022/B/2195447 and GEM/2022/B/2195541,
Scientific Security succeeded in GEM/2022/B/2194834, and Singh
Intelligence emerged as the L-1 bidder in respect of GEM/2022/B/2195769.
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Contracts were issued to Bombay Intelligence on 31 July, 2023, and on 26
July, 2023 to Scientific Security and Singh Intelligence. Following this
selection, the Petitioners remitted the requisite service charges to the GeM
portal and furnished a Performance Security in the form of a Bank
Guarantee, as stipulated in their contract(s).
3.5. As per tender terms and conditions, deployment was set to commence
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from 10 August, 2023. In preparation for delivering the stipulated services,
the Petitioners expended substantially and even initiated recruitment of
employees, placing them under their payroll. Significant investments were
also made in procuring the necessary uniforms and related accessories.
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3.6. On 07 August, 2023, DoE communicated a deployment order in
respect of Cluster B schools to Singh Intelligence. However, this order was
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kept in abeyance vide DoE’s communication dated 09 August, 2023. Work
orders in Bombay Intelligence and Scientific Security’s names were still
awaited. Representations were addressed to DoE, but to no benefit.
3.7. In the meantime, Petitioners learnt of filing of three writ petitions –
W.P. (C) 10090/2023 and W.P.(C) 10967/2023 and W.P.(C) 9904/2023,
impugning DoE’s evaluation of financial bids received for the tenders in
question. In anticipation of the deployment orders, Petitioners joined the
proceedings in the afore-noted petitions. It is contended that since no stay
had been imposed by the Court, no impediments stood in DoE’s path to
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Signing Date:27.09.2023
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W.P.(C) 12314/2023 & connected matters Page 5 of 10
finalize the tender process; yet, the DoE halted the process, without any
justification.
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3.8. Much to Petitioners’ dismay, on 11 September, 2023, DoE conveyed
their decision to annul the entire tendering procedure. This action is entirely
unwarranted, devoid of rationality, and contrary to established legal
principles. The decision merely states that certain technically qualified
bidders had submitted false particulars in their bids. DoE has baselessly
equated Petitioners with alleged technically qualified bidders, without
assigning any valid reasons. DoE’s decision is thus arbitrary, unjust, and
perverse. That apart, on the same date, DoE issued another order [bearing
F.1/1064/Security/New Tender/2022/681] authorizing the Heads of all
Government Schools to outsource security services through the GeM portal,
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for their respective schools for the period commencing from 01 October,
2023.
3.9. When dismissing Top Edge Security’s petition [W.P.(C) No.
8903/2022 and connected matter] challenging the conditions of the tenders
in question, this Court had specifically highlighted the absence of any
discrepancies and acknowledged transparency in the tender process.
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3.10. DoE issued the impugned order on 11 September, 2023 cancelling
the process on nebulous and unfounded reasons, overlooking this Court’s
imprimatur to the process. Furthermore, since the tender process had
reached an advanced stage and was on the brink of culminating with
issuance of a deployment/work order, DoE could not have terminated it
unilaterally. Reliance was placed upon the judgement delivered in M/s
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By:SAPNA SETHI
Signing Date:27.09.2023
13:45:01
W.P.(C) 12314/2023 & connected matters Page 6 of 10
2
Allengers Medical Systems Ltd. v. State of Karnataka and Ors.
DoE’s submissions
4. Ms. Hetu Arora Sethi, counsel representing DoE, supported the
impugned decisions, arguing that they do not call for any judicial
interference. She further submitted that with the revocation of the tenders,
performance guarantee furnished by the Petitioners shall be duly returned,
and thus, no prejudice would be caused to them.
Analysis and findings
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5. DoE’s order dated 11 September, 2023 rescinding the subject
tenders, reads as under:
“ ORDER
Subject: Cancellation of bids invited for Outsourcing of Security Guards in Govt.
Schools and Govt. Aided Schools
Based on recommendations of the Purchase Committee vide minutes of
meeting dated 11.09.2023, the tenders/bids published on GeM portal for awarding
the contract of providing Security Services in Govt. Schools in respect of Bid No.
GEM/2022/8/2194834, GEM/2022/B/2195060, GEM/2022/8/2195371 &
GEM/2022/B/2195586 and in Govt. Aided Schools in respect of Bid No.
GEM/2022/B/2195734 & GEM/2022/B/2195769 are hereby cancelled on the
following grounds: -
“The bidders technically qualified in above mentioned bids had misled the
Directorate of Education, GNCT of Delhi while wrongly and falsely applying for
the bid under Micro and Small Category seeking exemption from EMO thereby
misleading the DoE to believe that these bidders belong to Micro/Small Category
and are eligible for EMO exemption but the fact remains that these bidders were
registered under medium category with MSME and falsely and wrongly applied
under Micro and Small Category. The act of such bidders is violative of provisions
of Rule 170 (i) of General Financial Rules 2017 read with provisions of O.M.
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20/2/2014-PPD (Pt) dated 25 July 2017 issued by Ministry of Finance
Government of India Procurement and Policy Division. These bids were to be
treated as non-responsive and ineligible and were liable to be rejected straightway
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In Writ Petition No. 17634/2022 (GM-TEN).
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Digitally Signed
By:SAPNA SETHI
Signing Date:27.09.2023
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W.P.(C) 12314/2023 & connected matters Page 7 of 10
in-terms of the guidelines of CVC aforesaid. The wrongful act of these 06 Bidders
has vitiated the whole process of present 10 bids resulting into causing undue
delay in Public Work."
Further, as per the said recommendations, the tenders/bids published on
GeM portal for awarding the contract of providing Security Services in Govt.
Schools in respect of Bid No. GEM/2022/B/2195292, GEM/2022/B/2195447,
GEM/2022/8/2195488 and GEM/2022/B/2195541 are also hereby cancelled as it
is found that inclusion of ineligible bidders and their processing on Autorun mode
with many ineligible bidders in these bids has vitiated the sanctity of whole
process.
As a consequent of cancellation of bids, the work order issued to the
bidders and subsequent allocation of work, if any, are also hereby revoked for all
intent and purposes with retrospective effect.
Sd/-
(HIMANSHU GUPTA)
DIRECTOR OF EDUCATION”
6. The outcome of the afore-mentioned order entails that henceforth,
instead of the DoE, the individual schools shall undertake the process of
outsourcing security services. The rationale presented by DoE for tender
cancellation stems from the fact that they were misled by certain bidders
concerning their qualifications. This connotes that several bidders, who
should have otherwise been designated as technically non-responsive and
consequently, ineligible, were erroneously taken into consideration during
the tender award process. In effect, the integrity of the process under the
afore-mentioned ten tenders had been compromised. Not only were the
ineligible bidders permitted to submit financial bids, but their automatic
progression within the bidding process resulted in inadvertent consideration
of numerous unqualified bidders.
7. Central to any tendering process is its integrity. When participants
provide misleading information, it not only dilutes the competitive spirit, but
also jeopardizes the objective of securing the best service or product. In the
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By:SAPNA SETHI
Signing Date:27.09.2023
13:45:01
W.P.(C) 12314/2023 & connected matters Page 8 of 10
present scenario, the deviation by certain bidders from the set criteria
detracted from transparency, fairness, and competitiveness – the
fundamental values of any tendering process. The impugned decision is
founded on the recommendations of the purchase committee, which
stemmed from a rigorous review of the facts and circumstances by the
committee of experts. Their advice serves as an additional layer of scrutiny,
and the DoE’s alignment with their conclusion, underscores the depth of the
discrepancy observed. Given these circumstances, where the integrity of
entire procedure has been jeopardised, DoE’s decision to rescind the tender
process and annul the work orders cannot be faulted with.
8. Given the differentiable factual matrix, the case of M/s Allengers
Medical System Ltd ., cited by the Petitioners, fails to bolster their argument.
In the afore-mentioned case, the Respondents had annulled the tender
process, attributing it to alleged corrupt practices by certain officers.
However, the Court discerned such a factor as insufficient to invalidate an
otherwise legitimate tender. Contrarily, in the instant cases before us, the
submission of inaccurate facts by the bidders has led to the inclusion of
unqualified participants in the contest. The participation of ineligible bidders
gravely undermines the integrity of the selection process, the foundation
upon which a contract/deployment order was accorded to the Petitioners.
9. In matters such as the present, the Court is tasked with assessing
whether the issuing authority, in resorting to rescind the tenders, has acted
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capriciously or with malafides . We do not find the situation to be so in the
present cases; the order notifying cancellation of the process is grounded in
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See: Suncity Projects Pvt. Ltd. v. Government of NCT of Delhi and Anr., 2009 SCC OnLine Del 94.
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Digitally Signed
By:SAPNA SETHI
Signing Date:27.09.2023
13:45:01
W.P.(C) 12314/2023 & connected matters Page 9 of 10
sound reasoning. In relation to DoE’s directive for the respective schools to
independently outsource the security services, which stands as a policy
decision pertaining to a commercial venture, we find no inadequacies or
shortcomings therein that would necessitate intervention.
10. Bearing the afore-noted reasons, the Courts finds that the reasons put
forth by DoE for passing the impugned order(s) are justifiable, and based on
cogent consideration. With respect to the Petitioners’ assertion of having
incurred losses in preparing themselves, whilst anticipating deployment
orders, it is the Court’s view that they should seek recourse through the civil
court for redressal of this grievance. This Court, in the present writ
proceedings, cannot determine the potential loss caused to the Petitioners, if
any, on account of cancellation order.
11. In light of the above, we do find any infirmity in the decision of DoE
in cancelling the tender process. We dispose of the present petition
observing that the Petitioners shall be at liberty to take recourse to civil
proceedings for their claim of damages, if any, on account of withdrawal of
the tender process.
12. Disposed of along with pending applications.
SANJEEV NARULA, J
SATISH CHANDRA SHARMA, CJ
SEPTEMBER 27, 2023
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Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:27.09.2023
13:45:01
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