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Judgment
M.S. Ramachandra Rao, CJ, Jyotsna Rewal Dua, J
The petitioner was awarded Rate Contract for providing cooked diet services at MGMSC Khaneri Rampur, District Shimla on 20.04.2023. Respondents cancelled it on 10.07.2023 and decided to go for a fresh tender. Aggrieved against cancellation of its Rate Contract/Cooked Diet award, the petitioner has instituted this writ petition.
Facts leading to filing of this petition: -
2(i) Respondents issued a notice inviting tender on 23.02.2023 for providing cooked diet at MGMSC Khaneri, Rampur Bushahr, District Shimla. The tenders were to be opened on 17.03.2023 and could be submitted by individuals, registered firms, proprietorship firms/partnership firms/company/Corporation/ Cooperative Society or any legal entity.
2(ii) Five bids were submitted in response to the NIT:-
Bidder ‘A to Z Solutions’ withdrew its bid on 22.03.2023.
Bidder ‘Sant Ram Sharma Caters’ withdrew its bid on 21.03.2023.
Bidder ‘Corporate Care’; Bidder ‘M/s Baldev Kumar’;
Bidder ‘M/s Zenith-Event & Services’ (petitioner).
The last three bidders remained in the foray & qualified the laid down technical criteria. Their financial bids were also opened.
2(iii) The petitioner emerged successful as L-1 bidder. Vide letter dated 20.04.2023, the tender for providing cooked diet at MGMSC, Khaneri, Tehsil Rampur Bushehar, District Shimla, for the years 2023-2025 was awarded to it. An agreement was also executed between the petitioner and respondents in this regard on 21.04.2023.
2(iv) On a complaint made by one Sh. Rajesh Kumar (not a tender participant) relating to alleged procedural lapses in finalizing the tender for providing cooked diet service, a meeting of State Level Committee was held on 07.06.2023 under the chairmanship of Joint Director Health Services. The Committee observed in its meeting as under:-
‘M/s A to Z Solutions’ and ‘M/S S.R. Caters’ had withdrawn their bids. In view of this, their Earnest Money Deposit (EMD) should have been forfeited, whereas the department had returned the EMD to these firms. Returning the EMDs instead of forfeiting the same, was contrary to the tender conditions.
The firms ‘Ms A to Z Solutions’ and ‘M/s Zenith-Event & Services’ (present petitioner) were under the same proprietor i.e. Sh. Harish Kumar. The authorized signatory of both the firms was also the same person.
In view of above, the Committee recommended for cancelling the contract awarded to the petitioner, to initiate fresh tender process and in the meanwhile to grant extension to the existing contractor (petitioner) for providing cooked diet service at MGMSC Khaneri Rampur, District Shimla on the same rates as sanctioned for the year 2019-20 till the finalization of fresh tender.
Based on above recommendations of the Committee, Rate Contract issued to the petitioner on 20.04.2023 was cancelled on 10.07.2023. Further, the petitioner-existing rate contract supplier for supply of cooked diet, was asked to continue to provide its services at the rate approved for the years 2019-20. The petitioner has invoked writ jurisdiction of this Court against the cancellation of its Rate Contract by the respondents on 10.07.2023.
Heard learned counsel on both sides.
Consideration
4(i) The respondents have admitted awarding Rate Contract to the petitioner on 20.04.2023 and cancelling it on 10.07.2023. Two reasons cited by the State Level Committee in its meeting dated 07.06.2023 have been reiterated by the respondents in their reply for cancelling petitioner’s Rate Contract: -
a) Instead of forfeiting the Earnest Money Deposit of two participant bidders, who had withdrawn their bids, the respondent/department had returned the Earnest Money Deposit to them in contravention to the tender conditions.
b) Participating bidders ‘M/s A to Z Solutions’ and ‘M/s Zenith- Event & Services’ (present petitioner) were owned by single proprietor-Sh. Harish Kumar.
4(ii) Earnest Money Deposit
The question whether the EMD ought to have been returned or forfeited in case of two bidders who had withdrawn their bids, can in no manner influence the Rate Contract awarded to the petitioner. Being L1 bidder, the petitioner was awarded the contract on 20.04.2023. Agreement between the petitioner and respondents was executed on 21.04.2023. It is not understandable as to how action or inaction of department in returning/forfeiting the Earnest Money Deposit of the other bidders, can have any impact upon the declared successful bidder. It is not a case, where the respondents found the petitioner to be non-compliant of the tender conditions. Seemingly, the respondents have mechanically put forth a reason to cancel the tender awarded to the petitioner on 20.04.2023, which has no relevance to the award of tender in petitioner's favour. It is not for the petitioner to ensure that the department acts as per law. The petitioner cannot be put to loss on account of department’s alleged non-compliance to the tender condition in case of other bidders, more so when same cannot have any impact upon the tender awarded to the petitioner.
4(iii) Single Proprietor
The petitioner has provided enough documentary evidence to suggest that ‘M/s A to Z Solutions’ and ‘M/s Zenith-Event & Services’ are distinct legal entities. The petitioner is a partnership firm consisting of two partners namely Sh. Partap Chand and Sh. Harish Kumar, whereas ‘M/s A to Z Solutions’ is a proprietorship concern of Sh. Harish Kumar. It is not in dispute that both the concerns have their separate registrations with statutory authorities, as well as independent/separate account numbers. Petitioner, a partnership concern is separately registered under H.P. (Shop & Commercial Establishment) Act, 1969, also as a Micro Small & Medium Enterprise, having separate GST, PAN numbers. It also enjoys separate registration under Food Safety & Standard Authority of India, has separate EPF & ESI registration. Merely because one of the partners in the petitioner firm has his own sole proprietorship concern in the name of M/s A to Z Solutions, in the given case, will not dis-entitle petitioner No.1 firm to participate in the tender process and for award of the work, more particularly, when M/s A to Z Solutions admittedly had withdrawn its bid before the opening of technical bids. The fact that ‘M/s A to Z solutions’ had withdrawn its bid before opening of technical bids finds mention in the “Proceeding of Technical bid opening and evaluation summary” (Annexure R-5), relevant portion of which reads as under:-
“There after the Committee opened the Technical bids of only three firms keeping into consideration of withdrawal by M/s A to Z Solutions Bijleshwar View Near Monal Cafe Dhalpur Kullu, H.P. and Sh. Sant Ram Sharma (Prop.) S.R. Catering Services Gandhi Mohalla Chowk Bazar Ward No.6 Solan, H.P.
The following bidders have submitted the bids online.
M/S Zenith Event & Services VPO Ralson, Tehsil & District Kullu, H.P.
M/S Baldev Kumar, Suraj Kund Road, Kangra Tehsil & District Kangra, H.P.
M/s Corporate Care Middle Market Sector No.II, Shimla, H.P.
All the documents submitted online by the above bidders in the technical bids, which were scrutinized by the committee with the respect to terms and conditions, eligibility criteria and check list of the tender document. On the basis of above scrutiny the bids were evaluated as under:-”
Learned Additional Advocate General could not point out any term and condition of the tender document debarring those firms from participating in the tender process, who had a common partner/proprietor. It is for the respondents to incorporate and have proper terms and conditions in the tender document.
In view of above, it is apparent that the reasons given by the respondents for cancelling the award of contract issued in favour for the petitioner firm are not justifiable. Accordingly, the writ petition is allowed. Letter dated 10.07.2023 conveying the decision of the respondents to cancel the Rate Contract issued to the petitioner on 20.04.2023 for providing cooked diet service at MGMSC Khaneri, Rampur Bushahr for the years 2023-25 is quashed and set aside. The respondents are directed to proceed further in the matter on the basis of office letter dated 20.04.2023 whereunder award for providing cooked diet services for the hospital in question was issued in favour of petitioner and also in terms of the contract agreement executed between the petitioner and the respondents on 21.04.2023 for the aforesaid purposes. Pending miscellaneous applications, if any, shall also stand disposed of.