Court deems rejection of security services contract bid unreasonable, directs award to petitioner. Excluding parties for legal redress against public policy.

The court found the rejection of the petitioner's bid for a security services contract arbitrary and unreasonable due to an overly broad interpretation of tender conditions. It set aside the award to the third respondent and directed the authority to award the contract to the petitioner within two weeks, ensuring deployment by a specified date. The court emphasized that excluding eligible parties for seeking legal redress was against public policy and unfounded in law. The writ petition was allowed without costs.

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Issues Involved:
1. Alleged arbitrariness and violation of Article 14.
2. Entitlement to the contract based on higher turnover.
3. Allegations of blacklisting and pending litigation.
4. Interpretation of eligibility conditions in the tender document.
5. Validity of the rejection of the petitioner’s bid.

Detailed Analysis:

1. Alleged Arbitrariness and Violation of Article 14:
The petitioner approached the court alleging arbitrariness and violation of Article 14, seeking a direction for CGHS to award a contract for providing security services and to quash the award of the tender to the third respondent, Jai Prakash. The court issued notices and heard the petition on merits without requiring formal affidavits or replies from the respondents.

2. Entitlement to the Contract Based on Higher Turnover:
The petitioner claimed that its turnover for the last three years was significantly higher than that of Jai Prakash. Both parties quoted identical administrative charges, invoking the tie-breaker condition in Clause (13) of Section 1 of the NIT, which favored the bidder with the highest turnover. The petitioner, with a turnover of over Rs. 17 crores, argued it should have been declared as L1 over Jai Prakash, whose turnover was about Rs. 8 crores.

3. Allegations of Blacklisting and Pending Litigation:
The petitioner’s bid was rejected based on complaints from Jai Prakash alleging that the petitioner had been blacklisted and had pending litigation. The petitioner responded by clarifying that the blacklisting order from 2010 had been set aside and that the pending litigation pertained to a refund of earnest money deposit (EMD), not a security job.

4. Interpretation of Eligibility Conditions in the Tender Document:
The CGHS rejected the petitioner’s bid on the grounds of a false affidavit, claiming no pending litigation regarding security jobs. The court noted that the eligibility condition required no litigation related to a "security job." The court interpreted this narrowly, stating that disputes over payments or claims of unsatisfactory service do not constitute litigation regarding security jobs. A wide interpretation would unjustly exclude eligible parties from contracts merely for seeking legal redress.

5. Validity of the Rejection of the Petitioner’s Bid:
The court found that the rejection of the petitioner’s bid was arbitrary, as the tender evaluation committee adopted an overly broad interpretation of the tender condition. This wide interpretation led to manifest injustice and arbitrariness, excluding a party eligible for the contract merely for having approached the courts. The court emphasized that such exclusion is contrary to public policy and unfounded in law.

Conclusion:
The court concluded that the rejection of the petitioner’s bid was arbitrary and unreasonable. It set aside the decision to award the tender to Jai Prakash and directed CGHS to complete the formalities to award the contract to the petitioner within two weeks, ensuring deployment by 01.09.2017. The writ petition was allowed, with no costs awarded.

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