Dismissed

Indian Institute of Technology and 3 Ors. v. M/S Minakshi Hospitality Services Pvt. Ltd. and Anr.

Gauhati HC22 Nov 2019WA/289/2019

Case brief

AI extract

What is this about?

Intra-court appeal by IIT Guwahati against a Single Judge order setting aside a tender award due to flawed price evaluation. The High Court upheld the Lower Court finding that tender data regarding mattress and blanket laundry costs was miscalculated per the prescribed formula, dismissing the appeal and affirming remand of the matter.

What did the court decide?

Appeal dismissed; the decision of the Learned Single Judge upholding remand of the matter for fresh decision was upheld.

Indian Institute of Technology and 3 Ors… — Contract and Commercial Disputes | Gauhati HC (2019)

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Page No.# 1/11

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GAHC010171012019

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : WA 289/2019

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1:INDIAN INSTITUTE OF TECHNOLOGY AND 3 ORS GUWAHATI, REP. BY ITS DIRECTOR, ADDRESS- P.O. AND P.S. JALUKBARI, DIST.- KAMRUP, GUWAHATI- 781039.

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2: DEAN IPM INDIAN INSTITUTE OF TECHNOLOGY GUWAHATI ADDRESS- P.O. AND P.S. JALUKBARI DIST.- KAMRUP GUWAHATI- 781039.

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3: THE REGISTRAR INDIAN INSTITUTE OF TECHNOLOGY GUWAHATI ADDRESS- P.O. AND P.S. JALUKBARI DIST.- KAMRUP GUWAHATI- 781039.

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4: THE DEPUTY REGISTRAR ESTABLISHMENT SECTION INDIAN INSTITUTE OF TECHNOLOGY GUWAHATI ADDRESS- P.O. AND P.S. JALUKBARI DIST.- KAMRUP GUWAHATI- 781039 THE APPELLANT NOS. 1 TO 4 ARE REP. BY THE REGISTRAR I/C OF THE INDIAN INSTITUTE OF TECHNOLOGY GUWAHATI ADDRESS- P.O. AND P.S. JALUKBARI DIST.- KAMRUP GUWAHATI- 781039

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Page No.# 2/11

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VERSUS

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1:M/S MINAKSHI HOSPITALITY SERVICES PVT. LTD. AND ANR HAVING REGISTERED OFFICE AT LACHIT NAGAR, BYE LANE NO. 07, GUWAHATI- 781007, ASSAM REP. BY ITS DIRECTOR, MRS. MINAKSHI GOSWAMI, W/O- RAMESH CHANDRA SARMA, R/O- 12, LACHIT NAGAR, BYE LANE NO. 07, GUWAHATI- 781007, ASSAM

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2:THE PROPRIETOR A TO Z CATERING COMPANY H.C. ROAD UZANBAZAR GUWAHATI- 781001

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Advocate for the Petitioner : MR. R P KAKOTI SR. ADV.

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Advocate for the Respondent : MR. B J GHOSH

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BEFORE

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HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA HONOURABLE MR. JUSTICE NELSON SAILO

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Date : 22-11-2019

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JUDGMENT & ORDER (CAV)

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(AM Bujor Barua, J)

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Heard Mr. R.P Kakoti, learned senior counsel for the appellant and Mr. B.J Ghosh, learned counsel appearing for the respondent No. 1 on Caveat.

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The appellant Indian Institute of Technology Guwahati (for short, IITG) issued a Tender Notice bearing No. IITG/Estb/17/NIT-03/GH/Housekeeping & Catering, Dated 11.12.2017 inviting tendered bids in a two-bid system, i.e., technical bid and financial bid, for providing round the clock hospitality, housekeeping & catering services at the institute guest house. The hospitality and housekeeping component of the bid also included for providing

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Page No.# 3/11

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laundry services. The tender notice provided that for the purpose of the bid for the laundry component, bids are required to be submitted in the manner as indicated therein. The manner indicated was as follows:-

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“Considering present requirement for laundry service for the institute items and based occupancy, 30 numbers of each item of Part-C in the Financial Bid will be assumed to be required per day. Therefore, price evaluation will be done as per quoted rates of each item for 30 nos. for 30 days. ( C2 )

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Evaluation is to be done as follows:-

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C=0.85 x C1 + 0.15 x C2

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Clow = Lowest bidder in the Financial Bid with the above.”

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The respondent No. 1 in respect of the laundry component of the tender had

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submitted their financial bid in the following manner:-

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Sl.	Items	Unit	Qty./day	Rate	Amount(Rs.)
No.			(tentative)	(Rs.)
1	Bed Cover	Each	30	15/-	450/-
2	Bed Sheet	Each	30	10/-	300/-
3	Pillow Cover	Each	30	10/-	300/-
4	Hand towel	Each	30	10/-	300/-
5	Bath towel	Each	30	10/-	300/-
6	Basin Towel	Each	30	10/-	300/-
7	Table cloth	Each	30	80/-	2400/-

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8	TrayTowel		30	10/-	300/-
9	Curtain	Each	30	80/-	2400/-
10	Mattress (dry wash),if required	Each	30	200/-	6000/-
11	Blankets (dry wash)	Each	30	150/-	4500/-
12	Pillow (dry wash),if required	Each	30	100/-	3000/-
	Total cost per day				20,550/-
C2	Total cost per month (30 days)				6,16,500/-

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NOTE : The rate should be inclusive of all relevant taxes and duties. Tenderer may visit the concerned units for seeing the quantum of actual work before submitting the tender and may discuss with the Technical Superintendent (Guest House) for any further information.”

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The respondent No. 2, on the other hand, had submitted their financial bid for the laundry component as under:-

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Sl. No.	Items	Unit	Qty./day (tentative)	Rate (Rs.)	Amount(Rs.)
1	Bed Cover	Each	30	23.40	702.00
2	Bed Sheet	Each	30	18.40	552.00
3	Pillow Cover	Each	30	14.50	435.00
4	Hand towel	Each	30	9.90	297.00

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5	Bath towel	Each	30	20.50	615.00
6	Basin Towel	Each	30	9.90	297.00
7	Table	Each	30	15.00	450.00
8	TrayTowel		30	9.90	297.00
9	Curtain	Each	30	55.90	1677.00
10	Mattress (dry wash),if required	Each	30	900.00	27000.00
11	Blankets (dry wash)	Each	30	400.00	12000.00
12	Pillow (dry	Each	30	50	1500.00
	wash),if required
	Total cost per day				15274.00
C2	Total cost per month (30 days)				458220.00

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It is taken note of that the respondent No. 1 M/s Minakshi Hospitality Services Private

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Ltd., was earlier providing the service to the appellant IITG on the subject matter of the tender notice. By the Letter No. IITG/Estb/17/NIT-03/GH/Housekeeping & Catering/236 dated 29.11.2018 of the appellants, the respondent No. 2 was informed that after finalization of the tender process, it was decided that the contract for providing round the clock hospitality, housekeeping & catering services at the institute guest house of the IITG had been awarded

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to the respondent No. 1 w.e.f., 01.12.2018. Accordingly, the respondent No. 1 was asked to hand over the charge from the respondent No. 2. The respondent No. 2 was accordingly requested to take charge from the respondent No. 1 at the earliest so that the service can be effected from 01.12.2018. The letter informing the respondent No. 2 requiring them to take over the charge had been assailed by the respondent No. 1 in the writ petition WP(C) No. 8520/2018 with the following prayer:-

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“…A writ in the nature of certiorari should not be issued to set aside quash the award of “Providing round the clock Hospitality, Housekeeping & Catering Services at Institute Guest House of Indian Institute of Technology Guwahati” in favour of the Respondent No. 5 under impugned Letter No. IITG/Estb/17/NIT03/Housekeeping and Catering/236, dated 29.11.2018 in pursuance of NIT no. IITG/Estb/17/Nit-03/GH/Housekeeping & Catering, dated 11.12.2017 and as to why a Writ in the nature of mandamus should not be issued directing the Respondents No. 1 to 4 to award the above contract to the petitioner…”

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In the writ petition, it had been the stand of the respondent No. 1 that their financial bid was lower than that of the respondent No. 2 and therefore, the decision of the appellant IITG to accept the respondent No. 2 to be the lowest bidder was arbitrary and unreasonable. It was the stand of the respondent No. 1 that the decision making process adopted by the appellant IITG suffered from vices of arbitrariness, mala fide, unreasonableness, biasness and, therefore, violated Article 14 of the Constitution of India.

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In the affidavit-in-opposition in the writ proceeding, the appellant IITG stated that the respondent No. 1 had quoted an amount of Rs. 7,04,759/- as the monthly fixed maintenance charge, whereas the respondent No. 2 had quoted an amount of Rs. 5,93,784/- for the same purpose. Accordingly, the amount quoted by the respondent No. 2 was found to be lower than the respondent No. 1. The appellant IITG was of the view that on a monthly basis, the

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price difference between the respondent No. 1 and the respondent No. 2 was Rs. 1,10,975/and therefore for a period of 24 months, being the period of the contract, the appellant would be required to pay an amount of Rs. 26,63,400/- in excess. The learned single Judge, in its Judgment & Order dated 17.06.2019, took note of the stand of the appellant IITG that as the respondent No. 1 quoted an amount of Rs. 7,04,759/- per month being the total monthly fixed maintenance charge, whereas the respondent No. 2 had quoted an amount to Rs. 5,93,784 /- and for a period of 2 (two) years, the appellant IITG would have to pay an amount of Rs. 26,63,400/- in excess. While taking note of the same, the learned Single Judge was also of the view that it was difficult to accept the mathematical formula applied by the appellant IITG, and one particular calculation had drawn the attention of the Court, which may have a material bearing on the determination as to who would be the L-1 bidder.

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For the purpose, the learned Single Judge took note of the detailed rates quoted by the respondent No. 1 and the respondent No. 2. Upon comparing the rates submitted by the 2 (two) bidders, the learned Single Judge arrived at the following conclusion:-

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“Having noticed the above, the schedule of rates of respondent No. 5 may now be adverted to as extracted above. A calculation of the rates from Sl. Nos. 1 to 12 will show that total cost per month (30 days) would be Rs. 13,74,660.00 and based on this, total cost per day would come to Rs. 45,822.00/-. However, what the Committee had done is that it had put the figure of Ra. 45,822.00 as the total cost per month (30 days) which cannot be the correct figure. Not only that, from out of nowhere the Committee mentioned the figure of Rs. 15,274.00 as the total cost per day. Under no circumstances, this figure of Rs. 15,274.00 can be arrived at, even if the erroneous figure of Rs. 45,822.00 is taken as the total cost per month (30 days).

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A minute observation of the schedule of rates for laundry services of petitioner and respondent No. 5 would go to show that while petitioner had quoted Rs. 200 for dry wash of mattress per piece, respondent No. 5 quoted Rs. 900. Likewise, for blankets (dry wash), petitioner quoted Rs. 150.00

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Page No.# 8/11

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whereas respondent No. 5 quoted Rs. 400. A tentative quantity of 30 pieces per day was provided by the employer. Calculating the rates multiplied by the tentative quantity, petitioner had offered Rs. 6,000 and Rs. 4,500/- respectively for mattress and blankets. On the contrary, respondent No. 5 had offered Rs. 27,000.00 and Rs. 12,000.00 for the above two items. From the above, what is noticeable is that in respect of Part-C (laundry service), total cost per month (30 days) quoted by the petitioner was Rs. 6,16,500.00 whereas rate provided by respondent No. 5 for laundry service was Rs. 13,74,660.00. Instead of taking this into account what the Committee had done was that it had calculated Rs. 4,58,220.00 as the laundry charge offered by respondent No. 5 which on the face of it is erroneous. It could either be Rs. 45,822.00 per day in which event, the monthly figure will be Rs. 13,74,660.00 or if it was Rs. 45,822.00 per month, the daily figure would come to Rs. 1,527.00”.

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We have examined the conclusion arrived at by the learned Single Judge as regards the analysis of the rates quoted by the 2 (two) bidders. It is taken note of that in respect of respondent No.2 the total cost per day arrived at was Rs. 15,274/-, but from detailed rates available in page 183 of the Memo of Appeal, it is noticed that for dry washing the mattresses, for a quantity of 30 mattresses per day @Rs. 900/-, the total amount came to Rs. 27,000/- and again for dry washing the blankets of 30 nos. per day @ Rs. 400/-, the total came to Rs. 12,000/-. If the total cost per day of Rs. 15,274/- arrived at also includes the amount of Rs. 27,000/- and Rs. 12,000/- respectively, a simple mathematical calculation would show that the total cost per day of Rs. 15,274/- which was arrived at would have to be incorrect. If the rate offered for dry washing the mattresses and dry washing the blankets is Rs. 27,000/- and Rs. 12,000/- per day, respectively, the conclusion arrived at by the learned Single Judge that the total for 30 days would be Rs. 13,74,600/- cannot be stated to be an incorrect calculation. As per the correct conclusion, if the amount payable to the respondent No. 2 for the 30 days period comes to Rs. 13,74,600/- and the total amount quoted by the respondent No. 1 for 30 days would be Rs. 7,04,759/-, the acceptance of the respondent No. 2 to be the L-1 bidder would be an incorrect assessment or conclusion.

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Accordingly, the learned Single Judge was pleased to set aside the allotment of the work in favour of the respondent No. 2 and it remanded the matter back to the authorities for a fresh decision in accordance with law.

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Being aggrieved by the Judgment dated 17.06.2019, the present intra court appeal has been preferred by the appellant IITG.

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Mr. R.P Kakoti, learned senior counsel for the appellant urges upon the ground that in reality, the number of mattresses and blanket that would be required to be dry washed would not be 30 nos. each per day. The requirement of dry washing of mattresses and blankets being not a daily requirement, according to the learned senior counsel, the actual payment that the appellant IITG would be required to make against the items of dry washing of mattresses and blankets would be much less. If the said aspect is taken into consideration and a re-calculation is made, the rate quoted by the respondent No. 2 would be much lesser amount that the appellant IITG would be required to pay. Accordingly, it is the contention that in the public interest and in the interest on equity, the decision arrived at by the appellant IITG to allot the work to the respondent No. 2 is justified and the interference of the same by the learned Single Judge would be unsustainable.

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We appreciate the contention sought to be raised by Mr. R.P Kakoti, learned counsel for the appellant IITG. The said contention may have been acceptable if the appellant authorities had required the bidders to have submitted their rates on the basis of one number of quantity of the item per day and there upon arrive at the total amount to be paid to the successful bidder. But as already extracted the tender notice itself required that the rates for

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the laundry items would have to be quoted by the bidders on the basis of 30 items per day, by assuming it to be the requirement per day and the price evaluation would be done as per the quoted rates of each item for 30 numbers for 30 days.

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An acceptance of the method of calculation arrived at by the appellant IITG, as projected by the learned senior counsel, in our view, would be a deviation of the specific method of calculation provided in the tender notice itself. In other words, if a different procedure is allowed to be adopted, the same would not only change the tender conditions, but would also allow the rules of the game to be changed after the game had begun.

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The tenderers are all hardened businessman, who knows the implications of the rates that they have quoted and the tendering authority while preparing their tender notice are also expected to know the implication of the procedure prescribed by them in the tender notice for the purpose of submission of the financial bids. A subsequent realization that the calculation required to be made in the given procedure would lead to a higher payment being made to the bidders, cannot be a reason for the appellate authorities to change the procedure to be adopted which was clearly spelt out in the tender notice.

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In view of the above, we are unable to accept the contention of the learned senior counsel for the appellant IITG. In the circumstance, when we look at the conclusion arrived at by the learned Single Judge in the Judgment dated 17.06.2019 in WP(C) No. 8520/2018 no infirmity could be found which would require an interference.

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Accordingly, the appeal is found to be devoid of any merit and the same stands dismissed.

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JUDGE JUDGE

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Comparing Assistant

Indian Institute of Technology and 3 Ors. v. M/S Minakshi Hospitality Services Pvt. Ltd. and Anr.

Case brief

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Indian Institute of Technology and 3 Ors. v. M/S Minakshi Hospitality Services Pvt. Ltd. and Anr.

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