* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgments Reserved on: 08 th September, 2015 Judgments Delivered on: 13 th January, 2016
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1 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgments Reserved on: 08 th September, 2015 Judgments Delivered on: 13 th January, WP(C) 7094/2014 M/S WELL PROTECT MANPOWER SERVICES PRIVATE LIMITED... Petitioner versus GOVT. OF NCT OF DELHI & ORS.... Respondents Advocates who appeared in this case: For the Petitioner : Mr Raman Kapoor, Senior Advocate with Mr Tarkeshwar Nath and Mr Saurabh Kumar Tuteja. For the Respondents : Ms Aayushi Gupta for Mr Raman Duggal for GNCTD. Mr Sarwesh Kumar and Ms Sufiya Aquil for R-3. + WP(C) 7134/2014 M/S WELL PROTECT MANPOWER SERVICES PRIVATE LIMITED... Petitioner versus GOVT. OF NCT OF DELHI & ORS.... Respondents Advocates who appeared in this case: For the Petitioner : Mr Raman Kapoor, Senior Advocate with Mr Tarkeshwar Nath and Mr Saurabh Kumar Tuteja. For the Respondents : Ms Aayushi Gupta for Mr Raman Duggal for GNCTD. Mr Sarwesh Kumar and Ms Sufiya Aquil for R-3. WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 1 of 9
2 + WP(C) 8109/2014 M/S WELL PROTECT MANPOWER SERVICES PRIVATE LIMITED... Petitioner versus NORTH DELHI MUNICIPAL CORPORATION & ANR.... Respondents Advocates who appeared in this case: For the Petitioner : Mr Raman Kapoor, Senior Advocate with Mr Tarkeshwar Nath and Mr Saurabh Kumar Tuteja. For the Respondents : Mr Parvinder Chauhan for R-1/NDMC. Mr Sudhir Nandrajog, Senior Advocate with Mr Rajesh Gogna for R-2. + WP(C) 8543/2014 GAURAV ENTERPRISES versus EAST DELHI MUNICIPAL CORPORATION & ANR. Advocates who appeared in this case:... Petitioner... Respondents For the Petitioner : Mr Raman Kapoor, Senior Advocate with Mr Tarkeshwar Nath and Mr Saurabh Kumar Tuteja. For the Respondents : Mr Pravesh Thakur for R-1. CORAM:- HON BLE MR JUSTICE BADAR DURREZ AHMED HON BLE MR JUSTICE SANJEEV SACHDEVA JUDGMENT WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 2 of 9
3 SANJEEV SACHDEVA, J WP(C) 7094/2014 & CM No.16635/2014, WP(C)7134/2014 & CM No.16815/2014, WP(C) 8109/2014 & CM No.18909/2014 & WP(C) 8543/2014 & CM Nos.19718/2014, 7731/ Since all these petitions involve common questions of fact and law, the same are being taken up together. All the petitioners in the respective petitions seek quashing of the award of contract to respondent No.3 by respondent Nos.1 & 2 in the respective petitions. 2. All the four tenders, which are the subject matter of the four petitions, pertained to provisions of security services. In W.P.(C) No.7094/2014, the respondent No.1 had invited tenders for providing security services and the last date for submission of the bids in the said NIT was In W.P.(C) No.7134/2014, the last date for submission of the bids was In W.P.(C) No.8109/2014, the last date for submission of the bids was and in W.P.(C) 8543/2014, the last date for submission of the bids was As per the respective NITs, the bidders were to abide by and comply with all relevant laws and statutory requirements under various laws. The issue, in the present case, revolves around the contribution of the employer to the Employee Provident Fund (EPF). 4. The contention of the petitioner is that the rate to be quoted by a bidder had to conform to the statutory minimum wage along with various WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 3 of 9
4 other statutory contributions payable to the employee and the bid of any bidder quoting a rate below the minimum wage or the statutory contribution was a non-responsive bid and was liable to be rejected. Reliance is placed on clause 7.1 of section 4 which reads as under: 7. WAGE DISBURSAL The Contractor shall pay to the Personnel deployed at such rates which should not be less than the minimum prescribed rate plus admissible EPF, ESI, Bonus etc. calculated at prevailing rates as per rules" 5. The crux of the present matters concerns the EPF contribution, which admittedly is at the rate of 13.61%. The contention of the petitioner is that the EPF contribution should be 13.61% of the minimum wage, which admittedly was Rs , and the bid of any party quoting a rate showing EPF contribution at below 13.61% of Rs was a non-responsive bid and was liable to be rejected. It is contended that the respondent No.3 had quoted a rate showing EPF contribution at the rate of 13.61% of Rs 6500/- which was below the minimum wage of Rs and as such, its bid was non-responsive and was liable to be rejected. 6. Reliance is placed on the decision of the Division Bench of this Court in MIT2C Security and Facilities Private Limited versus Government of NCT & Others : as under:- 2013(205) DLT 288, wherein this Court in para 22 held 22. It is evident that the statutory minimum wages notified for the class of employment concededly is Rs.8008 per WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 4 of 9
5 month. The arguments of the respondents about the EPF benefits payable only to the extent of Rs.6500/- is because there has been no amendment in the provisions of the 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 not pay such minimum wages. If he 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 W.P.(C) 4056/2013 Page , "4...where a person provides labour or service to another for remuneration which is less than the minimum wage, 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 provident fund contributions in excess of Rs.6500/- may not be paid, despite no employer being able to actually employ anyone for less than Rs.8008/-, is indefensible. That the state becomes a party to such complicity in accepting a contract for service in relation to maintenance or security of public 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 Rs.8008/-, i.e Rs /- per month, and not Rs.885/- per month. The state, therefore, in effect became a party to a patently unfair labour practice, in accepting the bids which proposed to pay lower than the permissible rates as contribution to Provident Fund and Pension schemes. WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 5 of 9
6 7. The learned counsel for the respondent, per contra, contended that in terms of para 26 of the Employees Provident Funds Scheme, 1952, as on the bid submission date, the statutory limit prescribed was Rs 6500 per month and as such, the EPF benefit available to the employee could only be to the extent of Rs 6500/- and the employers contribution could not be in excess of an amount based on the statutory limit of Rs 6500/-. We may note that the said limit of Rs 6,500/- has now been increased to Rs 15,000/- by GSR 608(e) dated (with effect from ). This increase in limit does not affect any of the four cases as in all these cases, the last date for submission of the bid was prior to The learned counsel for the respondent relied on the decision of the Supreme Court in the case of Marathwada Gramin Bank Karamchari Sanghatana versus Marathwade Gramin Bank : (2011) 9 SCC 620, and more particularly on paragraph 28, which reads as under:- 28. The respondent Bank is under an obligation to pay provident fund to its employees in accordance with the provisions of the statutory scheme. The respondent Bank cannot be compelled to pay the amount in excess of its statutory liability for all times to come just because the respondent Bank formed its own trust and started paying provident fund in excess of its statutory liability for some time. The appellants are certainly entitled to provident fund according to statutory liability of the respondent Bank. The respondent Bank never discontinued its contribution towards provident fund according to the provisions of the statutory scheme. WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 6 of 9
7 9. Further it is contended that consequent to the said judgment of the Supreme Court, the Employee Fund Organization, Ministry of Labour and Employment, Government of India, has issued a circular dated to all Additional Central Provident Fund Commissioners (Zones) directing them not to force employers to contribute over and above the statutory wage ceiling in respect of their employees. It is contended that the said decision of the Supreme Court in Marathwada Gramin Bank Karamchari Sanghatana (supra) was not brought to the notice of the Division Bench in MIT2C Security and Facilities Private Limited (supra). 10. We find force in the submission made by learned counsel for the respondent that where the statute provides the statutory limit beyond which an employer cannot be forced to contribute to the provident fund, the bid of the employer quoting a rate complying with the statutory requirement cannot be thus held to be non-responsive. It is one thing to state that in the tender condition, the tender inviting authority may prescribe a condition that the employer has to quote a rate quoting EPF contribution equivalent to the minimum wage and another thing to state that an employer has to conform to the statutory requirement of law. Where the tender envisages compliance of the laws, then an employer quoting a rate that satisfies the statutory requirement cannot be said to have submitted a bid that is non-responsive. 11. Even the Supreme Court in Marathwada Gramin Bank Karamchari Sanghatana (supra) has held that it is under an obligation to pay provident fund to its employees in accordance with the provisions of the statutory WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 7 of 9
8 scheme. The employer cannot be compelled to pay the amount in excess of its statutory liability. The employees are certainly entitled to provident fund according to statutory liability of the employer. Even the Employee Fund Organization, Ministry of Labour and Employment, Government of India, has in compliance with the said judgment issued a circular dated to all Additional Central Provident Fund Commissioners (Zones) directing them not to force employers to contribute over and above the statutory wage ceiling in respect of their employees. We may also note that the judgment of the Supreme Court in Marathwada Gramin Bank Karamchari Sanghatana (supra) had not been brought to the notice of the Division Bench in MIT2C Security and Facilities Private Limited (supra). 12. When the statutory scheme provided that the employer has to contribute its share calculated on the basis of Rs. 6,500/-, the employer cannot be said to be in default if he complied with the statutory requirement. Even when the minimum wage was enhanced, the said statutory limit was not revised correspondingly and continued at Rs. 6500/- the necessary corollary of it is that where employers contributed their share on the basis of the statutory limit of Rs. 6,500/-, the employer would be in compliance with the law. When the employer is in compliance with the law, the bid submitted by it cannot be said to be non responsive. 13. In these circumstances, we feel that the view taken by a Coordinate Bench of this Court in MIT2C Security and Facilities Private Limited (supra) needs to be considered by a larger bench. Accordingly, we refer the WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 8 of 9
9 question Whether an employer quoting a rate inclusive of provident fund contribution that complies with the statutory requirement but is not based on the minimum wage can be said to have submitted a bid that is nonresponsive? for consideration by a full bench of this Court. 14. These matters be placed before Hon ble the Chief Justice for constitution of a Full Bench for answering the question as stated above. SANJEEV SACHDEVA, J. January 13, 2016 sn BADAR DURREZ AHMED, J. WP(C)Nos.7094 /2014, 7134/2014, 8109/2014 & 8543/2014 Page 9 of 9
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