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A Registration Certificate under Section 4 of the Orissa Act cannot Possibly be the Equivalent of a Valid labor License issued by the labor Department: Supreme Court of India

The characterizing the action of accepting the tender as mala fide was itself open to question but there was no mala fide had been made in facts and circumstances, except spell of the word mala fide. This auspicious judgement was passed by the Supreme Court of India in the case of M/S Utkal Suppliers vs. M/s Maa Kanak Durga Enterprise & ors. [CIVIL APPEAL NOS. 1517-1518 OF 2021] by The Hon’ble Mr. Justice Rohinton Fali Nariman.

This appeal was filled by appellant out of a Tender Call Notice the Office of the Superintendent, SCB Medical College and Hospital, Cuttack. By this TCN, sealed tenders in a two-bid were invited from eligible registered diet preparation and catering firms/suppliers etc. having a valid labor license and a food license with a minimum of three years of relevant experience in the field of preparation and distribution of therapeutic and non-therapeutic diet to government or private health institutions having a minimum of 200 beds 1for the year 2019-2020. Four bids were received by the Tender Committee were held to be disqualified inter alia for the reason that they had not submitted a valid labor license, i.e., a contract labor license from the competent authority, as per the TCN requirement. This writ petition was dismissed as being premature, the Tender Committee opened the financial bids and founded the Appellant to be the lowest bidder, quoting an average cost of Rs.82/- per patient per day. Respondent no.1 filed a writ petition, praying that the Tender Committee proceedings be set aside and that Respondent no.1 be awarded the tender.

The learned council referred the case of Tata Cellular v. Union of India, (1994) 6 SCC, Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818, Galaxy Transport Agencies v. New J.K. Roadways, 2020 and Silppi Constructions Contractors v. Union of India, 2019 SCC OnLine SC 1133,

The court opinioned that, “the argument of Respondent no.1 with reference to Section 1(4) of Contract Labor Act is wholly misplaced. The requirement of this Act that its applicability be extended only to establishments in which there are 20 or more workmen can be done away with by the appropriate government under the proviso, making it clear that this is not an inflexible requirement. In any case, the acceptance of such argument would amount to second-guessing the authority’s interpretation of its own TCN which, as has been stated hereinabove, cannot be so second-guessed unless it is arbitrary, perverse or mala fide.

The High Court’s judgment is consequently set aside and the appeals are allowed stating that, “The High Court has not adverted to any of these decisions, and in second-guessing the authority’s requirement of a licence under the Contract Labor Act, has clearly overstepped the bounds of judicial review in such matters. In any case, a registration certificate under Section 4 of the Orissa Act cannot possibly be the equivalent of a valid labor license issued by the labor department.”

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