Gauhati High Court
WP(C)/6414/2021 on 29 June, 2022
Author: Manish Choudhury
Bench: Manish Choudhury
Page No.# 1/48
GAHC010203672021
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Writ Petition (Civil) no. 6381/2021
PREMIER ENERGIES LTD.
A PUBLIC LIMITED COMPANY HAVING ITS REGISTERED OFFICE
AT SY NO. 54/PART ABOVE G PULLA REDDY SWEETS,
VIKRAMPUR, KARKHANA MAIN ROAD, SECUNDEABAD 500009 TELENGANA,
INDIA REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE SRI RAVI
PRAKASH KHADRIA.
...............Petitioner
-Versus-
1) ASSAM POWER DISTRIBUTION COMPANY LIMITED [APDCL]
HAVING ITS REGISTERED OFFICE AT BIJULI BHAWAN, PALTAN BAZAR,
GUWAHATI 1, REPRESENTED BY ITS MANAGING DIRECTOR
2) THE MANAGING DIRECTOR,
ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN, PALTAN
BAZAR, GUWAHATI 1
3) THE CHIEF MANAGER (RE)
ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN (ANNEX
BUILDING), PALTAN BAZAR, GUWAHATI 1
...................Respondents
Writ Petition (Civil) no. 6414/2021 PREMIER ENERGIES LTD.
A PUBLIC LIMITED COMPANY HAVING ITS REGISTERED OFFICE AT SY NO. 54/PART ABOVE G PULLA REDDY SWEETS, VIKRAMPUR, KARKHANA MAIN ROAD, SECUNDEABAD 500009 TELENGANA, INDIA REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE SRI RAVI Page No.# 2/48 PRAKASH KHADRIA.
...............Petitioner
-Versus-
1) ASSAM POWER DISTRIBUTION COMPANY LIMITED [APDCL] HAVING ITS REGISTERED OFFICE AT BIJULI BHAWAN, PALTAN BAZAR, GUWAHATI 1, REPRESENTED BY ITS MANAGING DIRECTOR
2) THE MANAGING DIRECTOR, ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN, PALTAN BAZAR, GUWAHATI 1
3) THE CHIEF MANAGER (RE) ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN (ANNEX BUILDING), PALTAN BAZAR, GUWAHATI 1 ...................Respondents Writ Petition (Civil) no. 6415/2021 PREMIER ENERGIES LTD.
A PUBLIC LIMITED COMPANY HAVING ITS REGISTERED OFFICE AT SY NO. 54/PART ABOVE G PULLA REDDY SWEETS, VIKRAMPUR, KARKHANA MAIN ROAD, SECUNDEABAD 500009 TELENGANA, INDIA REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE SRI RAVI PRAKASH KHADRIA.
...............Petitioner
-Versus-
1) ASSAM POWER DISTRIBUTION COMPANY LIMITED [APDCL] HAVING ITS REGISTERED OFFICE AT BIJULI BHAWAN, PALTAN BAZAR, GUWAHATI 1, REPRESENTED BY ITS MANAGING DIRECTOR
2) THE MANAGING DIRECTOR, ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN, PALTAN BAZAR, GUWAHATI 1
3) THE CHIEF MANAGER (RE) ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN (ANNEX BUILDING), PALTAN BAZAR, GUWAHATI 1 ...................Respondents Page No.# 3/48 Writ Petition (Civil) no. 6417/2021 PREMIER ENERGIES LTD.
A PUBLIC LIMITED COMPANY HAVING ITS REGISTERED OFFICE AT SY NO. 54/PART ABOVE G PULLA REDDY SWEETS, VIKRAMPUR, KARKHANA MAIN ROAD, SECUNDEABAD 500009 TELENGANA, INDIA REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE SRI RAVI PRAKASH KHADRIA.
...............Petitioner
-Versus-
1) ASSAM POWER DISTRIBUTION COMPANY LIMITED [APDCL] HAVING ITS REGISTERED OFFICE AT BIJULI BHAWAN, PALTAN BAZAR, GUWAHATI 1, REPRESENTED BY ITS MANAGING DIRECTOR
2) THE MANAGING DIRECTOR, ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN, PALTAN BAZAR, GUWAHATI 1
3) THE CHIEF MANAGER (RE) ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN (ANNEX BUILDING), PALTAN BAZAR, GUWAHATI 1 ...................Respondents Writ Petition (Civil) no. 6418/2021 PREMIER ENERGIES LTD.
A PUBLIC LIMITED COMPANY HAVING ITS REGISTERED OFFICE AT SY NO. 54/PART ABOVE G PULLA REDDY SWEETS, VIKRAMPUR, KARKHANA MAIN ROAD, SECUNDEABAD 500009 TELENGANA, INDIA REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE SRI RAVI PRAKASH KHADRIA.
...............Petitioner
-Versus-
1) ASSAM POWER DISTRIBUTION COMPANY LIMITED [APDCL] HAVING ITS REGISTERED OFFICE AT BIJULI BHAWAN, PALTAN BAZAR, GUWAHATI 1, REPRESENTED BY ITS MANAGING DIRECTOR
2) THE MANAGING DIRECTOR, Page No.# 4/48 ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN, PALTAN BAZAR, GUWAHATI 1
3) THE CHIEF MANAGER (RE) ASSAM POWER DISTRIBUTION CO. LTD., BIJULI BHAWAN (ANNEX BUILDING), PALTAN BAZAR, GUWAHATI 1 ...................Respondents Advocates :
For the Petitioner : Dr. A.K. Saraf, Senior Advocate
Mr. R. Dubey, Advocate
For the Respondent : Mr. K.P. Pathak, Standing Counsel, APDCL
Date of Hearing : 26.04.2022
Date of Judgment : 29.06.2022
BEFORE
HON'BLE MR. JUSTICE MANISH CHOUDHURY
JUDGMENT & ORDER
The writ petitioner in this batch of 5 [five] writ petitions, W.P.[C] no. 6381/2021, W.P.[C] no. 6414/2021, W.P.[C] no. 6415/2021, W.P.[C] no. 6417/2021 and W.P.[C] no. 6418/2021, instituted under Article 226 of the Constitution of India is the same and the respondents are also same.
2. The genesis of the lis is the publication of a Notice Inviting Tender [NIT] vide NIT no. APDCL/CGM[NRE]/NRE-36/2021-22/182 dated 08.09.2021 by the Assam Power Distribution Company Limited [APDCL] whereby a competitive e-bidding process was initiated for a project - 'Off Grid Rural Electrification Works in District of Assam through Standalone Solar PV System on Turnkey Mode' under DDUGJY New Scheme ['the Project', for short], which consisted of 17 [seventeen] nos. of packages. For the benefit of the interested bidders, an e- Tender Document was also published. It was a Single Stage Bid [Techno Commercial Bid] Envelope Bidding Procedure to be followed by e-bidding for Price Bids, as detailed in the Bidding Documents.
Page No.# 5/48 2.1. The e-Tender Document stated that the APDCL had been entrusted as the Project Implementing Agency [PIA] by the Rural Electrification Corporation [REC] Limited, Government of India [GoI] to execute the Project, 'Rural Electrification works in Assam through Standalone Solar PV system' under the Pradhan Mantri Sahaj Bijlee Har Ghar Yojana [SAUBHAGYA]. The execution of the Project was to be funded out of the proceeds of financial assistance to be received by the Government of Assam from the REC Limited and the ownership of the project shall remain vested with the Government of Assam. The Project was to be executed by the APDCL by awarding the same to the successful bidder[s] through competitive e-bidding process on turnkey basis and all payments under the Project were to be made from the proceeds of financial assistance to be received by the Government of Assam.
2.2. By the NIT dated 08.09.2021, sealed bids were invited from interested and eligible bidders for the aforesaid Project on Domestic Competitive Bidding in respect of the 17 [seventeen] nos. of packages with the following details :-
Total Tender
Sl. Nos. of
Package No. District Nos. of Processing EMD [Rs.]
No. HH
System Fee [Rs.]
Bongaigaon 3565
1 Package No-1 5310 20000 2500000
Kokrajhar 1745
Hailakandi 2849
20000 2500000
2 Package No-2 Karimganj 691 3845
20000
Cachar 305
Sonitpur 1868
Dhemaji 916
3 Package No-3 4089
Lakhimpur 442 20000 2500000
Darrang 863
4 Package No-4 Dibrugarh 786 4127 20000
Jorhat 177 20000 2500000
Tinsukia 705
Page No.# 6/48
Kamrup 2459
5 Package No-5 Goalpara 3894 3894
6 Package No-6 Karbi Anglong 5122 5122 20000
7 Package No-7 Dima Hasao 1861 1861
8 Package No-8 Barpeta 4000 4000
9 Package No-9 Barpeta 4000 4000 20000 2500000
10 Package No-10 Barpeta 4000 4000
11 Package No-11 Barpeta 4768 4768 20000
12 Package No-12 Dhubri 4000 4000
13 Package No-13 Dhubri 4000 4000
14 Package No-14 Dhubri 4003 4003 20000 2500000
15 Package No-15 Nalbari 4000 4000
16 Package No-16 Nalbari 4000 4000 20000
Nalbari 3100
Baksa 248
17 Package No-17 3880
Chirang 86 20000 2500000
Morigaon 446
Total 71199
* HH - House Hold
2.3. In the Invitation for Bids [IFB] part of the e-Tender Document, the Scope of Work for the Project was mentioned as under :-
The scope of work includes site survey, planning, design, engineering, assembly manufacturing, testing, supply, loading, transportation, unloading, insurance, delivery at site, handling, storage, installation, testing, commissioning and documentation of all items/material required to complete the Electrification works which inter-alia include installation of Solar PV standalone system and providing service connection with house wiring and for extending 5 [five] years Comprehensive Maintenance Contract [CMC] service to all beneficiaries/consumers spread all over the State. The above scope of work is indicative and the detailed scope of work is given in the Bidding Documents.
Page No.# 7/48 2.4. As per Clause 6.0 of the e-Tender Document, a bidder was permitted to submit a maximum of 5 [five] nos. of packages separately in the same tendering process, either individually as a bidder or as a partner of a consortium. It further mentioned that a bidder who would submit or participate in more than 5 [five] packages would cause all the proposals in which the bidder had participated to be disqualified.
2.5. Clause 7.0 of the e-Tender Document required a bidder to submit a bid proposal along with a non-refundable Tender Processing Fee and a refundable Bid Security [EMD] complete in all aspects as per the Bid Data Sheet [BDS]. Clause 8.0 of the BDS mentioned the Tender Processing Fee and the Bid Security [EMD] for the 17 [seventeen] nos. of packages, which are already mentioned in Paragraph 2.2 above. The submission of bids started from 15-00 Hours, 20.09.2021 and the last date and time for online submission of bids and physical submission of offline document was up-to 15-00 Hours, 29.09.2021. In the BDS, the work completion period was mentioned as on or before 31.12.2021.
2.6. As per the Bid Data Sheet [BDS], the Tender Processing Fee of Rs. 20,000/- for each package was to be submitted by the bidders in online while submitting the bid online in https://assamtenders.gov.in. In so far as the Bid Security [EMD] against each package of Rs.
25,00,000/- was concerned, the same was to be submitted separately in the form of online payment / demand draft / bank guarantee [valid for 6 [six] months plus an additional claim period of 30 (thirty) days] issued by any nationalized bank or scheduled commercial bank of the Reserve Bank of India [RBI] in favour of the respondent no. 3 i.e. the CGM [RE] APDCL, payable at Guwahati, and was to be attached with the Bidding Document.
3. Finding itself eligible and qualified as per the e-Tender Document, the petitioner, a public limited company, participated in the bidding process by submitting bids for 5 [five] nos. of packages, that is, Package no. 5, Package no. 8, Package no. 9, Package no. 10 and Package no. 11. Along with its bids, the petitioner deposited the requisite Tender Processing Fees as well as the Bid Security [EMD] amounts of Rs. 25,00,000/- each for each of the 5 [five] packages. The petitioner had deposited the Bid Security [EMD] amounts in the form of Page No.# 8/48 5 [five] bank guarantees of Rs. 25,00,000/-, that is, one bank guarantee each for each Package.
4. As per Clause 22.0 [Award Criteria] of the e-Tender Document, the Employer [the APDCL] would award the contract to each of the successful bidder against the corresponding package number [also referred to as the L 1 bidder for each package] whose bid had been determined to be substantially responsive and to be the lowest evaluated bid, providing further that the bidder was to be determined to be qualified, as per the Qualification Requirement specified in the Bidding Document to perform the contract satisfactorily. The rankings of the bidders were to be done on their MAAT values and preference was to be given to that bidder who had higher MAAT value.
4.1. The first envelopes of the participant bidders containing the Techno Commercial Bids were opened on 23.10.2021. After necessary evaluation for identifying the responsive ones, the Price Bids of the participant bidders were downloaded from the e-Tendering portal on 06.11.2021. Upon final evaluation of the Price Bids for the 17 [seventeen] nos. of packages [supra], more specifically, Package no. 5, Package no. 8, Package no. 9, Package no. 10 and Package no. 11, the petitioner emerged as the successful bidder [L 1] for the 5 [five] nos. of Packages viz. Package no. 5, Package no. 8, Package no. 9, Package no. 10 and Package no.
11. Accordingly, the respondent APDCL issued 5 [five] nos. of Letter of Awards [LoAs] for the said packages as under : -
Sr. No. Package no. Letter of Award [LoA] reference Date
number
1 Package no. 5 APDCL/CGM[NRE]/NRE-36/2021- 12.11.2021
22/321
2 Package no. 8 APDCL/CGM[NRE]/NRE-36/2021- 12.11.2021
22/326
3 Package no. 9 APDCL/CGM[NRE]/NRE-36/2021- 12.11.2021
22/328
Page No.# 9/48
4 Package no. 10 APDCL/CGM[NRE]/NRE-36/2021- 12.11.2021
22/330
5 Package no. 11 APDCL/CGM[NRE]/NRE-36/2021- 12.11.2021
22/334
5. It is also apposite to mention herein that the writ petition, W.P.[C] no. 6381/2021 is in connection with Package no. 8 while the writ petition, W.P.[C] no. 6414/2021 is in connection with Package no. 9. While the writ petition, W.P.[C] no. 6415/2021 is in connection with Package no. 10, the writ petition, W.P.[C] no. 6417/2021 pertains to Package no. 11. The remaining writ petition, W.P.[C] no. 6418/2021 is in connection with Package no. 5.
6. Henceforth, the facts involved in and the sequence of events associated with the writ petition, W.P.[C] no. 6381/2021, would be adverted to for better appreciation of the common issue involved, by taking the same as the lead case of the batch.
7. The Letter of Award [LoA] bearing reference no. APDCL/CGM[NRE]/NRE-36/2021- 22/326 dated 12.11.2021 was issued in favour of the petitioner by the respondent no. 3 in respect of Package no. 8 stating that the same was issued strictly as per the rates, specifications, instructions, terms and conditions stipulated in the LoA. As per the LoA, a total of 2000 nos. of systems were to be installed in 2000 nos. of households [HHs] in the villages, as per the list to be provided separately, in Barpeta District. The LoA further mentioned that the total Contract Price for the entire scope of work under the Contract shall not exceed Rs. 9,00,00,000/- [Rupees nine crore only] including all applicable taxes and duties, etc. for aggregate quantum of 2000 nos. Standalone Solar PV Systems at different locations and the Contract would be construed as a Turnkey Contract. The detailed cost break-up inclusive of all applicable taxes, cess, fees, etc. was as follows :-
Sl. No. Description Qty [Nos.] Total Amount [Rs.]
[A] [B] [D=BxC]
A. Supply Materials, Freight & 2000 8,85,70,000.00
Page No.# 10/48
Insurance
Erection Charges 23,60,000.00
Total 2000 8,82,30,000.00
* The above contract prices is inclusive of taxes, fess, cess, etc. Ex-Work Total Unit Total GST @ 18% Sl. No. Description Rate Rate Qty [Nos.] Amount [Rs./Unit] [A] [B] [Rs./Unit] [Rs./Unit] [F] [Rs.] [D] [C] [C+D=E] [G=ExF] Operation & 1,77,0000.0 B. Maintenance 750 135.00 885.00 2000 0 [O&M] Charges 1,77,0000.0 2000 0 The total contract price for the entire scope of work under this contract shall be = [A + B] = Rs. 9,00,00,000.00 [Rupees nine crore Only].
7.1. The Letter of Award [LoA] also contained the following 'Note' :-
"Note :
1. Terms and Procedure of Payment are enclosed as Annexure-A.
2. General Terms and Conditions of the Contract are enclosed as Annexure-B.
3. Time Schedule is enclosed as Annexure-C.
4. The Scope of Work and Technical Specifications are enclosed as Annexure-D.
5. The Format of Installation & Commissioning Certificate and Handling Over Certificate is enclosed as Annexure-E.
6. The Format of Village Completion Certificate is enclosed as Annexure-F.
7. The Format of System Maintenance and Data Log Book is enclosed as Annexure-G. Page No.# 11/48
8. The Format of Performance Security Form is enclosed as Annexure-H.
9. The Format of Indemnity Bond to be executed by the Contractor for the Equipment Handed Over in one LOT is enclosed as Annexure-I.
10. The Format of Indemnity Bond to be executed by the Contractor for the Equipment Handed Over in Installments is enclosed as Annexure-J.
11. The Format for Extension of Bank Guarantee is enclosed as Annexure-K.
12. The Survey Format is enclosed as Annexure-L.
13. The Format of Guaranteed Technical Particulars [GTP of Standalone Solar PV System is enclosed as Annexure-M.
14. The PERT Chart Format is enclosed as Annexure-N.
15. The Contract Agreement Format is enclosed as Annexure-O."
7.2. The Letter of Award [LoA] also mentioned about the Period of Completion and Signing of Contract Agreement as under :-
"Period of Completion :
The work should be completed in all respect on or before 31.12.2021. APDCL will not be liable for the works executed after the timeline of 31.12.2021.
Signing of Contract Agreement :
On unconditional acceptance of this LoA, the contract agreement shall have to be signed on submission and acceptance of contract performance security within 7 days from the date of issuance of this LoA."
7.3. The LoA had inter alia stipulated that the Contract Performance Security for 3% of the Contract Price shall have to be submitted within 7 [seven] days from the date of issuance of the LoA and in the event of non-submission of the Performance Bank Guarantee [PBG] within the stipulated period the Award would be terminated and the Bid Security [EMD] submitted by the successful bidder [L1] would be forfeited without any further notice.
Page No.# 12/48 7.4. The petitioner was thereby asked to confirm its acceptance of the LoA within 3 [three] days from the date of its issuance, by submitting a duplicate copy of the LoA duly signed and stamped on each page as a token of its acknowledgment. The petitioner was asked to execute the Contract Agreement with the APDCL within 7 [seven] days from the date of Award of the Contract.
8. The starting point of the contestation between the parties, that is, the petitioner and the respondent APDCL authorities was the LoA, more specifically, the Terms and Procedures of Payment enclosed as Annexure-A in the 'Note' and the Period of Completion.
8.1. As per the contention of the petitioner, when it scrutinized the LoA after its receipt it found changes in the Terms and Procedures of Payment apart from truncation in the Period of Completion of the Project. The petitioner had contended that the Terms and Procedures of Payment contained in the e-Tender Document had undergone changes in the LoA to the detriment of the petitioner, who emerged as the successful bidder [L 1]. As the respondent APDCL authorities by the LoA had asked the petitioner to convey its unconditional acceptance with such changes in the Terms and Procedures of Payment contained in the e-Tender Document, the petitioner responded by an E-mail dated 17.11.2021 inter alia highlighting about such changes brought in the Terms and Procedure of Payment. It had also projected that a period of 3 [three] months would be necessary to execute the Project whereas only about a period of 5 [five] weeks was made available to the petitioner. By the said E-mail, the petitioner had asseverated that there was alteration in respect of the Terms and Procedures of Payment and the Period of Completion in a unilateral manner. The petitioner by the said E- mail conveyed its conditional acceptance of the LoA with the request to withdraw the questioned clause and to send the petitioner a revised LoA.
8.2. In response to the E-mail dated 17.11.2021, the respondent APDCL authorities had sent an E-mail on 22.11.2021 informing the petitioner that as per the terms and conditions of the LoA issued to the petitioner, it had to confirm its unconditional acceptance of the LoA within 2 [two] days of the receipt of the E-mail for execution of the Project, failing which Page No.# 13/48 necessary action would be initiated as per the Bid Document/the Rules of the APDCL.
8.3. On receipt of the E-mail dated 22.11.2021 from the end of the respondent APDCL authorities, the petitioner responded with an E-mail, sent on 24.11.2021, intimating the respondent APDCL authorities that the petitioner was agreeable to accept all other conditions of the LoA unconditionally, except the Terms and Procedures of Payment, which should be as per the e-Tender Document.
8.4. On 25.11.2021, the respondent APDCL authorities sent an E-mail informing the petitioner that the LoA awarded to the petitioner against the Project for Package no. 8 in respect of the Project had stood terminated with immediate effect due to non-furnishing of unconditional acceptance by the petitioner within the stipulated time period. The petitioner was further intimated that necessary action as per the terms and conditions of the respondent APDCL would be initiated against the petitioner.
9. After issuance of LoAs in respect of the other 4 [four] Packages - Package no. 5, Package no. 9, Package no. 10 and Package no. 11, the sequence of events followed similar pattern. By the same E-mail dated 25.11.2021 of the respondent APDCL authorities, the LoAs issued for the other 4 [four] Packages, that is, Package no. 5, Package no. 9, Package no. 10 and Package no. 11 were also terminated with immediate effect on the same ground, that is, non-furnishing of unconditional acceptance of the LoAs within the stipulated time period.
10. Upon receipt of the information about termination of the LoAs for all the 5 [five] Packages, the petitioner by an E-mail, sent on 26.11.2021, expressed regret for taking such decision of termination and reiterated its position that the petitioner would still be interested to execute the Project if the Terms and Procedures of Payment were in conformity of the e- Tender Document. By the said E-mail, the petitioner requested the APDCL authorities to return and release the Bid Security [EMD] for all the 5 [five] Packages, that is, Package no. 5, Package no. 8, Package no. 9, Package no. 10 and Package no. 11.
11. The respondent APDCL authorities had, in the meantime, published another Notice Page No.# 14/48 Inviting Tender [NIT] vide NIT no. APDCL/CGM[NRE]/NRE-36/2021-22/354 dated 26.11.2021, whereby, a bidding process was again initiated for the following few packages out of the original 17 [seventeen] nos. of packages whose LoAs were terminated : -
Package No. District Estimated
Sl. Nos. of Bid submitted for
Packages Value
No. Systems * [Tick mark (√)]
[Rs. Crore]
1 Package No-7 Dima Hasao 3861 19.305
2 Package No-8 Barpeta 2000 10.00
[Part]
3 Package No-9 Barpeta 2000 10.00
[Part]
4 Package No-10 Barpeta 2000 10.00
[Part]
5 Package No-11 Barpeta 3179 15.895
[Part]
6 Package No-16 Nalbari 4000 20.00
11.1. It was specifically laid down in the NIT dated 26.11.2021 that the bidder who had not submitted unconditional acceptance of the LoA as issued by the APDCL against the NIT no. APDCL/CGM[NRE]/NRE-36/2021-22/182 dated 08.09.2021 would not be eligible to participate in the bidding process under the NIT dated 26.11.2021 either individually as a bidder or as a partner of a JV/Consortium.
12. With the apprehension that the respondent APDCL authorities would forfeit the Bid Security [EMD] deposited by the petitioner in the form of bank guarantees due to non- acceptance of the LoAs by the petitioner in view of changed Terms and Procedures of Payment incorporated in the LoAs and contending the act of termination of the LoAs with the consequent publication of the NIT dated 26.11.2021 as bad, arbitrary and unjust, the petitioner has approached this Court by these writ petitions seeking quashing and setting aside of the termination of the LoAs vide E-mail dated 25.11.2021. The petitioner has also Page No.# 15/48 assailed the NIT dated 26.11.2021 and has sought for a direction in the nature of mandamus for restraining the respondent APDCL authorities from forfeiting the Bid Security [EMD] submitted by the petitioner in connection with the 5 [five] Packages, that is, Package no. 5, Package no. 8, Package no. 9, Package no. 10 and Package no. 11.
13. I have heard Dr. A.K. Saraf, learned Senior Counsel assisted by Mr. R. Dubey, learned counsel for the petitioner and Mr. K.P. Pathak, learned Standing Counsel, Assam Power Distribution Company Limited [APDCL] for all the respondents.
14. The issue involved in these writ petitions is one and the same. As the exchange of pleadings is complete in all the 5 [five] writ petitions, they are taken up together for consideration at the admission stage itself, as sought for by the learned counsel for the parties.
15. Dr. Saraf, learned senior counsel for the petitioner has, at first, referred to Clause 6.0 of Part-II : ITB of the e-Tender Document to submit that the Employer [the APDCL] did not bring any amendment to the part relating to the Terms and Procedures of Payment contained originally in the Bidding Documents at any time prior to the last time and date for submission of bids. By referring to Clause 12.4 and Clause 12.6 together, it is submitted by him that the Bid Security [EMD] of a bidder could have been forfeited only in the event the case of a bidder had fallen within the ambit of either sub-clause [a] or sub-clause [b] of Clause 12.6. He has further contended that the Employer [the APDCL] only had the right, at the time of Award of the Contract, to increase or decrease the quantity of goods and change location of supply without any change in discovered unit price or other terms and conditions, as per Clause 22.4 of the ITB. Thus, the Employer [the APDCL] could not have changed the Terms and Procedures of Payment in a unilateral and arbitrary manner.
15.1. Under Clause 25.0 : Contract Performance Bank Guarantee of the ITB, the successful bidder was required to furnish the performance security for 3% [three percent] of the Contract Price within 7 [seven] days after receipt of the notification of Award through LoA Page No.# 16/48 and failure on the part of the successful bidder [L 1] to do so would have permitted the Employer [the APDCL] to annul the Award and to forfeit the Bid Security. As per Clause 22.6 of the ITB, the execution of the Contract Agreement was to be preceded by the issuance of the LoA by the Employer [the APDCL] and an unconditional acceptance of the LoA by the bidder within 7 [seven] days from the date of issuance of the LoA. But the e-Tender Document had nowhere permitted the Employer [the APDCL] to make alteration/modification in the Terms and Procedures of Payment unilaterally at the time of issuance of the LoA. In the case in hand, it was the Employer [the APDCL] who made the alteration/modification in the Terms and Procedures of Payment at the time of issuance of the LoA whereby it had deviated itself from the terms and conditions originally set forth by it and had, thereafter, asked the successful bidder [L1], that is, the petitioner to accept the changed terms and conditions unconditionally. If having noticed material changes the successful bidder [L 1] requests the Employer [the APDCL] to stick to the original terms and conditions which were not changed till the last date of submission of bids it cannot be contended by the Employer [the APDCL] that the successful bidder [L1] had violated the terms and conditions.
15.2. In reference to Part-III : General Conditions of Contract [GCC] with specific reference to Clause 6 [Terms of Payment], he has submitted that the Employer [the APDCL] had undertaken to make payment of the Contract Price in the manner outlined in Appendix - 1 [Terms and Procedures of Payment] until the date of issuance of the 5 [five] nos. of LoAs to the petitioner. But when the 5 [five] nos. of LoAs were issued to the petitioner on 12.11.2021, the respondent APDCL had completely changed the Terms of Payment by bringing in Appendix - A [Terms and Procedures of Payment]. As such Terms of Payment in the form of Appendix - A was not agreed to by the petitioner and it was the Terms of Payment in the form of Appendix - 1 by agreeing to which the petitioner had submitted its competitive bids which were declared as L1 after evaluation, the petitioner has every right to protest and record its objection against it.
16. Mr. Pathak, learned Standing Counsel, APDCL has submitted that in the LoAs issued to Page No.# 17/48 the petitioner on 12.11.2021, there was a minor change vis-à-vis the original Terms of Payment contained in Appendix - 1. A 'Note' was added to new Appendix - A stating about the manner of payment of the first installment of the progressive payment for supply of the materials. The petitioner refused to tender unconditional acceptance within the 7 [seven] days time period, as mandated under Clause 22.6 of the e-Tender Document, and instead, had sought by its reply dated 16.11.2021 for extension of the completion period of the Project up to 31.03.2022. When the e-Tender Document clearly stipulated that the work completion date would be 31.12.2021, such request of extension was not acceptable. The petitioner had also raised an objection regarding the change in the Terms of Payment of the first installment of progressive payment for supply of material. As the petitioner did not tender its unconditional acceptance of the LoAs within the stipulated time period of 7 [seven] days i.e. on or before 19.11.2021 the Bid Security [EMD] furnished by the petitioner had undoubtedly entailed forfeiture.
16.1. Mr. Pathak has further submitted that notwithstanding such unconditional non- acceptance of the LoA by the petitioner, the petitioner was given another opportunity by the respondent APDCL authorities to furnish unconditional acceptance of the LoA within 2 [two] days time from 22.11.2021 but the petitioner intimated the respondent APDCL authorities on 24.11.2021 that the Terms of Payment were not acceptable to it. It was in such fact situation, the LoAs were terminated on 25.11.2021 which action, according to him, was clearly justified and in conformity with the terms and conditions of the e-Tender Document.
16.2. In respect of the NIT dated 26.11.2021, he has submitted that during the pendency of the present proceedings, the bidding process initiated by the NIT dated 26.11.2021 was finalized and the works were awarded to the bidders emerging successful in the subsequent bidding process. Since those successful bidders have not been impleaded as party- respondents in this batch of writ petitions the writ petitions suffer from non-joinder of necessary parties. On the aforesaid counts, the assailment made by the petitioner to the NIT dated 26.11.2021 should fail.
16.3. It has been submitted by him that in view of forfeiture of Bid Security [EMD] Page No.# 18/48 submitted by the petitioner for the aforesaid 5 [five] packages the corresponding unconditional bank guarantees which the petitioner had submitted as Bid Security [EMD] were encashed. It is his contention that there could not be any interference with the encashment of such unconditional bank guarantees unless there was either egregious fraud or irretrievable damage. He has placed reliance in the decisions of the Hon'ble Supreme Court of India in Hindustan Steelworks Construction Limited vs. Tarapore & Co. and another, reported in [1996] 5 SCC 34, and Dwarikesh Sugar Industries Limited vs. Prem Heavy Engineering Works [P] Limited, reported in [1997] 6 SCC 450.
16.4. It is his further submission that the dispute between the petitioner and the respondent APDCL authorities is a purely contractual one arising out of the interpretation of the terms and conditions incorporated in the e-Tender Document and the LoAs dated 12.11.2021. It is, thus, his contention that a writ petition is not maintainable in respect of a claim arising out of breach of a contract and disputes relating to contracts cannot be permitted to be agitated in writ proceedings under Article 226 of the Constitution of India. Since the contract between the parties is in the realm of private law and the same being not a statutory contract, the matter is best left for adjudication by a civil court or in arbitration. Whether any amount is due to one party and if so, the exact amount and an act of refusal to pay on the part of the other party is a matter which cannot be agitated in a writ petition. In order to buttress his such submissions, Mr. Pathak has referred to the decisions of the Hon'ble Supreme Court of India in Kerala State Electricity Board and another vs. Kurien E. Kalathil and others, reported in [2000] 6 SCC 293, and National Highways Authority of India vs. Ganga Enterprises and another, reported in [2003] 7 SCC 410.
16.5. It has further been contended that the petitioner is seeking to enforce a right which is purely contractual. In the absence of arbitrariness, illegality or discrimination, this Court should not interfere with the decision taken by the respondent authorities as the cause espoused by the petitioner does not involve any element of public interest on the touchstone of Article 14 of the Constitution of India. In order to support his submission, reliance is placed in the decisions in Jagadish Mandal vs. State of Orissa and others, reported in [2007] 14 SCC 517, and Bharat Coking Coal Limited and others vs. AMR Dev Prabha and others, reported in Page No.# 19/48 [2020] 16 SCC 759.
17. In his reply submissions, Dr. Saraf has submitted that in view of issuance of contract works to the successful bidders pursuant to the NIT dated 26.11.2021, the petitioner is not pressing for any relief with regard to the NIT dated 26.11.2021. He has submitted that during the pendency of the proceedings, the Bid Securities [EMDs] which the petitioner had submitted against the 5 [five] nos. of packages in the form of bank guarantees were encashed. When the matter was taken in writ appeal, the writ appellate court had taken note of the submission of the petitioner that the bank guarantees ought not to have been encashed by the Employer [the APDCL] and remanded the matter back to the writ court for consideration.
17.1. It is his contention that when an action is ex-facie arbitrary and unjust on the touchstone of the Article 14 of the Constitution of India a writ petition under Article 226 of the Constitution of India is maintainable. Even when the same involves a money claim then also a writ petition can be considered. For the said proposition, he has relied upon the decision in ABL International Limited and another vs. Export Credit Guarantee Corporation of India Limited and another, reported in [2004] 3 SCC 553. The present lis is not one where any disputed question of fact is involved. The petitioner participated in the bidding process in the right earnest acting on the representation of the Employer [the APDCL] made through the e-Tender Document. The petitioner had in good faith acted on such representation and altered its position acting on such representation but it was the Employer [the APDCL] who had resiled from its own representation. In such situation, the instant writ petition is maintainable and the petitioner is entitled to relief in respect of illegal and arbitrary forfeiture of the Bid Securities [EMDs].
17.2. Dr. Saraf in support of his submissions, has referred to the decisions of the Hon'ble Supreme Court of India in [i] Kumari Shrilekha Vidyarthi and others vs. State of U.P. and others, reported in [1991] 1 SCC 212; [ii] Harbanslal Sahnia and another vs. Indian Oil Corporation Limited, reported in [2003] 2 SCC 107; and [iii] Union of India and others vs. Tantia Construction Private Limited, reported in [2011] 5 SCC 697. The decision in Harbanslal Page No.# 20/48 Sahnia [supra] has highlighted three contingencies when despite availability of an alternative remedy, the High Court can still exercise its discretionary writ jurisdiction. The decision in Tantia Construction Private Limited [supra] has been relied upon to canvas the point that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction and also for the proposition that injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution.
18. I have duly considered the rival submissions of the learned counsel for the parties and have also perused the materials on record brought by the parties through their pleadings. I have also gone through the synopsis of written argument filed on behalf of the respondents. That apart, I have also gone through the decisions cited at the bar by the learned counsel for the parties in support of their respective submissions.
19. It needs mention at the outset that when these writ petitions were initially moved there was an apprehension on the part of the petitioner that since the LoAs had been terminated with immediate effect by the email dated 25.11.2021 with indication that necessary action would also be initiated, the succeeding action would be encashment of the Bid Securities [EMDs], deposited by the petitioner, in the form of bank guarantees. With such apprehension, the petitioner made an interim prayer for restraining the respondent APDCL authorities from forfeiting the Bid Securities [EMDs]. While issuing notice of motion, the Court had only observed to the extent that any forfeiture of the Bid Securities [EMDs], deposited by the petitioner, would be subject to the outcome of the writ petitions. Aggrieved by non-grant of interim relief, the petitioner took the matters to the writ appellate court by 5 [five] intra- court appeals - Writ Appeal no. 345/2021, Writ Appeal no. 346/20121, Writ Appeal no. 348/2021, Writ Appeal no. 349/2021 and Writ Appeal no. 347/2021. When the 5 [five] appeals were taken up for consideration on 20.12.2021, it was submitted at the bar that the Bid Securities [EMDs] deposited in the form of bank guarantees had been encashed in the meantime by the Employer [the APDCL]. Taking note of such development, the writ appellate court had observed that as on that date [20.12.2021], where admittedly the conditions as given in the e-Tender Document were changed unilaterally by the Employer [the APDCL], as a follow up of which the writ petitioner withdrew from the offer, the case of the petitioner was Page No.# 21/48 whether under the obtaining facts and circumstances of the case, the bank guarantees given as Bid Securities [EMDs] could have been encashed by the Employer [the APDCL]. As the writ petitions were pending, the writ appellate court did not interfere in the matter and disposed of the intra-court appeals by orders, all dated 20.12.2021, for disposal of the writ petitions in an expeditious manner.
20. One of the stances taken, as noted above, on behalf of the respondent APDCL authorities is that there should not be any interference in the writ petitions with the action taken for encashment of the bank guarantees in absence of egregious fraud or irretrievable damage. In such backdrop, the issue regarding encashment of bank guarantee needs a dilation first.
20.1. In Hindustan Steelworks Construction Ltd. [supra], it has been held that a bank guarantee is an independent and distinct contract between the bank and the beneficiary and is not qualified by the underlying transaction and the primary contract between the person at whose instance the bank guarantee is given and the beneficiary. The transaction between the bank and the beneficiary is independent and of a different nature. In case of an unconditional bank guarantee the nature of obligation of the bank is absolute and not dependent upon any dispute or proceeding between the party at whose instance the bank guarantee is given and the beneficiary. Whether the bank guarantee is towards security deposit or mobilization advance or working funds or for due performance of the contract if the same is unconditional and if there is a stipulation in the bank guarantee that the bank should pay on demand without a demur and that the beneficiary shall be the sole judge not only the question of breach of contract but also with regard to the amount of loss or damages, the obligation of the bank would remain the same and that obligation has to be discharged in the manner provided in the bank guarantee.
20.2. In Dwarikesh Sugar Industries Ltd. [supra], it has been held that an order granting injunction has the effect of restraining the encashment of a bank guarantee. In relation to a bank guarantee, it is well settled position that when in the course of commercial dealings an unconditional bank guarantee is given or accepted, the beneficiary is entitled to realize such a Page No.# 22/48 bank guarantee in terms thereof irrespective of any pending dispute. The bank giving such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. An order of injunction defeats the very purpose of giving such an unconditional bank guarantee. Therefore, the courts have to be slow in granting an injunction to restrain the realization of such a bank guarantee, subject only to two exceptions, firstly, an established fraud vitiating the very foundation of such a bank guarantee of which the beneficiary seeks to take advantage; and secondly, irretrievable and exceptional injury or injustice to one of the parties leaving no possibility whatsoever to recover the amount from the beneficiary, by way of restitution.
20.3. There is no dispute to the aforesaid propositions enunciated in Hindustan Steelworks Construction Ltd. [supra] and Dwarikesh Sugar Industries Ltd. [supra] and this Court fully subscribes to the said propositions. The submission of the learned counsel for the respondent APDCL authorities to the effect that there cannot be any restraining order in relation to an action on the part of the respondent APDCL authorities to encash the bank guarantees, submitted by the petitioner, does seem appealing at first blush. But on further dissection, it turns up that the primary issue here is not encashment of the bank guarantee simpliciter. Rather, it is the secondary issue. The primary issue enveloping the secondary issue of encashment of bank guarantee is the forfeiture of the Bid Security [EMD] of the successful bidder [L1].
20.4. The e-Tender Document permitted the bidders, at the bidder's option to furnish the Bid Security [EMD] in one of the three forms : [i] on-line payment; [ii] demand draft; and [iii] bank guarantee [valid for 6 months plus an additional claim period of 30 (thirty) days] issued by any nationalized bank or scheduled commercial bank of the Reserve Bank of India [RBI] in favour of the CGM [RE] APDCL, payable at Guwahati, and to be attached with the Bid. The e- Tender Document/Bidding Document made it clear that a bid not accompanied by Bid Security [EMD] would entail rejection at the hand of the Employer [the APDCL] as being non- responsive.
Page No.# 23/48 20.5. Thus, a bidder had the option of furnishing the Bid Security [EMD] in either of the three options, mentioned hereinabove. If a successful bidder had chosen to furnish the Bid Security [EMD] by demand draft then in case of such a bidder, the event of encashment of bank guarantee would not have arisen and it would have been only a case of forfeiture of Bid Security [EMD]. Similar would have been the case of a successful bidder who had furnished the Bid Security [EMD] by on-line payment. In such context, the case of the petitioner herein is forfeiture of Bid Security [EMD] at first and the event of forfeiture of Bid Security [EMD] was succeeded by the event of encashment of the bank guarantee. In case it emerges that the first event of forfeiture of the Bid Security [EMD] is bad and/or arbitrary and/or unjustified, the consequential event of encashment of the bank guarantee which was submitted as Bid Security [EMD] would automatically be bad and/or arbitrary and/or unjustified. Thus, it is to be examined at first whether the action on the part of the respondent APDCL to forfeit the Bid Security [EMD] is sustainable in law or not.
21. The next point of discord is on the maintainability of the writ petitions which, according to the respondents, have arisen out of a dispute between the parties in a purely contractual matter.
21.1. It has been held in Kerala State Electricity Board [supra] that the interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226 of the Constitution of India. A contract cannot be termed as a statutory contract only it is for construction of a public utility. Disputes arising out of terms of a non-statutory contract or alleged breaches have to be settled by the ordinary principles of law of contract. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act since activities arising out of such contract may not raise any issue of public law. It has, therefore, been held that the disputes relating to interpretation of the terms and conditions of such a contract are not to be agitated in a writ petition under Article 226 of the Constitution of India and the matter is to be left for adjudication by a civil court or in arbitration if provided for in the contract.
Page No.# 24/48 21.2. In respect of the case in hand, Clause 22.5 of the e-Tender Document had mentioned that the mode of contract with the successful bidder [L 1] would be as per stipulation outlined in the General Conditions of Contract [GCC]. As per Clause 2[f] of the GCC, 'Contract' means the Contract Agreement entered into by the Employer [the APDCL] and the Contractor together with the Contract Documents referred to therein and as per Clause 2[g] of the GCC, 'Contract Documents' means the documents listed in the Form of Contract Agreement [including any amendments thereto]. The term, 'Contractor' means, as per Clause 2[i] of the GCC, the firm whose bid to perform the Contract has been accepted by the Employer [the APDCL] and is named in the Contract Agreement. Contract Agreement Documentation found mention in Clause 22.6 in Part-II [ITB] part of the e-Tender Document and as per the said clause, the sequence of Contract Agreement Documentation was [a] Letter of Award [LoA] by the Employer [the APDCL] and its unconditional acceptance by the bidder within 7 [seven] working days from the date of issuance of the LoA; [b] Mutual Agreement on PERT chart/Project Execution Plan duly signed and accepted by the turnkey contractor and the Employer [the APDCL] within 2 [two] days from the date of acceptance of the LoA; and [c] submission of Contract Performance Security for an amount of 3% of the contract value, within 7 [seven] days from the date of issuance of the LoA. The clause had further stipulated that the Contract Agreement should be signed on unconditional acceptance of the Letter of Award [LoA] and submission and acceptance of the Contract Performance Guarantee.
21.3. It is reiterated that Clause 23.0 and 24.0 of the e-Tender Document provided for notification of the Award and signing the Contract Agreement. The said clauses read as under
:-
"23.0 Notification of Award 23.1. Prior to the expiration of the period of bid validity, the Employer will notify the successful Bidder in writing through Letter of Award [LoA], that its bid has been technically and commercially accepted. The bidder shall provide unconditional acceptance of LoA within 7 [seven] working days . Bidder will also submit PERT Chart/Project Execution Plan within 2 [two] days from date of LoA.
Page No.# 25/48 PERT Chart/Project Execution Plan shall be signed, accepted and mutually agreed by successful bidder and Employer within 7 [seven] days from date of acceptance by LoA. Contract Performance Security shall be submitted by the successful bidder within 7 [seven] days from date of LoA. On unconditional acceptance of Letter of Award and requisite submission of Contract Performance Security, the Contract Agreement shall be signed.
24.0 Signing the Contract Agreement 24.1 At the same time as the Employer notifies the successful Bidder that its bid has been accepted through Letter of Award, the Employer will prepare the Contract Agreement provided in the Bidding Documents , incorporating all agreements between the parties.
24.2. On unconditional acceptance of Letter of Award, Contract Agreement shall be signed on submission and acceptance of Contract Performance Security within 7 days from the date of issue of Letter of Award."
21.4. The issue whether a concluded contract had been arrived at by the parties is also dependent upon the terms and conditions of the Notice Inviting Tender [NIT] and the e- Tender Document herein, the Letter of Award [LoA] issued by the Employer [the APDCL] in favour of the petitioner as the successful bidder [L 1] and the conduct of the parties. The Letter of Award [LoA] dated 12.11.2021 was issued stating that the LoA was issued to the petitioner for the Package no. 8 as per the rates, specifications, instructions and the terms and conditions stipulated in the LoA. The LoA mentioned the total Contract Price. By appending a 'Note' to the LoA wherein terms and conditions were set forth vide Annexure - A to Annexure - O, the respondent APDCL informed the successful bidder [L 1] that on unconditional acceptance within 3 [three] days from the date of issuance of the LoA, the petitioner would be required to submit Contract Performance Guarantee [PBG] for 3% of the Contract Price within 7 [seven] days from the date of the issuance of the LoA. The LoA further contained that in the event of non-submission of the PBG within the stipulated period, the Award might be terminated and the Bid Security [EMD] would be forfeited without any Page No.# 26/48 further notice. The LoA further contained the condition that the PBG would stand forfeited if 'the Contractor' was not able to commission the awarded work to the satisfaction of the Employer [the APDCL] within the scope of the work and also within the stipulated time frame. A reading of the LoA indicates that in the event the successful bidder [L 1] did not accept the LoA unconditionally within the stipulated time period, the Award notified by the LoA would be terminated and the Bid Security [EMD] submitted by the successful bidder [L 1] would be forfeited without any further notice. On the other hand, if the successful bidder [L 1] had accepted the LoA unconditionally, submitted the PBG and signed the Contract Agreement with the APDCL within the stipulated period from the date of the Award, the successful bidder [L 1] would become 'the Contractor'. If after execution of the Contract Agreement 'the Contractor' would fail to execute the awarded contract work as per the terms and conditions of the Contract Agreement the PBG of 'the Contractor' would entail forfeiture.
21.5. The e-Tender Document containing the Instruction to Bidders [ITB] and the General Conditions of Contract [GCC] do not fall in the category of a contract. The ITB part of the e- Tender Document informed the prospective bidders how the bids were to be prepared and submitted and stipulated the procedure for consideration and acceptance of the bid. After evaluation of the bids received, the successful bidder [L 1] was to be identified and he was to be issued the Letter of Award [LoA] with the instruction to give his acceptance to the LoA first and thereafter, to complete the formalities indicated therein including submission of Contract Performance Guarantee [PBG]. It was only after such stages were over, the Contract Agreement was to be signed between the Employer [the APDCL] and the successful bidder [L1] as 'the Contractor'. A specimen form of Contract Agreement in Form - 2 had been made part of the e-Tender Document and admittedly, no such Contract Agreement in Form - 2 was in existence at the point of time when the dispute arose between the parties. The question in the context of this case is whether there was a concluded contract between the parties or not. The answer to it is to be gathered upon the terms and conditions of the e-Tender Document, the LoA and the subsequent events. The sequence of events after accomplishment of which the Contract Agreement was to be signed have already been Page No.# 27/48 indicated above. From the facts narrated above, it is manifestly evident that in the case in hand, there was no concluded contract executed between the Employer [the APDCL] and the petitioner as the successful bidder [L 1] at the time when the dispute arose as the Letter of Award [LoA] herein cannot be construed as a concluded contract between the parties inter se. It is settled position of law that to get a contract concluded, one criterion is acceptance of the offer.
21.6. From the above discussion, it is clear that the relationship between the petitioner as the successful bidder [L 1] and the respondent APDCL [the Employer] did not crystallize into a Contract Agreement between the petitioner as 'the Contractor' and the respondent APDCL as the Employer. Thus, the decision in Kerala State Electricity Board [supra] is found not applicable to the facts and circumstances obtaining in the case in hand.
22. In view of the finding reached that there was no concluded contract between the petitioner as the successful bidder [L 1] and the Employer [the APDCL], the next issue that has arisen is what can be the scope and ambit of judicial review under Article 226 of the Constitution of India in such obtaining fact situation.
22.1 It is held as trite in Noble Recourses Limited vs. State of Orissa and other, [2006] 10 SCC 236, that if an action on the part of the State is violative of the principle contained in Article 14 of the Constitution of India, a writ petition would be maintainable in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contract and a breach of contract; whereas in the former situation the court's scrutiny would be more intrusive, in the later the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution of India. While exercising contractual powers also, the State or its instrumentalities may be subjected to judicial review in order to prevent arbitrariness or favouritism on their part. It is held that though inherent limitations exist but it is not correct to opine that under no circumstances a writ will lie only because it involves a contractual matter. The issue involved in the case in hand clearly falls in the first of the two categories indicated above wherein the Page No.# 28/48 court's scrutiny can be more intrusive on the touchstone of the principle embodied in Article 14 of the Constitution of India.
22.2. In ABL International Limited [supra], the Hon'ble Supreme Court after considering a number of precedents on the subject of maintainability of a writ petition under Article 226 of the Constitution in the contractual arena, has held as under :-
"27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition :
[a] In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. [b] Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule.
[c] A writ petition involving a consequential relief of monetary claim is also maintainable.
28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. [See : Whirlpool Corporation vs. Registrar of Trade Marks, [1998] 8 SCC 1 ]. And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction."
22.3. In Civil Appeal No. 317/2021 [UNITECH Limited and others vs. Telangana State Page No.# 29/48 Industrial Infrastructure Corporation [TSIIC] and others] , decided on 17.02.2021 and reported in 2021 SCC OnLine SC 99 , the Hon'ble Supreme Court of India has observed that recourse to the jurisdiction under Article 226 of the Constitution of India is not excluded altogether in a contractual matter. A public law remedy is available for enforcing legal rights subject to well-settled parameters. The decision has taken notice of the conclusion arrived at in ABL International Ltd. [supra] that writs under Article 226 are maintainable for asserting contractual rights against the State or its instrumentalities, as defined under Article 12 of the Constitution of India. It has made an observation that the decision in ABL International Ltd. [supra] has cautioned that the plenary power under Article 226 must be used with circumspection when other remedies have been provided by the contract. But as a statement of principle, the jurisdiction under Article 226 is not excluded in contractual matters. The presence of an arbitration clause within a contract between a State instrumentality and a private party does not create an absolute bar to availing remedies under Article 226 of the Constitution of India. If the State instrumentality violates its constitutional mandate under Article 14 to act fairly and reasonably, relief under the plenary powers of the Article 226 of the Constitution would lie. Therefore, while exercising its jurisdiction under Article 226, the Court is entitled to enquire into whether the action of the State or its agencies/instrumentalities is arbitrary or unfair, in violation of Article 14. The jurisdiction under Article 226 is a valuable constitutional safeguard against an arbitrary exercise of State power or a misuse of authority. In determining as to whether the jurisdiction should be exercised in a contractual dispute, the Court must, undoubtedly eschew disputed questions of fact which would depend upon an evidentiary determination requiring a trial. It is also observed as well settled that the jurisdiction under Article 226 cannot be ousted only on the basis that the dispute pertains to the contractual arena, because of the reason that the State and its instrumentalities are not exempt from the duty to act fairly merely because in their business dealings they have entered into the realm of contract. The Court has, however, issued a caveat that it still needs to be decided from case to case as to whether the jurisdiction under Article 226 of the Constitution is to be invoked or not.
23. It is well settled that mere existence of an alternative remedy or an alternative forum does not stand as an impediment on the Court to exercise its jurisdiction under Article 226 of Page No.# 30/48 the Constitution of India, which is discretionary. But it is a relevant factor for the Court to take a decision whether to exercise the discretionary jurisdiction or not and to decide that, the Court has the power to examine any case before it. It is also true that a writ petition involving serious disputed questions of fact requiring the parties to lead evidence in a full- fledged trial, is not ordinarily be entertained by Court in the exercise of its jurisdiction under Article 226 of the Constitution of India. It is also not an absolute rule that in all cases involving disputes questions of fact the parties should be relegated to a civil court or to an arbitration proceeding, if provided in the contract. A writ petition is ordinarily decided on the basis of affidavits by the parties and therefore, a clear picture about what facts are in dispute and what facts are not in dispute or are admitted, emerges only after the exchange of pleadings/affidavits by the parties. If after such stage, it is found that the writ petition raises questions of fact of a complex nature requiring their determination on the basis of evidence to be led by the parties in dispute in a trial proceeding and the same could not be appropriately be decided in a writ petition, the Court may decline to adjudicate the writ petition. But if after exchange of pleadings, there remains a question of fact of elementary nature or rather, there is no disputed question of fact then such a writ petition can be decided in the discretionary writ jurisdiction of the Court under Article 226 of the Constitution of India.
23.1. In the case in hand, the petitioner has contended that by Clause 6 [Terms of Payment] of Part-III : GCC, the Employer [the APDCL] had undertaken to make payment of the Contract Price in the manner set forth in Appendix - 1 [Terms and Procedures of Payment] until the date of issuance of the LoA dated 12.11.2021 and the Employer [the APDCL] had unilaterally changed the manner of payment when it issued the LoA on 12.11.2021 by substituting erstwhile Appendix - 1 by new Appendix - A [Terms and Procedures of Payment]. The stand of the respondent APDCL, in its affidavit-in-opposition, is to the effect that the work completion date was fixed as 31.12.2021 since the Project was extremely urgent and had to be completed in a time bound manner. It was in order to ensure that all the contractors strictly adhere to the time schedule of a project of such vital national importance, the tendering authority i.e. the APDCL being empowered, deemed it appropriate to insert Annexure - A in the LoA, which was a provision for release of the installment of 60% progressive payment based on actual physical progress of the work certified by the Page No.# 31/48 competent authority of the concerned district. It is contended that the said provision was brought in so as to negate the likelihood of financially ill-equipped contractors delaying the project. Thus, there is categorical admission on the part of the respondent APDCL authorities that there was alteration in the Terms of Payment when it issued the LoA on 12.11.2021 with Annexure - A [Terms and Procedures of Payment] in replacement of the previous Terms of Payment contained in Annexure - 1 [Terms and Procedures of Payment] 23.2. From the exchange of the communications that occurred between the petitioner and the respondent APDCL authorities the period from 12.11.2021 to 25.11.2021, it is noticed that initially by its email dated 07.11.2021, the petitioner lodged its protest on two aspects, firstly, changes brought in the Terms and Procedures of Payment by replacing Annexure - 1 by Annexure - A and secondly, the time period for completion given. The petitioner in its email dated 24.11.2021 had conveyed to the respondent APDCL authorities that it agreed unconditionally to the LoA with a hedged condition that the Terms of Payment must remain the same as per the e-Tender Document. Thus, it is evident that it was only the Terms of Payment which remained as the apple of discord between the parties and the respondent APDCL which had admitted to have made such alteration and that too, unilaterally. Other than the above, which appears to be a legal one, there is no disputed question of fact involved here. The sole issue remained to be examined, therefore, is whether the Employer [the APDCL] was empowered to change the Terms of Payment by substituting Annexure - 1 [Terms and Procedures of Payment] with new Annexure - A [Terms and Procedures of Payment].
24. Reverting back once again to the e-Tender Document/Bidding Documents of the case in hand, a reference to Clause 6.0 [Amendment to Bidding Document] appears necessary at this stage. Clause 6.0 had laid down that at any time prior to deadline for submission of bids, the Employer [the APDCL] might, for any reason, whether at its own initiative or in response to a clarification requested by a prospective bidder, modify the Bidding Documents by amendment[s]. The amendment, if any, was required to be uploaded in the designated websites or notified by email to all the participant bidders. It further stipulated that such amendments, clarifications, etc. shall be binding on the bidders and the bidders were Page No.# 32/48 obligated to give such amendments, clarifications, etc. due consideration at the time of submission of their bids. It is an admitted position that no amendment[s] and/or clarification[s] with regard to the Terms of Payment, as originally incorporated in the e-Tender Document/Bidding Documents was/were effected by the Employer [the APDCL] at any time prior to the deadline for submission of bids, meaning thereby, the Terms of Payment contained in Annexure - 1 [Terms and Procedures of Payment] did not undergo any change when the bid submission was over.
24.1. In what situations the Bid Security [EMD] of a bidder can be forfeited were outlined in Clause 12.6 of the e-Tender Document and the same read as under :-
12.6 The Bid Security may be forfeited [a] If the Bidder withdraws its bid during the period of bid validity specified by the Bidder in the Bid Form; or [b] In the case of a successful Bidder, if the Bidder fails within the specified time limit [i] to sign the Contract Agreement, in accordance with bidding document [ii] to furnish the required performance security[ies], in accordance with bidding document.
24.2. The other situations when the Bid Security [EMD] can be forfeited by the Employer [the APDCL] were outlined in Clause 25.0 of the e-Tender Document/Bidding Document and the same reads as under :-
25.0 Contract Performance Bank Guarantee
25.1. Within seven [7] days after receipt of the Notification of Award through LoA, the successful Bidder shall furnish the performance security for 3% [three percent] of the contract price.
25.2. The Performance Security shall be valid for a minimum period of 5 years from the date of issuance of Letter of Award [LoA] and shall be Page No.# 33/48 renewed/extended till the completion of 5 years of O&M period. The Performance Security shall be released after 5 years from the date of commissioning with the compliance of entire obligations in the contract. 25.3. Failure of the successful Bidder to comply with the requirement shall constitute sufficient grounds for the annulment of the award and forfeiture of the bid security, in which event the Employer may make the award to the next lowest evaluated Bidder or call for new bids.
24.3. There is no dispute that the contestation between the parties started from the moment the LoA was issued on 12.11.2021 whereby the respondent APDCL authorities asked the petitioner as the successful bidder [L 1] to convey its unconditional acceptance of the LoA which was indubitably issued with the substitution of the Terms of Payment in the form of Annexure - 1 by the Terms of Payment in the form of Annexure - A. 24.4. To get clarity about the actual controversy, it appears necessary to have a reading of the Annexure - 1 vis-à-vis Annexure - A in juxtaposition and for that purpose, the contents of the part relating to the first installment [60%], where the alteration took place, of Annexure - 1 and Annexure - A are extracted hereinunder in the following table :-
Appendix - 1 : TERMS AND Appendix - A: TERMS AND PROCEDURES OF PROCEDURES OF PAYMENT PAYMENT I. "Billable Items" are worked out I. "Billable Items" are worked out and and attached to Price Schedule. The attached to Price Schedule. The payment payment shall be made on billable shall be made on billable item as item as indicated in Price Schedule. indicated in Price Schedule.
II. All progressive payments shall II. All progressive payments shall be
be released on validity of Contract released on validity of Contract
Performance Security. Performance Security.
A. Supply, Erection, Testing and III. You must comply the defects
Page No.# 34/48
Commissioning of works : observed during inspection by
1. Progressive payments PMA/RQM/NQM at different stages of
[Supply]: execution within time. Before release of
1.1. First Installment [60%] : any payment there must be 'NIL' in
Sixty percent [60%] payment pending compliance of defects observed.
against supply of various items of A. Supply, Erection, Testing and
price schedule 1 [Complete items Commissioning of works :
of individual Solar Home Lighting 1. Progressive payments [Supply System] including 100% GST shall including Freight & Insurance]: be paid on receipt and acceptance 1.1. First Installment [60%] : Sixty of Materials on submission of percent [60%] payment against supply documents indicated of various items [Complete items of hereinunder:- individual Solar Home Lighting System] a. Copy of unconditional including 100% GST shall be paid on acceptance of the Letter of receipt and acceptance of Materials on Award [LoA] and signing of submission of documents indicated contract agreement by the hereinunder:-
Contractor. a. Copy of unconditional
b. Copy of submitted acceptance of the Letter of Award
unconditional & irrevocable [LoA] and signing of contract
Bank Guarantee for three agreement by the Contractor.
percent [3%] of the total b. Copy of submitted
Contract price towards unconditional & irrevocable Bank
Contract Performance Guarantee for three percent [3%]
Guarantee [CPG] in of the total Contract price towards
accordance with the provisions Contract Performance Guarantee
of bid document. [CPG] in accordance with the
c. Copy of Detailed Project provisions of bid document.
Execution Plan/PERT chart. c. Copy of Detailed Project
d. Contractor's detailed Execution Plan/PERT chart.
Page No.# 35/48
invoice & packing list d. Contractor's detailed invoice &
identifying contents of each packing list identifying contents of
shipment. each shipment.
e. Copies of Certificate to e. Copies of Certificate to the
the effect of payments of effect of payments of SGST/CGST,
SGST/CGST, duties, levies etc. duties, levies etc. have been made
have been made by the bidder by the contractor against supply of
against supply of materials materials under the contract.
under the contract. f. Certified copy of Insurance
f. Certified copy of policy/Insurance Certificate.
Insurance policy/Insurance g. Manufacturer's/Contractor's
Certificate. guarantee certificate of Quality.
g. h. Copy of Guaranteed Technical
Manufacturer's/Contractor's Particulars [GTP] and drawing
guarantee certificate of approved by the Employer.
Quality. i. Material Dispatch Clearance
h. Copy of Guaranteed Certificate [MDCC] / Dispatch
Technical Particulars [GTP] and Instructions [DI] for dispatch of
drawing approved by the materials from the manufacturer's
Employer. works. MDCC/DI shall be issued by
i. Material Dispatch authorized officer of Employer.
Clearance Certificate [MDCC] / j. Manufacturer's copy of challan
Dispatch Instructions [DI] for k. Submission of the certificate
dispatch of materials from the by the Employer's representative
manufacturer's works. that 100% billable item[s] have
MDCC/DI shall be issued by been verified & delivered to site.
authorized officer of Employer. MICC [Material Inspection &
j. Manufacturer's copy of Clearance Certificate] to be issued
challan by the AGM [Project], APDCL and
k. Submission of the countersigned by concerned CEO,
Page No.# 36/48
certificate by the Employer's APDCL.
representative that 100%
billable item[s] have
been NOTE :
verified & delivered to site. 1. As the project completion [in all MICC [Material Inspection & respect] date is 31.12.2021, release of the Clearance Certificate] to be installment of 60% Progressive payment will issued by the AGM [Project], be based on the physical progress of work APDCL and countersigned by as on date. In this connection a certificate of concerned CEO, APDCL. actual physical progress of work from AGM NOTE : [Projects], APDCL of concerned district shall
1. Total 4 [four] nos. of progressive have to be submitted by the Contractor. bills against Supply shall be allowed. Total 4 [four] nos. of progressive bills
2. After submission of 2 [two] nos. of against Supply shall be allowed.
Supply Bills, the Contractor shall have to 2. Supply of the 100% ordered quantity complete Erection, Testing and shall be completed as per stipulated timeline Commissioning of the 100% material / mentioned in LoA.
equipment supplied earlier for submission of next bills against supply. 3. Supply of the 100% ordered quantity shall be completed as per stipulated timeline mentioned in LoA.
25. On comparison of Annexure - 1 with Annexure - A, it is evident that there was clear changes in the Terms of Payment. In the light of the discussions made above, this Court is of the considered view that the matter needs examination in the context of the provisions the Contract Act, 1872, more particularly, Section 7 thereto which has laid down that the offer and the acceptance of the offer must be absolute and unqualified, leaving no element for incertitude. If the acceptor puts in a new condition while accepting an offer which offer is in conformity with the earlier invitation to make offers from the acceptor, then it is not an Page No.# 37/48 acceptance simpliciter. An acceptance with a unilateral variation cannot be termed as an acceptance, absolute and unqualified. Such an acceptance with further condition[s], not in existence at the time of the invitation to make offers, can be termed only as a counter proposal which must be accepted fully by the offerer to make the relationship between them binding under a concluded contract. If the acceptance is conditional, the offer can be withdrawn at any moment.
25.1. The e-Tender Document/Bidding Document did not contain any clause which empowered the Employer [the APDCL] to bring changes in the Terms of Payment set forth in Appendix - 1 [Terms and Procedures of Payment] in a unilateral manner. The bid of the petitioner was in conformity with the NIT dated 08.09.2021 and to the terms and conditions incorporated in the e-Tender Document/Bidding Document, which were invitations from the Employer [the APDCL] to the intending and eligible bidders to make offers. The LoA issued in favour of the successful bidder [L 1], that is, the petitioner with the substitution of the Terms of Payment in the form of Annexure - 1 by the new Terms of Payment in the form of Annexure - A, which was effected admittedly unilaterally, can only be termed as a conditional acceptance akin to a counter proposal. By such conditional acceptance akin to a counter proposal, the Employer [the APDCL] intended to make a substantial variation in the proposed contract with regard to the Terms of Payment with the proposal contractor for execution of the contract-work in question. With the LoA containing such conditional acceptance/counter proposal, the Employer [the APDCL] insisted for its unconditional acceptance. In such scenario, it was open for the successful bidder [L 1], that is, the petitioner to ask the Employer [the APDCL] to stick to the original Terms of Payment contained in Annexure - 1 [Terms and Procedures of Payment] and such request cannot be held to be a breach on the part of the successful bidder [L1], that is, the petitioner of any terms and conditions of the e-Tender Document/Bidding Document.
26. At this juncture, it is apposite to refer to two decisions of the Hon'ble Supreme Court of India in Union of India vs. Vertex Broadcasting Company Private Limited and others, reported in [2015] 16 SCC 198; and Suresh Kumar Wadhwa vs. State of Madhya Pradesh and others, Page No.# 38/48 reported in [2017] 16 SCC 757.
27. The facts, in nutshell, in Vertex Broadcasting Company Private Limited [supra] are as follows : the respondent Vertex Broadcasting Company Private Limited ['M/s Vertex Broadcasting', for short] approached the High Court by filing a number of writ petitions under Article 226 of the Constitution of India seeking interference of the High Court with the action of the Union of India in forfeiting/withholding the reserved license fee, 50% of which was deposited by it as a condition of their bids for obtaining FM Broadcasting License. M/s Vertex Broadcasting contended that there was a unilateral departure by the Union of India from the terms of the tender document which had surfaced when the Letter of Intent [LoI] was issued on 02.08.2020. It was the specific case of M/s Vertex Broadcasting that the departure became even more apparent from the draft license agreement which was forwarded to them by the Union of India. It was contended that the alleged departure was a unilateral departure on the part of the Union of India in breach of the tender conditions. It was also contended that in absence of any specific clause in the tender document permitting forfeiture/retention of the license fee, the action was totally unjustified. It was further contended that the Union of India was not justified in forfeiting the earnest money inasmuch as it was the Union of India which had acted in breach of the agreement and there was no wilful default on the part of M/s Vertex Broadcasting to act in terms of the offers made by it. A learned Single Judge of the High Court dismissed the writ petition on the grounds that the departure from the conditions of the tender document as made in the LoI and the draft license agreement were not of significance and the act of retention/forfeiture of the amount was held to be justified, as the action of the bidder i.e. M/s Vertex Broadcasting in refusing to act in terms of the LoI granted to them had occasioned loss to the Union of India. The Division Bench of the High Court in intra-court appeals reversed the view of the learned Single Judge by holding that the departures from the terms of the tender document were major in nature amounting to imposition of new conditions beyond those contemplated in the tender document and after consideration of the relevant clauses of the tender document, the Division Bench came to the conclusion that there was no power vested in the Union of India to forfeit/withhold the license fee and the Union of India directed refund of the license fee.
Page No.# 39/48 27.1. The Hon'ble Supreme Court of India perused the terms of the tender document, the LoI, the first draft license agreement and the final license agreement and reached a view that the final license agreement embodied terms and conditions which went far beyond what was mentioned in the NIT and the draft agreement proposed also dealt with matters on which the NIT was silent. Thereafter, the Hon'ble Supreme Court has observed that the subject-matter involved was primarily a legal question, namely, whether in the absence of any specific clause in the NIT, forfeiture was justified and if such was the issue involved, there would be no handicap for the High Court in answering the same in its exercise of writ jurisdiction.
27.2. Thereafter, the Hon'ble Supreme Court of India has observed in the following manner :
"9. We have already taken the view that the Union had departed from the terms of NIT and had incorporated new/additional terms and conditions in LOI and the draft licence agreements which were finalized by the Union after exchange of correspondence with the licensees. The precise content of the departures made has also been set out above. Inherent in the said finding would be a further determination of the unjustifiability of the action of the Union in forfeiting the licence fee. The Union could not have departed from the terms of NIT unilaterally and on the refusal of the licensees to accept such modified terms and act in terms of LOI granted to them the Union could not have resorted to the forfeiture as made. This is irrespective of the question of the existence of any enabling provision in NIT for forfeiture of the licence fee.
10. Coming to the aforesaid question of availability of a power to order forfeiture, a reading of the relevant clauses i.e. Clauses 8[f], 10[d] and 12 extracted above would go to show that the Union had not protected/empowered itself to forfeit the licence fee. The forfeiture contemplated by the aforesaid clauses are altogether in different contexts and situations. In the absence of any such power, the forfeiture that has taken place in this case will have to be adjudged as null and void.
11. This would take this Court to the issue with regard to earnest money. The earnest money Page No.# 40/48 required to be deposited by the licensees under Clause 12 of NIT can be forfeited only in the event there is default on the part of the licensees or if a licensee is unwilling to act on its offer. The refusal of the licensees in the present case was not on their own volition but was prompted by additions to the terms and conditions of NIT made unilaterally by the Union of India. If that is so, it will be difficult to accept the view of the High Court insofar as forfeiture of earnest money is concerned. The refusal of the licensees to act in furtherance of LOIs granted to them being on account of breach committed by the Union, we are of the view that the forfeiture of the earnest money is also not justified."
28. In Suresh Kumar Wadhwa [supra], the factual matrix was as follows : a public notice was published on 07.01.1996 in a daily newspaper for and on behalf of the State of Madhya Pradesh for sale of 4 [four] plots of land including Plot no. E-5/5 in a public auction, scheduled to be held on 11.01.1996, on the terms and conditions set out therein. Interested bidders were asked to participate by following the terms and conditions mentioned in the public notice. As per the original terms and conditions, a bidder before taking part in the public auction, was required to deposit an amount of Rs. 3,00,000/- as security and after declaration of results, the highest bidder would be required to deposit one-fourth amount of his bid amount immediately after closure of auction. Thereafter, the highest bidder would have to deposit the entire amount of his bid after adjustment of the security deposit and one- fourth amount already deposited and after receipt of full payment in the afore-stated manner, the possession of the auctioned plot would be delivered to the highest bidder for a permanent lease of 30 years. The appellant participated in the auction proceedings by complying with the requisite formalities including deposit of the sum of Rs. 3,00,000/- as security. In the public auction held on 11.01.1996, the appellant with his bid of Rs. 53,80,000/- emerged as the highest bidder for Plot no. E-5/5 and the respondents accepted the said bid. When the appellant was asked to deposit one-fourth of the total bid amount, the appellate deposited the sum on 11.01.1996 itself. On 25.01.1996, the appellant received a letter dated 24.01.1996 from the respondent authorities informing that his bid for Plot no. E- 5/5 was accepted subject to 'special terms and conditions'. As per the 'special terms and conditions', annual lease @ 7.5% would be charged from the bidder on the accepted bid amount and if the lease rent for 10 years was deposited in lump sum, then the remaining 20 Page No.# 41/48 years would be free from lease rent. The appellant replied on 29.01.1996 stating that the 'special terms and conditions' were neither published nor informed to him at any point of time earlier and nor was he ever made aware of any such terms and conditions till he received the letter dated 24.01.1996. The appellant declined to accept the 'special terms and conditions' and requested the State respondents to return the security amount of Rs. 3,00,000/-, which he deposited at the time of submission of the bid. After issuance of a show cause notice to the appellant and after receipt of a reply to the show cause notice from the appellant, the State respondents forfeited the security deposit of Rs. 3,00,000/- deposited by the appellant.
28.1. The Hon'ble Supreme Court considered three questions in Suresh Kumar Wadhwa [supra], firstly, whether the appellant committed any breach of the terms and conditions of the public notice dated 07.01.1996; secondly, whether the State was justified in forfeiting the security deposit of Rs. 3,00,000/- deposited by the appellant for the alleged breach said to have been committed by the appellant of any terms and conditions of the public notice; and thirdly, whether the State had power to forfeit the security deposit in the facts of the case. The Hon'ble Supreme Court has referred to the provisions of Section 74 of the Contract Act and some settled legal principles relating to the law of contract. In the context of the Section 74 of the Contract Act, it has been observed that in order to forfeit the sum deposited by the contracting party as 'earnest money' or 'security' for due performance of the contract, it is necessary that the contract must contain a stipulation of forfeiture. If there is no stipulation in the contract for forfeiture, there is no such right available to the party to forfeit the sum. Though the proceedings in Suresh Kumar Wadhwa originated from a civil suit, the principles laid down therein are found of much relevance for the case in hand.
28.2. In Suresh Kumar Wadhwa, the Hon'ble Supreme Court of has gone on to observe in the following manner :
"26. Equally well-settled principle of law relating to contract is that a party to the contract can insist for performance of only those terms/conditions, which are part of the contract. Likewise, a party to the contract has no right to unilaterally "alter" the terms and conditions in the contract and nor they have a right to "add" any additional Page No.# 42/48 terms/conditions in the contract unless both the parties agree to add/alter any such terms/conditions in the contract.
27. Similarly, it is also a settled law that if any party adds any additional terms/conditions in the contract without the consent of the other contracting party then such addition is not binding on the other party. Similarly, a party, which adds any such term/condition, has no right to insist on the other party to comply with such additional terms/conditions and nor such party has a right to cancel the contract on the ground that the other party has failed to comply with such additional terms/conditions.
28. Keeping in view the aforementioned principle of law, when we examine the facts of the case at hand we find the public notice [advertisement], extracted above, only stipulated a term for deposit of the security amount of Rs. 3 lakhs by the bidder [appellant] but it did not publish any stipulation that the security amount deposited by the bidder [appellant herein] is liable for forfeiture by the State and, if so, in what contingencies.
29. In our opinion, a stipulation for deposit of security amount ought to have been qualified by a specific stipulation providing therein a right of forfeiture to the State. Similarly, it should have also provided the contingencies in which such right of forfeiture could be exercised by the State against the bidder. It is only then the State would have got a right to forfeit. It was, however, not so in this case.
30. So far as the four special conditions are concerned, these conditions were also not part of the public notice and nor they were ever communicated to the bidders before auction proceedings. There is no whisper of such conditions being ever considered as part of the auction proceedings enabling the bidders to make their compliance, in case, their bid is accepted.
31. In our considered opinion, it was mandatory on the part of the respondent Page No.# 43/48 State to have published the four special conditions at the time of inviting the bids itself because how much money/rent the bidder would be required to pay to the State on allotment of plot to him was a material term and, therefore, the bidders were entitled to know these material terms at the time of submitting the bid itself. It was, however, not done in this case.
32. Since these four conditions were added unilaterally and communicated to the appellant by Respondent 3 while accepting his bid, the appellant had every right to refuse to accept such conditions and wriggle out of the auction proceedings and demand refund of his security amount. The State, in such circumstances, had no right to insist upon the appellant to accept such conditions much less to comply nor it had a right to cancel the bid on the ground of non-compliance with these conditions by the appellant.
33. The learned counsel for the respondent State, however, argued that it was not necessary for the State to specify the condition relating to forfeiture and four additional terms/conditions in the public notice because they were already part of RBC, which is applicable to the nazul lands in question.
34. We find no merit in this submission for more than one reason. First, the public notice inviting bids did not even contain a term that all the provisions of RBC will be applicable to the auction proceedings and second, the relevant clauses of RBC which, according to the State, were to govern the auction proceedings ought to have been quoted in verbatim in the public notice itself. It was, however, not done.
35. In our considered opinion, the object behind publishing all material term[s] is/are threefold. First, such term[s] is/are made known to the contracting parties/bidders; second, parties/bidders become aware of their rights, obligations, liabilities qua each other and also of the consequences in the event of their non- compliances; and third, it empowers the State to enforce any such term against the bidder in the event of any breach committed by the bidder and lastly, when there are Page No.# 44/48 express terms in the contract/public notice then parties are bound by the terms and their rights are, accordingly, determined in the light of such terms in accordance with law.
* * * * *
40. In the light of foregoing discussion, we are of the considered opinion that the appellant did not commit any breach of the term[s] and condition[s] of the notice inviting bids and on the other hand, it was the respondents who committed breaches. In these circumstances, the State had no right to forfeit the security amount and instead it should have been returned when demanded by the appellant."
29. In Ganga Enterprise [supra], the appellant NHAI by a notice called for tenders for collection of toll on a portion of a particular stretch of a highway. The notice provided that the toll plazas would be completed by the appellant and handed over to the selected enterprise. The notice required the bidders to furnish [i] a bid security for an amount of Rs. 50,00,000/- in the form of a bank draft or bank guarantee, and [ii] a performance security in the form of a bank guarantee of Rs. 2,00,00,000/- . The bid security was liable to forfeiture in case the bidder withdrew his bid during the validity period of the bid or failed to furnish the performance security and sign the agreement within the specified period. The bid was to remain valid for a period of 120 days after the last date of bid submission. In terms of the tender document, the respondent Ganga Enterprise gave its bid and furnished one on- demand bank guarantee of Rs. 50,00,000/-. The validity period of the bid was to end on 28.11.1997 but the respondent Ganga Enterprise withdrew its bid on 20.11.1997 and did not furnish the performance guarantee. The appellant NHAI found the respondent Ganga Enterprise to be the highest bidder and accepted its offer on 21.11.1997 and encashed the bank guarantee for Rs. 50,00,000/-. The Hon'ble Supreme Court had found that the bid security of Rs. 50,00,000/- was not for performance of the contract as it was an earnest to ensure that the bidder did not withdraw its bid during the period of bid validity and/or that after acceptance of the performance security was furnished and the agreement signed. It has been observed that the Contract Act has merely provided that a person can withdraw his offer Page No.# 45/48 before its acceptance but withdrawal of an offer, before it is accepted, is a completely different aspect from forfeiture of earnest/security money given for a particular purpose. A person may have a right to withdraw his offer but if he has made his offer on a condition that the earnest money will be forfeited for not entering into contract or some act is not performed, then even though he may have a right to withdraw his offer, he has no right to claim that the earnest/security be returned to him. There was no change on the part of the appellant NHAI in the terms and conditions of the tender and it was the bidder, Ganga Enterprise who had withdrawn the offer on 20.11.1997, which was before the validity period of the bid up to 28.11.1997. The Hon'ble Supreme Court in such factual scenario, has observed that the decision on the part of the appellant tendering authority, NHAI does not call for any interference as the breach had occurred at the end of the bidder and the terms and conditions of the tender notice provided for such forfeiture of the earnest/security deposit of the bidder. The breach that had occurred in Ganga Enterprise can be made relatable to Clause 12.6[a] of the e-Tender Document of the case in hand, which event is not involved here for adjudication. Thus, the fact situation obtaining in the case in hand is not similar to the fact situation obtaining in Ganga Enterprise [supra] and as such, the reliance placed on it by the learned counsel for the respondent is misplaced.
30. The factual matrices involved in Jagdish Mandal [supra] and Bharat Coking Coal Limited [supra] go to reveal that the writ petitions were instituted by the writ petitioners as unsuccessful bidders challenging award of contracts to the successful bidders in the concerned tender processes. The claim of the writ petitioners therein was that the contract work had been wrongly awarded to the other party whereas the writ petitioner ought to be awarded with the contract work State or the instrumentality of the State. The facts and circumstances is those decisions are not similar to the case in hand. As such, the observations made in the context of the background factual matrices in those decisions are not directly made applicable here.
31. Having regard to the entire facts and circumstances of the case and the principle deducible from the decisions in Vertex Broadcasting Company Private Limited [supra] and Suresh Kumar Wadhwa [supra], this Court is of the clear view that as the Employer [the Page No.# 46/48 APDCL], a party to the proposed contract in question for execution of the project under Package no. 8, had made alteration in the terms and conditions of the proposed contract unilaterally and without the consent of the successful bidder [L 1], that is, the petitioner, then such unilateral alteration cannot be held to be binding on the petitioner. The Employer [the APDCL] had no right inhered in it to insist on the petitioner to comply with such proposed contract with alteration made unilaterally and the Employer [the APDCL] did not have any right to terminate the offer on the ground that the petitioner had failed to convey its unconditional acceptance to the proposed contract. Non-acceptance of the LoA with altered terms and conditions by the petitioner cannot be termed as a breach attributable to it as the petitioner had declined to convey its unconditional acceptance of the conditional acceptance/counter proposal forwarded by the Employer [the APDCL] in the form of LoA dated 12.11.2021.
32. Applicability of Article 14 of the Constitution of India to all executive actions of the State or its instrumentalities at the threshold to the making of a contract has been recognized in Kumari Shrilekha Vidyarthi [supra]. The principle enshrined in Article 14 of the Constitution does not envisage or permit unfairness or unreasonableness even in contractual matters. The principle casts a duty on the State or its instrumentalities to act fairly, justly and reasonably even in contractual matters. It has been further held in UNITECH Limited [supra] that having invited private players to submit bids on stipulated terms and conditions, the State and the instrumentalities of the State must be held down to make good its representations. The State and its instrumentalities are duty bound to act fairly under Article 14 of the Constitution of India. They cannot, even in the domain of contract, claim an exemption from the public law duty from acting fairly. The State and its instrumentalities do not shed either their character or their obligation to act fairly in their dealings with private parties in the realm of contract.
33. Though the respondent APDCL as the Employer herein claimed that being empowered, it was deemed appropriate to insert Annexure - A [Terms and Procedures of Payment] in the LoA, this Court has not been referred to any such enabling terms and conditions in the NIT, e- Tender Document/Bidding Document or any other document which had empowered the Page No.# 47/48 Employer [the APDCL] to do so. An action/activity of the respondent APDCL which is an instrumentality of the State under Article 12 of the Constitution of India, is subject to Article 14 and must be fair and free from arbitrariness. The basic requirement of Article 14 is fairness in action and non-arbitrariness. The purpose of judicial review is to consider a matter where an allegation of breach is made and is to ensure that there is no unfair treatment meted to a party by any action of the State or its instrumentalities on the touchstone of Article 14 of the Constitution of India. Having reached a finding that the LoA contained conditional acceptance/counter proposal which the Employer [the APDCL] insisted for its unconditional acceptance, this Court holds that it was open for the successful bidder [L 1], that is, the petitioner to ask the Employer [the APDCL] to make good its representations by sticking to the original Terms of Payment contained in Annexure - 1 [Terms and Procedures of Payment]. Such request cannot be held to be a breach on the part of the successful bidder [L1], that is, the petitioner of any terms and conditions of the e-Tender Document/Bidding Document. The breach had occurred at the end of the Employer [the APDCL] who had changed the original Terms of Payment by substituting Annexure - 1 [Terms and Procedures of Payment] with Annexure - A [Terms and Procedures of Payment] unilaterally when there was no enabling power to do so. When an obligation is cast on the instrumentality of the State to act fairly and when it had committed a breach of such obligation, then that authority is not permitted to take unfair advantage of such situation. Viewed in the above context, the action on the part of the respondent APDCL authorities in forfeiting the Bid Securities [EMDs], deposited by the petitioner, is held to be unfair and arbitrary and the same is liable to be set aside. It is accordingly ordered. As a corollary, the succeeding action of encashment of the bank guarantees which were deposited by the petitioner towards bid securities, is also held to be unfair and arbitrary.
34. The fact situations obtaining in the other 4 [four] writ petitions - W.P.[C] no. 6414/2021, W.P.[C] no. 6415/2021, W.P.[C] no. 6417/2021 and W.P.[C] no. 6418/2021 - are same.
35. As a result, all the 5 [five] writ petitions - W.P.[C] no. 6381/2021, W.P.[C] no.
Page No.# 48/48 6414/2021, W.P.[C] no. 6415/2021, W.P.[C] no. 6417/2021 and W.P.[C] no. 6418/2021 - are allowed to the extent that the respondent APDCL authorities shall refund the amounts of the Bid Securities [EMDs] which the petitioner had deposited in the form of bank guarantees against the 5 [five] nos. of packages [Package no. 5, Package no. 8, Package no. 9, Package no. 10 and Package no. 11]. It is directed that such exercise shall be completed within a period of 15 fifteen] days from the date of this order. There shall, however, be no order as to cost.
JUDGE Comparing Assistant