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[Cites 10, Cited by 0]

Gujarat High Court

M/S Elsol Energy Systems Through Minip ... vs Dakshin Gujarat Vij Company Limited on 19 March, 2021

Author: R.M.Chhaya

Bench: R.M.Chhaya, Vaibhavi D. Nanavati

    C/SCA/5395/2020                                              CAV JUDGMENT




              IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                R/SPECIAL CIVIL APPLICATION NO. 5395 of 2020


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE R.M.CHHAYA

and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

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===

1      Whether Reporters of Local Papers may be allowed
       to see the judgment ?

2      To be referred to the Reporter or not ?

3      Whether their Lordships wish to see the fair copy
       of the judgment ?

4      Whether this case involves a substantial question
       of law as to the interpretation of the Constitution
       of India or any order made thereunder ?

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===
    M/S ELSOL ENERGY SYSTEMS THROUGH MINIP PATEL, PROPRIETOR
                             Versus
               DAKSHIN GUJARAT VIJ COMPANY LIMITED
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===
Appearance:
M R BHATT & CO.(5953) for the Petitioner(s) No. 1
MUNJAAL M BHATT(8283) for the Petitioner(s) No. 1
MR DIPAK R DAVE(1232) for the Respondent(s) No. 1
NOTICE SERVED BY DS(5) for the Respondent(s) No. 2
=========== ==== == == == == == === == == == == == == == == == == == = == ==
===

 CORAM: HONOURABLE MR. JUSTICE R.M.CHHAYA
        and
        HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

                              Date : 19/03/2021

                              CAV JUDGMENT
Page 1 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT

(PER : HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI)

1. The petitioner has filed this petition under Articles 14, 19(1)(g) and 226 of the Constitution of India and has prayed for the following relief:­ "(a) That this Hon'ble Court may be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction to quash and set aside the impugned order dated 17.04.2018, received under email dated 21.04.2018, addressed by respondent No.1 to the petitioner, marked as Annexure­A to this petition;

(b) That pending admission, hearing and final disposal of the present petition, this Hon'ble Court be pleased to stay the effect, operation and implementation of the impugned order dated 1.04.2018 to the extent that it puts the petitioner in the 'Stop Deal List';

(c) That pending admission, hearing and final disposal of the present petition, this Hon'ble Court be pleased to direct the respondent No.1 to refund Page 2 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT an amount of Rs.34,09,625/­ illegally deducted by respondent No.1 with interest;

(d) That this Hon'ble Court may be pleased to grant ex­parte ad­interim relief in terms of paragraph 21(b) and 21(c);

(e) That this Hon'ble Court be pleased to award cost the present petition to the petitioner.

(f) Pass such other order(s) as this Hon'ble Court deems fit in the facts and circumstances of the case."

2. The petitioner has challenged the order dated 17.4.2018 passed by the respondent No.1 - Dakshin Gujarat Vij Company Limited by which the petitioner has been put in the 'Stop Deal List' for the period of three years and further an amount of Rs.34,09,625/­ is directed to be recovered from the retention money maintained by the petitioner in connection to the tender and work order in question with respondent No.2.

3. Brief facts as stated in the petition Page 3 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT are as under:­ 3.1 The petitioner is a proprietorship concern established in 2004 involved in delivering high quality solar pump, solar agriculture pump, solar deep submersible pump, solar surface pumps, solar fountain pumps, solar garden pumps, solar pump for home etc. The petitioner has completed several projects with respondent No.2 ( for sake of brevity referred as "PGVCL"in short).

3.2 PGVCL floated a tender for "Supply, Installation and Commissioning of Off­Grid Solar Water pumping system with comprehensive maintenance at various locations of all DISCOMs under GUVNL"in the year 2017.

3.3 The petitioner participated in the said tender by submitting the bid on 29.5.2017 online as well as in the physical mode. The petitioner has further stated that the tender was floated by the respondent No.2 and had undertaken the work only for respondent No.2 - PGVCL. The petitioner bid for the same was under the impression that the work was to be carried out for respondent No.2. On 29.5.2017 the Page 4 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT respondent No.2 in reference to the tender and the bid submitted by the petitioner requested the petitioner to confirm the same within three days whether they were willing to supply 100 nos. of 5 HP (5000 WP) Solar Water Pumping System with Motor Pump Set at L1 price i.e. Rs.3,25,000/­ each.

3.4 The petitioner accepted the said offer on 1.6.2017 thereby giving acceptance to match the price with L1 bidder.

3.5 The Letter of Acceptance (LoA) value was Rs.3,40,96,250/­ and accordingly security of Rs.34,09,625/­ was to be deposited by the petitioner with respondent No.1 within 15 days.

3.6 The Clause (7) of the LoA specifically states that, 'contract agreement was to be executed between the respondent No.1 and the petitioner.

3.7 It is asserted by the petitioner that the petitioner was under the impression that the work was to be carried out for PGVCL as all the communications including the tender was floated by PGVCL. However, on 14.6.2017 when the LoA was addressed to Page 5 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT the petitioner by the PGVCL, the petitioner was disinterested to carry out the allotted work.

3.8 The petitioner addressed various e­mails.

The petitioner showed disinterest in carrying out the work under the LoA.

3.9 The petitioner has further stated that on 23.10.2017 the respondent No.1 DGVCL addressed a letter to the petitioner requesting them to complete the work awarded at the earliest. The petitioner immediately communicated to the respondent No.1 that it was not interested in carry out the work under the LoA dated 14.6.2017.

3.10 By a communication dated 26.2.2018 the respondent No.1 informed the petitioner to remain present for personal hearing on 1.3.2018 at the corporate office of DGVCL, Surat at 11 hours for execution of work of supply and installation of solar water pumping system in the area of DGVCL under the LoA No.PGVCL/RJT/PRO/Solar­ Pump/LoA/837 dated 14.6.2017.

3.11 The petitioner further submitted that on 17.4.2018 DGVCL passed the impugned Page 6 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT order, under which;

(a) The petitioner was put in the 'Stop Deal List' for the period of three years with immediate effect from the date of issuing circular.

(b) To forfeit the EMD of tender.

4. The learned advocate appearing for the petitioner as well as respondent DGVCL were heard through video conference. The learned advocates for both the sides have submitted their written submissions which are taken on record.

5. Mr. M. R. Bhatt, the learned Senior Advocate for the petitioner in his written submissions filed on 18.9.2020 has reiterated the contentions raised in the petition and contended that the order dated 17.4.2018 passed by the respondent No.1 is required to be quashed and set aside.

6. The petitioner has contended that there is no lease between the petitioner and DGVCL i.e. respondent No.1. Clause (33) of the tender condition states that in relation to signing of contract, the respective DISCOM will notify the successful bidder about acceptance of bid.

Page 7 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT

In the present case the PGVCL has informed about acceptance of their bid and not the DGVCL on page­80. The petitioner's email dated 14.6.2017 was also addressed to PGVCL. The petitioner has contended that after the petitioner addressed the email dated 14.6.2017 to PGVCL, DGVCL started issuing letters to the petitioner to undertake the work order.

7. Further the petitioner has contended that,

(a) The respondents themselves have deviated from the tender conditions.

(b) There is no concluded contract between the parties so as to permit DGVCL to pass the impugned order.

8. The petitioner has contended that the respondents have relied on Clause (48) of the tender conditions which has resulted in passing the impugned order. The petitioner has submitted that the clause controverted by saying that the clause clearly notes that the failure to supply number of systems as contracted by the bidder and as accepted by him while receiving the order will lead to forfeiture of Security Deposit and Page 8 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT disqualification.

9. In the present case the letter of acceptance dated 14.6.2017 specifically noted that the petitioner was required to do two things (a) pay security deposit within 15 days and (b) execute a contract agreement within 15 days. The petitioner has further controverted by stating that Clause (33) of the tender conditions notes that within 07 days of receipt of letter of acceptance the successful bidder shall acknowledge the confirmation of acceptance of terms and conditions alongwith contract agreement. In the present case the petitioner has neither given confirmation letter nor has issued contract agreement. On the contrary, the petitioner had on 14.6.2017 itself indicated their intention not to perform the allotted work and, therefore, admittedly "no concluded contract between the parties."

10. The petitioner has further contended that the respondents are empowered to black list the petitioner and forfeit the security deposit in cases where the bidder fails to supply the required system as contracted and accept which is absent in Page 9 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT the case of petitioner and, therefore, the impugned order deserves to be quashed and set aside.

11. The petitioner has contended that there is no clause in the tender condition which permits DGVCL to recover from the retention money of the petitioner lying with PGVCL which is maintained for another contract.

12. Clause (3) only permits DGVCL to forfeit the security deposit paid by the petitioner in case they fail to supply the contracted systems. The petitioner has submitted that there is no contract in the present case. Assuming even without accepting that the petitioner failed to supply the contracted system, even then all DGVCL was not empowered to recover the security deposit from another contract and, therefore, the petition requires to be allowed and the impugned order deserves to be quashed and set aside.

13. The respondent has filed their affidavit­ in­reply wherein the following contentions are raised :­ 13.1 The respondent has stated that the Page 10 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT petitioner has efficacious alternative remedy, more particularly under Clause (12) of the contract, that any dispute or difference whatsoever arises between respective DISCOMs and contractor arises out of the agreement is required to be referred to the sole arbitration of a person nominated by the Managing Director of concerned DISCOM.

13.2 The petitioner shall have to invoke the arbitration clause which is not invoked by the petitioner and hence the petition requires to be dismissed on the said ground of alternative remedy itself.

13.3 The respondent has further submitted that the petition suffers from delay and latches. The order dated 17.4.2018 passed by the respondent No.1 was accepted at the first instance and thereafter the same is challenged after a period of two years and, therefore, the petition is required to be dismissed on that ground alone.

13.4 The respondent has stated that the petitioner has participated in the tender process. The bid of the petitioner was accepted. The petitioner itself accepted Page 11 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT on 1.6.2017. The contract came to be concluded between the parties. Thereafter the petitioner did not execute the work. As per the terms and conditions of the tender, more particularly Clause (12) the matter is required to be referred to the arbitration in case of any dispute.

13.5 The respondent has further submitted that since the petition raises disputed questions of facts it is not maintainable under Article 226 of the Constitution of India. In matters of contract the petitioner cannot invoke the jurisdiction under Article 226 of the Constitution of India.

14. The respondent has submitted that the petitioner has suppressed material facts, which can be stated as under :­ 14.1 The petitioner has stated that it has not accepted the offer. While stating so the petitioner has deliberately not mentioned the letter dated 10.11.2017 at Page­167. The said letter is produced by the respondent.

14.2 The petitioner had accepted the work but wanted to transfer the work to M/s. Kosol Page 12 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT Engineer Pvt., Ltd. As per the contract sub­contracting was not permissible and, therefore, the same was not allowed. Thereafter the DGVCL issued show cause notice to the petitioner since the work was not executed. The petitioner was provided opportunity of hearing also. However, the petitioner did not avail of the same. The petitioner has failed in giving any convincing reason for not remaining present in the personal hearing.

14.3 The petitioner did not reply to any of the notices issued by the respondent. The petitioner has therefore unequivocally accepted the breach of contract, more particularly Clause (48) at page­33 and Clause (3A) at page 129. The impugned order therefore is just and proper.

14.4 The respondent has further controverted the petition by saying that if tender is accepted and the contractor backs out from the contract, it has to pay the amount as mentioned in the contract. In this case the tender was accepted and the petitioner also accepted the offer. Thus, the contract is a concluded contract.

14.5 It is further submitted that the Page 13 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT petitioner has approached this Court with false and distorted version. It is the case of the petitioner that it was not aware and that the supply was to be made to DGVCL is false and contrary to the documentary evidence. Clause (44) at page­ 31 clearly mentions that the tender is invited for "Supply, Installation, Commissioning and comprehensive Maintenance for 05 years during guarantee period of off grid Solar Pumping System at various locations of DISCOMs for Centralized Tender Invitation System. Total number of system to be supplied for DGVCL is clearly mentioned in Clause (44). Further Clause (47) also clearly mentions that security deposit is to be deposited with respective DISCOM. In the tendered document also it is clearly mentioned that the same is for all the DISCOMs at several places. The said fact is also mentioned in the tender notice at page 120. It is clearly mentioned that tender is for various locations of DISCOMs. There were pre­bidding meetings also.

14.6 It is submitted that the petitioner was aware of each and every aspect, participated in the tender process and the Page 14 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT tender of the petitioner was also accepted by the respondent. After acceptance of tender it cannot be said that the contract is not concluded.

14.7 It is further submitted by the respondent that the petitioner has given a false reason to wriggle out from its obligation to the effect that it was not aware that the supply was to be made at DGVCL. The respondent has submitted that the petitioner has suppressed the letter dated 10.11.2017 and the petitioner has tried to contend that there is no concluded contract. In fact the letter of the petitioner dated 10.11.2017 clearly indicates that the petitioner has accepted the offer. However, it is not permissible to accept the petitioner's own terms and conditions in view of the fact that it is impermissible in law and, therefore, the petitioner has no case in the eye of law. Therefore the petitioner having approached this Court with false reason the petition is required to be rejected.

14.8 The respondent has submitted that poor farmers who are waiting for installation of Solar Water Pumping Systems in their Page 15 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT farm remained without the systems for quite long period. The respondent No.1 has suffered in distribution network because of non­implementation of project and several other steps which respondent No.1 was required to undertake because of non­ implementation of the project. The public at large has been put to inconvenience and respondent No.1 has suffered both tangible and intangible loss in terms of money. Moreover, the petition is also instituted after almost 02 years and, therefore, the petition requires to be rejected.

15. The petitioner has answered submissions made on behalf of the DGVCL as under :­ 15.1 Availability of alternative remedy in the form of arbitration Clause (12) of the tender conditions clearly states that arbitration clause shall becomes operative post award of contract to the successful bidder which is absent in the present case and hence the contention of the respondent is not sustainable.

15.2 On the aspect of delay in preferring the petition and suppression of documents the petitioner has controverted the Page 16 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT submissions of the respondents that the petition is barred by delay by contending that there is no limitation prescribed in filing the petition. Further no equity has been created and the delay, if any, has been explained in para­17 of the petition under oath. As regards suppression, the petitioner has contended that clearly in para­5 it is stated that the respondents are annexing only the 'General and Commercial Terms and Conditions of the Tender and, therefore, the petitioner has denied any suppression on its part.

15.3 The petitioner has further contended that the affidavit­in­reply filed by DGVCL is silent on the aspect of forfeiture/adjustment thereby admitting lapse.

15.4 Forfeiture of earnest money is permissible only after 'concluded contract' comes into force.

16. The petitioner has relied on the following decisions;

(a) Gorkha Security Services vs. Government (NCT of Delhi) and ors., Page 17 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT reported in (2014) 9 SCC 105. (Para 16, 17 and 20)

(b) Yogesh Mehta vs. Custodian Appointed under the Special Court and ors., reported in (2007) 2 SCC 624 (Para 30, 31 and 32)

(c) Oral judgment dated 25.2.2013 passed by this Court in Special Civil Application No.15037 of 2011 (Para 4 and 5)

17. As against that the respondents have relied on the following decisions ;

(a) S B P and Co., vs. Patel Engineering Ltd., 2005 (6) SCC 288 (para 45)

(b) Empire Jute Company Ltd., and Ors., vs. Jute Corporation of India Ltd., 2007 (14) SCC 680

(c) M/s. Deep Industries Ltd., vs. Oil and Natural Gas Corporation Ltd., & Anr., 2019 (17) SCALE page­85

(d) National Highways Authority of India vs. Ganga Enterprices and Anr., 2003 (7) SCC 410, para 6 and 9.

18. Some dates may be relevant for deciding the issues on hands are as under :­ 2017 ­ PGVCL floated tender.

29.5.2017 PGVCL requested the petitioner to Page 18 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT confirm within three days if they were willing to supply material at L1 price. 1.6.2017 The petitioner accepted the offer to match the L1 price.

On 14.6.2017 PGVCL issued a Letter of Acceptance to the petitioner. On 14.6.2017 the petitioner addressed a Letter to PGVCL indicating that they are disinterested to carry out the allotted work.

17.6.2017 ­ Communication by DGVCL to petitioner instructing the petitioner to complete the procedure in accordance with the LoA dated 14.6.2017.

10.11.2017 ­ Petitioner's communication to DGVCL requesting that the work order be issued to KEPL instead of the petitioner. 14.12.2017 ­ Communication by DGVCL to petitioner informing that the petitioner consented that the payment against supply and commission may be directly given to M/s.Kosol Energy Pvt. Ltd., by DGVCL. Such request could not be considered as there was no provision in the tender and the work was required to be carried out only as per the LoA terms and conditions and, therefore, the formalities of LoA were required to be completed within 03 days. The petitioner were told that otherwise Page 19 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT the respondent - DGVCL would be compelled to initiate stop deal procedure at the risk and cost of the petitioner as per DGVCL prevailing norms and the work will be allotted to other agency.

1.3.2018 the petitioner were called for personal hearing by DGVCL. The petitioner did not appear or avail the opportunity of personal hearing.

On 14.4.2018 impugned order.

19. Reliance placed on various decisions by the petitioner as well as respondents are dealt with as under ;

(a) In the case of Yogesh Mehta vs. Custodian Appointed under the Special Court and ors., reported in (2007) 2 SCC 624 which deals with forfeiture of bank guarantee, it is noticed that since the petitioner was aware that the contract was between the petitioner and DGVCL and also the bank guarantee was deposited with clear understanding that it would be ensued with either of the subsidiary companies.

(b) The petitioner has further relied on the decision in the case of Kamal Builder Page 20 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT vs. Sardar Sarovar Narmada Nigam Ltd., Through Managing Director & Ors. judgment dated 25.2.2013 passed by this Court in Special Civil Application No.15037 of 2011.

(c) The petitioner has relied on the decision in the case of Gorkha Security Services vs. Government (NCT of Delhi) and ors., reported in (2014) 9 SCC 105, wherein it is held that it was incumbent on part of the Department to state in show cause notice that it intended to impose a penalty of blacklist, so as to provide adequate and meaningful opportunity to show cause against the same.

20. The respondent has relied on the decision in the case of

(a) S B P and Co., vs. Patel Engineering Ltd., 2005 (6) SCC 288, paras 45 and 46. Since the contract is complete the Clause (12) of the tender condition can be invoked by both the parties.

(b) Empire Jute Company Ltd., and Ors., vs. Jute Corporation of India Ltd., 2007 (14) SCC 680, para 18 of the citation, and

(c) M/s. Deep Industries Ltd., vs. Oil Page 21 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT and Natural Gas Corporation Ltd., & Anr., 2019 (17) SCALE page­85, para­17 of the citation.

In the above decisions it is held that, Court should refrain from judicial scrutiny under Article 226 of the Constitution of India, more so because there is alternative remedy by way of arbitration available to the parties.

(d) National Highways Authority of India vs. Ganga Enterprices and Anr., 2003 (7) SCC 410, para 9 and 10.

21. The tender having been floated by respondent No.2 ­ PGVCL and in response to letter of acceptance from respondent No.2 ­ PGVCL, the petitioner was required to pay the security deposit within 15 days and execute a contract/agreement within 15 days.

22. On 17.06.2017, respondent No.1 had instructed the petitioner to complete the procedure in accordance with the letter of acceptance dated 14.06.2017 addressed to respondent No.2. Since the petitioner showed disinclination to complete the Page 22 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT procedure and carry out the allotted work, the notices were issued initiating stop deal procedure. The petitioner was called upon to appear in person on 01.03.2018. The petitioner did not appear on 14.04.2018 and on 17.04.2018, respondent No.1 passed the order putting the petitioner in stop deal list for a period of three years with immediate effect from the date of hearing and issuing circular to forfeit the EMD of tender.

23. In the present case the petitioner has not only accepted the condition to offer at the price of L1 but also signed the Letter of Acceptance and offered for conversion of EMD to security of deposit/performing guarantee which leads to a concluded contract in relation to a Government tender. It is not open for the petitioner to contend that the contract is not concluded. The conduct of the parties establishes the fact that there exists a contract.

24. There is no agreement with the petitioner which enables respondent No.1 to recover from retention money of the petitioner lying with the PGVCL which is towards Page 23 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT another contract.

25. The question which arises is that whether notice issued by respondent No.1 putting the petitioner in stop work zone and forfeiting the deposit is justified or not.

26. It is not possible to accept the contention of the respondent that forfeiture of deposit from the PGVCL in respect of other contract is justified. The action to forfeit the deposit of the petitioner on the basis of the contract with other legal entity is not an action recognized by law. In such circumstances the only option available to this Court is to declare the action of forfeiture of deposit as bad in law and it is ordered accordingly.

27. Apart from the facts narrated above, the impugned order was passed on 17.04.2018 and the petitioner initiated the ) proceedings in March 2020, however that should not come in the way of the petitioner since in absence of any such condition between the petitioner and respondent No.1, the action of forfeiture Page 24 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT of the deposit is wholly unjustified. The parties have not resorted to arbitration even though there was a clause in the agreement and arbitration clause undoubtedly would have given him a relief. Both the sides having not invoked such clause, it would not be justified to reject the petition on the said ground.

28. In the present case the petitioner has not only accepted the condition to offer at the price of L1 but also signed the Letter of Acceptance and offered for conversion of EMD to security of deposit/performing guarantee which leads to a concluded contract in relation to a Government tender. It is not open for the petitioner to contend that the contract is not concluded.

29. The nuances and the technicality of a tender process are well­known wherein right vests in successful bidder not only on final execution of the contract but the liability on the bidder to fulfill the obligation commence with the participation itself. Such failure to adhere to the obligation at any stage makes the petitioner disentitled to any relief. The Page 25 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT conduct of the parties is vital for interfering in the aspect of conclusion of a contract, especially when we are dealing with a tender process the same is to be read in consonance with a tender process only. In the present case, it is clear from the conduct of the parties and the terms and conditions of the tender that the tender and the Letter of Acceptance completes the rights and obligation of the parties in question.

30. The signing of agreement as sought to be canvassed by the petitioner does not change the fate of the proceedings in view of the fact that there were no negotiation left to be made after signing of the agreement once the Letter of Acceptance was signed and accepted by both the parties.

31. We are aware about the limitation while dealing with the tender matter under writ jurisdiction. Ultimately, the interference by writ Court in a contract matter is governed by the principles enshrined under the Constitution and not otherwise which includes the principles of arbitrariness and interest of justice only.

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32. The scope of judicial review is limited and the legal position for the same is very clear. We are hence examining the issue with respect to the above principles only.

33. On examining the contentions raised by the petitioner following facts emerged.

(a) Notice came to be issued calling upon the petitioner for clarification in not adherence to the terms and conditions of the tender.

(b) The petitioner choose to remain absent.

(c) The decision is challenged after a period of about two years.

(d) The petitioner has failed to show any material to administer arbitrariness on the part of the respondent.

(e) The action of putting the petitioner in 'Stop Work Zone' is as per the terms of the tender document which has been duly signed and accepted by the petitioner.

(f) The decision of putting the petitioner in 'Stop Work Zone' has remained in force for two years already.

34. It is trite to note that the decision of authority is based on the terms of tender wherein it has been kept open for the Page 27 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT authority to debar the petitioner for the period of two years or more. It is discretion of the Managing Director if there is lapse in adherence to the condition of the tender. Admittedly the petitioner has failed to continue with the work after signing the Letter of Acceptance which clearly violates the terms of tender and hence the impugned order passed by the authority cannot be faulted with. One more aspect which is required to be observed is that the petitioner has chosen not to remain present when they were called for personal hearing and the impugned order was passed subsequently. During the course of hearing also, the petitioner has failed to point out any illegality or arbitrariness in the decision making process. It is a settled law that writ jurisdiction can be exercised against the decision making process if any arbitrariness is pointed out and the same is provided. In the present case no such attempt has been made by the petitioner to show that the decision making process is arbitrary and hence writ jurisdiction cannot be an exercise in such set of facts.

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35. Even considering the judgments cited by both the sides on facts the picture emerges is that while putting the petitioner in stop work zone as per the terms of the tender documents, the respondent authority has adhered to proper procedure and such decision is neither arbitrary or malafide.

36. Hence the question that requires to be answered in the facts of the case is as under.

36.1 The question as to the legality of the order putting the petitioner in stop work cannot be faulted with as the petitioner has failed to demonstrate any illegality in the decision making process of the respondent. Hence the decision dated 17.04.2018 qua putting the petitioner in no work zone for 3 years is not interfered with. Even considering the delay in challenging the order dated 17.4.2018 would disentitle the petitioner to any discretionary relief as well.

36.2 As far as forfeiture of deposit lying with the respondent no.2 by the respondent No.l is clearly an action unrecognized by law. Such Page 29 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022 C/SCA/5395/2020 CAV JUDGMENT action on the part of the respondent authority is without any authority. The terms do not envisage that a security deposit lying with the respondent No.2 in connection with the same another contract can be forfeited by the respondent No.1. Hence such decision is illegal and without authority is quashed and set aside. It would however be open for the respondent authority to take appropriate steps in accordance with law. The petition is partly allowed. However, there shall be no order as to costs.

(R.M.CHHAYA, J) (VAIBHAVI D. NANAVATI,J) K.K. SAIYED Page 30 of 30 Downloaded on : Thu Jan 13 09:20:17 IST 2022