Delhi District Court
M/S Suvidha Engineers India Pvt Ltd vs M/S Engineers India Ltd on 10 January, 2023
IN THE COURT OF SH. GAURAV RAO, ADJ-03 / NEW
DELHI DISTRICT, PATIALA HOUSE COURTS, NEW
DELHI.
CS No. 450/16
CNR No. DLND01-005175-2017
M/s Suvidha Engineers India Pvt Ltd
Having its office at -
C-37, Sector 57,
Noida, U.P.
........Plaintiff
Vs.
M/s Engineers India Ltd.
Having its Registered Office at,
Engineers India Bhawan,
1, Bhikaji Cama Place,
New Delhi - 110066
..........Defendant
Date of institution : 22.05.2014
Date on which reserved for judgment : 09.01.2023
Date of decision : 10.01.2023
Decision : Suit decreed
JUDGMENT
1. The present suit for recovery of Rs. 36,10,000/- (Rupees Thirty Six Lakhs Ten Thousand only) along with interest has been filed by the plaintiff against the defendant.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 1/55 Plaint/Plaintiff's version
2. It is the case of the plaintiff that it is a company engaged in the business of heating, ventilation & air-conditioning and the present suit has been filed by Mr. R.K. Singh, General Manager, Sales who is duly authorized by the resolution, dated 01.03.2014, passed by the Board of Directors to sign, verify & institute the present suit on its behalf.
2.1 It is its case that the defendant company floated tender for construction of its new office at Sector 16, Gurgaon, Haryana and the plaintiff applied for the said tender, vide its letter dated 25.07.2011.
2.2 It is its case that as per the terms and conditions of the tender, it was to be engaged for the electrical work, heating, ventilation & air-conditioning and fire fighting works and further, as per the terms and condition of the tender document, it could have associates in allied fields as well, such as Electrical and Fire Fighting.
2.3 It is further its case that the entire work for air- conditioning, electrical & fire fighting was to be completed within a period of 12 months and it was required to furnish bank guarantee of Rs. 36,10,000/- (Rupees Thirty Six Lacs Ten Thousand only) as a earnest money and the last date & time of submission of the tender was 15.07.2011.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 2/55 2.4 It is further its case that it gave a bank guarantee for Rs. 36,10,000/- towards the earnest money of the tender amount and it had also submitted other required documents along with the letters as required by the defendant. It is its case that as per the tender requirement, it gave certificate of requisite experience for Fire Fighting of its associates i.e. M/s SSA Projects Pvt Ltd issued by Godavari Shilpkala Ltd., consultant of Claridges Hotel, Surajkund, Faridabad, Haryana to the effect that M/s SSA Projects Pvt. Ltd. had executed the Fire Fighting works, meeting the qualifying criteria.
2.5 It is further its case that it received information that the defendant had not accepted its tender application on some frivolous grounds and on further enquiry, it transpired that its application was not considered by the defendant on receipt of some baseless information through some source that the certificate for the Fire Fighting associate was not genuine. It is its case that the moment it came to know about this fact, it contacted the defendant and learnt that probably the certificate of its associate, submitted by it, is not genuine as it was told to the defendant by some person from the office of Godavari Shilpkala Ltd.
2.6 It is further its case that it immediately contacted the office of Godavari Shilpkala Ltd and got a letter from the office of Godavari Shilpkala Ltd, to defendant, to the effect that M/s CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 3/55 SSA Projects Pvt Ltd had indeed done many works of Fire Fighting with Claridges Hotel, Faridabad.
2.7 It is further its case that it tried to persuade the defendant that its associates M/s SSA Project Pvt Ltd had the requisite experience, as was also certified by M/s Godavari Shilpkala Ltd. in very clear terms in mail dated 22.09.2011 as well in the other documents written to defendant.
2.8 It is its case that defendant, despite receiving clear information and letter from M/s Godavari Shilpkala Ltd that M/s SSA Project Pvt. Ltd. had executed fire fighting projects of the stipulated financial limit did not consider the tender submitted by it. It is its case that it further came to know that the defendant has written to its bank for encashing the bank guarantee given by it.
2.9 It is further its case that it came to know through its banker i.e. Canara Bank that the defendant has given instruction to encash the Bank Guarantee of Rs. 36,10,000/- submitted by it along with tender application merely on the ground that the certificate given by it is not correct.
2.10 It is its case that it had taken all the letters from M/s Godavari Shilpkala Ltd that it, through its associates, is executing many work of fire fighting and it got its confirmation by the mail dated 22.09.2011 written by Mr. Akhilesh Srivastava. It is its case CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 4/55 that the defendant proceeded to encash its bank guarantee inspite of clearance given by Mr. Akhilesh Srivastava.
2.11 It is further its case that the moment this fact came to its knowledge, that the defendant is going to encash its bank guarantee, it filed a suit for permanent injunction against the defendant which was registered as CS (OS) No. 64/2012 titled as "M/s Suvidha Engineers India Pvt. Ltd. Vs. M/s Engineers India Ltd." and on 09.01.2012, the Hon'ble High Court of Delhi was pleased to direct the defendant to maintain status quo in respect of the bank guarantee.
2.12 It is further its case that it immediately served the said orders upon the defendant on 12.01.2012 but the defendant had encashed the bank guarantee after the service of the status quo order and since the defendant had encashed the bank guarantee and too the money from the bank, it was left with no other option but to file an application u/O 6 Rule 17 CPC for the amendment of the plaint from a suit for permanent injunction to a suit for recovery. It is its case that the said amendment application came for hearing on 19.03.2014 and the Hon'ble High Court was of the view that instead of amendment of the plaint, the plaintiff should file suit for recovery and vide its order dated 19.03.2014 gave permission to it to withdraw the amendment application and to file a fresh suit for recovery against the defendant.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 5/55 2.13 It is further its case that the defendant had acted illegally & arbitrarily and encashed the bank guarantee submitted by it and the defendant did not give any notice to it asking about the authenticity of the false information allegedly received by it about the certificate produced by it, before encashing the bank guarantee. It is its case that no show cause notice or any explanation was called by the defendant from it, and if any such information was required the same would have been furnished immediately. It is its case that it on its own provided full details but the same were, arbitrarily and illegally, not considered by the defendant in the proper perspective.
2.14 It is further its case that the action of the defendant is against all principles of natural justice, particularly since M/s Godavari Shilpkala Ltd. had given a very clear reference towards the capability of the plaintiff's associate, M/s SSA Project Pvt. Ltd. and confirmed that the initial certificate was issued by them, and as such the same is genuine. It is its case that accordingly, this ought to have been accepted by the defendant and its tender, under the circumstances, ought not to have been summarily rejected on an erroneous premise.
2.15 It is further its case that the plaintiff has suffered a loss of Rs. 36,10,000/-(Rupees Thirty Six Lakh Ten Thousand only) on account of illegal encashment of bank guarantee by the defendant. Hence, the present suit.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 6/55 Written Statement
3. It was pleaded that the defendant is a Government of India undertaking and it invited Bids from independent bidders vide Invitation to Bid for electrical, heating ventilation air conditioning works and firefighting works to be carried out at its office complex at Sector-16, Gurgaon, Haryana. It is its case that the Bids were required to be filed complete in all respects, including the submission of the EMD/Bid Security in the form of a non-revocable Bank Guarantee for Rs. 36,10,000/-. It is its case that one of the conditions in the Tender Documents required the bidder to have experience in such similar contract and submission of a performance certificate to this effect was one of the 'mandatory criteria' for evaluation or consideration of the Bid.
3.1 It is its case that the plaintiff submitted its Bid along with its EMD (Bid Security) in the form of a Bank Guarantee being BG No. 112030001 dated 22.07.2011 drawn on Canara Bank, New Delhi for a sum of Rs. 36,10,000/-, unconditionally accepting all terms and conditions contained in the Bid Documents. It is its case that apart from providing various terms and conditions for evaluation of bids and awarding of the contract under the said Tender, Clause 36 of the Instructions to Bidder stipulated certain conditions in which the Earnest Money Deposit (EMD) of a Bidder could be forfeited by it in case the bidder was found having provided false or forged information/documents required for evaluation of its Bid, such tendering of false or CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 7/55 forged information or document would entitle it to forfeit the Earnest Money Deposit (EMD) of the Bidder.
3.2 It is its case that while evaluating the Bids with respect to experience criteria as prescribed under the Tender Conditions, it found discrepancies in a completion certificate submitted by the plaintiff in respect of some work done by its sub-contractor, M/s SSA Projects Pvt. Ltd. for one, M/s Godavari Shilpkala Ltd. against some Work Order dated 08.01.2007. It is its case that by submitting the said completion certificate of Godavari Shilpkala Ltd, the plaintiff had claimed in its Bid of possessing the required experience fulfilling the qualification criteria under the Tender Conditions.
3.3 It is its case that it requested confirmation/authentication from M/s Godavari Shilpkala Ltd. vide letter dated 16.08.2011 in respect of the completion certificate submitted as past track record for firefighting works and thereafter a reminder dated 23.08.2011 and in response, the Projects Manager of the said company, Mr. Akhilesh Srivastava, vide his email dated 22.09.2011 categorically stated that though the work in question had been done by M/s SSA Projects Pvt. Ltd (plaintiff's sub-contractor), but he also confirmed that the completion certificate submitted by the plaintiff was not the one issued by him. It is its case that subsequently, vide his another letter dated NIL, Mr. Akhilesh Srivastava further clarified that the said certificate, which was submitted by the plaintiff and CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 8/55 contained Mr. Akhilesh Srivastava's signatures at the foot, was not issued by him, but was actually issued by his assistant while he was not in his office. It is its case that the said facts were further confirmed by Godavari Shilpkala Ltd. in a meeting held on 10.10.2011 in the presence of its representatives and of the plaintiff and thus, it was indisputably established that the plaintiff had deliberately filed forged and fabricated completion certificate along with its Bid for obvious malafide reasons.
3.4 It is its case that upon discovery of the said fraud, it during verification and discussion with the plaintiff sought explanation with respect to the submission of the said forged completion certificate and the plaintiff failed to provide any plausible explanation for having submitted the said forged certificate.
3.5 It is its case that it would be relevant to note that the plaintiff vide its email dated 29.09.2011 forwarded another completion certificate for qualification of its Bid purportedly issued in favour of SSA Projects Pvt Ltd by the same Godavari Shilpkala Ltd., which actually amounted to putting a stamp on the illegal act committed by the plaintiff while submitting its Bid. It is its case that notwithstanding the above, it was discovered that the said original completion certificate dated 26.09.2011 was also not capable of establishing the required experience of the plaintiff in terms of the Bid Conditions at all and thus, it was apparent that the plaintiff had consciously forged the certificate of Godavari CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 9/55 Shilpkala Ltd. in order to qualify in the evaluation process fraudulently. It is its case that the plaintiff tried to substitute the forged completion certificate with the new one thus thereby confirming the act of forgery committed by it.
3.6 It is its case that the plaintiff had consciously & deliberately submitted forged & fabricated qualification certificate along with its Bid with a view to gain undue advantage in the Tender evaluation process and it was revealed to the defendant, at the time of bid evaluation, that the completion certificate dated NIL submitted by the plaintiff along with its Bid, which had been allegedly issued by one M/s Godavari Shilpkala Ltd. in favour of the plaintiff's sub-contractor, M/s SSA Projects Pvt. Ltd., was a forged and fabricated document as it did not contain the signatures of the person who was stated to have issued the said certificate, which fact was disclosed by Mr. Akhilesh Srivastava of M/s Godavari Shilpkala Ltd., in his response to the defendant's specific query. It is its case that it was thus revealed that in order to qualify in the Bid evaluation process, the plaintiff had deliberately played a fraud by submitting the said forged and fabricated completion certificate purportedly issued in favour of its sub-contractor, and secure the contract through illegal means.
3.7 It is its case that it is clearly established from the above facts that the plaintiff had submitted forged and fabricated certificates along with their bid with malafide interest, and therefore, their EMD (Bid Security) was liable to be forfeited in CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 10/55 terms of Clause 36.1 of the Instructions to Bidders, the same being an accepted term of the Bid Conditions. It is its case that the contract did not require it to serve any show cause notice upon the plaintiff before acting in terms of Clause 36.1 of the Instructions to Bidders.
3.8 It is its case that after taking all factors into account it decided to forfeit the EMD (Bid Security) of the plaintiff in terms of clause 36 of the Instruction to Bidders by invoking the Bank Guarantee in question and accordingly, it issued a letter dated 04.01.2012 to Canara Bank, New Delhi invoking the said Bank Guarantee and the bank honored the invocation and transmitted the amount of Rs. 36,10,000/- as per the said bank guarantee to it. It is its case that it had rightfully invoked and encashed the bank guarantee in terms of the Tender Conditions.
Replication
4. In its replication, the plaintiff denied the averments of the written statement while simultaneously reiterating and reaffirming the contents of the plaint.
Admission/denial
5. Admission/denial of documents were conducted vide proceedings dated 05.12.2016.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 11/55 Issues
6. On the basis of pleadings of the parties, following issues were framed, by the Ld. Predecessor of this court, vide proceedings dated 05.12.2016:-
1. Whether defendant was within its right to encash the bank guarantee of Rs. 36.10 lacs on account of submission of forged and fabricated document by the plaintiff? OPD.
2. Whether plaintiff is entitled to recovery of Rs. 36,10,000/-
along with 18% interest w.e.f. 04.01.2012? OPP.
3. Relief.
Plaintiff's evidence
7. To prove its case, plaintiff examined PW1 Sh. R.K. Singh, General Manager (Sales) and tendered his evidence by way of affidavit Ex. PW1/A and relied upon the following documents:-
A. Resolution passed by the Board of Directors of the plaintiff dated 01.03.2014 as Ex. PW1/1.
B. Copy of BID document (Tender) i.e. document No. 7710/T-520/11-12/PKK/20 as Ex. PW1/2.
C. Copy of letter dated 25.07.2011 as Ex. PW1/3. D. Copy of certificate dated 25.07.2011 furnished by the plaintiff company as Ex. PW1/4.
E. Copy of letter dated 10.01.2012 as Ex. PW1/5. F. Copy of email dated 22.09.2011 as Ex. PW1/6.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 12/55 G. Copy of email dated 21.09.2011 as Ex. PW1/7. H. Copy of letter dated 12.01.2012 written by the plaintiff company to the defendant as Ex. PW1/8.
I. Copy of the letter dated 04.01.2012 written by the defendant to the Manager, Canara Bank as Ex. PW1/9. J. Copy of letter dated 05.01.2012 as Ex. PW1/10. K. Copy of order dated 09.01.2013 passed by Hon'ble High Court of Delhi as Ex.PW1/11.
L. Copy of the order dated 19.03.2014 passed by Hon'ble High Court in I.A. No. 4788/2013 in CS (OS) No. 64/2012 as Ex. PW1/12.
M. Certificate u/s 65B of Indian Evidence Act as Ex. PW1/13.
7.1 Plaintiff also examined Sh. Akhilesh Sriwastav as PW2 and he after seeking document at page 47 deposed that it is a completion certificate issued from his office under his instructions in Godavari Shilp Kala Limited and this certificate has been issued certifying that M/s SSA Project Pvt. Ltd ha done fire fitting work for the project of Gadavari Shilpkala Ltd at Hotel Claridges, Surajkund Faridabad which completed successfully an satisfactory and the details of work are mentioned there and the certificate is Ex. P8. He further deposed that he has perused the document filed by the defendant at page 19 an he deposed that said document and document at page 47 are same. He deposed that the work order number in Ex. P-8 and the defendant document at page 19 are different. He deposed that document at page 19 of defendant document is Ex. P-9 and Ex. P8 and Ex. P9 CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 13/55 both are not signed by him however the same had been issued by his office under his instruction and knowledge. He deposed that he has asked his assistant to issue the certificate as he was on leave on that day and the party was requiring separate certificate in respect of fire fighting work. He deposed that he had asked to issue the certificate on behalf of the company. He deposed that he had instructed his assistant in this regard and asked him to issue the certificate on his behalf. He deposed that the company had the knowledge regarding issuance of certificate and both Ex. P8 and Ex. P9 have been issued correctly and represent the true facts. He deposed that he has seen document at page 21 so filed by the defendant and he deposed that same has been issued by him. He identified his signatures at point A on page 21 and the document is marked Ex. P-10. He deposed that the said document had been issued on the asking of Mr. Sanjay Jain of EIL on phone. He deposed that he was asked to certify that Ex. P8 and Ex. P9 had been issued by him and he accordingly certified the same by way of Ex. P10.
7.2 Plaintiff also examined Dr. Pankaj Mishra as PW-3 who deposed that she has seen letter at page 37 of plaintiff document Ex. PW-1/5. He deposed that the same has been issued by him on behalf of Godavari Shilpkala Ltd. in the capacity of Senior Vice President (Projects) and bears his signatures at point A. He deposed that M/s SSA Project have carried out the work of fire fighting as well as plumbing for Godavari Shilpkala Ltd. at Hotel Claridges Surajkund Faridabad from January, 2007 to CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 14/55 October 2010 and the performance was to their satisfaction. He deposed that it is to his knowledge that a Godavari Shilpkala Ltd.
had issued certificate with respect to fire fighting work only to M/s SSA Projects Pvt. Ltd. He deposed that he can identify such certified issue on behalf of Godavari Shilpkala Ltd. as on the letter head of Godavari Shilpkala Ltd. certificates are issued under his instructions. He deposed that he has seen Ex. P-8 & P-9 and deposed that the same had been actually issued on behalf of Godavari Shilpkala Ltd. He deposed that Ex. P-7 had also been actually issued on behalf of Godavari Shilpkala Ltd. He deposed that it is to his knowledge that EIL had asked for clarification in respect of Ex. P-8 & Ex. P-9. He deposed that Ex. P-7 had been issued by Godavari Shilpkala Ltd. He deposed that such letters are issued by the project manager. He deposed that Mr. Akhilesh Srivastava was the project manager for the particular work mentioned Ex. P-7. He deposed that he does not remember in what context Ex. P-7 was issued. He deposed that he does not know whether EIL had asked for clarification as such nature of work was looked after by his juniors. He deposed that whatever his juniors have done they have done so under his instructions.
Defendant's evidence
8. Defendant examined Sh. Sanjay Jain as DW1 and he tendered his evidence by way of affidavit Ex. DW1/A and relied upon following documents:-
a. Work order dated 08.01.2007 as Ex. D-1.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 15/55 b. Two undated completion certificates in respect of two alleged work orders bearing no. SSA/GSL- CLARIDGES/ F-FIGHTING/RK/2007/090 dated 08.01.2007 and F/FIGHTING(TOWER)/GSL- CLARIDGES/AKV/2008 dated 09.07.2008 as Ex. D-5 and D-6.
c. Copy of defendant's said letter dated 16.08.2011 as Ex.
D2.
d. Copy of said email dated 22.09.2011 as Ex. D-3.
e. The said two emails as Ex. D-4. f. Undated letter as Ex. D-7. g. The email dated 29.09.2011 along with the completion
certificate dated 26.09.2011 as Ex. D-8 and D-9. h. Vide letter dated 12.01.2012 and another certificate dated 10.01.2012 issued by M/s Godavari Shilpkala Ltd. as Ex. P-11 (colly).
Findings
9. I have heard the Ld. counsels for the parties, given due consideration to the rival contentions raised at bar and have carefully gone through the record. I have also gone through the written submissions filed by the parties and the case laws relied by the plaintiff i.e. Md. Ibrahim and ors Vs. State of Bihar and anr MANU/SC/1604/2009, Shiela Sebastian Vs. R. Jawaharaj and anr 2018 AIR (SC) 2434, A.S. Krishan and anr Vs. State of Kerala MANU/SC/0233/2004, Kailash Nath Associates Vs. Delhi Development Authority MANU/SC/0019/2015 and that by CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 16/55 defendant i.e. National Highways Authority of India Vs. Ganga Enterprises and Anr (2003) 7 SCC 410, National thermal Power Corporation Ltd. Vs. Ashok Kumar Singh and ors MANU/SC/01443/2015 and State of Haryana and ors Vs. Malik Traders MANU/SC/0945/2011.
9.1 Both issues being interconnected are taken up together and my finding is as under:-
Issue no. 1. Whether defendant was within its right to encash the bank guarantee of Rs. 36.10 lacs on account of submission of forged and fabricated document by the plaintiff? OPD.
Issue no. 2. Whether plaintiff is entitled to recovery of Rs.
36,10,000/- along with 18% interest w.e.f. 04.01.2012? OPP.
9.2 Plaintiff has filed the present suit for recovery of Rs.
36,10,000/- which was the earnest money/bank guarantee furnished by the plaintiff along with its bid/tender application and which was invoked & encashed by the defendant.
9.3 The bid/tender document no. 7710/T-520/11- 12/PKK/20 is on record as Ex. PW1/2 (also Ex. P1). The scope of the work is defined in clause 2 of the bid document. The same is reproduced hereunder:-
"BRIEF SCOPE OF WORK CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 17/55 Brief scope of work includes Electrical, HVAC & Fire Fighting Works for construction of EIL's New Office Complex at Sector 16, Gurgaon, Haryana broadly consisting of:
a)11 KV sub-stn. MV Panels, Distribution panels, rising mains
b)415 Volts DG sets, cabling, earthing etc
c)Central Air-conditioning plant with centrifugal chillers, pumps, colling tower, AHU's piping, ducting, insulation, ventilation system etc.
d)Fire pumps, piping, sprinkler system, hydrant system, extinguishers etc"
9.4 Deposit of earnest money, along with bid application, to the tune of Rs. 36,10,000/- is provided in clause 4 (iii) of the bid document. Same is reproduced hereunder:-
"iii) Earnest Money Deposit (EMD) : Rs. 36,10,000/- (Rupees Thirty Six Lakh Ten Thousand only)."
9.5 Clause 6 provides for qualification criteria and clause 6.1 the experience criteria, same is reproduced hereunder:-
"QUALIFICATION CRITERIA Bidder shall fulfill the following qualification criteria:
6.1.1 IN CASE OF SINGLE BIDDER 6.1.1.1 The bidder on his own or as sub-contractor should have successfully completed following work during the last seven years ending last day of the month of May 2011:
a) HVAV work with chiller capacity 1000 TR in aggregate under one work order.
b) Substation or DG Set work of 3000 KVA capacity in aggregate under one work order.
c) Fire Fighting work of not less than Rs. 170 Lakhs under one work order.
d) In case, experience in fire fighting work above is not met of their own by the single bidder, they may engage a Sub-
contractor for the same, who of their own shall met the experience criteria of fire fighting work stated above. The proposed Fire Fighting contractor shall be identified by the bidder in the bidding stage which shall be subject to acceptance by EIL. Bidder shall furnish Memorandum of Understanding with the sub-contractor for executing the Fire Fighting Work. 6.1.2 IN CASE OF CONSORTIUM BID CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 18/55 6.1.2.1 Bids from Consortium comprising maximum two members (one Leader and one member) are also acceptable, provided the Leader meets at least any one of the criterion specified at para 6.1.1.1 (a) & (b) above. However, both the members shall jointly meet the criteria specified at para 6.1.1. above.
6.1.2.2. The division in scope of work between Consortium members shall commensurate with their past experience. The overall Project Management shall be performed by the Leader. The members of Consortium shall assume responsibility jointly and severally and shall submit Agreement/MOU along with the Bid clearly defining the scope and responsibility of each member along with nomination of the Leader. This Agreement/MOU must remain in force at least till the pendency of this Contract. 6.1.2.3 the Consortium Leader and the division of scope of work will be identified and set forth in the bid and will not be permitted to be changed thereafter.
6.1.2.4 The Leader of the Consortium shall be authorized to incur liabilities and receive instructions for and on behalf of the consortium."
9.6 Clause 13 of instructions to bidders provided that in case the bidder was a consortium, as is the present case, the members of the Consortium shall be jointly and severally liable. Clause 13.1 in this regard is reproduced hereunder:-
"13.1 Bids from Consortium are acceptable provided that they fulfill the qualifying requirements stated in the IFB. Members of the consortium shall assume responsibility jointly and severally. Consortium Agreement/MOU shall be submitted along with the bid, clearly defining the scope and responsibilities of each of the consortium members.
9.7 Clause 13.5 (iv) provided that the leader of the Consortium shall be exclusively responsible for the performance and all the liabilities of the consortium under the contract. Same is reproduced hereunder:-
"13.5 (iv) All members of the Consortium shall be liable jointly and severally for the execution of Contract in accordance with the Contract terms and a relevant statement to this effect shall be CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 19/55 included in the authorisation mentioned under ii) above as well as in the Form of Agreement (in case of successful bid). Notwithstanding statement by the member(s) of the consortium, the leader shall be exclusively responsible for the performance and all the liabilities of the consortium under the Contract."
9.8 Clause 36 of the bid document dealt with corrupt and fraudulent practices. Sub clause 1 of the same, though wrongly numbered as 32.1 and in fact should be 36.1, provided as under:-
"36.1 Bidder is required to furnish the complete and correct information/documents required for evaluation of their bids. If the information/documents forming basis of evaluation is found to be false/forged, the same shall be considered adequate ground for rejection of the bids and forfeiture of earnest money deposit."
9.9 In fact according to clause 36 the bank guarantee could be encashed if any such false information/document or forgery came to the knowledge/notice even after the award of the contract or the execution of the above. The relevant clauses are provided as under:-
"36.2 In case, the information/document furnished by the vendor/contractor forming basis of evaluation of his bid is found to be false/forged after the award of the contract, Owner shall have full right to terminate the contract and get the remaining job executed at the risk & cost of such vendor/contractor without any prejudice to other rights available to Owner under the contract such as forfeiture of CPBG/security deposit, withholding of payment etc. 36.3 In case, this issue of submission of false documents comes to the notice after execution of work, Owner shall have full right to forfeit any amount due to the vendor/contractor along with forfeiture of CPBG/security deposit furnished by the vendor/contractor.
36.4 Further, such bidder/vendor/contractor shall be put on blacklist/holiday list of EIL debarring them from future business with EIL."
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 20/55 9.10 The defendant invoked & encashed the bank guarantee by invoking clause 36 claiming that the information furnished by the plaintiff was false/forged which entitled it to forfeit the earnest money/bank guarantee. It is the defendant's case that two false/forged certificates were furnished by the plaintiff and thus it invoked clause 36 and forfeited the earnest money.
9.11 Plaintiff submitted its bid vide Ex. PW1/3 (also Ex. P2) dated 25.07.2011. Along with its application/bid plaintiff had also attached its own certificate attaching therewith the certificate of M/s SSA Project Pvt. Ltd. vide Ex. PW1/4 dated 25.07.2011. The certificate Ex. PW1/4 issued on the letter head of the plaintiff is reproduced hereunder:-
"EIL/RKS/11 25th July 2011 TO WHOMSOEVER IT MAY CONCERN It is certified that no member of the Consortium including sub-contractor formed for the execution of the project in terms of the tender document by EIL (Bidding Document No. 7710/T- 520/11-12/PKK/20), is under liquidation, court receivership or any other proceeding which could invite disbarment for the project.
To this effect, a vendor self certifications of the Lead Member, M/s. Suvidha Engineers India Pvt. Ltd, other Member, M/s Mas Project Engineers Pvt. Ltd. and the appointed Sub- contractor M/s Ssa Projects Pvt. Ltd on their respective letter heads are also attached in support of the certification given by the consortium."
9.12 One of the document was a completion certificate, dated NIL issued on the letter head of Godavari Shilpkala Ltd.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 21/55 certifying the work performed by M/s SSA Projects Pvt. Ltd. in respect of Fire Fighting. The said certificate i.e. Ex. D6 (also Ex. PW/DA and Ex. P8) (on page 20 of the plaintiff's documents and page 352 of the paper book), as was attached with Ex. PW1/4, is reproduced hereunder:-
"Completion Certificate This is to certify that M/s SSA Projects Pvt. Ltd has done the Fire Fighting work for our Project at Hotel Claridges (Tower), Surajkund, Faridabad. Project has been completed successfully and satisfactory. Work Order details are as under:-
Project : Fire Fighting Work
Work Order No. & Date : SSA/GSL-CLARIDGES/F-
FIGHTING/RK/2007/090 Date
- 08.01.2007
Contract Value : INR 24,578,000/-
Completiion date : 08.09.2007
Actual Date of completion : 09.04.2008
Executed Contract Value : INR 31,471,689/-
Akhilesh Srivastava
(Project Manager)"
9.13 This certificate was purportedly signed by Sh.
Akhilesh Srivastava (PW1), Project Manager, Godavari Shilpkala Ltd. Defendant called for verification of the said completion certificate vide its letter dated 16.08.2011 i.e. Ex.D2 written by Sh. Sanjay Jain (DW1) on behalf of the defendant. Same is reproduced hereunder:-
"Kind Attn: Akhilesh Srivastava (Project Manager) Sub: Completion Certificate of Fire Fighting work at Hotel Claridges & Claridges Tower, Surajkund, Faridabad. This is to inform you that M/s SSA Projects Pvt. Ltd. is bidding as a sub-contractor for Fire fighting works for EIL's new office complex at sector 16, Gurgaon, Haryana for which they have CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 22/55 submitted the completion certificate no. NIL dated NIL issued by you (copy enclosed).
You are requested to confirm/authenticate the same. The reply may be sent at Fax No: 0124-2391410 or Email: [email protected] latest by 20.08.2011."
9.14 This letter was replied by Sh. Akhilesh Srivastava vide email dated 22.09.2011 i.e. Ex. D3 (also Ex. PW1/6) sent to the above email id i.e. [email protected] at about 2.57 p.m. Same is reproduced hereunder:-
"Dear Mr. Jain With reference to your letter dated 16.08.11 regarding confirmation of work done by M/s SSA Projects Pvt. Ltd. I hereby confirm that he has done various work packages with us for our Hotel Project, The Claridges Surajkund Faridabad. The details are as:
Plumbing & Fire fighting work, Order no. Ssa/GSL- Claridges/plumbing/rk/2007/090, Order Value Rs. 12,88,55,618. Plumbing & Fire fighting work, Order No. Plumbing/Ssa/GSL- Claridges/Acs/2009/014, Order Value Rs. 19,008,611. Fire fighting work, Order No. Fire fighting (Tower)/Ssa/GSL- Claridges/akv/2008, Order Value Rs. 17,131,569. M/s SSA Projects has completed all the above work successfully and satisfactorily.
Further Your Letter dated 23.08.11 regarding confirmation of completion certificate issued by us in favour of M/s Suvidha Engineers Pvt. Ltd, I hereby confirm you that M/s Suvidha Engineers Pvt. Ltd. has not done any work with us. I am sorry to reply you so late Since I recd. your letter late as I am not sitting at surajkund right now. I am sitting at our corporate office at New Delhi."
9.15 Vide email of the even date i.e. 22.09.2011 while acknowledging mail Ex. D3, fresh verification was called by the defendant, through Sh. Rajeev Khandelwal, vide email sent at 03.23 p.m. i.e. Ex. D4. Same is reproduced hereunder:-
"Dear Mr. Akhilesh We acknowledge the receipt of your mail and would like you to confirm/authenticate the completion certificate issued for work order no. SSA/GSL/CLARIDGES/F-FIGHTING/RK/2007/090 for CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 23/55 a contract value of Rs. 245.78 Lakhs and completed cost of Rs. 244.71 Lakhs (copy enclosed).
You may kindly do the needful.
Thanks and regards Rajeev Khandelwal"
9.16 The above email was replied by Sh. Akhilesh Srivastava on the same day at about 04.16 p.m. who clarified that the certificate in question i.e. Ex. D6 was not issued by him. The said email which is also Ex. D4 is reproduced hereunder:-
"Dear Mr. Khandelwal The work details given in my last mail was done by M/s SSA Projects Pvt. Ltd. and I had issued the completion certificate for the same but the attached certificate is not the one which was issued by me.
Thanks & regards Akhilesh Srivastava"
9.17 There is another completion certificate available on record i.e. Ex. D5 (on page 19 of the plaintiff's documents and page 351 of the paper book). It appears that this certificate was also submitted by the plaintiff along with its bid application/document i.e. Ex. PW1/3. Completion certificate Ex. D5 is reproduced hereunder:-
"Completion Certificate This is to certify that M/s SSA Projects Pvt. Ltd has done the Fire Fighting work for our Project at Hotel Claridges (Tower), Surajkund, Faridabad. Project has been completed successfully and satisfactory. Work Order details are as under:-
Project :Fire Fighting Work
Work Order No. & Date :F/FIGHTING(TOWER)/GSL-
CLARIDGES/AKV/2008 Date -
09.07.2008
Contract Value :INR 17,131,569/-
Completion date :17.10.2008
Actual Date of completion :26.11.2008
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 24/55
Executed Contract Value :INR 18,956,535/-
Akhilesh Srivastava
(Project Manager)"
9.18 It has come up during the cross-examination of PW1,
particularly question no. 15, 22 and 23 that the said completion certificate was also furnished along with Ex. PW1/3. Furthermore according to PW1 plaintiff had furnished three certificates. At this stage, it will be relevant to highlight the cross examination of PW1 Sh. R.K. Singh. Same is reproduced hereunder:-
"Q.10 Is it correct that submission of experience certificate of the fire fighting vendor was the condition precedent, alongwith the bid?
Ans. Yes. It was so.
Q. 11 Whether the plaintiff submitted the requisite certificate of SSA project in this regard along with the bid? Ans. Yes Q.12 Whether such certificate had been placed on record? Ans. Yes Q.13 Can you point out from the record of the present case and which document reliance in this regard is being place? Ans. The document is at page No. 47 so filed along with plaint. Q. 14 Whether the document filed by the defendant at page 20 of its list of documents dated 28.07.2015, is the same document on which you are placing reliance in answer to question No. 13? Ans. Yes (the document is now marked and Ex. PW-1/DA). Q.15 Whether you also filed along with the bid, document at page No. 19 of its list of documents dated 28.07.2015? Ans. I have to check from the record of the plaintiff. Q.16 Whether EX PW1/DA was obtained by you from Godavari Shilp Kala Ltd. or was handed over to you by SSA projects Pvt. Ltd.?
Ans. It was handed over by SSA projects Pvt. Ltd. Q. 17 Whether the plaintiff tried to verified the authenticity of the same at its own in?
Ans. No. Q. 18 Whether the aforesaid letter was provided to you in an envelope?
Ans. A copy of the same was provided to us by SSA Project Pvt. Ltd.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 25/55 Q. 19 Can it be taken that you have not seen the original of EW Pw-1/DA?
Ans. Yes Q. 20 I draw your attention to para 5 of your affidavit Ex. PW- 1/A. In the same you have referred to an experience certificate of SSA project Pvt. Ltd. date 25.07.2011. Whether the plaintiff had filed such certificate on court record?
Ans The date 25.07.2011 is not the date of the certificate but the date of our bid.
Q. 21 Can it be taken that there is no experience certificate dated 25.07.2011 as mentioned in para 5 of your affidavit Ex. PW1/A?
Ans. Yes.
Q. 22 At the time of submitting of bid how many certificates relating to SSA Project Pvt. Ltd were submitted along with the bid?
Ans. Three Q. 23 I draw you attention to your answer to question No. 15 where you stated that you will check the record of the plaintiff to ascertain whether of the defendant's list of documents at page No. 19 dated 28.07.2015. Have you checked the record and what do you have to say?
Ans. I had checked the record and the said documents were also filed along with the bid.
Q. 24 Do you know the reason for rejection of the bid of the plaintiff by the defendant?
Ans. It was on account of submissions some certificates of SSA Project.
Q. 25 Which were the certificates of SSA Project that you are referring to you in answer to previous question? Ans. The certificates referred are at page 47 of the list of documents filed by the plaintiff along with the plaint. Q. 32 Can you describe the discrepancies pointed out by the defendant to the plaintiff in the certificates of SSA project filed by the plaintiff along with the tender?
Ans. We were told that the certificates were false. Q. 33 Whether the basis of terming the documents as false documents were brought to your knowledge by the defendant? Ans. No."
9.19 Hence even certificate Ex. D5 was not signed by Sh. Akhilesh Srivastava. There is no third certificate available on record or proved by the parties.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 26/55 9.20 One letter was written by Sh. Akhilesh Srivastava to the defendant, addressed to Sh. Sanjay Jain (DW1) and the same is on record as Ex. P7 (also Ex. D7). The letter is reproduced hereunder:-
"Kind Attn: Mr. Sanjay Jain Dear Sir, With reference to your letter dated 16.08.11 and telephonic conversation had with you on Dated 22.08.11 I here by confirm that M/s SSA Projects Pvt. Ltd. has done various work packages with us for our Hotel Project, The Claridges Surajkund Faridabad.
The details are as:
Plumbing & Fire fighting work, Order no. Ssa/GSL- Claridges/plumbing/rk/2007/090, Order Value Rs. 12,88,55,618. Plumbing & Fire fighting work, Order No. Plumbing/Ssa/GSL- Claridges/Acs/2009/014, Order Value Rs. 19,008,611. Fire fighting work, Order No. Fire fighting (Tower)/Ssa/GSL- Claridges/akv/2008, Order Value Rs. 99,31,569. M/s SSA Projects has completed all the above work successfully and satisfactorily.
Regarding completion certificate submitted by M/s SSA Projects, it was issued from my office in absence of me by my assistant. Though I had issued all the completion certificate for the above mentioned work but they needed completion certificate for Fire fighting part separately and at that time I was on leave So in absence of me my assistant has issued that certificate.
Akhilesh Srivastava 9.21 Vide the above letter Sh. Akhilesh Srivastava of Godavari Shilpkala Ltd. had clarified that as Fire fighting certificate was required separately and he was at that moment on leave, therefore in his absence his assistant had issued the certificate. Though there is no date on the letter and neither the plaintiff nor its witness or for that matter the defendant proved when the said letter was written to it but same was obviously CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 27/55 before the encashment of the bank guarantee. This letter provided the clarity as regards certificate Ex. D5 and Ex. D6 and removed the ambiguity, suspicion as was created vide Sh. Akhilesh Srivastava's email Ex. D4. Despite issuance of this letter by Sh.
Akhilesh Srivastava, the defendant went on to encash the bank guarantee. It did not even once bother to seek clarification from the plaintiff, though in my considered opinion no clarification was required once Sh. Akhilesh Srivastava wrote the above letter to the defendant. Defendant admittedly did not even once inform the plaintiff about the issues, discrepancies it found in the certificate provided along with Ex. PW1/3. Plaintiff should have been accorded an opportunity to clarify its stand, ambiguity appearing qua Ex. D5 and Ex. D6 before going on to encash the bank guarantee which was indeed a severe penalty upon the plaintiff. At this stage it will be worthwhile to point out the statement made by PW1 in his cross-examination, same is reproduced hereunder:-
"Q. 27 The attention of the witness is drawn to Ex. P-7 at page No. 4 of the plaintiff's list of documents dated 15.04.2015. Can you describe the document?
Ans. It is a clarification letter written by Mr. Akhilesh Srivastava in response to the query raised by Sh. Sanjay Jain of EIL Q. 28 When you receive this letter and if you are not received the same so then, how the said letter came into your possession? Ans. The letter was not directly received by the plaintiff. It was routed through SSA Projects. That is to say that the plaintiff received the same from SSA Projects.
Q. 29 Can you tell date, month and time of such receiving of Ex. P-7?
Ans. I have to check the same from the plaintiff's record. Q. 30 What action was taken if any by the plaintiff after receipt of Ex. P-7?
Ans. When we came to know that the Bank had received a letter regarding invocation of the Bank guarantee, we sent Ex. P-7 to the defendant requesting not to invoke the bank guarantee.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 28/55 Q. 34 I once again draw your attention to the document Ex. P-7. Did you take any steps to find out whether the statement that the certificates of SSA Projects filed by the plaintiff had not been issued by Mr. Akhilesh Srivastava as stated in this letter, was correct or not?
Ans. The letter is self explanatory in this regard and it is mentioned that the certificates were issued by his Assistant in his absence and as such there was no need for further verification. This communication was between the defendant and the Godavari Shilpkala.
Q.36 Is it correct to say that the certificates filed by you along with the bid, relating to SSA Projects were reflected to have been signed by Sh. Akhilesh Srivastava but infact they were not bearing the signatures of Akhilesh Srivastva? Ans. I can only say that Akhilesh Srivastava had already stated in the letter that his assistant had signed the certificates in his absence."
9.22 Sh. Akhilesh Srivastava was examined by the plaintiff as PW2 and his testimony makes it crystal clear that certificate Ex. PW/DA/Ex. P8/Ex.D6 and Ex. D5 were issued by his office. The relevant portion of his examination in chief is reproduced hereunder:-
"I have seen the document at page 47 and say that it is a completion certificate issued from my office under my instructions in Godavari Shilp Kala Limited. This certificate has been issued certifying that M/s SSA Project Pvt. Ltd has done fire fitting work for the project of Gadavari Shilpkala Ltd at Hotel Claridges, Surajkund Faridabad which completed successfully and satisfactory and the details of work are mentioned there. The certificate is Ex. P8."
9.23 Though he stated that Ex. P8 and P9 (though there appears to be typographical error and Ex. P9 is a letter written by Canara Bank and it appears that witness is referring to completion certificate Ex. D5, which is on page 19) are not signed by him but he again clarified but same were issued under his instructions and CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 29/55 knowledge. This is in conformity with his earlier communication with the defendant via mails/letters as have been discussed above. The relevant portion of his examination in chief is reproduced hereunder:-
"I have perused the document filed by the defendant at page 19 and I say that said document and document at page 47 are same. (In fact witness is referring to document at page no. 20 & 47 being the same and not 19 & 47, as was also clarified by the parties during the arguments) The work order number mentioned in the Ex. P-8 and the defendant document at page 19 are different. Document at page 19 of defendant document is Ex. P-
9. (as discussed above Ex. P9 is in fact Ex. D5 as was also clarified by the parties during the arguments) Ex. P8 and Ex. P9 both are not signed by me however the same had been issue by my office under my instruction and knowledge. I have asked my assistant to issue the certificate as I was on leave on that day and the party was requiring separate certificate in respect of fire fighting work. I have asked to issue the certificate on behalf of the company. I have instructed my assistant in this regard and asked him to issue the certificate on my behalf. Company had the knowledge regarding issuance of certificate. Both Ex. P8 and Ex. P9 have been issued correctly and represent the true facts. I have seen document at page 21 so filed by the defendant and I say that same has been issued by me. I identify my signature at point A on page 21. The document is marked Ex. P-
10. The said document had been issued on the asking of Mr. Sanjay Jain of EIL on phone. I was asked to certify that Ex. P8 and Ex. P9 had been issued by me and I accordingly certified the same by way of Ex. P10. (in fact the document is Ex. D7).
9.24 Hence according to PW2 both the certificates were issued by his office under his instruction and knowledge. In fact according to PW2 he had issued Ex. D7 certifying the issuance of certificates Ex. D5 & D6, (Ex. P8 & P9) and this letter according to him was on the asking of the defendant. The fact that Sh. Sanjay Jain (DW1) asked him to certify the said documents has not been disputed by the defendant. Once Akhilesh Srivastava CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 30/55 (PW2) had certified regarding the certificates, on the asking of the defendant, then there was no occasion for the defendant to go ahead with the encashment of the bank guarantee. Atleast plaintiff should have been put to notice before taking the extreme step.
Not doing so somewhere smells of foul play.
9.25 Coming back to the certificates in question, the only irregularity was that Sh. Ashutosh Dhiman issued the certificate after signing in the name of Sh. Akhilesh Srivastava. The relevant portion of the cross-examination of PW2 in this regard reads as under:-
"The name of the said assistant who had issued Ex. P-8 & P-9 was Mr. Ashutosh Dhiman. It is correct that Ex. P-8 & P-9 do not bear the signatures of Mr. Ashutosh Dhiman but it is he who had put the signatures in my name. I have not authorized or given instruction to Mr. Ashutosh Dhiman to sign in my name. Q. Can you tell the basis of your statement that the company had the knowledge of issuance of Ex. P-8 & P-9? Ans. My basis are saying so is that I was working under Vice President Project who has the knowledge.
Q. Whether the company had the knowledge that Mr. Ashutosh Dhiman had issued certificate in your name and putting your signature?
Ans. Yes.
9.26 This was atmost an irregularity and there was no malafide or ill intention either on the part of M/s Godavari Shilpkala Ltd or the plaintiff. It did not amount to fraud or forgery nor there was any intention to deceive.
9.27 Plaintiff also examined Dr. Pankaj Sharma, the Vice President of Godavari Shilpkala Ltd. as PW3 and he also went on to state that the certificates as above were issued by his office.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 31/55 The relevant portion of examination in chief of PW3 in this regard reads as under:-
"I have seen letter at page 37 of plaintiff document Ex. PW-1/5. The same has been issued by me on behalf of Godavari Shilpkala Ltd. in the capacity of Senior Vice President (Projects) and bears my signatures at point A. M/s SSA Project have carried out the work of fire fighting as well as plumbing for Godavari Shilpkala Ltd. at Hotel Claridges Surajkund Faridabad from January, 2007 to October 2010 and the performance was to our satisfaction. It is to my knowledge that a Godavari Shilpkala Ltd. had issued certificate with respect to fire fighting work only to M/s SSA Projects Pvt. Ltd. I can identify such certified issue on behalf of Godavari Shilpkala Ltd. as on the letter head of Godavari Shilpkala Ltd. certificates are issued under my instructions. I have seen Ex. P-8 & P-9 and say that the same had been actually issued on behalf of Godavari Shilpkala Ltd. Ex. P-7 had also been actually issued on behalf of Godavari Shilpkala Ltd. It is to my knowledge that EIL had asked for clarification in respect of Ex. P-8 & Ex. P-9. Ex. P-7 had been issued by Godavari Shilpkala Ltd. Such letters are issued by the project manager. Mr. Akhilesh Srivastava was the project manager for the particular work mentioned Ex. P-7. I do not remember in what context Ex. P-7 was issued. I do not know whether EIL had asked for clarification as such nature of work was looked after by my juniors. I further say that whatever my juniors have done they have done so under my instructions"
9.28 The relevant portion of his cross-examination is reproduced hereunder:-
"I cannot say to on which dates Ex. P-8 & P-9 were issued, I do not remember the dates. Ex. P-8 & P-9 were issued under my instructions.
Q. Can you tell to whom instructions were given by you? Ans. Normally the instructions are given to the concerned project manager which in the present case was Mr. Akhilesh Srivastav.
Q. Whether Mr. Akhilesh Sriwastav was in office or not on the date when you issued instructions to him? Ans. I do not remember.
Q. Can you remember the nature of the instructions given by you.
Ans, I had given instructions to issue the completion certificate as per asking of the contractor."
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 32/55 9.29 The fact remains that Akhilesh Srivastava was not present in the office when certificates Ex. D5 and D6 were issued but the certificates were indeed issued as per his instructions and their issuance was in his due knowledge. As the certificates were urgently required by the plaintiff and Sh. Akhilesh Srivastava was not present in the office, M/s Godavari Shilpkala Ltd.'s employee Sh. Ashutosh Dhiman in his wisdom, issued the certificates while purportedly signing as Akhilesh Srivastava. Except for this irregularity, mistake which does not appear to be even remotely malafide or intentional with any ulterior motive, there is no other issue with the certificates in question.
9.30 Though Ld. Counsel for the defendant argued that the amount of the contract value and the executed contract value is different in Ex. D5 and Ex. D6 which itself creates doubts upon the genuineness of these certificates, however, I find no merits in his arguments. It is to be seen that both the completion certificates are in respect of different work orders. Ex. D6 is in respect of work order dated 08.01.2007 whereas Ex. D5 is in respect of work order dated 09.01.2007. The work was different, the completion date was different and the contract value was difference, hence the difference.
9.31 Defendant examined Sh. Sanjay Jain, who had been corresponding with Sh. Akhilesh Srivastava, M/s Godavari Shilpkala Ltd. on its behalf as DW1. DW1 admitted that Sh.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 33/55 Akhilesh Srivasvata (PW2) had written to the defendant certifying that the certificates in question were issued by the office of M/s Godavari Shilpkala Ltd. The relevant portion of cross examination of DW1 Sh. Sanjay Jain is reproduced hereunder :
"It is correct that the plaintiff along with the bid submitted a fire fighting and plumbing certificate issued by M/s. Godavari Shilpkala Limited. It is incorrect to suggest that an email was written by me to M/s. Godavari Shilpkala Limited. Rather a letter dated 16.08.2011 to M/s. M/s. Godavari Shilpkala Limited was asked to confirm / authenticate the issuance of the aforesaid certificate.
Q1. Is it correct that when the letter dated 16.08.2011 was received by M/s. Godavari Shilpkala Limited then the office of M/s. Godavari Shilpkala Limited has confirmed that M/s SSA Projects Pvt. Ltd. has executed three contracts of plumbing and fire fighting of M/s. Godavari Shilpkala Limited? Ans. Yes. Vol. Vide mail dated 22.09.2011 it was further confirmed by M/s. Godavari Shilpkala Limited that the completion certificate for the value of Rs.314 lakhs (approximately) has not been issued by him (that is the person who sent the mail i.e. Akhlish Srivastava) to SSA Project. Q2. It is put to you that you have falsely deposed that vide email stated by you, issued by M/s. Godavari Shilpkala Limited mentioned the fact that the work for the value of Rs.314 Lakhs has been not issued by them? What do you have to say? Ans. The witness submits that he first wants to refer to the document for the exact figure. (Witness is permitted to see the email dated 22.09.2011).
No. I have not at all stated so as is being put to me. (Witness has answered the question after the question was explained to him at least three or four times).
Q3. Is it correct that as per the tender documents the requirement that the person who is making the bid should have work experience in fire fighting and plumbing? Ans. The requirement was for experience in fire fighting work only.
Q4. Is it correct that the plaintiff submitted certificates having executed work for fire fighting as well as for plumbing? Ans. I have to check it from the record of the defendant company.
Q5. Is it correct that when you sought information from M/s. Godavari Shilpkala Limited regarding the fire fighting CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 34/55 certificate and plumbing certificate filed by the plaintiff along with the bid, it was informed to you that the said certificates had been issued by M/s. Godavari Shilpkala Limited? Ans. Yes. Vol. It was also informed by Sh. Akhlish Srivastava of M/s. Godavari Shilpkala Limited that the said certificates have been issued by his office by his subordinate in his absence. The signatures on these certificates did not match with the signatures of Sh. Akhlish Srivastava though the certificate was issued in his name.
Q6. Is it correct that Akhlish Srivastava had told you that the said certificate was issued by the office of M/s. Godavari Shilpkala Limited, by his associates?
Ans. It is correct.
Q7. Is it correct that neither M/s. Godavari Shilpkala Limited nor Akhlish Srivasta wrote to you that the certificates filed by the plaintiff along with the bid have been prepared by the plaintiff themselves?
Ans. It is correct. Vol. As per the requirement of the bid documents, the bidder i.e. plaintiff had submitted the experiences certificate of M/s. Godavari Shilpkala Limited towards bid qualification requirements.
Q8. Is it correct that any company from whom any certificate is asked for is at liberty to use the language in the certificate as the issuing company deems it proper and appropriate especially when the issuing company is not asked to give a certificate a specific proforma?
Ans. It is correct as EIL do not have standard proforma. Q9. I draw you attention to para 12 of Ex. DW-1/A. I put it to you that plaintiff has not forged any document as stated in the said para. What have you to say?
Ans. The tender for electrical HVAC and fire fighting works was quoted by plaintiff along with one more agency. The bid qualification criteria stipulates that in case the bidder does not have the experience for fire fighting works, the sub-contractor can be engaged for fire fighting work and the experience of the sub-contractor shall be considered. In the instant case M/s SSA Project Pvt. Ltd. was engaged as a sub-contractor by the plaintiff and the other agency as aforesaid. Accordingly the plaintiff was responsible for fulfilling the requirements as the bidder.
Q10. It is put to you that you have falsely mentioned in para No. 12 of your affidavit that Mr. Akhlish Srivastava had stated that he had not issued the completion certificate in-fact Mr. Akhlish Srivastava has stated that in-fact certificate is issued CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 35/55 from his office by his associate in his absence. What do you have to say?
Ans. I do not agree in respect of the earlier part of the question. As has already been stated in the above paras the completion certificates were issued under the name of Sh. Akhlish Srivastava by his associate. The signatures of Sh.Akhlish Srivastava do not match with the signatures on the completion certificates issued by the associate. Q11. I put it to you that the defendant illegally rejected the bid of the plaintiff on a wrong ground that the certificates submitted by the plaintiff with the bid documents are forged. What do you have to say?
Ans. As per the tender condition instructions to bidders clause No. 36.1 in case the document submitted by the bidders are false/ forged, the bids shall be rejected and the EMD shall be forfeited. In the instant case the documents submitted by the plaintiff are forged one, the defendant rightly rejected the bid of the plaintiff and forfeited the earnest money submitted by way of the bank guarantee.
...............Q14. Is it correct that the plaintiff company has not forged itself the experience certificate as alleged by defendant, and submitted the said certificate with the defendant as received by the plaintiff from Godavari Shilp Kala Ltd.? Ans. The bid for Electrical, HVAC and Fire Fighting works was quoted by the plaintiff alongwith one more agency. In order to meet the experience criteria for fire fighting works, sub contractor experience of M/s S.S.A. Projects was considered by the plaintiff. The experience certificate towards fire fighting works of M/s SSA Project was submitted by the plaintiff alongwith the bid which was found to be forged/fabricated. Q15. Is it correct that the forgery can be alleged to be committed by a person if that person prepares a documents itself on behalf of some other person without his knowledge? Ans. I can not answer the same as a matter of question of law. Q16. Whether you know the meaning of word forgery as used in para No. 12 of your evidence affidavit or you can say as to in what manner the said word forgery has been used in your evidence affidavit?
Ans. In the instant case the completion certificate Ex. P-8 & P-9 submitted by the plaintiff alongwith the bid have been signed under the name of Sh. Akhlesh Shrivastav. The said signatures are different from the real signature of Sh Akhlesh Shrivastav as per the undated letter and also subsequent completion certificate dated 26.09.2011 issued by Sh. Akshlesh Shrivastav.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 36/55 Q25. Suvidha Engineers has not played any role in preparation of Ex. P-8 & P-9. Is it correct? Ans. It is correct. Vol. The said completion certificates were submitted by the plaintiff alongwith the bid. Q26. Ex.P-8 & P-9 were prepared by the office of Godavari Shilp Kala Ltd. and Plaintiff was not having any malafide intention in preparation of the same. Is it correct? Ans. It is a matter of record that Ex. P-8 & P-9 were issued by the office of M/s. Godavari Shilp Kala Ltd. The said experience certificates for firefighting works were submitted by the plaintiff along with the bids since the said experience certificates were submitted by the plaintiff along with the bid. It may not be possible to comment on any other aspect."
9.32 What is forgery and what amounts to making a false document has been defined u/s 463 and 464 of Indian Penal Code. Section 463 and 464 IPC are reproduced hereunder:-
Section 463 IPC "Forgery.-- [Whoever makes any false documents or false electronic record or part of a document or electronic record, with intent to cause damage or injury], to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery."
Section 464 IPC "Making a false document. --[A person is said to make a false document or false electronic record-- First --Who dishonestly or fraudulently--
(a) makes, signs, seals or executes a document or part of a document;
(b) makes or transmits any electronic record or part of any electronic record;
(c) affixes any [electronic signature] on any electronic record;
(d) makes any mark denoting the execution of a document or the authenticity of the [electronic signature], with the intention of causing it to be believed that such document or part of document, electronic record or [electronic signature] was made, signed, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 37/55 authority he knows that it was not made, signed, sealed, executed or affixed; or Secondly --Who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with [electronic signature] either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly --Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his [electronic signature] on any electronic record knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the contents of the document or electronic record or the nature of the alteration.] 9.33 The documents/certificates admittedly were not prepared by the plaintiff. They were prepared and issued by the office of M/s Godavari Shilpkala Ltd. on its letter head. The fact that they were prepared/issued by the office of M/s Godavari Shilpkala Ltd. is not disputed by the defendant. Plaintiff was not even remotely involved in the preparation of the certificates as it was issued by M/s Godavari Shilpkala Ltd. The only grievance of the defendant is that the certificates were shown to have been signed by Sh. Akhilesh Srivastava though it was Sh. Ashutosh Dhiman, an employee of M/s Godavari Shilpkala Ltd. who had affixed his signatures against the name of Sh. Akhilesh Srivastava. Things would have been entirely different had M/s Godavari Shilpkala Ltd. completely disowned the documents/certificates and written to the defendant that the certificates were not issued by its office. Had that been the case there would have been no escape for the plaintiff. But once M/s Godavari Shilpkala Ltd. repeatedly certified that the certificates CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 38/55 were issued by its office, the defendant should not have gone ahead to encash the bank guarantee as there is/was no fraudulent intention on the part of the plaintiff in submitting those certificates along with bid application. In fact it has also come on record that the plaintiff had not even seen the certificates as it had received the same in an envelope and the same were handed over to the defendant in that condition itself i.e. in the same very manner. There was no intention on the part of the plaintiff to commit any fraud whatsoever upon the defendant. There was no intent whatsoever to cause any damage or injury to the defendant.
Most importantly defendant has failed to prove that the plaintiff had the knowledge or reasons to believe that the certificates were not bearing the signatures of Sh. Akhilesh Srivastava or that it was Sh. Ashutosh Dhiman who had signed in the name of Sh. Akhilesh Srivastava. Defendant has failed to prove that the plaintiff was not only having the said knowledge but, having had the said knowledge he went on to use the certificates to its benefits and to the detriment to the defendant much least with the intent to commit fraud upon the defendant. The documents/certificates having not been prepared by the plaintiff there was no occasion for the plaintiff to have the said knowledge and therefore no fraudulent intention whatsoever can be attributed to the plaintiff.
9.34 In fact it has also come up on record that plaintiff had had dealings with the defendant in the past. It is also not the defendant's case that during the enquiry it was revealed to it or CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 39/55 that it emerged that M/s SSA Projects Ltd. did not have the requisite experience or did not complete the project/contract as was certified by M/s Godavari Shilpkala Ltd. Had it been the case that M/s SSA Projects Pvt. Ltd had not completed the fire fighting work as was contracted/awarded to it by M/s Godavari Shilpkala Ltd. or that M/s Godavari Shilpkala Ltd. had issued a false certificate or that plaintiff had procured a false certificate from M/s Godavari Shilpkala Ltd. in the name of M/s SSA Projects, only then any fraudulent intention could have been attributed to the plaintiff but not otherwise. There is no deliberate deception or treachery or cheating which can be attributed to the plaintiff. The certificates do not fall in any of the category of section 464 IPC. Reliance may also be placed upon Shiela Sebastian (supra) wherein the Hon'ble Apex Court observed as under:-
19. A close scrutiny of the aforesaid provisions makes it clear that, Section 463 defines the offence of forgery, while Section 464 substantiates the same by providing an answer as to when a false document could be said to have been made for the purpose of committing an offence of forgery under Section 463 IPC.
Therefore, we can safely deduce that Section 464 defines one of the ingredients of forgery i.e., making of a false document. Further, Section 465 provides punishment for the commission of the offence of forgery. In order to sustain a conviction under Section 465, first it has to be proved that forgery was committed under Section 463, implying that ingredients under Section 464 should also be satisfied. Therefore unless and untill ingredients under Section 463 are satisfied a person cannot be convicted under Section 465 by solely relying on the ingredients of Section 464, as the offence of forgery would remain incomplete.
20. The key to unfold the present dispute lies in understanding Explanation 2 as given in Section 464 of IPC. As Collin J., puts it precisely in Dickins v. Gill, (1896) 2 QB 310, a case dealing with the possession and making of fictitious stamp wherein he stated that "to make", in itself involves conscious act on the part CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 40/55 of the maker. Therefore, an offence of forgery cannot lie against a person who has not created it or signed it.
21. It is observed in the case Md. Ibrahim and Ors. vs. State of Bihar and Anr., (2009) 8 SCC 751 that-
"a person is said to have made a `false document', if
(i) he made or executed a document claiming to be someone else or authorised by someone else; or
(ii) he altered or tampered a document; or
(iii) he obtained a document by practicing deception, or from a person not in control of his senses."
22. In Md. Ibrahim (supra), this Court had the occasion to examine forgery of a document purporting to be a valuable security (Section 467, IPC) and using of forged document as genuine (Section 471, IPC). While considering the basic ingredients of both the offences,this Court observed that to attract the offence of forgery as defined under Section 463, IPC depends upon creation of a document as defined under Section 464, IPC. It is further observed that mere execution of a sale deed by claiming that property being sold was executant's property, did not amount to commission of offences punishable under Sections 467 and 471, IPC even if title of property did not vest in the executant.
23. The Court in Md. Ibrahim (supra) observed that:
"There is a fundamental difference between a person executing a sale deed claiming that the property conveyed is his property, and a person executing a sale deed by impersonating the owner or falsely claiming to be authorised or empowered by the owner, to execute the deed on owner's behalf. When a person executes a document conveying a property describing it as his, there are two possibilities. The first is that he bona fide believes that the property actually belongs to him. The second is that he may be dishonestly or fraudulently claiming it to be his even though he knows that it is not his property. But to fall under first category of `false documents', it is not sufficient that a document has been made or executed dishonestly or fraudulently. There is a further requirement that it should have been made with the intention of causing it to be believed that such document was made or executed by, or by the authority of a person, by whom or by whose authority he knows that it was not made or executed. When a document is executed by a person claiming a property which is not his, he is not claiming that he is someone else nor is he claiming that he is authorised by someone else. Therefore, execution of such document (purporting to convey some property of which he is not the owner) is not execution of a false document as defined under Section 464 of the Code. If what is CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 41/55 executed is not a false document, there is no forgery. If there is no forgery, then neither Section 467 nor Section 471 of the Code are attracted."
24. In Mir Nagvi Askari vs. Central Bureau of Investigation, (2009) 15 SCC 643, this Court, after analysing the facts of that case, came to observe as follows:
"A person is said to make a false document or record if he satisfies one of the three conditions as noticed hereinbefore and provided for under the said section. The first condition being that the document has been falsified with the intention of causing it to be believed that such document has been made by a person, by whom the person falsifying the document knows that it was not made. Clearly the documents in question in the present case, even if it be assumed to have been made dishonestly or fraudulently, had not been made with the intention of causing it to be believed that they were made by or under the authority of someone else.
The second criteria of the section deals with a case where a person without lawful authority alters a document after it has been made. There has been no allegation of alteration of the voucher in question after they have been made. Therefore, in our opinion the second criteria of the said section is also not applicable to the present case.
The third and final condition of Section 464 deals with a document, signed by a person who due to his mental capacity does not know the contents of the documents which were made i.e. because of intoxication or unsoundness of mind, etc. Such is also not the case before us. Indisputably therefore the accused before us could not have been convicted with the making of a false document.
25. Keeping in view the strict interpretation of penal statute i.e., referring to rule of interpretation wherein natural inferences are preferred, we observe that a charge of forgery cannot be imposed on a person who is not the maker of the same. As held in plethora of cases, making of a document is different than causing it to be made. As Explanation 2 to Section 464 further clarifies that, for constituting an offence under Section 464 it is imperative that a false document is made and the accused person is the maker of the same, otherwise the accused person is not liable for the offence of forgery.
26. The definition of "false document" is a part of the definition of "forgery". Both must be read together. 'Forgery' and 'Fraud' are essentially matters of evidence which could be proved as a CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 42/55 fact by direct evidence or by inferences drawn from proved facts. In the case in hand, there is no finding recorded by the trial Court that the respondents have made any false document or part of the document/record to execute mortgage deed under the guise of that 'false document'. Hence, neither respondent no.1 nor respondent no.2 can be held as makers of the forged documents. It is the imposter who can be said to have made the false document by committing forgery. In such an event the trial court as well as appellate court misguided themselves by convicting the accused. Therefore, the High Court has rightly acquitted the accused based on the settled legal position and we find no reason to interfere with the same.
9.35 In fact it has also come up on record that after the bank guarantee was invoked by the defendant, the plaintiff had a meeting with the defendant, gave the representation and also submitted fresh certificate but the defendant did not consider the same. Relevant portion of cross-examination of PW1 in this regard reads as under:-
"Q. 31 When the plaintiff came to know that the defendant had cancelled the bid of the plaintiff because of the certificate of SSA Project?
Ans. We became aware after our bank guarantee was invoked by EIL and there was a meeting with EIL officials where we had made representation and also submitted a fresh certificate issued by Godavari Shilpkala after the meeting and we came to know that our bid had not been considered by the defendant."
9.36 After the bank guarantee was encashed plaintiff had written a letter dated 12.01.2012 to the defendant i.e. Ex. PW1/8 (also Ex. P11) and also furnished fresh certificate dated 10.01.2012. The relevant portion of PW1 in this regard reads as under:-
"Q.38 Attention of the witness is drawn to document Ex. P-11. In the letter the reference is regarding submission of a fresh certificate dated 10.01.2012. Whether such certificate was procured by you or was given to the plaintiff by SSA Project?
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 43/55 Ans. It was given by SSA Project.
Q.39 Whether any permission was taken from EIL in writing for submitting the fresh certificate Ex. P-11? Ans. The discussion in this regard were held in the meeting as aforesaid and no permission in writing was sought."
9.37 The said letter Ex. P11 (also Ex. PW1/8) is reproduced hereunder:-
"Kind attention: Mr. Ashok K. Gupta (Executive Director PS) CC: Mr. A.K. Purwaha (CMD) Mr. Deepak Moudgil (Director Projects) Mr. G.D. Goyal (Director Commercial) Sub: Invocation by bank guarantee no. 112030001 issued on 22.07.2011 for Rs. 36,10,000/- submitted towards EMD for Electrical, HVAC and Fire fighting works for EIL new office complex at Gurgaon.
We thank you for the audience and courtesy extended to us in the meeting in your office on 9th January 2012 It is respectfully submitted that encashment of the bank guarantee under reference has come as huge shock to our Company.
Apparently the charge levied is of false credentials submitted by our proposed sub-vendor for fire fighting works, Ms. SSA Projects, w.r.t. per-qualification experience. The claim of Ms. SSA Projects has been admitted by the office of the issuing authority Ms Godavari Shilpkala Ltd (Claridges Hotel management), hinting at best to irregularity in form but not of substance.
We are enclosing a fresh certificate dt. 10.1.2012 to the effect that the work experience of the sub-vendor Ms. SSA Projects is genuine and work of stipulated amount has in fact been executed satisfactorily.
It would thus be manifestly evident that no false representation has been made by us that should cast aspersions on our integrity.
In any case, Ms. SSA Projects whose credentials have been questioned was only a selected sub-vendor and not a JV bid partner. Corrective action prompted by any insufficiency could CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 44/55 have easily been initiated without compromising the integrity of our bid.
We have been associated with you for long and on several projects. On no occasion has there been any reason to doubt our bonafides. The action now summarily initiated is drastic, particularly when no opportunity was given to us to explain or clarify.
In imposing a penalty, it is axiomatic and in consonance with principles of natural justice that opportunity is extended to a party against whom such action is contemplated for timely explanation or a re-examination of the issue. We earnestly solicit that the matter is re-evaluated in light of submissions in the text above and the earnest money encashment order revoked."
9.38 The certificate dated 10.01.2012 i.e. Ex. PW1/5, issued on the letter head of Godavari Shilpkala Ltd. and as was annexed with PW1/8, is reproduced hereunder:-
"January 10 2012 TO WHOM SO EVER IT MAY CONCERN This is to certify that M/s SSA Projects Pvt. Ltd has carried out Plumbing cum fire fighting work for Hotel Claridges, Surajkund, Faridabad for a total value of Rs. 12,88,55,618/- out of which fire fighting element was approximately Rs. 3,14,71,689/-
This work was executed from January 2007 to October 2010 and we find their performance to our satisfaction.
9.39 In fact certificate was furnished on earlier occasion also vide email Ex. D8 dated 29.09.2011 as was sent at about 02.59 p.m. by Sh. R.K. Singh (PW1) Ltd. to Sh. Sanjay Jain (DW1). The said email i.e. Ex. D8 was addressed to Mr. Khandelwal. The email is reproduced hereunder:-
"Dear Mr. Khandelwal, Please find attached completion certificate for fire fighting. Regards RK Singh Suvidha Engineers India Pvt. Ltd., CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 45/55 IDA"
9.40 The Certificate is reproduced hereunder:-
"TO WHOM SO EVER IT MAY CONCERN Dated: 26-9-11 This is to certify that M/s SSA PROJECTS PVT. LTD had completed the Plumbing and Fire fighting works package for our project as per given below information Name of the work Plumbing and Fire fighting works package for Hotel Claridges at Surajkund, Faridabad Work order no Ssa/GSL-
Claridges/plumbing/rk/2007/090
Date of Order 8th Jan. 2007
Project Order value Rs. 6,00,00,000.00
Fire fighting Order value Rs. 1,33,01,750.00
Project completed value Rs. 12,88,55,618.00
Fire fighting completed value Rs. 2,43,86,651.00 Stipulated Completion date 20th August 2007 Actual Completion date 9th April 2008 Scope of work Plumbing and Fire fighting works comprising of Fire hydrant system sprinkler system, pumps and filtration system, fire pump, sanitary fixtures. Boilers rail water harvesting etc. performance Satisfactory (Authorized Signatory) Name Akhilesh Srivastava Designation Project Manager Ph No. : 09811948362"
9.41 Hence despite being repeatedly sent the requisite clarification and certificates to it, the defendant went on to encash the bank guarantee without giving a reasonable opportunity, fair hearing to the plaintiff. The said act on the part of the defendant is contrary to the principles of natural justice and fair CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 46/55 play. Defendant could have sought clarification from the plaintiff as is provided under the instructions to the bidders particularly clause 29.6. Why it did not so has not been explained by the defendant. In fact it somewhere appears that vendetta was at work considering the fact that Ex. PW1/8 makes it crystal clear that there had been prior association, on different project, between the plaintiff and the defendant but in this particular case/bid the defendant acted too hastly ignoring the numerous correspondences by Sh. Akhilesh Srivastava and the plaintiff. Considering their past relation and when there was nothing adverse against the plaintiff in the past, atlesat nothing has been brought on record by the defendant in this regard, the plaintiff should have definitely being given due opportunity to clarify the ambiguity, clear the doubts arising in view of documents Ex. D5 & D6, which was otherwise provided by Sh. Akhilesh Srivastava.
9.42 Vide its letter dated 04.01.2012 defendant wrote to Canara Bank seeking invocation of the bank guarantee of Rs. 36,10,000/- as was submitted by the plaintiff along with its bid application. The said letter which is Ex. PW1/9 (also Ex. P3) is reproduced hereunder:-
"Kind Attention: Ms. Veena Gupta/SR Mahapatra SUB: Invocation of Bank Guarantee No. 112030001 issued on 22-07-2011 for Rs. 36,10,000/-
Dear Sir, Please refer to the above mentioned bank guarantee issued by you in favour of Engineers India Limited on behalf of your client i.e. M/s Suvidha Engineers India Pvt. Ltd. which is valid till 10-01-2012.
We hereby inform you that M/s Suvidha Engineers India Pvt Ltd. has submitted fake documents (as per clause 36 of Instruction to CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 47/55 Bidders of the Bid Documents). We are therefore constraint to invoke the subject bank guarantee issued by you for a value of Rs. 36,10,000.00.
Accordingly, you are requested to issue a payorder for Rs. 36,10,000.00 in favour of Engineers India Limited or transfer the aforesaid funds through RTGS to the Engineers India Limited Bank Account as per details given below:
ENGINEERS INDIA LIMITED Bank Details for transferring Rs. 36,10,000/- INDIAN OVERSEAS BANK, F-47, Malhotra Building, Janpath, New Delhi-110001 CURRENT ACCOUNT NO. 006502000000515 IFSC CODE: IOBA0000065 MICR CODE; 110020004"
9.43 Vide its letter dated 05.01.2012 i.e. Ex. PW1/10, plaintiff objected to the invocation of the bank guarantee by the defendant and requested the defendant to withdraw the revocation. The relevant portion of Ex. PW1/10 is reproduced hereunder:-
"Dear Sir, SUB: Invocation of Bank Guarantee No. 112030001 issued on 22/7/2011 for Rs. 36,10,000/-
We have been informed by our banker Canara Bank, Maharani Bagh, New Delhi that you have invoked the above bank guarantee through your letter no. EIL/BANK/2011-12 dated 4/01/2012.
The bank guarantee has been invoked alleging that we have submitted fake documents. We are surprised to get this communication from you now for encashment of bank guarantee under clause 36 of Instruction of Bidder of the Bid document, as there has been no prior communication to us on any insufficiency whatsoever. Neither have we been intimated any reasons for rejection of our bid.
We can only presume that the issue concerns completion certificate for fire fighting works submitted on behalf of our bid associates Ms SSA projects Pvt. Ltd. for works executed by them at Hotel Claridges, Surajkund.
The confirmatory mail and letter subsequently issued by Claridges does not disown the claim of certificate, rather clearly accepts it. Copies of both are enclosed for reference.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 48/55 Our offer has been submitted as always in good faith, spirit and transparency. If there is an internal procedure within Claridges, we are not concerned with it.
Under the circumstances you are requested to immediately withdraw the invocation & intimate our banker failing which we shall be compelled to seek legal recourse"
9.44 Though undoubtedly vide orders dated 09.01.2012, passed in CS (OS) No. 64/12 the Hon'ble High Court of Delhi, i.e. Ex. PW1/11 had granted status quo with regard to the invocation of bank guarantee in question, however, as the bank guarantee had already invoked/encashed and the money was remitted into the defendant's account, as is reflected in orders dated 09.03.2014 i.e. Ex. PW1/12, the suit having been become infructuous the plaintiff withdrew the suit with liberty to file a fresh one and thereafter the present suit was filed. The relevant portion of cross-examination of DW1 in this regard reads as under:-
"Q28. Is it correct that Hon'ble High Court vide order dated 09.01.2012 has restrained defendant from encashing the bank guarantee submitted by the plaintiff along with the bid? Ans. It is a matter of record.
Q29. I put it to you that the Bank guarantee was encashed by the defendant deliberately inspite of the stay order dated 09.01.2012?
Ans. The bank guarantee was encashed as per the clause No. 36 of instruction to bidders of the tender documents. The letter for invocation was sent on 04.01.2012 to Canara Bank New Delhi who are issued the bank guarantee. The amount of Rs.36,10,000.00 i.e. the amount of Bank guarantee was transmitted to the defendant by the bank on 07.01.2012 as such it was well before the passing of stay order by the Hon'ble High Court."
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 49/55 9.45 It is also to be seen that the defendant did not suffer any loss on account of the purported false/fabricated certificates furnished by the plaintiff. The contract was admittedly awarded to a third party and defendant has failed to prove any loss that it might have suffered for having to award the contract to the third party. In fact it is not the defendant's case that it suffered any loss. Though Ld. Counsel for the defendant relied upon National Highway Authority of India (supra), National Thermal Power Corporation Ltd. (supra) and State of Haryana (supra), however, the said case laws are based on completely different facts altogether. In National Highway Authority of India (supra) the bidder had withdrawn the bid during the bid validity period and also did not furnish the bank guarantee. In that case the Hon'ble Apex court observed that a person who by his own conduct precludes the coming into existence of a contract cannot be given advantage of his own wrong by not allowing forfeiture. In the case at hand no wrong doing can be attributed to the plaintiff. Rather it was the defendant who for reasons best known to it did not consider the repeated clarifications furnished by the company which issued the certificates i.e. M/s Godavari Shilpkala Ltd. It was the defendant who ignored the letters/emails of Sh. Akhilesh Srivastava which cleared the doubts/ambiguity surrounding the genuineness of the certificates or the experience of M/s SSA Projects Ltd. in fire fighting. It was the defendant's hastiness and completely ignoring of the principles of natural justice and fair play which resulted in the present situation.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 50/55 9.46 As far as National Thermal Power Corporation Ltd. (supra) is concerned, the bidder had withdrawn the bid while praying for refund of the earnest money, whereas in the present case, as discussed above, no fault whatsoever can be attributed to the bidder/plaintiff. There was undoubtedly an irregularity regarding the certificates in question, but the initial irregularity stood corrected by subsequent clarifications/letters much before the acceptance of the bid. The clarification came at the time of evaluation itself and nothing more was required once the clarification came. Most importantly the defendant did not even once inform the plaintiff or gave it an opportunity to present its case, clarify the picture, remove the ambiguity surrounding the certificates, which otherwise was not required considering the clarification given by Sh. Akhilesh Srivastava.
9.47 As far as State of Haryana (supra) is concerned, in that case also the bidder, despite having agreed to keep its bid open for acceptance upto 90 days, wrote a letter informing that it was not interested in the work anymore and sought refund of the bid security amount. In the case at hand the facts are completely different and no wrong doing or fault can be attributed to the bidder/plaintiff. The bidder/plaintiff was always willing to enter into the contract, if any, but it was the defendant who at the evaluation stage itself, without providing the bidder/plaintiff an opportunity to remove the shortcomings found in the bid application, documents attached therewith, encashed the bank guarantee.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 51/55 9.48 In Kailash Nath Associates (supra) two particular terms in the auction of a plot by DDA were as under:-
(iv) In case of default, breach or non-compliance of any of the terms and conditions of the auction or mis -representation by the bidder and/or intending purchaser, the earnest money shall be forfeited.
(vi) When the bid is accepted by the DDA, the intending purchaser shall be informed of such acceptance in writing and the intending purchaser shall, within 3 months thereof, pay to the Delhi Development Authority, the balance 75% amount of the bid, in cash or by Bank Draft in favour of the Delhi Development Authority or by Cheque guaranteed by a Scheduled Bank as "good for payment for three months" in favour of the Delhi Development Authority. If the bid is not accepted, the earnest money will be refunded to the intending purchaser without any interest unless the earnest money is forfeited under para 2 (iv) above."
9.49 The bidder failed to deposit 75% of the premium of the auctioned plot and while canceling the bid/allotment, the earnest money deposited by the bidder amounting to Rs. 78 lacs was forfeited by the DDA. The Hon'ble Apex Court observed as under:-
"21. Based on the facts of this case, the Single Judge was correct in observing that the letter of cancellation dated 6.10.1993 and consequent forfeiture of earnest money was made without putting the appellant on notice that it has to deposit the balance 75% premium of the plot within a certain stated time. In the absence of such notice, there is no breach of contract on the part of the appellant and consequently earnest money cannot be forfeited.
28. It will be noticed at once that T.P. Daver v. Lodge Victoria No. 363, S.C. Belgaum, 1964 (1) SCR 1, is not an authority on Article 14 at all. It deals with clubs and the fact that rules or bye-laws which bind members of such clubs have to be strictly adhered to. On the other hand in ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd., (2004) 3 SCC 553 at paras 22 and 23, the Supreme Court held:
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 52/55 "22. We do not think the above judgment in VST Industries Ltd.
[(2001) 1 SCC 298 : 2001 SCC (L&S) 227] supports the argument of the learned counsel on the question of maintainability of the present writ petition. It is to be noted that VST Industries Ltd.[(2001) 1 SCC 298 : 2001 SCC (L&S) 227] against whom the writ petition was filed was not a State or an instrumentality of a State as contemplated under Article 12 of the Constitution, hence, in the normal course, no writ could have been issued against the said industry. But it was the contention of the writ petitioner in that case that the said industry was obligated under the statute concerned to perform certain public functions; failure to do so would give rise to a complaint under Article 226 against a private body. While considering such argument, this Court held that when an authority has to perform a public function or a public duty, if there is a failure a writ petition under Article 226 of the Constitution is maintainable. In the instant case, as to the fact that the respondent is an instrumentality of a State, there is no dispute but the question is: was the first respondent discharging a public duty or a public function while repudiating the claim of the appellants arising out of a contract? Answer to this question, in our opinion, is found in the judgment of this Court in the case of Kumari Shrilekha Vidyarthi v. State of U.P. [(1991) 1 SCC 212 : 1991 SCC (L&S) 742] wherein this Court held: (SCC pp. 236-37, paras 22 & 24) "The impact of every State action is also on public interest. ... It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters."
23. It is clear from the above observations of this Court, once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim of the appellants the first respondent as an instrumentality of the State has acted in contravention of the abovesaid requirement of Article 14, then we have no hesitation in holding that a writ court can issue suitable directions to set right the arbitrary actions of the first respondent."
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 53/55
29. Based on the facts of this case, it would be arbitrary for the DDA to forfeit the earnest money on two fundamental grounds. First, there is no breach of contract on the part of the appellant as has been held above. And second, DDA not having been put to any loss, even if DDA could insist on a contractual stipulation in its favour, it would be arbitrary to allow DDA as a public authority to appropriate Rs.78,00,000/- (Rupees Seventy Eight Lakhs) without any loss being caused. It is clear, therefore, that Article 14 would apply in the field of contract in this case and the finding of the Division Bench on this aspect is hereby reversed.
42. In the present case, forfeiture of earnest money took place long after an agreement had been reached. It is obvious that the amount sought to be forfeited on the facts of the present case is sought to be forfeited without any loss being shown. In fact it has been shown that far from suffering any loss, DDA has received a much higher amount on re-auction of the same plot of land.
44. The Division Bench has gone wrong in principle. As has been pointed out above, there has been no breach of contract by the appellant. Further, we cannot accept the view of the Division Bench that the fact that the DDA made a profit from re-auction is irrelevant, as that would fly in the face of the most basic principle on the award of damages - namely, that compensation can only be given for damage or loss suffered. If damage or loss is not suffered, the law does not provide for a windfall."
9.50 No loss being pleaded or proved by the defendant, the defendant cannot justify invoking the bank guarantee or the encashment of the same and retaining the amount of the bank guarantee. The certificates were neither false nor forged but irregularly signed by Sh. Ashutosh Dhiman, who signed them in the name of Sh. Akhilesh Srivastava. However there was no intent to deceive, no fraudulent intention whatsoever and most importantly no forgery. The plaintiff cannot be held to have furnished any false/forged information/document in the form of the certificates in question. It had in fact no role to play in preparation of the documents.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 54/55 9.51 Therefore in view of the above discussion, issue no. 1 is decided against the defendant and issue no. 2 is decided in favour of the plaintiff to the extent that the plaintiff is entitled to recovery of Rs. 36,10,000/-. As far as interest is concerned, the interest which the plaintiff has prayed for amounts to penalty. The interest claimed is too exorbitant and no special case is made out for being entitled to the said interest. Nonetheless the plaintiff is indeed entitled to nominal interest as the defendant has retained the amount since 2012.
Relief
10. As issue no. 2 has been decided in favour of the plaintiff, plaintiff is entitled to recovery of Rs. 36,10,000/- along with interest @ 6% per annum w.e.f. 04.01.2012 till its realization. Suit of the plaintiff is decreed accordingly. Decree sheet be prepared accordingly. I order accordingly.
11. File be consigned to record room after necessary compliance.
Announced in the open court on 10th January 2023 (Gaurav Rao) ADJ-03/ New Delhi District Patiala House Courts, New Delhi.
CS 450/2016 M/s Suvidha Engineers India Pvt Ltd Vs. M/s Engineers India Ltd. Pages 55/55