Gujarat High Court
Kamal Builders vs Sardar Sarovar Narmada on 25 February, 2013
Author: Vijay Manohar Sahai
Bench: Vijay Manohar Sahai
KAMAL BUILDERS....Petitioner(s)V/SSARDAR SAROVAR NARMADA NIGAM LTD THROUGH MANAGING DIRECTOR C/SCA/15037/2011 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 15037 of 2011 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE VIJAY MANOHAR SAHAI and HONOURABLE MR.JUSTICE S.G.SHAH =========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ KAMAL BUILDERS....Petitioner(s) Versus SARDAR SAROVAR NARMADA NIGAM LTD THROUGH MANAGING DIRECTOR & 1....Respondent(s) ================================================================ Appearance: DS AFF.NOT FILED (N) for the Petitioner(s) No. 1 MRS MAUNA M BHATT, ADVOCATE for the Petitioner(s) No. 1 DS AFF.NOT FILED (R) for the Respondent(s) No. 2 MR NIRZAR S DESAI, ADVOCATE for the Respondent(s) No. 1 NOTICE SERVED BY DS for the Respondent(s) No. 2 ================================================================ CORAM: HONOURABLE MR.JUSTICE VIJAY MANOHAR SAHAI and HONOURABLE MR.JUSTICE S.G.SHAH Date : 25/02/2013 ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE VIJAY MANOHAR SAHAI) We have heard Ld. Counsel Mr. M R Bhatt, assisted by Ms. Mona Bhatt for the petitioner and Mr. Nirjar Desai, Ld. Counsel appearing for the respondents.
2 The respondent no. 1 issued an advertisement in May 2011 inviting tenders for constructing Distributories and Minor work for command area under Dhrangadhra Branch Canal ch. 98.267 to 124.983 Km., and other work was for construction of distributories and minor work of command area under Dhrangadhra Branch Canal ch. 74.3 to 98.267 Km. The prospective tenderers were also supposed to apply by e.tender. The section-1 of the tender documents provides for Information and Instructions . Para. 2 is with regard to Invitation , which is extracted below :
2.0 INVITATION [A] Online Tenders are invited publicly by the Superintending Engineer, S.B.C. Circle No. 5, Taluka Seva Sadan, 2nd floor, Halvad Road, Dhrangadhra 363 310, from the eligible contractors registered in AA class and equivalent in Sardar Sarovar Narmada Nigam Limited and/or Narmada, Water Resources, Water Supply and Kalpasar Department and/or Road and Building Department in State Govt. of Gujarat or equivalent class in CPWD/ Railway/ other State Government for the work of Constructing Distributories And Minor Work For Command Area Under Dhrangadhra Branch Canal ch. 98.267 to 124.983 Km.
[B] The concerned Contractor shall submit the certificate of registration or renewal receipt as approved Contractor in AA class in SSNL/ NWRWS & K Dept/ R & B Dept. of Gujarat State or equivalent class in CPWD/ Railway/ other State Government.
[C] The Contractor registered outside Gujarat shall apply for getting registered himself in AA class either with the Sardar Sarovar Narmada Nigam Ltd., or with the State of Government of Gujarat before the date of submission of tender. The proof of the application for registration shall have to be attached with Tender online and physical also.
[D] The Contractor registered in CPWD/ Railway and other State Government equivalent to class of Gujarat mentioned in para A , will be eligible to quote for the Tender with the condition that concerned Contractor shall get themselves registered in AA class in the Sardar Sarovar Narmada Nigam Ltd., or in the State of Gujarat on or before the date of acceptance [approval] of his Tender.
[E] Failure of taking action specified in Para. [B] or [C] or [D], the concerned contractor shall be disqualified and Earnest Money Deposit shall be forfeited.
3 The petitioner applied for both the tenders and deposited the Earnest Money Deposit [for short EMD ] of Rs.57.68 lacs and Rs.78.68 lacs for the two tenders, total amount comes to Rs.1.36 crore. The petitioner submitted his tender on 14/6/2011 and he also made an application with the respondent no. 1 for registration as contractor on 1/7/2011. According to the respondents, the terms of the tender notice clearly provided that at the time of submitting the tender, the parties should be registered contractor with the respondent no. 1. Since the petitioner submitted his tender on 14/6/2011 and thereafter applied for registration, he was found by the respondents to be ineligible and accordingly his tender was not opened by the respondents. On 8/8/2011 the petitioner submitted a clarification of registered Class A contractor, but this was not accepted by the respondents and the respondents have forfeited the EMD which was deposited in the shape of Bank Guarantees [for short BG ] and after finding the petitioner not eligible, the respondents have invoked the BG. Hence the petitioner has challenged the order dated 29/9/2011 invoking the BG and this Court has stayed invocation of BG.
4 Ld. Counsel for the petitioner urged that once his tender was not opened by the respondents on the ground that the petitioner was not eligible for grant of tender as he was not registered contractor prior to submission of the tender, in such a situation, the BG furnished by the petitioner ought to have been returned back by the respondent no.
1. On the other hand, Ld. Counsel for the respondents has urged that in view of para. 2 of the Information and Instructions in the heading Invitation , it has been clearly provided for forfeiture of BG in terms of para. 2 [C] of the tender documents under the heading Invitation . It is further urged that since the petitioner had applied for registration as Class AA contractor with the respondent no. 1 after submission of the tender as provided in para. 2 [D], the respondents were justified in forfeiting EMD deposited by the petitioner in terms of para. 2 [E] of the tender documents, which clearly provides that if the party fails to take action as specified in para. 2 [B] or [C] or [D], the contractor shall be disqualified and his EMD shall be forfeited.
5 To us, this condition imposed in the tender notice, prima-facie appears to be arbitrary. Though the respondent no. 1 has deleted in subsequent tender notices, the para. 2 [E], but in this tender notice, this condition remains as it is. Once an order is not awarded to a party, any EMD, in our opinion, cannot be forfeited only on the ground that the contractor was disqualified or is not eligible to apply for contract in terms of the tender notice. The petitioner has deposited Rs.1.36 crore as EMD and his tender was not opened by the respondents as he has applied for registration with the respondent no. 1 after submitting tender. In such a situation, in our opinion, the EMD could not be forfeited by the respondents and para. 2 [E], in our opinion, is totally arbitrary. In our opinion, forfeiture of any amount could be justified by the respondents only if the concluded contract come in existence or respondents have altered their position/ condition in issuance of the tender notices. Therefore, in our opinion, the respondents are not justified in forfeiting the EMD deposited by the petitioner and the order passed invoking BG is illegal and cannot be maintained.
6 In the result, this writ petition succeeds and is allowed. The orders dated 29/9/2011 invoking the Bank Guarantees passed by the respondent no. 1 are quashed. The respondents are directed to release the Bank Guarantees to the petitioner within a period of two weeks from the date of receipt of certified copy of this order by the respondent no. 1. Parties shall bear their own costs. Rule is made absolute accordingly.
(V.M.SAHAI, J.) (S.G.SHAH, J.) Pansala.
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