Calcutta High Court (Appellete Side)
Bidyut Das vs Union Of India & Ors on 12 May, 2017
Author: Debangsu Basak
Bench: Debangsu Basak
1 12-05-2017
S.D. WP 13174 (W) of 2017 Bidyut Das Versus Union of India & Ors.
Mr. Utpal Majumder Mr. Abhishek Banerjee ..For the Petitioner.
Mrs. Aparna Banerjee ...For the U.O.I. There are two claims in the present writ petition. The first claim relates to a forfeiture of an earnest money with regard to a tender. The second claim relates to floating of the new tender.
Learned Advocate for the petitioner submits that, the petitioner had participated in a tender floated by the Indian Railways. The petitioner had become the lowest bidder. The Railway authorities had entered into negotiations with the petitioner for the purpose of lowering the rates even further. In the midst of such negotiations, by a writing dated June 17, 2016, the petitioner had quoted a rate of Rs.6,500/- per metric ton of steel. He submits that, such a rate is absurd. The rate quoted was a mistake. It should be Rs.65,000/-. The absurdity of such rate was 2 known to the Indian Railways. Notwithstanding such a mistake, the Indian Railways had purported to issue a letter of acceptance. The petitioner immediately upon discovering such mistake had by a letter dated August 1, 2016 informed the Indian Railways that, there was a mistake in the rate quoted. Regardless of such letter, the Indian Railways had proceeded to treat that there was a concluded contract between the parties and that, the Indian Railways were entitled to forfeit the earnest money deposited in respect of such tender.
Learned Advocate appearing on behalf of the petitioner relies upon (2001) 2 SCC 451 (West Bengal State Electricity Board vs. Patel Engineering Co. Ltd. & Ors.) and submits that, when there is a mistake committed by a bidder, he is entitled to correct such mistake and that, he cannot be penalized for such mistake.
Learned Advocate appearing on behalf of the Railways has submitted that the Railways have taken steps for the purpose of a new tender consequent upon the petitioner not discharging his functions under the first tender. She submits that, there was a concluded contract between the parties and the Railways are entitled to forfeit the earnest money deposited. 3
I have considered the rival contentions of the parties and considered the materials made available on record.
The first relief of the petitioner relating to a mistake committed at the time of negotiation of the rates is taken up for consideration first.
It appears from the correspondence exchanged that, the petitioner did make a mistake in quoting a rate of Rs.6,500/- per metric ton of steel when the market price was at least Rs.65,000/-. Therefore, the petitioner had committed an apparent mistake. The rate of steel is also known to the Indian Railways. But, Indian Railways, however, had proceeded to accept such rate quoted by the petitioner in his writing of June 17, 2016. The Indian Railways ought not to have done so. They ought to have sought clarifications from the petitioner on such rate. The petitioner had by the writing dated August 1, 2016 protested that, the rate quoted by the petitioner on June 17, 2016 was a mistake. The Railways ought to have considered such aspect also. It is permissible for a bidder to claim that a rate was quoted by mistake provided such bidder establishes that, the mistake was committed despite exercise of ordinary care and diligence and that the offeree had the 4 knowledge of the mistake. In the present case, it cannot be said that, Indian Railways does not know the marker rate of steel. The rate quoted by the petitioner is abnormally low. It is, in fact, in the realm of an absurdity. Patel Engineering Company (supra) considers a mistake committed by a bidder and is of the view that, when there is a honest mistake, the same can be allowed to be corrected.
In such circumstances, the petitioner having committed a mistake at the time of negotiations it should not be penalized for such purpose. The action of the Indian Railway authorities in forfeiting of the earnest money deposited by the petitioner is set aside. The Indian Railway authorities will refund the earnest money to the petitioner within a fortnight from the date of communication of this order.
So far as the second claim of the petitioner is concerned, i.e. the floating of a new tender, in my view, the Railway authorities are entitled to do so. The petitioner not being the position to discharge the obligations in respect of first tender, the Railway authorities have correctly floated the second tender. The petitioner cannot be allowed to blow hot and cold at the same time. It cannot 5 say that there is a mistake at the negotiations and from the Railways to negotiate at the same time.
The challenge to the second tender, therefore, fails. W.P. No. 13174 (W) of 2017 is disposed of.
No order as to costs.
Urgent certified website copy of this order, if applied for, be made available to the parties upon compliance of requisite formalities.
(Debangsu Basak, J.) 6