Allahabad High Court
Ganesh Shankar Pandey And Company vs Union Of India (Uoi), Through The ... on 6 May, 2003
Equivalent citations: AIR2004ALL26, 2003(3)ARBLR11(ALL), AIR 2004 ALLAHABAD 26, 2004 ALL. L. J. 398, 2004 A I H C 1502, 2003 (2) ALL CJ 1164, 2003 (3) ARBI LR 11, 2003 (5) ALL WC 3483, 2003 (52) ALL LR 310, 2003 ALL CJ 2 1164, (2003) 8 ALLINDCAS 294 (ALL)
Author: M. Katju
Bench: M. Katju, R.S. Tripathi
JUDGMENT M. Katju, J.
1. This writ petition has been filed against the impugned judgment of a learned single Judge of this Court (Hon'ble Sudhir Narain, J.) dated 17.08.1999 copy of which is Annexure 17 to the writ petition. The petitioner his also prayed for a mandamus to the appropriate authority under Section 11 of the Arbitration and Conciliation Act, 1996 to appoint an Arbitrator to settle the dispute between the petitioner and respondents 1 to 4 and pay compensation to the petitioner for the loss suffered due to cancellation of his contract.
2. We have heard the learned counsel for the parties and have carefully perused the impugned judgment. The facts of the case are mentioned in detail in the impugned judgment and hence need not be repeated. The contract in question was for conversion of 35 kms. Railway track from meter gauge to broad gauge. The petitioner had submitted a tender but he did not furnish the bank guarantee as was required. He was asked by the letter of Chief Engineer dated 27.03.1996 to submit bank guarantee within 15 days but he did not do so. Hence a letter was issued from the office of the Chief Administration Officer intimating to the petitioner that provisional acceptance letter dated 27.03.1996 and the letter dated 02.02.1996 have been withdrawn. The petitioner asked for expenses on the ground that it had incurred expenses but was not permitted to perform the contract work. He also requested that the matter be referred for the arbitration.
3. The stand of the respondents was that the petitioner did not submit the performance guarantee and there was no concluded contract. In the absence of any such contract the petitioner was not entitled to enforce Clause 64 of the arbitration agreement.
4. We fully agree with the view taken by the learned singh Judge in the impugned order. The acceptance bid was subject to performance of certain terms and conditions of the contract. The petitioner fully knew that it had to submit bank guarantee but it failed to do so and hence the petitioner cannot rely on the arbitration clause as there was no enforceable contract which came into existence.
5. The learned Single Judge in our opinion rightly held that the tenderer had to submit performance guarantee within 15 days of the issue of letter of acceptance, and in the event of his failure to do so it was a disqualification.
6. Learned counsel for the petitioner submitted that the letter dated 02.02.1996 Annexure 3 to the petition amounts to unconditional acceptance of the petitioner's offer and it has resulted in a complete contract between the parties. Hence he has alleged that the terms and conditions cannot be changed unilaterally but that is what has been done by the letter dated 27.03.1996 and the letter dated 22.02.1996 and 16.02.1996 Annexures 4 and 5 to the writ petition. It is these letters which had required a performance guarantee but there was no such requirement in the letter dated 02.02.1996. However, it appears from the petitioner's letter dated 15.04.1996 Annexure 10 to the writ petition that the petitioner had agreed to deposit the performance guarantee as required by the respondents. Hence, even assuming that there was a concluded contract it can be said that the petitioner had himself agreed to modification in the contract by his letter dated 15.04.1996. The petitioner therefore submitted another letter dated 22.04.1996 Annexure 11 to the writ petition praying for extension of time to submit performance guarantee by one month. This again makes it clear that the petitioner had agreed to the modification of the contract.
7. Since the petitioner had agreed to give the performance guarantee but failed to do so it is he himself who was to blame.
8. We have perused the counter-affidavit. In paragraph 2(b) of the same it is stated that a successful bidder was required to furnish a performance guarantee equivalent to 5% of bare construction cost inclusive of interest during the period of construction. This performance guarantee was to be furnished within 15 days of the issuance of the provisional letter of acceptance and failure to furnish it amounts to disqualification. Thus the deposit of performance guarantee was a condition precedent before the final letter of acceptance and award of work to the bidder. The petitioner never furnished performance guarantee much less within 15 days and hence there was no final acceptance of petitioner's bid or concluded agreement between the parties.
9. In paragraph 6 of the counter-affidavit it is stated that the bid document were amended before the petitioner had submitted its bid and the amendment was notified by issuing corrigendum on 15.05.1995 which was received by the petitioner vide Annexure C.A.1. This corrigendum is part of the bid document submitted by the petitioner himself and it states that a successful bidder has to furnish performance guarantee equivalent to 5% of bare construction cost inclusive of interest during the period of construction. The petitioner failed to submit performance guarantee and has not submitted it even till today.
10. On the facts of the case we find no merit in this petition. We are fully in agreement with the impugned order of the learned single Judge that there was no concluded contract as the petitioner did not submit bank and performance guarantee. Moreover even otherwise this is not a fit case for interference under Article 226 of the Constitution. Writ jurisdiction is discretionary jurisdiction and we are not inclined to exercise our discretion in favour of a party who has not complied with the bid condition/deposit of performance guarantee. The petition is therefore dismissed.