Calcutta High Court
Abb Limited And Anr. vs West Bengal State Electricity Board And ... on 3 May, 2005
Equivalent citations: 2005(3)CHN34
Author: Pranab Kumar Chattopadhyay
Bench: Pranab Kumar Chattopadhyay
JUDGMENT Pranab Kumar Chattopadhyay, J.
1. The petitioners herein have challenged the decision of the respondent authorities regarding rejection of the tender bid of the petitioner No. 1 for alleged discrepancy in the bank guarantee on various grounds mentioned in the writ petition.
2. It has been submitted on behalf of the petitioners that the respondent authorities have kept the petitioner No. 1 out of participation in the tender on the ground that the bank guarantee is not in terms of the proforma as prescribed by the West Bengal State Electricity Board.
3. Mr. Anindya Mitra, learned senior Counsel appearing on behalf of the petitioners submits that the bank guarantee has been filed on behalf of the petitioner No. 1 in prescribed form and the alleged defect as pointed out by the respondents in respect of the bank guarantee is nothing but an error of judgment on the part of the respondent West Bengal State Electricity Board Authorities. It has been specifically stated on behalf of the petitioners that the petitioner No. 1 is duly qualified in all respects for participating in the tender and the tender papers have been duly submitted on behalf of the said petitioner No. 1 in four covers as per prescribed procedure.
4. According to the petitioner, after opening the cover-I of the bids in presence of the tenderer, the respondent No. 3 pointed out the alleged discrepancies in the bank guarantee submitted by the petitioner No. 1 on the ground that the said bank guarantee of the petitioner No. 1 does not provide for the claim period of six months after expiry of the validity period. The representative of the petitioner No. 1 after detection of the aforesaid discrepancy in the bank guarantee contacted the banker and requested the Senior Manager to issue a formal amendment to the bank guarantee.
5. From the records it appears that the bank issued a corrigendum to the bank guarantee and sent the name by fax to the office of the respondent West Bengal State Electricity Board Authorities on the same day i.e. on 24th March, 2004 when the cover-I of the bids was opened. By the written communication dated 24th March, 2005, Senior Manager of the Union Bank of India also informed the concerned authority of the W.B.S.E.B. that the original bank guarantee was issued without the claim period through oversight and the same has been corrected by incorporating the claim period as desired by the said respondent West Bengal State Electricity Board Authorities.
6. The Chief Engineer (Transmission Project) of the W.B.S.E.B., however, informed the petitioner No. 1 by the written communication dated April 4, 2005 that subsequent submission of the amendment to the bank guarantee cannot be considered and the bid of the petitioner was treated as invalid on the aforesaid ground that the bank guarantee submitted by the petitioner No. 1 was not in order.
7. Mr. Bikash Ranjan Bhattacharyya, learned senior Counsel appearing on behalf of the respondent W.B.S.E.B. submits that the bank guarantee submitted by the petitioner No. 1 does not conform to the requirements of tender notice and as such the respondents had no other option but to reject the tender bid of the petitioner No. 1.
8. Referring to the bank guarantee submitted by the petitioner No. 1, Mr. Anindya Mitra, learned senior Counsel of the petitioners submits that the same has been duly prepared as per the prescribed format supplied by the respondent W.B.S.E.B. authorities but the clarificatory clause mentioned at the end of the bank guarantee does not abridge or affect the last substantive clause of the said bank guarantee.
9. Mr. Bhattacharyya, learned senior Counsel of the respondents W.B.S.E.B. authorities, however, submits that as per the tender condition although the bank guarantee was required to be submitted strictly in terms of the prescribed form but in the present case, the said bank guarantee was not submitted in prescribed form in view of the insertion of the clarificatory clause at the end of the bank guarantee.
10. Mr. Bhattacharyya further submits that specific omission of the claim period in the clarificatory clause in a serious defect which cannot be cured subsequently and the members of the Tender Committee have rightly refused to treat the bank guarantee submitted by the petitioner No. 1 as valid. According to Mr. Bhattacharyya, the omission of the aforesaid claim period in the clarificatory clause of the bank guarantee has virtually invalidated the entire bank guarantee as the same will not cover the liabilities of the bank for the entire prescribed period in terms of the tender condition.
11. Mr. Bhattacheryya also submits that the amendment of the bank guarantee and communication of the same by fax cannot be acceptable in view of the tender condition.
12. On examination of the bank guarantee, however, I find that the provision of the claim period has been specifically mentioned in the said bank guarantee submitted by the petitioner No. 1 in the paragraph just above the clarificatory clause which is also quoted hereunder :
"All rights of West Bengal State Electricity Board under this guarantee shall be forfeited and the Bank shall be relieved and discharged from all liabilities thereunder unless W.B.S.E.B. brings any suit or action to enforce a claim under this guarantee against the bank within six months from the abovementioned expiry date of validity or from that of the extended date."
13. In the clarificatory clause of the bank guarantee although the claim period has not been mentioned but the same cannot abridge or affect the declaration mentioned in the substantive clause of the bank guarantee, namely, the suit has to be filed against the bank within six months from the expiry of the date of validity period of the bank guarantee.
14. Undisputedly, the validity period has been correctly mentioned by the banker of the petitioner No. 1 in the bank guarantee and admittedly, any claim in relation to the bank guarantee should be made within the aforesaid validity period. The clarificatory clause in the bank guarantee, in my view, cannot render the other substantive clauses of the bank guarantee invalid or infructuous. In the bank guarantee submitted on behalf of the petitioner No. 1, claim period has been specifically provided in a separate clause as per the prescribed format.
15. The clarificatory clause mentioned in the said bank guarantee starting with the word 'Notwithstanding' cannot render the aforesaid substantive clause regarding the claim period as nullity or infructuous for the aforementioned reasons.
16. Scrutinising the said bank guarantee, I find that the same has been prepared as per the prescribed form and the additional clarificatory clause mentioned at the bottom of the bank guarantee, however, does not affect any substantive clause of the bank guarantee. The alleged omission of the claim period of six months after expiry of the validity period in the clarificatory clause of the said bank guarantee has neither diluted and/or varied and/or modified the terms and conditions mentioned in the said bank guarantee and the bank also cannot be relieved from discharging the liabilities as have been mentioned in various portions of the said bank guarantee apart from the clarificatory clause.
17. Furthermore, on March 24, 2005 when the cover-I of the tender bid was opened, the Senior Manager of the respondent bank not only issued a corrigendum amending the bank guarantee by incorporating the claim period but also intimated the respondent W.B.S.E.B. in writing on the same day to the effect that the claim period was not mentioned in the clarificatory clause through oversight.
18. In the event any mistake committed by the banker while issuing the bank guarantee through oversight has been corrected immediately after detection then the concerned respondent should consider the same in its correct perspective and should not unnecessarily penalise the petitioner for the alleged mistake of the banker.
19. However, in my opinion, the bank guarantee submitted by the petitioner No. 1 should be regarded as valid in view of the fact that the claim period has been duly incorporated in the said bank guarantee and omission to incorporate the same once again in the clarificatory clause cannot relieve the bank to discharge its liabilities regarding enforcement of any claim under the said guarantee by filing any suit or action within the prescribed claim period of six months from the expiry date of the validity period.
20. Pursuant to the earlier direction of this Court, other bidders were intimated about the present proceedings. Upon hearing the submissions of the learned Counsel representing other bidders, I am of the view that the participation of the petitioner No. 1 in the tender process hereinafter will not interfere with the accrued rights of the other bidders.
21. In the aforesaid circumstances, the impugned decision of the respondent authorities to keep the petitioner No. 1 out of participation in the tender on the alleged ground that the bank guarantee has not been submitted in terms of the prescribed proforma cannot be sustained and the same is accordingly quashed. The respondents herein are, therefore, directed to open the cover-II of the petitioner's tender immediately and before opening cover-Ill and IV of the other tenderers, thereafter, process the petitioner's tender alongwith other eligible tenderers for finalising the tender in question.
22. This writ petition thus stands allowed. There will be, however, no order as to costs.
23. Let xerox plain copy of this judgement duly countersigned by the Assistant Registrar (Court) be handed over to the learned Advocates of the parties on usual undertaking.