Ms Damodar Velley Construction Through ... vs Ms Bharat Coking Coal Limited Through ... on 21 June, 2016

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Jharkhand High Court

Ms Damodar Velley Construction Through ... vs Ms Bharat Coking Coal Limited Through ... on 21 June, 2016

2. In response to the tender notice dated 29.11.2014(Annexure A to the counter affidavit) petitioner submitted its tender in the prescribed format which included details of the vehicles i.e. model and year of manufacturing, registration number, name and address of the owner as per clause 2(i) of the Instructions to Bidders. Finding him to be the fittest bidder with the lowest quote, the letter of Acceptance( LOA) was issued date 17.4.2015 (Annexure-1) by the respondent no.2, Deputy General Manager(Administration) Bharat Coking Coal Limited, Dhanbad asking him to deposit the performance security of 5% of the contract value within 28 days and present 4 number of new TATA 407 vehicles within the same period for inspection along with documents. Further work order was to be issued only after presentation of the vehicles and documents referred therein. Failure on the part of the petitioner would lead to cancellation of LOA. This was followed by the letter dated 7.5.2015(Annexure-3) asking him to produce new vehicles as per the terms of the tender notice. The said letter also indicated that failure on the part of the petitioner would invite appropriate action as per the provision of N.I.T. Petitioner submitted documents of vehicles, which were 4 years old. He did not produce 4 new vehicles as per the terms of clause 2(i) of the Instructions to Bidders, part of tender notice (Annexure-A to the counter affidavit). This led to the cancellation of the LOA vide -2- Annexure-5 dated 17.7.2015 and forfeiture of earnest money of Rs.71,096/- vide letter dated 30.9.2015 (Annexure-7) issued by the Deputy General Manager (Administration), B.C.C.L impugned herein.

3. Petitioner has assailed the impugned action asserting that it had faithfully disclosed the details of the vehicles being of the year 2011 in its bid documents and have not indulged in any misrepresentation. Respondents have not suffered any loss or damages either to forfeit the earnest money. Petitioner has produced 4 vehicles though of an older age which the respondents refused to accept. Therefore, withdrawal of LOA and forfeiture of earnest money cannot be upheld in the eye of law and on facts. Reliance has been placed upon a judgment of the Hon'ble Supreme Court in the case of Kailash Nath Associates Vrs. Delhi Development Authority & another reported in 2015(4) SCC 136. He has also relied upon a judgment rendered by this Court in the case of M/s Om Prakash Singh Buildicon Pvt Ltd. Vrs. State of Jharkhand & others reported in 2016(2) JBCJ 225[HC].

4. Learned counsel for the respondent- B.C.C.L submits that failure on the part of the petitioner to provide commercial vehicles being registered within 1 month from the date of issuance of LOA and non deposit of the performance security of 5% of the contract value in terms of Annexure-A, LOA, necessitated revocation of the LOA and forfeiture of the earnest money in terms of the Tender Notice containing the terms and conditions. Petitioner therefore cannot make any lawful ground for interference with the impugned order.

5. I have considered the rival submission of the parties and material facts pleaded. It appears that petitioner did not misrepresent facts while submitting the bid documents but it was -3- required to produce commercial vehicles of the specification prescribed in the N.I.T dated 29.11.2015 and LOA dated 17.4.2015 within 1 month from the date of issuance of the LOA, following which, the work order was to be issued. Reminder letter dated 7.5.2015 to the petitioner was also issued for production of 4 new vehicles. Petitioner was also required to submit 5% of total contract value within 28 days of the issuance of LOA. However petitioner has only offered 4 old vehicles. Failure on the part of the petitioner to produce vehicles as per the prescribed specification therefore rightly invited revocation of the LOA which needs no interference.

6. Petitioner however also did not furnish the performance security / Security deposit which is one of the condition prescribed under clause 12 of the Instructions to Bidders for forfeiting of the earnest money/ bidding security. Action of the petitioner may not be explicitly shown to have caused pecuniary loss or damage to the respondent- company, but has definitely withheld the process of finalization of the tender for a certain length of time and also breach of the condition of the Instructions to Bidders, part of tender notice. Therefore, reliance of the petitioner upon the judgment rendered in the case of Kailash Nath Associates (supra) does not fit in the fact of the present case as though there are no contract executed with the petitioner. By reading of the same judgment, it is clear that in case of default, breach and non-compliance of any of the terms and conditions of the auction forfeiture of earnest money can be resorted to, which seem to have been done in the present case. The contention of the petitioner that no notice was issued prior to forfeiture of earnest money does not appear to be correct in view of the fact that petitioner's LOA (Annexure-1) and thereafter letter dated 7.5.2015(Annexure-3) did provide for appropriate action on -4- failure of the petitioner, as per the provision of the N.I.T, to deposit 5% of the security amount and present 4 new TATA 407 vehicles within 28 days of the issuance of the LOA.

7. Therefore action of the respondents did not suffer from legal infirmity so as to warrant interference in the present writ petition. The writ petition is dismissed accordingly.

(Aparesh Kumar Singh, J.) A. Mohanty

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Jharkhand High Court