ABCIIPL - PII JV V. THE UNION OF INDIA and 4 ORS

WP(C)/4025/2015

AI Insights

The case revolves around the rejection of the petitioner's technical bid for a tender issued by the N.F. Railway for the construction of a single line BG tunnel. The petitioner submitted a tender that included an FDR as earnest money, but the FDR was not in the name of the FA & CAO as required by the tender documents. Despite attempts to rectify this after the bid opening, the court upheld the rejection of the bid based on non-compliance with the tender conditions. The petitioner argued that the bank's subsequent clarification should validate the bid, but the court disagreed, emphasizing the importance of adhering to the tender conditions at the time of submission.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 688314 (HC-ASSAM)
• Appeal Type: Others
• Pronouncement Date: 13-07-2015
• Assessment Year: misc
• Other Referred Cases: B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd. and others, Rashmi Metaliks Limited and another Vs. Kolkata Metropolitan Development Authority and others, Megha Electricals Dihang Edutech Infrastructure Private Limited & Ors Vs. State of Assam and others
• Laws Referred To: Clause 4 of the tender documents
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: A K SARKAR
• Assessee Lawyers: G N SAHEWALLA
• Keywords: Earnest money; FDR; Technical bid rejection; Tender documents; Tender compliance
• Section: 4(5); 4(4)

Judgement Text

"WP(C) 4025/2015 BEFORE HON’BLE MR. JUSTICE B. K. SHARMA JUDGEMENT AND ORDER (ORAL) 1. The petitioner is aggrieved by rejection of his technical bid in respect of the tender Notice No. Con/2014/Nov/09 by which tender documents in two packe t system were called for construction of single line BG tunnel. The last date of submission of tender was fixed as 13/01/2014 and the date of opening was fixed as 16/01/2014. However, it is submitted that the last date of closing was extend ed upto 13/02/2015. Responding to the tender notice, the petitioner submitted it s tender. As stated in the writ petition (para 5) tenders were opened on 13/02/2 015 in presence of authorised representatives of the tenderers. 2. In para 6 of the writ petition, the petitioner has stated that while the petitioner was legitimately expecting that they would be called for opening of the financial bid, but they came to learn that the authority declined to accept the earnest money deposited by the petitioner along with its tender. Approach b eing made, the representative of the petitioner was informed that as the FDR sub mitted by the petitioner stipulated that the deposit is held at the disposal of the petitioner, the same was not acceptable in terms of clause 4 of the tender d ocuments and accordingly the technical bid of the petitioner was found not accep table. 3. In para 7 of the writ petition, the petitioner has stated that after su ch rejection of the technical bid of the petitioner, it approached the bank auth ority which clarified the matter vide Annexure-IV series letter dated 10/04/2015 . The petitioner has also placed reliance on the Annexure-V communication of the particular bank dated 06/07/2015 informing the GM/Con/N.F. Railway about the pa rticular FDR purportedly issued in favour of FA & CAO/Con/ NF Railway, Maligaon. 4. From the above narration of fact, what has emerged is that the last date of opening of tender was 13/02/2015 on which date the tender was opened. As the Annexure-III FDR dated 07/02/2015 would reveal, the same was drawn in favour of the petitioner and not in favour of the authority issuing the tender., Clause-4 of the tender documents deals with earnest money. As per the requirement of cla use 4 which deals with earnest money, Deposit receipts or pay orders or demand d raft from the State Bank of India or from any of the Nationalised Banks or a Sch edule Banks should be drawn in favour of Financial Advisor & Chief Account Offi cer/CON/N.F. Railway/Maligaon and endorsed Account Payee and valid at least u pto the validity of tender offer. No conformation advise from the Reserve Bank o f India will be necessary. 5. For a ready reference, clause 4 is reproduced below :- 6. Admittedly, the petitioner did not submit the FDR drawn in favour of the FA & CAO as per the stipulation made in clause 4.4 referred to above. Clause 4. 5 provides that a tender not accompanied with the requisite earnest money, in th e requisite manner as aforesaid will be summarily rejected. 7. As noted above, Annexure-3 FDR which the petitioner had submitted along with its tender was drawn in favour of the petitioner. Tenders were opened on 13 /02/2015 and when it was found that the FDR accompanying the tender documents of the petitioner was not in the manner prescribed under clause 4.4, the earnest m oney deposit and for that matter, the technical bid of the petitioner was reject ed. It was much thereafter, the petitioner addressed the letter dated 10/04/2015 to the respondent authority by way of clarification enclosing therewith the tra nsaction enquiry of the particular bank, so as to contend that the particular FD R was drawn in favour of FA & CAO. However, on a bare perusal of the FDR receip t dated 07/02/2015 reveals that the same was drawn in favour of the petitioner a nd not in favour of FA & CAO. On the reverse page of the FDR, there is an endors ement (seal, but when put, not specified), which reads as follows :_ At the request of the depositor ABCIIPL P II JV. This deposit is held at the di sposal of ABCIIPL P II JV as Security/Earnest Money deposit for the work ....... .......... This deposit will be released only with the written consent of FA & C AO/CON/N.F. Railway, Maligaon. 8. Above endorsement on the reverse side of the FRD (date not specified) ca nnot be said to have conformed to the requirement of clause 4.4 referred to abov e. Apart from the fact that the FDR is not drawn in favour of FA & CAO, the endo rsement also does not specify the work. It only certifies release of the deposit with the consent of the FA & CAO, meaning thereby that the FDR even with said e ndorsement stood in the name of the petitioner. It was never drawn in favour of FA & CAO as required under clause 4.4. Subsequent consent of the Bank obtained b y the petitioner after opening of the technical and financial bids cannot help t he case of the petitioner. 9. When the matter rested thus, the financial bid was opened on 26/06/2015 and only thereafter the petitioner filed the writ petition on 13/07/2015. In the mean time, the respondent bank addressed the Annexure-V letter dated 06/07/2015 to the Railway authority stating that the FDR was issued in favour of FA & CAO/ Con/NF Railway, Maligaon. Such a course of action was adopted by the bank upon i nsistence of the petitioner. However, the fact of the matter is that the FDR was in the name of the petitioner and not the FA & CAO. Tenders having been opened on 13/02/2015, the authority examined the tender documents submitted by the peti tioner and others and when it was found that the FDR was not drawn in reference to the clause 4.4 referred to above, it was within its competence and jurisdicti on, not to accept the earnest money and to reject the technical bid of the petit ioner. Subsequent clarification after opening of the technical and financial bid s cannot help the case of the petitioner. 10. Mr. G.N. Sahewalla, learned senior counsel for the petitioner has placed reliance on two decisions of the Apex Court reported in (2006) 11 SCC 548 (B.S. N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd. and others) and (2013) 10 SCC 9 5 (Rashmi Metaliks Limited and another Vs. Kolkata Metropolitan Development Auth ority and others). He also placed reliance on the decision of this Court reporte d in 2012 (4) GLT 723 (Megha Electricals Dihang Edutech Infrastructure Private L imited (M/S) & Ors Vs. State of Assam and others). Mr. A.K. Sarkar, learned coun sel representing the Railways submits that the earnest money was required to be drawn in the particular manner and the petitioner having failed to do that, cann ot fall back on the purported clarification issued by the bank, that too after t he technical bids were opened on 13/02/2015 and thereafter financial bids were a lso opened on 26/06/2015. 11. I have given my anxious consideration to the submissions made by the lea rned counsel for the parties and have also perused the entire materials on recor d. There is no dispute that the petitioner submitted the Annexure-III FDR along with its tender. On the face of it, the FDR was drawn in favour of the petitione r and not in favour of the FA & CAO as per the stipulation made in clause 4.4 of the tender documents. If that be so it being not in conformity with clause 4.4 of the tender documents, the authority was within its competence and jurisdictio n to reject the earnest money and for that matter the technical bid of the petit ioner. 12. I have carefully gone through the decisions on which the learned counsel for the petitioner has placed reliance. Needless to say that the ratio of a dec ision will have to be understood in the factual background of each and every cas e. In B.S.N. Joshi (Supra) the Apex Court while holding that if there are essent ial conditions of contract, the same must be adhered to, also held that if a dev iation is made in relation to all the parties in regard to any of the tender con ditions, ordinarily the power of relaxation may be held to be existing. In the i nstant case, clause 4.4 of the tender documents provided for drawing of the FDR in the particular manner. That was an essential condition of the tender document . There being failure on the part of the petitioner, the earnest money deposited by it and for that matter the financial bid was rightly rejected. There was no relaxation extended to tenderers. 13. In Rashmi Metaliks Ltd. (Supra), the Apex Court was concerned with the I ncome Tax return which assumed the character of an essential term. The dispute t hat arose was in relation to the income tax, whether gross or net. It was in suc h circumstances, it was held that necessary clarification ought to have been obt ained from the bank. Same is not the case in hand. 14. In Megha Electricals (Supra), this Court was concerned with substantial compliance in respect of the earnest money. In the instant case and as noted abo ve, the earnest money was required to be deposited in a particular form which th e petitioner failed to do. 15. Above apart, the tenders were opened on 13/02/2015 and thereafter the fi nancial bid was also opened on 26/06/2015. It is only thereafter, the petitioner filed the writ petition on 13/07/2015 agitating the grievance in respect of rej ection of technical bid with the opening of the fids on 13/02/2015. 16. For all the aforesaid reasons I do not find any merit in the writ petiti on and accordingly it is dismissed, leaving the parties to bear their own costs. "