Research › Search › Judgment

Madhya Pradesh High Court · body

2000 DIGILAW 199 (MP)

RAKESH CHANDANI v. M. P. ELECTRICITY BOARD

2000-02-28

DIPAK MISRA

body2000
ORDER Dipak Misra, J. In this writ petition preferred under Article 226 of the Constitution of India, the petitioner has prayed for issue of a writ in the nature of certiorari for quashment of the impugned order contained in Annexure P-8, whereby the order passed in favour of the petitioner accepting his offer has been cancelled, and further to issue a writ in the nature of mandamus commanding the respondents to give contract work in pursuant to the order dated 23-2-1999 and sign the agreement. The facts as have been setforth in the writ petition are that the respondent No. 1, M.P. Electricity Board through its Chief Engineer, respondent No. 2, herein, invited tenders for complete erection of 132 KV DCBS, Handiya-Harda Line involving check-survey Sub-setting Tower erection, stringing etc. vide NIS dated 5-5-1997. The petitioner along with four others participated in the said bid submitting their tenders. The petitioner quoted the lowest rate and his tender was accepted by the Chief Engineer. Parties entered into the negotiation and the lowest negotiated offer was accepted by the respondent No. 2. After due consideration and by telegram dated 5-2-1999 in terms of Clause 3.27 of section-Ill of Commercial Terms and Conditions of tender, document was sent to the petitioner. The acceptance of the document was followed by order No. 04-06/EE-C/668 dated 23-2-1999. As alleged, the contract was concluded on 5-2-1999 and on 23-2-1999 a telegram and its confirmation copy of the order was received by the petitioner. As stipulated in Clause 4.01 of the work order the petitioner was required to execute the agreement with the Board in its office within 10 days of the award of the contract on non-judicial stamp paper of worth Rs. 50/-. The aforesaid telegram was received by the petitioner on 23-2-1999. He started the execution of the work and also incurred expenses as he was required to complete the work within four months. The petitioner purchased the necessary paper on 3-3-1999 at Bhopal and got the agreement typed on 6-3-1999. He sent his representation with the balance amount of initial security deposit to be deposited with the Senior Accounts Officer (CBU), MPEB, Jabalpur and met the respondent No. 2 on 18-3-1999 with the typed copy of the agreement for its execution in terms of the Clause IV of the work order dated 23-2-1999. He sent his representation with the balance amount of initial security deposit to be deposited with the Senior Accounts Officer (CBU), MPEB, Jabalpur and met the respondent No. 2 on 18-3-1999 with the typed copy of the agreement for its execution in terms of the Clause IV of the work order dated 23-2-1999. At that juncture, the petitioner was intimated that a telegram had been issued to him keeping the contract in abeyance. He came to learn that when the petitioner accepted the further reply from the Board, he received the letter dated 24-9-1999 issued by the respondent No. 2 indicating that the work order has been cancelled as the petitioner had failed to complete the contractual formalities within the stipulated period of 10 days by furnishing security of Rs. 61,435/- and by executing the agreement within the said period on the non-judicial stamp paper. According to the petitioner the work order was issued on 23-2-1999 and was received by him on 27-2-1999, and if the period is computed the 10 days would be completed on 9-3-1999. But the respondent No. 2 passed the impugned order in an arbitrary manner before expiry of the period. It is alleged that the respondents have invited fresh tender vide order No. 04-06-EE-C/3343 dated 25-9-1999 for complete erection of 132 DCDS Handiya-Harda Line of 18 kilometers. It is putforth in the writ petition that the cancellation of the tender and recalling of the tender amounts to colourable exercise of power and the Board, is not justified in its action. It is highlighted that when the petitioner was granted 10 days time to complete the formalities, the Board could not have cancelled the tender before expiry of the stipulated period. A return has been filed by the answering respondents contending, inter alia, that a detailed order to complete the erection was issued vide order dated 23-2-1999 at the contract value of Rs. 55,71,749.17 as per Clause IV of the work order, the petitioner was required to complete the contractual formalities by furnishing 2 per cent security i.e. Rs. 81,435/within 10 days from the date of award of contract. It is setforth as the petitioner failed to complete the contractual formalities for furnishing of security deposit and entering into the contract within a stipulated period of 10 days, there has been breach of terms and conditions of the contract resulting in its cancellation. 81,435/within 10 days from the date of award of contract. It is setforth as the petitioner failed to complete the contractual formalities for furnishing of security deposit and entering into the contract within a stipulated period of 10 days, there has been breach of terms and conditions of the contract resulting in its cancellation. It is also putforth in the counter/affidavit that fresh tenders have been called vide tender to notice No. 3343 dated 25-9-1999 and the specification has been changed. It is also highlighted that the petitioner was well aware regarding deposit of security amount which he came to know on receipt of the telegram dated 5-2-1999. He was required to execute the agreement with the Board on non-judicial stamp paper within 10 days from the date of the award of the contract and was required to deposit the security amount within 10 days from 23-2-1999 but as he did not do so, there was no option but to cancel the contract. Investment of the money by the petitioner has been seriously disputed. There has been denial that the petitioner had sent his representation with the balance amount of initial security deposit to be deposited with the Senior Accounts Officer on 18-3-1999. It is categorically stated that as the petitioner failed to complete the contractual formalities within the specified period of 10 days respondent kept the contract in abeyance and informed the same to the petitioner by telegram dated 8-3-1999. In paragraph 10 of the counter affidavit, it has been clarified that stand of the petitioner that 10 days time would be computed from 27-2-1999 and the same would expire on 9-3-1999, is not correct as the award of contract was made on 22-3-1999 and the time expired within 5-3-1999 and contract was cancelled on 8-3-1999. Making such averments, the Board has justified its action. The core question that falls for consideration is whether the Board has been justified in cancelling the work order passed in favour of the petitioner on the ground that the petitioner has not complied with his part of obligation. On a perusal of the Annexure P-1, it transpires that the petitioner's offer was accepted and he was asked to mobilise his resources to start the work immediately after completing contractual formalities. It was mentioned in the said telegram "the detailed order follows" as per Annexure P/2, which is a correspondence between the parties'. On a perusal of the Annexure P-1, it transpires that the petitioner's offer was accepted and he was asked to mobilise his resources to start the work immediately after completing contractual formalities. It was mentioned in the said telegram "the detailed order follows" as per Annexure P/2, which is a correspondence between the parties'. Paragraph 4 which pertains to contract agreement and security deposit. It reads as under: 4. Contract Agreement and Security Deposit: 4.01: You shall execute the agreement with the Board in this office within 10(ten) days of award of contract on non-judicial stamp paper worth Rs. 50/-. The cost of which will be borne by you." After this letter was issued, the petitioner, as alleged by the respondent, did not complete the contractual formalities by furnishing security deposit and entering into the contract within 10 days and as such, committed breach and violation of the terms of the contract resulting into cancellation. A letter was sent vide Annexure R-1 on 8-3-1999 keeping the contract in abeyance. At this juncture, it is worthwhile to refer to the development of the case. On a perusal of the dates it transpires that the petitioner has computed the date from 27-2-1999 and come to the conclusion that the 9th March would be the last date, whereas the respondent has computed the date from 23-2-1999 and has arrived at the date of 5th March, 1999 to be 'the date'. Appreciating the totality of circumstances and the correspondences between the parties, I am of the considered view that the conclusion arrived by the Board is absolutely fallacious inasmuch as the letter was issued on 23-2-1999. Mr. Jaiswal, learned counsel for the respondents has placed heavy reliance on Clause IV to highlight that 10 days time is to be computed from the award of contract but that does not necessarily mean 10 days when the Board takes a decision to award the contract. Award of contract must be known to the contractor so that, he can take effective steps to comply with the terms and conditions for depositing the security deposit. If the interpretation of the Board is accepted, it would give rise to an absurd result, which would not be permissible in law. A reasonable transit period has to be allowed. Award of contract must be known to the contractor so that, he can take effective steps to comply with the terms and conditions for depositing the security deposit. If the interpretation of the Board is accepted, it would give rise to an absurd result, which would not be permissible in law. A reasonable transit period has to be allowed. In the case at hand the petitioner received the letter dated on 27-2-1999 and the cancellation has been done on 8th March, 1999. In view of this, I am of the considered opinion that the Board has not cancelled the contract after expiry of 10 days but on the 9th day which is unjustified, arbitrary and illegal. Ordinarily this Court would have quashed the orders passed by the Board and directed to enter into an agreement with the petitioner but, a significant but, there has been certain development during the pendency of this case. It was brought to the notice of this Court that on 19-11-1999 after cancellation of the tender a second tender was issued and a letter of intent has been sent in favour of the M/s Anand Transport. An affidavit was filed by the Board indicating that M/s Anand Transport Company has given the lowest offer amounting to Rs. 41,42,709.60 p. It is putforth that if the tender of the M/s Anand Transport Company is accepted the Board will be benefited by 20%, as the offer of the petitioner was Rs. 50,71,749.17 Paise. In course of hearing this Court enquired from the counsel for the petitioner whether he would reduce his offer to bring it at par with the offer of M/s Anand Transport Company. Mr. Rusia, learned counsel for the petitioner, upon instructions, submitted that the petitioner is not inclined to reduce the offer. This fact has weighed with me inasmuch as the Board has got a benefit of almost Rs. 10,00,000/- and this circumstance cannot be ignored. It is worth noting here that the petitioner had not participated in the second tender though there was no stay by this Court, yet this Court was inclined to accept the offer submitted by him if it would have been at par with the new fresh tenderer. But as negative approach has been exhibited by the petitioner I have not been persuaded to interfere in the matter. But as negative approach has been exhibited by the petitioner I have not been persuaded to interfere in the matter. It is to be borne in mind that public interest plays a paramount role in the award of contract. True it is, the Board has erroneously calculated the number of days and kept the award of contract in favour of the petitioner in abeyance, but when by the second tender the Board has been benefited by an amount of Rs. 10,00,000/-, public interest is served and hence, the same does not warrant interference. Before parting with the case I am obligated to put it on record that the Board's conduct is not that of a model owner. The Board must understand that it is a statutory body and it deals with the public in a welfare State. While entering into the contract it must adopt all fair means and any kind of arbitrariness or capriciousness has to be ostracised. They have no role to play. The Board should have applied its mind while computing the period and should not have acted in hurry. It is to be kept in mind that a hurried action is not an act of wisdom. It is expected in future that Board would act wisely and would not compel the citizens to knock at the doors of justice. It has been pleaded that the petitioner has spent some money after receipt of telegraphic work order. I refrain myself commenting on the same. Needless to emphasize, it would be open to the petitioner to agitate his grievance before the appropriate Court of law. The writ petition is accordingly dismissed without any order as to costs. Writ petition dismissed. Final Result : Dismissed