Research › Search › Judgment

Jharkhand High Court · body

2015 DIGILAW 1256 (JHR)

Sanjukta Tiwary v. State of Jharkhand

2015-10-08

SHREE CHANDRASHEKHAR

body2015
ORDER : Seeking quashing of the decision of the Tender Committee dated 01.10.2015, the present writ petition has been filed. 2. The petitioner no.1 claiming himself a registered Class-II contractor under the Road Construction Department states that petitioner no.2 is his friend, who duly pledged his Fixed Deposit Receipts in favour of the Executive Engineer, Rural Works Department, for facilitating submission of Earnest Money Deposit. On 16.09.2015, e-Tender Notice No. 04/1516/EE/RWD/Latehar was issued inviting bids for various works including, “Construction of Two Units Teacher Quarter at P.T.G Primary Residential School in Village-Netarhat, Block-Mahuadanr, District-Latehar” and, the Single Bid Documents (SBD) containing terms and conditions and requisite eligibility criteria was published. The cost of Tender was to be deposited through Demand Draft/Bankers' Cheque issued by the State Bank of India in favour of the Executive Engineer, Rural Works Department and, the Earnest Money Deposit (EMD) was to be submitted through various instruments including, Fixed Deposit Receipts (FDR) issued by Scheduled Public Sector Bank duly pledged in favour of the Executive Engineer, Rural Works Department. The petitioner no.1 in compliance of the aforesaid conditions deposited Demand Draft bearing No. 287179 dated 23.09.2015 and uploaded the Fixed Deposit Receipts of petitioner no.2 duly pledged in favour of respondent no.3. On 30.09.2015 when petitioner no.1 furnished the original copy of the Fixed Deposit Receipts to respondent no.3, the FDR was returned informing him that it must be in the name of petitioner no.1. The finance bid opening summary dated 02.10.2015 uploaded by the respondents discloses that one Devanand Prasad has quoted the lowest rate @ 5% below the estimated rate whereas, petitioner no.1 quoted his rate @ 5.01% below the estimated cost. Alleging arbitrariness, unreasonableness and malice in law in rejecting the technical bid of petitioner no.1, the present writ petition has been filed. 3. Mr. Sumeet Gadodia, the learned counsel for the petitioners assailing the decision of the respondent-authority rejecting the offer out-rightly submits that although the petitioner no.1 fulfills the conditions of e-Procurement Notice dated 16.09.2015, on an erroneous ground that the Fixed Deposit furnished by the petitioner no.1 was not in his name, rejected the bid. Referring to Clause 5 of e-Procurement Notice dated 16.09.2015, it is contended that the Fixed Deposit furnished by the petitioner no.1 as Earnest Money Deposit was in the prescribed proforma. Referring to Clause 5 of e-Procurement Notice dated 16.09.2015, it is contended that the Fixed Deposit furnished by the petitioner no.1 as Earnest Money Deposit was in the prescribed proforma. The prescribed proforma only indicates that the Fixed Deposit should be pledged in favour of the Executive Engineer, Rural Works Department, Works Division, Latehar. It is further submitted that the object behind insistence upon submission of Earnest Money Deposit through the demand draft/banker’s cheque or National Saving Certificate and/or Fixed Deposit which would be adjusted towards Security Deposit, is to recover damage/penalty in terms of the conditions of the contract in the event of failure of the contractor to execute the contract. 4. Before adverting to the contentions raised on behalf of the petitioners, relevant provisions under the Tender Document need to be noticed. “5. Cost of tender/bidding document in the shape of demand draft/banker’s cheque issued by State Bank of India within Jharkhand in favour of Executive Engineer, Rural Works Department, Works Division, Latehar payable at Latehar and earnest money in the shape of Bank Guarantee in prescribed Performa as per Annexure1 from any Scheduled Public Sector Bank within the State of Jharkhand and valid for 180 days from the date of opening of tender of Fixed Deposit of a Scheduled Public Sector Bank issued within the State of Jharkhand or current issues of National Saving Certificate duly pledged from any Post Office within the State of Jharkhand, in favour of Executive Engineer, Rural Works Department, Works Division, Latehar. Cost of tender/bidding document, Earnest Money Deposit, affidavit regarding correctness of Bid (Annexure-2) and a set of hard copy of scanned & uploaded technical qualification documents only shall be deposited in Executive Engineer, Rural Works Department, Works Division, Latehar on 29092015 from 10.00 A.M to 3.30 P.M. If this date is declared as holiday these papers will be submitted on the next working day.” “5.1 Duly pledged Earnest Money, if any, lying with the concerned Executive Engineer against work already completed shall not be adjusted by transfer. In such case the tenderer is required to get the same refunded released and then attach the same with the tender, duly pledged afresh for the work for which tender is filled.” “5.2 Tender not accompanied with required Earnest Money in the prescribed manner shall be rejected outright and will not be evaluated.” “13. In such case the tenderer is required to get the same refunded released and then attach the same with the tender, duly pledged afresh for the work for which tender is filled.” “5.2 Tender not accompanied with required Earnest Money in the prescribed manner shall be rejected outright and will not be evaluated.” “13. In the case of successful tenderer (hereinafter called contractor) the amount of E.M. will be transferred towards Initial Security Deposit in such a manner so that the security deposit will form part of 5% of the approved amount of the approved tender & the remaining 5% shall be recoverable from the subsequent bills of the contractor.” “22. Conditional tender shall not be valid/accepted.” 5. Clause 7 of Instructions to Bidders provides that, “Bidders have to produce the original D.D. towards tender fee, EMD & affidavit regarding correctness of Bid in approved form (Annexure2) and a set of hard copy of scanned & uploaded Technical qualification documents shall be deposited to “Executive Engineer, Rural Works Department, Works Division, Latehar” on the date & time as mentioned in the NIT failing which bidder will be disqualified. The details of cost of documents, EMD specified in the tender documents & affidavit regarding correctness of Bid should be the same as submitted online (scanned copies) otherwise tender will summarily be rejected.” Section-V of the Bid Documents provides format of the affidavit to be filed by the intending bidders. The bidders are required to affirm that all papers submitted by them in the BID are correct to the best of their knowledge. At any stage if it is found that the information given is not genuine or any of the papers submitted by the bidder is not correct, department would be free to forfeit EMD and may initiate process of blacklisting against the firm. 6. Clause 5 of e-Procurement Notice dated 16.09.2015 mandates that the Earnest Money Deposit shall be pledged in favour of the Executive Engineer, Rural Works Department, Works Division, Latehar and it should be accompanied by an affidavit. The learned counsel for the petitioner no.1 submitted that these two conditions have been fulfilled by the petitioners, still the bid submitted by the petitioner no.1 has been rejected. The learned counsel for the petitioner no.1 submitted that these two conditions have been fulfilled by the petitioners, still the bid submitted by the petitioner no.1 has been rejected. I find that Clause 13 of e-Procurement Notice dated 16.09.2015 provides that the amount of Earnest Money will be transferred towards Initial Security Deposit in such a manner so that the security deposit will form part of 5% of the approved amount of the approved tender and the remaining 5% shall be recoverable from the subsequent bills of the contractor. It is not in dispute that the Earnest Money Deposit in the form of Fixed Deposit was furnished by the petitioner no.1 however, the Fixed Deposit was not in the name of petitioner no.1, rather it was in the name of a friend of petitioner no.1. The learned counsel for the petitioners submitted that petitioner no.2 is the person in whose favour the Fixed Deposit was made and he has consented that his Fixed Deposit can be invoked by the employer. Referring to Clause 5 of e-Procurement Notice dated 16.09.2015, and the proforma for Bank Guarantee, the learned counsel for the respondents submits that the Fixed Deposit furnished by the petitioner no.1 must be in the name of the bidder. Unless the Fixed Deposit furnished by the bidder is in his name, the employer cannot enforce the condition of forfeiture of Earnest Money Deposit in the event of breach of the conditions of contract. As noticed above, in terms of the condition of e-Procurement Notice dated 16.09.2015, the amount of Earnest Money Deposit forms part of Initial Security Deposit however, unless the person in whose name the Fixed Deposit has been made, makes endorsement on the Fixed Deposit, it cannot be invoked. The learned counsel for the petitioners submits that in case the Fixed Deposit is in the name of petitioner no.1, then also he would be required to make endorsement on the Fixed Deposit for invoking the same. I find no substance in the said contention for the reason that once petitioner no.1 submitted his bid, he would be bound by the conditions under NIT and the affidavit submitted by him. The very fact that the Fixed Deposit is not in the name of the bidder would require an enquiry from the issuing Bank however, no such enquiry is contemplated under the Tender. The very fact that the Fixed Deposit is not in the name of the bidder would require an enquiry from the issuing Bank however, no such enquiry is contemplated under the Tender. In the affidavit, petitioner no.1 has undertaken that if at any stage it is found that the information given is not correct or the paper submitted by him is not correct, the employer can forfeit his Earnest Money Deposit. The Earnest Money Deposit furnished by petitioner no.1 is not in his name and therefore, the Earnest Money Deposit furnished by petitioner no.1 cannot be invoked against him. The bid submitted by the petitioner no.1 in fact, was conditional and under Clause 22 of the Tender Document it was liable to be rejected. 7. Referring to the decision in Poddar Steel Corporation Vs. Ganesh Engineering Works & Ors. reported in (1991) 3 SCC 273 , the learned counsel for the petitioners submits that even if it is assumed, though not admitted, that the bid submitted by the petitioner no.1 was lacking in some details, since it was only a nonessential condition of contract, the rejection by the respondent-authority of the offer submitted by the petitioner no.1 is erroneous. In “Poddar Steel Corporation” case, Clause 6 of tender notice required Earnest Money deposit by cash or by demand draft drawn on the State Bank of India. However, the bidder furnished a cheque of the Union Bank of India drawn on its own branch. The Hon'ble Supreme Court held that the certified cheque of the Union Bank of India drawn on its own branch must be treated as sufficient for the purpose of achieving the object of the condition under the tender. In so far as the contention that the bid submitted by the petitioners fulfills the essential conditions, as contained in Clause 5 of e-Procurement Notice dated 16.09.2015 is concerned, I find that in view of the fact that the Fixed Deposit duly pledged in favour of the Executive Engineer, Rural Works Department, Works Division, Latehar was not drawn in the name of petitioner no.1, he has failed to fulfill the essential conditions of Clause 5. In “Jal Mahal Resorts private Limited Vs. In “Jal Mahal Resorts private Limited Vs. K.P. Sharma & Ors.” (2014) 8 SCC 804 , the Hon'ble Supreme Court held that, “what is sought to be emphasised is that there has to be a boundary line or the proverbial “Laxman rekha” while examining the correctness of an administrative decision taken by the State.” 8. Considering the facts disclosed in the present writ petition, I am of the opinion that petitioner no.1 has failed to establish malafide against the respondent-authority. The action taken by the respondent-authority cannot be said to be arbitrary. Every executive action in the matters relating to contract is generally not open to judicial review, unless it is found patently illegal, arbitrary and malafide. It is not the case of the petitioners that the action taken by the respondent-authority is against the public interest. In “Master Marine Services (P) Ltd. Vs. Metcalfe & Hodgkinson (P) Ltd.” (2005) 6 SCC 138 , the Hon'ble Supreme Court observed as under, “12 ......... The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. The Government must have freedom of contract. In other words, fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” 9. Considering the aforesaid facts, I find no merit in the writ petition and, accordingly, it is dismissed. Petition dismissed.