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Himachal Pradesh High Court · body

2015 DIGILAW 1949 (HP)

Ajmer Singh v. State of H. P.

2015-12-22

DHARAM CHAND CHAUDHARY

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JUDGMENT : Dharam Chand Chaudhary, J. (Oral) Petitioner is a Government Contractor. Consequent upon the notice, Annexure P-1 inviting tenders by respondent No. 4, qua dismantling the building of Baba Balak Nath Temple Trust, Deothsidh, district Hamirpur, he submitted the tender alongwith a sum of Rs. 25,000/- towards security/earnest money. The tenders were opened on 14.10.2014. The petitioner, being the highest bidder having offered Rs. 8,45,000/- for dismantling the building and removal of the debris, was declared successful and as per special terms and conditions of the notice, inviting tenders, he deposited 25% of the bid amount, i.e. Rs. 2,11,250/- at the fall of hammer. As per condition No. 6, the competent authority had the right to accept or reject the bid without assigning any reason. The successful bidder had to complete the dismantling work within 40 days from the acceptance of the bid by the competent authority. On his failure to complete the work, to forfeit the whole of the amount he already deposited. The bid was yet to be accepted by the respondents, the petitioner by a legal notice, Annexure P-2, expressed his inability to execute the work on the ground that the material as disclosed in the list and was to be removed was less than as shown in the list and also that he was not allowed to inspect the building in question before offering the bid and he offered the bid amount on the basis of exaggerated version of the employee of the respondents. He, therefore, informed respondent No. 4 to treat the bid as cancelled. The said respondent, instead of taking any action on the notice, Annexure P-2, has intimated the acceptance of the bid vide Annexure P-3 and called upon the petitioner to complete the work within 40 days. Hence, the present petition with the following prayers:- (a) Issue writ in the nature of certiorari quashing and set aside the impugned letter (Annexure P-3) as issued by respondent No. 4 ; (b) Issue a writ of mandamus or any other suitable writ, order or direction directing the respondents to refund the security amount to Rs. 25,000/- and the bid money amounting to Rs. 2,11,250/- alongwith interest @ 18% per annum.” 2. 25,000/- and the bid money amounting to Rs. 2,11,250/- alongwith interest @ 18% per annum.” 2. The stand of the respondents in reply to the writ petition is that since the petitioner has failed to execute the work within the stipulated period, therefore, he is not entitled to refund of the bid amount or the security, he deposited before making the bid. 3. On hearing learned counsel representing the parties on both sides and having gone through the records, in the considered opinion of this Court, the bid amount could not have been withheld for the reason that the petitioner well before acceptance of the bid by the respondents had expressed his inability to execute the work vide legal notice, Annexure P-2. The notice is dated 20.10.2014, whereas the bid has been accepted by respondent No. 4 vide letter Annexure P-3, dated 22.10.2014. The respondents having gone through the legal notice should have decided the dispute raised by the petitioner and considered his request qua cancellation of the bid, he offered instead of thrusting upon him their decision to execute the work. There is nothing in reply to the writ petition to show that on account of withdrawal of the bid by the petitioner, the respondents have sustained any damage or loss. Therefore, in the considered opinion of this Court, the respondents-Trust is not justified in withholding lacs of rupees deposited by the petitioner at the fall of hammer. The findings, so recorded, are supported by the judgment of apex Court in Kailash Nath Associates Vs. Delhi Development Authority and another, (2015) 4 SCC 136 . As a matter of fact, in the case before the apex Court also the bidder had deposited 25% of the bid amount being the highest bidder like in the present case. In that case, on account of recession in the industry, bidder failed to execute the work, though extension was granted to him from time to time, however, ultimately the Delhi Development Authority resorted to fore feature clause and forfeited the bid amount, i.e. Rs. 78,00,000/- in that case. The apex Court in para 29 of the judgment has held as under:- “29. Based on the facts of this case, it would be arbitrary for DDA to forfeit the earnest money on two fundamental grounds. First, there is no breach of contract on the part of the appellant as has been held above. 78,00,000/- in that case. The apex Court in para 29 of the judgment has held as under:- “29. Based on the facts of this case, it would be arbitrary for DDA to forfeit the earnest money on two fundamental grounds. First, there is no breach of contract on the part of the appellant as has been held above. And second, DDA not having been put to any loss, even if DDA could insist on a contractual stipulation in its favour, it would be arbitrary to allow DDA as a public authority to appropriate Rs. 78,00,000/- (Rupees seventy-eight lakhs) without any loss being caused. It is clear, therefore, that Article 14 would apply in the field of contract in this case and the finding of the Division Bench on this aspect is hereby reversed.” 4. It is seen that the point in issue in the present case is identical as was before the apex Court because the present is also a case where damage has not been caused to the respondents on account of the petitioner withdrawing from the bidding process. The respondents-Trust, therefore, is not justified in withholding the bid amount. 5. Reliance on behalf of the respondents has also been placed on the judgment of the apex Court in National Thermal Power Corporation Vs. Ashok Kumar Singh and others, (2015) 4 SCC 252 . In this case, it is the earnest money deposited at the time of making bid which has been forfeited and not the bid amount. Therefore, the respondents’ case is not supported by this judgment at all. At the most, they can withhold Rs. 25,000/-, the security/earnest money deposited by the petitioner alongwith his tender documents. 6. In view of the above, this petition succeeds and is accordingly allowed. Consequently, the order, Annexure P- 3 whereby the petitioner has been called upon to execute the work within 40 days is quashed and set aside with a further direction to the respondents to release the bid amount i.e. Rs. 2,11,250/- to the petitioner within two months from the date of production of the copy of this judgment before respondent No. 4. The petitioner however, is not entitled to the refund of Rs. 25,000/-, the security/earnest money, he deposited with the tender documents. The writ petition stands disposed of, so also the pending applications, if any.