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2015 DIGILAW 240 (JHR)

Ram Chandra Yadav v. Food Corporation of India

2015-02-12

SHREE CHANDRASHEKHAR

body2015
ORDER : Seeking quashing of letter dated 20.08.2014 and for a direction to the respondents for release of earnest money deposited by the petitioner for Tender Reference No. S and C13/21/NIT/201314, the present writ petition has been filed. 2. The brief facts of the case are that, pursuant to Tender Notice, the petitioner submitted his bids for two works namely, (i) Two way transportation from RH Chandil to PEG Seraikella and handling work at RH Chandil and, (ii) Two way transportation from RH Dhalbhumgarh to PEG Chakulia and handling work at RH Dhalbhumgarh. 3. With respect to Chandil-Seraikella work, the petitioner tendered earnest money deposit of Rs. 5,80,000/however, the petitioner was declared unsuccessful and therefore, earnest money deposit of Rs. 5,80,000/was required to be refunded to the petitioner within 30 days. The petitioner was awarded work for Dhalbhumgarh-Chakulia however, due to unavoidable reasons, the petitioner could not perform the said contract and finally, vide letter dated 20.08.2014 the contract was terminated. The petitioner vide emails dated 05.08.2014 and 18.08.2014 requested for refund of earnest money deposited however, vide letter dated 20.08.2014, the respondents refused to refund the earnest money for Chandil-Seraikella work, on the ground that the said amount is withheld till the actual loss which may incur due to nonperformance of the contract for Dhalbhumgarh-Chakulia work is ascertained. The petitioner submitted representation dated 19.09.2014 seeking refund of the earnest money for Chandil-Seraikella work however, the same has not been considered by the respondents and therefore, constrained, the petitioner has approached this Court by filing the present writ petition. 4. Heard the learned counsel appearing for the parties. 5. Mr. Pandey Neeraj Rai, the learned counsel appearing for the petitioner submits that under the contract the earnest money is required to be refunded within 15 days if, the bidder is disqualified in the technical bid and within 30 days in all other cases. The petitioner was unsuccessful for Chandil-Seraikella work and thus, the earnest money of Rs. 5,80,000/was required to be refunded to the petitioner within 30 days however, the same has been withheld illegally by the respondents. It is further submitted that there was no concluded contract in so far as, Chandil-Seraikella work is concerned, and therefore, with respect to the same work the respondents cannot take any punitive action against the petitioner and they are liable to refund the earnest money deposited of Rs. 5,80,000/. 6. It is further submitted that there was no concluded contract in so far as, Chandil-Seraikella work is concerned, and therefore, with respect to the same work the respondents cannot take any punitive action against the petitioner and they are liable to refund the earnest money deposited of Rs. 5,80,000/. 6. As against the above, Mr. Satish Bakshi, the learned counsel appearing for the respondents, submits that under Clause X (b) of the contract, the respondent-Corporation is at liberty to reimburse itself for any damage, loss, charge, cost or expenses suffered or incurred by it due to contractor's negligence and un-workman like performance of services under the contract or breach of any terms thereof. The respondent-Corporation is also entitled to deduct from any sum due or which at any time may become due to the contractor under the same contract or any other contract with the Corporation. It is further submitted that in the event of the sum due from the Corporation being insufficient, the balance of the total sum claimed and recoverable from the contractor can be deducted from the security deposit furnished by the contractor and if the security deposit is also not sufficient to cover the full amount claimed by the Corporation, the contractor shall pay to the Corporation on demand the remaining balance amount claimed. 7. Having heard the learned counsel appearing for the parties and after perusing the documents on record, I am of the opinion that the present writ petition deserves to be allowed. The instruction to tenderers with respect to Chandil-Seraikella work refers to earnest money in paragraph no. 6 of the contract. which provides; “(ii) The Earnest Money will be returned to all unsuccessful tenderes within a period of 15 days from the date of disqualification in the case of all Tenderers whose Technical Bids are disqualified, and within a period of 30 days from the date of issue of the acceptance letter in the case of all other Tenderers and to a successful Tenderer, after he has furnished the Security deposit if he does not desire the same to be adjusted towards the Security Deposit. No interest shall be payable on Earnest Money, in any case.” It is not in dispute that eTender notice was issued on 05.05.2014 and the bids were opened on 07.05.2014. No interest shall be payable on Earnest Money, in any case.” It is not in dispute that eTender notice was issued on 05.05.2014 and the bids were opened on 07.05.2014. The petitioner was declared unsuccessful for Chandil-Seraikella work on 07.05.2014 and thus, within 30 days the earnest money deposit with respect to Chandil-Seraikella work was required to be refunded to the petitioner. The contract with respect to Dhalbhumgarh-Chakulia work was terminated on 20.08.2014. In terms of paragraph no. 6(ii) of the contract document, after 07.06.2014 the earnest money deposit was required to be refunded and thus, no sum with respect to Chandil-Seraikella work can remain due to the petitioner. The respondent-corporation, who were under a duty to refund the earnest money deposit within 30 days, that is, on or before 07.06.2014, cannot be permitted to take a plea that on 20.08.2014 when the contract for Dhalbhumgarh-Chakulia work was terminated the earnest money deposit for Chandil-Seraikella work was not paid to the contractor and thus, remained due to the contractor and therefore, the respondent-corporation can withhold the same for compensating itself on account of any loss or damage caused by the contractor in execution of Dhalbhumgarh-Chakulia work. It is well settled that the plain language of a contract must be given its literal meaning and the terms of the contract must be adhered by both the parties. Withholding of earnest money deposit for Chandil-Seraikella work by the respondent-Corporation is unfair and illegal. The respondent-Corporation being a Public Sector Corporation is under a duty to act fairly in its dealings with the general public. Adherence to terms of the contract by the contracting parties is in the public interest and any breach thereof would result in shaking the confidence of general public who are dealing with the Government Corporation/Company/Department. The learned counsel for the petitioner has submitted that the challenge to order dated 20.08.2014 in the present writ petition is confined to refund of earnest money deposit for Chandil-Seraikella work only and therefore, I am not going into the other aspect of the matter. 8. In view of the above discussion, the present writ petition is allowed. The respondent-Corporation is directed to refund the earnest money deposit of Rs. 5,80,000/- with interest, if payable in terms of Corporation's own guidelines, within a period of four weeks.