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Madhya Pradesh High Court · body

2015 DIGILAW 808 (MP)

Baldev Thakur v. Union of India

2015-08-06

SUJOY PAUL

body2015
ORDER 1. This petition filed under Article 226 of the Constitution is directed against the order dated 6.5.2015 (Annexure P-1), whereby the earnest money deposited by the petitioner was forfeited by the respondents. In addition, it is directed that the petitioner shall not be allowed to participate in re-tendering of the work. 2. Brief facts necessary for adjudication of this matter, as narrated by petitioner, are that the petitioner is a registered civil contractor (Class A-4) of the Central Public Work Department (CPWD). The respondent-department issued a Notice Inviting Tender (NIT), pursuant to which the petitioner submitted his bid. The petitioner being the lowest bidder had preferential right to get the work. The respondents passed the impugned order, whereby the earnest money deposit by the petitioner was forfeited and it is further ordered that the petitioner shall not be allowed to participate in re-tendering of the work. 3. Criticizing this order, Shri D.K.Agarwal, learned counsel for the petitioner, submits that the legality of the impugned order must be examined on the anvil of the conditions mentioned in the NIT. It is submitted that as per clause (1) of Schedule “F”, seven days’ time is allotted for submission of performance guarantee from the date of issue of letter of acceptance. Shri Agarwal by placing reliance on catena of judgments of Supreme Court submits that in contractual matter, the date of issue must be the date of communication/service of the acceptance letter. He submits that the petitioner was never orally informed that his bid has been accepted. By placing reliance on the respondents’ response dated 15.5.2015, it is contended that as per their stand, they have submitted that two letters No.333 and 335 were sent to the petitioner in one envelope. However, the petitioner has received only one letter. The acceptance letter was not there in the envelope. By taking this Court to Annexure R-5, it is contended that as per respondents’ stand, the acceptance letter was dispatched on 28.4.2015 and it was delivered on 29.4.2015 at 17:20 hours. It is submitted that the issuance at best can be counted after dispatch of letter. By placing reliance on a Division Bench judgment of this Court in Writ Petition No.7698/2013 (Shree Balaji Food Industries Pvt. Ltd. v. Food Corporation of India), it is contended that the date of delivery dated 29.4.2015 shall not be counted for the purpose of counting seven days. By placing reliance on a Division Bench judgment of this Court in Writ Petition No.7698/2013 (Shree Balaji Food Industries Pvt. Ltd. v. Food Corporation of India), it is contended that the date of delivery dated 29.4.2015 shall not be counted for the purpose of counting seven days. If it is counted from 30.4.2015, seven days were not over till 6.5.2015. Hence, seven days’ time, as mentioned in Schedule “F” is not fulfilled and rejection order before completion of said period is totally impermissible and bad in law. In addition, it is contended that depriving the petitioner from participating in retendering amounts to black listing him for the purpose of re-tendering. It is contended that such action is punitive in nature and, therefore, could not have been done without following the principles of natural justice. Reliance is placed on (2014)9 SCC 105 (Gorkha Security Services v. Government [NCT of Delhi] and others). It is submitted that the action of respondent No.4 is bad in law. Shri Agarwal by taking this Court to various response filed by the respondents submits that their stand is inconsistent and contradictory in nature. In para 5 of response dated 15.5.2015, they have submitted that acceptance letter was dispatched on 24.4.2015 and thereafter the respondents waited for eight days. After eight days from the date of delivery, they passed the impugned order. Shri Agarwal contended that this runs contrary to their own document, which shows that the letter/envelope was booked only on 28.4.2015 and it was delivered on 29.4.2015. Shri Agarwal has not pressed any relief against respondent No.4 and specifically contended that he is not pressing allegation of malafide against said respondent. 4. Shri Vivek Khedkar, learned ASG, on the other hand, supported the order passed by the department. He contended that the word “issue” has a definite connotation in law. “Issue” means the date when the respondents have lost control over the document. It is contended that the competent authority signed the acceptance letter on 24.4.2015 and directed the concerned ministerial employee to dispatch it. This is recorded in the dispatch register on the same day, i.e., 24.4.2015. In addition, the petitioner was telephonically informed on 24.4.2015 itself that the letter is ready and petitioner assured the department that he will collect it personally within two days. This is recorded in the dispatch register on the same day, i.e., 24.4.2015. In addition, the petitioner was telephonically informed on 24.4.2015 itself that the letter is ready and petitioner assured the department that he will collect it personally within two days. Since it was not collected by the petitioner within aforesaid time, the letter dated 24.4.2015 was dispatched by Speed Post on 28.4.2015. Shri Vivek Khedkar submits that once acceptance was orally communicated to the petitioner on 24.4.2015 itself, the petitioner gathered knowledge on the said date. Seven days are to be counted from 24.4.2015. He submits that the petitioner has not been declared as “black-listed”. In fact, the petitioner thereafter participated in another tender proceeding and work order is allotted to him. However, on a specific query from the Bench, Shri Vivek Khedkar fairly admitted that in the present NIT, there is no enabling provision to deprive the petitioner to participate in re-tendering process of same work and he further admitted that at present no contract has been given to anybody in re-tendering process nor any work order has been issued. 5. No other point is pressed by learned counsel for the parties. 6. I have heard learned counsel for the parties at length and perused the record. 7. In the light of rival contentions aforesaid, following questions emerge for determination : (i) How the word “issue” is to be construed as per Schedule “F” of the NIT? (ii) Whether the alleged oral communication of acceptance letter dated 24.4.2015 can be treated to be acceptance of the said letter? (iii) Whether the period of seven days is to be counted from 24.4.2015 or from 28/29.4.2015? (iv) Whether the respondents were justified in forfeiting the earnest money deposit and depriving the petitioner from participating in re-tendering process? 8. Clause 1 of Schedule “F” of NIT reads as under : “Clause 1 Time allowed for submission of performance guarantee 7 days” from the date of issue of letter of acceptance. 9. The stand of the parties on interpretation of the word “issue” in clause 1 is diametrically opposite. Thus, it requires serious consideration as to what would be the meaning of the word “issue” in a contractual matter of this nature. 9. The stand of the parties on interpretation of the word “issue” in clause 1 is diametrically opposite. Thus, it requires serious consideration as to what would be the meaning of the word “issue” in a contractual matter of this nature. Reliance is placed on the judgment of the Supreme Court in Raja Harish Chanrda Raj Singh v. The Deputy Land Acquisition Officer and another [ AIR 1961 SC 1500 ]. However, the said judgment deals with the expression “the date of the award” used in section 18(2) of Land Acquisition Act 1894. The said judgment has no application in the present matter. In AIR 1964 SC 1742 (Banarsi Debi v. ITO), the apex Court opined that the intention would be effectuated if the wider meaning is given to the expression “issued”. The dictionary meaning of the expression “issued” takes in the entire process of sending notice as well as service thereof. The said word used in section 34(1) of the Act itself was interpreted by the Courts to mean “served”. 10. This Supreme Court judgment was considered by a Division Bench of this Court in Shiv Saran Lal Kashi Prasad v. State of M.P. and others [ 1980 JLJ 170 = 1980 MPLJ 218 ]. This Court opined that the use of word “issue” to denote service is also not uncommon. It cannot be forgotten that the word “issue” is used in a clause which is related with submission of performance guarantee by the contractor. Unless the contractor receives acceptance by the department, he will not be in a position to know whether or not his offer has been accepted by the Government. Therefore, the date of receipt would be the date of issue. The Supreme Court after considering the judgment of Division Bench of this Court in Shiv Saran Lal Kashi Prasad (supra), has taken this view in Kalyanji Vithaldas and Sons v. State of M.P. and others [ (1996)10 SCC 762 ]. In this view of the matter, I find force in the argument of Shri Agrawal that the word “issue” must be construed as served. The word “issue” implies service of notice. Thus, the question No. (i) is decided in favour of the petitioner. 11. So far question No. (ii) is concerned, the parties have taken diametrically opposite stand in relation to oral information/communication given by the department. The word “issue” implies service of notice. Thus, the question No. (i) is decided in favour of the petitioner. 11. So far question No. (ii) is concerned, the parties have taken diametrically opposite stand in relation to oral information/communication given by the department. Petitioner has vehemently denied that any such oral information was given. In (1999)3 SCC 172 (Delhi Development Authority v. Ravindra Mohan Aggarwal and Another), the apex Court opined that merely because the respondents gathered knowledge of the acceptance having been recorded on the file would not make any difference. In view of aforesaid, I am unable to hold that the period of seven days will be counted from the date of alleged oral communication. The oral communication is neither established by the department, nor it can be the date of counting limitation. 12. So far question No. (iii) is concerned, as per Annexure R-5, it is clear that the acceptance was dispatched/booked on 28.4.2015 and it was delivered on 29.4.2015. Thus, acceptance was communicated on 29.4.2015 at 17:20 hours. The ancillary question is whether the period of seven days is to be counted from 28/29.4.2015. This aspect is also not res integra. The apex Court in Econ Antri Ltd. v. Rom Industries Ltd. and another [ 2014(1) JLJ 1 ], opined as under : “25. Having considered the question of law involved in this case in proper perspective in the light of relevant judgments, we are of the opinion that Saketh lays down the correct proposition of law. We hold that for the purpose of calculating the period of one month, which is prescribed under section 142(b) of the N.I.Act, the period has to be reckoned by excluding the date on which the cause of action arose. We hold that SIL Import USA does not lay down the correct law. Needless to say that any decision of this Court which takes a view contrary to the view taken in Saketh by this Court which is confirmed by us, do not lay down the correct law on the question involved in this reference. The reference is answered accordingly.” 13. The Division Bench of this Court relied on this Supreme Court judgment in Shree Balaji Food Industries Pvt.Ltd. (supra). This Court opined that the offer was communicated to the petitioner on 21.2.2013 at about 3:41 p.m. by e-mail. The reference is answered accordingly.” 13. The Division Bench of this Court relied on this Supreme Court judgment in Shree Balaji Food Industries Pvt.Ltd. (supra). This Court opined that the offer was communicated to the petitioner on 21.2.2013 at about 3:41 p.m. by e-mail. As per General Clauses Act, the date of 21.2.2013 has to be excluded. In view of said ratio, the date of 29.4.2015 has to be excluded for the purpose of counting seven days from the date of acceptance. Thus, the period has to be counted from 30.4.2015. Admittedly, the impugned order is passed on 6.5.2015, counting it from 30.4.2015, it is clear that seven clear days time was not given to the petitioner for submission of performance guarantee. Thus, action of respondents is arbitrary and runs contrary to settled legal position. The impugned order for this reason cannot sustain judicial scrutiny. 14. So far the question of blacklisting is concerned, although respondents have not backlisted the petitioner by using express words, fact remains that for the purpose of re-tendering, the petitioner was held to be ineligible. The apex Court way back in (1975)1 SCC 70 (Erusian Equipment and Chemicals Ltd. v. State of West Bengal), opined that blacklisting amounts to “civil death” of a person who is foisted with the order of blacklisting. Such stigmatic order cannot be passed without following the principles of natural justice. This view is consistently followed by Supreme Court in (1989)1 SCC 229 (Raghunath Thakur v. State of Bihar) and (2012)11 SCC 257 (Patel Engineering Ltd. v. Union of India). Recently in Gorkha Security Services v. Government (NCT of Delhi) and others [ (2014)9 SCC 105 ], the apex Court reiterated the same principle. In my view, depriving the petitioner to participate in re-tendering process amounts to blacklist him for re-tendering process. Admittedly, no opportunity of any nature was given to the petitioner in this regard. 15. Shri Khedkar was also unable to show any enabling provision in the NIT which deprives the petitioner to participate in re-tendering process. Thus, the respondents were not justified in issuing the impugned order and forfeiting the earnest money deposited. Admittedly, no opportunity of any nature was given to the petitioner in this regard. 15. Shri Khedkar was also unable to show any enabling provision in the NIT which deprives the petitioner to participate in re-tendering process. Thus, the respondents were not justified in issuing the impugned order and forfeiting the earnest money deposited. A Division Bench of this Court in S.R.S. Infra Project Pvt.Ltd. Gwalior v. Gwalior Development Authority, reported in 2010(2) MPLJ 142 , held that “forfeiture of earnest money deposit without issuance of a show cause notice is violative of principle of natural justice.” The respondents committed further error in depriving the petitioner from participating in re-tendering process. Question No. (iv) is answered accordingly. 16. As analyzed above, the impugned order is arbitrary and unjustifiable. Thus, the order dated 6.5.2015 (Annexure P-1) and order of re-invitation of tender are set aside. The respondents are directed to release the EMD to the petitioner forthwith and allow the petitioner to complete the contract by deposit of performance guarantee as per NIT. 17. Petition is allowed to the extend indicated above.