JUDGMENT : This writ petition is filed by the petitioners seeking to quash Ext.P19 order passed by the 1st respondent dated 16.11.2016, whereby sanction is accorded for forfeiting EMD provided by the petitioners towards the construction of Community Skill Parks at Edamattom and Pampadi in Kottayam District, and at Kattappana in Idukki District, and for other related reliefs Material facts for the disposal of the writ petition are as follows: 2. First petitioner is a construction company and 2nd petitioner is its Director. Petitioners participated in the e-tender, inviting construction of Community Skill Parks at the places specified above. Petitioners deposited an amount of Rs.12,00,000/- towards EMD in the aggregate. Subsequent to the opening of the bid and on negotiations conducted by the 2nd respondent, petitioner was awarded with contract of the said works. Petitioners quoted the contract rates on the estimated Probable Amount of Contract (PAC) between 2.5% to 4.5% of the PAC. As per Ext.P11 general conditions of the contract, if the PAC quoted by the petitioner falls below 10% and within the maximum permissible limit of 25%, of the PAC, then additional performance guarantee has to be provided. Accordingly, letter of acceptance was issued to the petitioners, evident from Exts.P5 to P7, by the 1st respondent, subject to the condition of executing additional performance guarantee. Petitioners submitted reply to the letter of acceptance issued by the 1st respondent on 16.08.2016, evident from Exts.P8 to P10, stating that petitioners are not liable to provide additional performance guarantee on the PAC. Petitioners sought clarification in respect of additional performance guarantee as per Exts.P12 to P17 communications. 3. According to the petitioners, as per the conditions pertaining to the remittance of performance guarantee provided under Clause 59.1 of Ext.P11 General Conditions of Contract (GCC), petitioners need only to provide performance guarantee of 5% of the PAC. It was also brought to the notice that as per Clause 59.2 of Ext.P11, an additional performance guarantee is required only when the quoted amount of the PAC would fall below 10% and within the maximum permissible limit, of 25% of the PAC. 4. Since the petitioners did not receive any reply from the 3rd respondent, further communications were issued, evident from Exts.P12 to P17. 4. Since the petitioners did not receive any reply from the 3rd respondent, further communications were issued, evident from Exts.P12 to P17. However, on 17.11.2016, a letter was served by the 1st respondent to the petitioners, stating that the petitioners have quoted low rates for certain items predominantly and hence assurance measures need to be adopted to ensure that petitioners perform and complete the project executing all items mentioned in the agreement and since additional performance security is not furnished, the EMD deposited of Rs.15,00,000/- is forfeited, evident from Exts.P18 and P19 respectively. Since the EMD amount forfeited by the 1st respondent was wrongly mentioned as Rs.15,00,000/- in Ext.P19 Government Order, a clarification letter was issued by the 1st respondent on 28.11.2016 along with the Government Order dated 24.11.2016 clarifying that the EMD amount is only Rs.12,00,000/-, evident from Exts.P20 and P21. 5. It is also the contention of the petitioners that the 3rd respondent without giving a reasonable explanation on the clarification sought on Additional Performance Guarantee, and without giving an opportunity to hear the petitioners, issued re-tender notification inviting bid for the construction work in question on 01.11.2016, evident from Exts.P22 to P24. It is thus challenging the aforesaid actions, this writ petition is filed by the petitioners. 6. Respondents have filed a joint counter affidavit in which it is stated that E-tender was invited by respondent No.2 and not the 3rd respondent, as described by the petitioners in the writ petition. All the contentions, allegations and claims and demands raised by the petitioners are denied. Among other contentions, it is stated that two bidders submitted E- tenders for the three Community Skill Parks at Kattappana, Pampady and Edamattom, i.e. the 1st petitioner company and another company named SRICO Project Private Ltd. Among the two bidders, SRICO was the lowest. But in the detailed Financial Evaluation, SRICO was found non-responsive. So the petitioners became the lowest and invited for negotiation. Subsequently, petitioners voluntarily submitted a letter dated 11.07.2016, offering to reduce the rate of PAC at the amount quoted in last column of paragraph 3. By a letter dated 11.07.2016, petitioners were invited to attend for a negotiation on 15.07.2016. But in the detailed Financial Evaluation, SRICO was found non-responsive. So the petitioners became the lowest and invited for negotiation. Subsequently, petitioners voluntarily submitted a letter dated 11.07.2016, offering to reduce the rate of PAC at the amount quoted in last column of paragraph 3. By a letter dated 11.07.2016, petitioners were invited to attend for a negotiation on 15.07.2016. In the negotiation held on 15.07.2016, petitioners offered to reduce the rates further, which this respondent accepted at the amounts stated in the last row of the table in paragraph 4 of the writ petition, and the same was confirmed by the letters sent by the petitioners dated 16.07.2016, marked as Exts.P2 to P4. 7. It is also contended that there was only one negotiation held on 15.07.2016 and the statement regarding a second negotiation is incorrect. In terms of the Instructions to the Bidders (ITB), Exts.P5 to P7 Letters of Acceptance dated 09.08.2016 were issued to the 1st petitioner, who is the lowest negotiated responsive bidder for the three works. In the aforesaid letters, petitioner was requested to furnish additional security in the form of a Bank guarantee as stipulated in ITB 41.4, which is also stipulated in Clause 59.2. of General Conditions of Contract. 8. According to the respondents, the very purpose of the provision of clauses 41.4 of the ITB and 59.2 of GCC is to protect the interest of the Government in proper management of the project without creating disputes during the execution. In case of Item Rate contracts, there is a tendency on the part of the bidders to quote higher rates for the initial items of work and quote very low rates for the items executed towards the end of the work, which are normally finishing items. This system is generally called 'front loading' of the bid. In case the 'front loading' is allowed, the contractors initially appropriate high amount. When the finishing works are due for execution in the field, the contractors would complain that the rates quoted for the work is not matching with market rates, thereby the contractor will either complete the work with substituted low standard materials or go for litigation or abandon the work. A chart is provided in order to demonstrate the low quality of finishing stage. A chart is provided in order to demonstrate the low quality of finishing stage. In order to avoid the tendency of 'front loading', Clauses in ITB 41.4 and GCC 59.2 have been introduced in the bid document which is vetted by the Department of Finance, Law and the Chief Technical Examiner. In the instant case, petitioner quoted about 20% less than the market rates for the finishing items. Obviously, there will be a tendency to delay or discard the finishing work pointing out the low rate. It was accordingly to safeguard the interest of the Government, provision for additional PAC is made, so that the contractor is compelled to complete the work as per the contract. The work under consideration is an 'item rate' work. Therefore, if the contentions raised by the contractor is accepted, the very purpose of the provisions of the clauses will be defeated, as it will not be possible to prevent 'front loading' of the bids. In the Request for Proposal, two terms are used with specific meaning attached with them, viz., "(i) Quoted rate, which means the rate quoted by the bidder against each item; (ii) The Probable Amount of Contract (PAC), which stands for the value obtained by adding all the amounts against each item multiplied by the quoted rate by the bidder." According to the respondents, the terms and conditions of ITB and GCC will show that the demand for additional PAC is perfectly justified. 9. Two pre-bid meetings were conducted in which every clause in the ITB and GCC were explained to the bidders. Petitioner failed to attend the meeting and there is no point in complaining about the demand for additional performance security at a later stage. In fact, for several other similar works for which bids were invited using the same procedure, all the contractors have submitted additional performance security after the issue of Letter of Acceptance, but before issuing the order to start the work. A chart showing the details of the finalization of 7 contracts are also provided. It is also stated that the respondents have recently awarded four similar contract works on 21.12.2016 for which also the contractors are liable to pay the Additional Performance Security as per the table provided. The 1st petitioner has also complied the terms with respect to the Additional PAC and accepted the work at Kalamassery. 10. It is also stated that the respondents have recently awarded four similar contract works on 21.12.2016 for which also the contractors are liable to pay the Additional Performance Security as per the table provided. The 1st petitioner has also complied the terms with respect to the Additional PAC and accepted the work at Kalamassery. 10. It is also stated, as per the General Conditions of Contract, there are two kinds of securities to be provided by a contractor. As per clause 59.1, the Performance Security of 5% of the PAC is to be furnished, while as per clause 59.2, an Additional Performance Security worked out on the basis of the 'RATES' quoted is also liable to be furnished. It is also urged, petitioner has deliberately misquoted GCC 59.2 by omitting the rates quoted. It is also contended that the act of the petitioner misquoting clauses in GCC is with the deliberate intention of misleading the Court. That apart, it is stated, as per clause 34.5 of ITB, respondents are entitled to insist additional performance security, at the expense of the Bidder to a level sufficient to protect the Employer against financial loss in the event of default of successful Bidder under the contract. Therefore, according to the respondents, the terms and conditions of the contract and the ITB provisions justify the additional performance security sought for by the respondents. 11. It is also stated that, as per Exts.P12, P13 and P14 letters, petitioner informed the respondents that he is not ready to give additional performance guarantee as required by the respondent as per Exts.P5, P6 and P7, and further requested to treat their tenders as cancelled and return EMD. After receipt of Exts.P12 to P14 letters, the matter was referred before the Technical Committee which consists of Chief Engineer (Buildings) PWD, Chief Architect, PWD and Chief Engineer (ASAP). The Committee unanimously recommended to cancel the tender in respect of of the three works tendered by the petitioner and forfeit the Bid Security Amount as per ITB 41.2. It is also stated that in Ext.P19, a clerical error occurred in respect of quantum of EMD, which was corrected by issuing a subsequent letter. 12. It is further stated, petitioner agreed to undertake the project on the final negotiated amount and submitted Ext.P2 letter confirming the same. Petitioner has withdrawn from the tender after acceptance of the bid. It is also stated that in Ext.P19, a clerical error occurred in respect of quantum of EMD, which was corrected by issuing a subsequent letter. 12. It is further stated, petitioner agreed to undertake the project on the final negotiated amount and submitted Ext.P2 letter confirming the same. Petitioner has withdrawn from the tender after acceptance of the bid. The act of the petitioner unilaterally withdrawing his tender caused unascertainable delay in realizing the project, escalation of cost of materials and labour, administrative delay and expenditure for re-tender works etc. The project is a prestigious project undertaken with the aid of Asian Development Bank (ADB), which stipulates strict mile stones with result based lending programme, and the Bank will release the fund only on completion of the mile stones provided in the agreement executed by the State of Kerala. Therefore, it is the contention of the respondents that the action of the respondents are in accordance with law and as per the terms and conditions of the contract, as well as the ITB and GCC. Therefore, the reliefs sought for by the petitioners cannot be sustained under law. 13. Petitioners have filed a reply refuting the contentions put forth in the counter affidavit and also reiterating the stand adopted in the writ petition. The contentions raised by the respondents with respect to the provisions of the ITB and GCC are all denied by the petitioners. According to the petitioners, the entire action of the respondents are illegal, arbitrary and unfair, since after issuing letter of acceptance, the contract conditions are varied and cancelled the tender awarded to the petitioners. Therefore, petitioners contend that the petitioners are entitled to get the entire reliefs as sought for in the writ petition. 14. Heard learned counsel for the petitioners and the learned State Attorney appearing for the respondents. Perused the documents on record and the pleadings put forth by the respective parties. 15. After negotiations, Ext.P2 letter was issued by the petitioners dated 16.07.2016 and the petitioners had agreed to the rates. It is stated thereunder that the petitioners agree to carry out the work at the negotiated rates described thereunder. It is also stated that considering the market rates prevailing at present, petitioners are not in a position to reduce rates any further. It is stated thereunder that the petitioners agree to carry out the work at the negotiated rates described thereunder. It is also stated that considering the market rates prevailing at present, petitioners are not in a position to reduce rates any further. Yet another letter was issued, evident from Exts.P3 and P4, that the petitioners agree to give an overall discount of 2.25% to 4.15% on all quoted rates over the final negotiated amount. The same was followed by Exts.P5 to P7 letter of acceptance issued by the 1st respondent. In Exts.P5 to P7, additional performance security in the form of bank guarantee as envisaged in clause 41.4 of the ITB was also sought for. Other terms and conditions are fixed under the letter of acceptance. The thrust of the contention advanced by the petitioners is that petitioners need to provide additional PAC only under the circumstances mentioned under clause 59.2 of the General Conditions of Contract, which read thus: "59.2 Additional Performance Security will be required in case the rates quoted by the successful Bidder falls below 10% of the PAC, but within the maximum permissible lower limit of 25% of the PAC as per PCC." 16. According to the learned counsel, the Probable Amount of Contract is not below 10% and therefore, petitioners are not liable to provide any additional security. Yet another contention advanced by the petitioner is that having issued with letter of acceptance before cancellation of the contract, petitioner ought to have been heard and having not heard, Ext.P19 order passed by the 1st respondent forfeiting the EMD amount and subsequent conduct in inviting tenders are bad under law, being arbitrary and illegal. 17. However, from Exts.P15 to P17, what I could gather is that, petitioner requested as per the letter dated 25.08.2016, evident from Ext.P14 that the petitioner is not ready to provide additional performance guarantee and therefore, the work awarded to the petitioner may be cancelled, and if the respondents are not satisfied with the proposal put forth by the petitioner, the EMD shall be returned. A communication was issued by the 1st respondent, evident from Ext.P18, assigning sufficient reasons justifying the action on the part of the respondents insisting upon additional security. A communication was issued by the 1st respondent, evident from Ext.P18, assigning sufficient reasons justifying the action on the part of the respondents insisting upon additional security. Therein, 1st respondent has quoted the provisions of the ITB and GCC and other terms and conditions of the contract, in order to justify the action of the respondents to seek additional performance guarantee. 18. The main contention advanced by the petitioner is that petitioner has not quoted below 10% of the PAC and the PAC is not expected to be on each item of work. However, in the counter affidavit filed by the respondents, it is unequivocally contended that two pre-bid meetings were conducted, in which every clauses in the ITB and GCC were explained to the bidders. But the petitioner failed to attend the meetings and there is no point in complaining about the demand for additional performance security at a later stage. However, pleadings reveal, under similar circumstances petitioner has accepted additional performance security in the work conferred to the petitioner at Kalamassery. It is also the contention of the respondents that there is a general tendency for front loading the work so as to attract the rates quoted by the contractors and in order to avoid such tendencies alone, additional security is insisted upon, under the invitation to bid specifically as per Clause 41.4, made available at the time of hearing, which read thus: "41.4 Additional Performance Security will be required in case the rates quoted by the successful Bidder falls below 10% of the PAC, but within the maximum permissible lower limit of 25% of the PAC. The Bidder shall furnish an Additional Performance Security for an amount equal to the difference in percentage, between the actual percentage falling below the PAC less 10% of the PAC, multiplied by the PAC." 19. According to the respondents, two terms are used with specific meanings attached viz., Probable Amount of Contract and quoted rates, which means, the rate quoted against each item. The rates quoted by the petitioner against each item is applied against the rates used to work out the total PAC of the amount, and the additional PAC has been worked out. According to the respondents, two terms are used with specific meanings attached viz., Probable Amount of Contract and quoted rates, which means, the rate quoted against each item. The rates quoted by the petitioner against each item is applied against the rates used to work out the total PAC of the amount, and the additional PAC has been worked out. Accordingly, it was found that the petitioner quoted very low rates for a number of items, predominantly that are to be executed towards the end of the project and therefore, the bids are front loaded and in order to secure assurance measure with respect to the performance, and complete the project executing all the items mentioned in the agreement, additional PAC was insisted upon. A reference to Clause 41.2 of the ITB would be worthwhile, which reads thus: "41.2 Failure of the successful Bidder to submit the above-mentioned Performance Security or to sign the Contract Agreement shall constitute sufficient grounds for the annulment of the award and forfeiture of the bid security or execution of the bid securing declaration. In that event the Employer may award the Contract to the next lowest evaluated Bidder whose offer is substantially responsive and is determined by the Employer to be qualified to perform the Contract satisfactorily." 20. Therefore, the failure of the successful bidder to submit the additional PAC or to sign the contract agreement will constitute sufficient grounds for the annulment of the award and forfeiture of the EMD. Thereupon, the respondents are left with the power to invite the lowest quoted bidder. However, in the case at hand, there were only two bidders and the other bid was found not responsive. Therefore, there was no other option for the respondents other than to go for fresh tender. A reference to Clause 34.5 of the ITB also would be worthwhile, which read thus: "34.5 If the bid for an admeasurement contract, which results in the lowest Evaluated Bid Price, is seriously unbalanced, front loaded or substantially below updated estimates in the opinion of the Employer, the Employer may require the Bidder to produce detailed price analysis for any or all items of the Bill of Quantities, to demonstrate the internal consistency of those prices with the construction methods and schedule proposed. After evaluation of the price analysis, taking into consideration the schedule of estimated Contract payments, the Employer may require that the amount of the performance security be increased at the expense of the Bidder to a level sufficient to protect the Employer against financial loss in the event of default of the successful Bidder under the Contract." 21. The said provision also shows that, if the quoted rate is seriously imbalanced, front loaded, or substantially below updated estimates in the opinion of the Employer, the Employer may require the Bidder to produce detailed price analysis for any or all items of the Bill of Quantities, to demonstrate the internal consistency of those prices with the construction methods and schedule proposed, and if it is convinced that the schedule of estimated contract payments is front loaded, the performance security can be increased at the expense of the Bidder to a level sufficient to protect the Employer against financial loss in the event of default of the successful Bidder under the Contract. 22. On a reading of Clause 41.1 of the ITB, it is clear that the successful bidder shall furnish the performance security in accordance with the conditions of contract, subject to clause 34.5 of ITB. On an evaluation of the entire facts and circumstances and gamut of the situation, it is clear and evident that respondents were satisfied that the rates quoted by the petitioner were front loaded and therefore, as provided under the terms of the ITB, and GCC, additional performance security had to be offered by the petitioner, and it was thereupon that the same was insisted upon as per the letters of acceptance. Moreover, from Exts.P15 to P17, it is categoric and clear that petitioner was aware of the conditions under the ITB and GCC. However, the petitioner was not prepared to provide additional security as sought for by the respondents. The contents of the said letters are clear indicative factors to show that petitioner was not prepared to undertake the conditions of ITB and GCC. It was thereupon insisted stoutly to return the EMD since petitioner was not prepared to provide additional security as sought for by the respondents. 23. The contents of the said letters are clear indicative factors to show that petitioner was not prepared to undertake the conditions of ITB and GCC. It was thereupon insisted stoutly to return the EMD since petitioner was not prepared to provide additional security as sought for by the respondents. 23. So also, on evaluation of facts, circumstances, documents produced by the petitioners, and the pleadings put forth by the respondents, it is categoric and clear that the issues raised by the petitioners under various communications were seriously considered by the respondents and suitable replies were issued, especially in Ext.P18, reasons for the insistence of additional security are precisely stated. In my considered opinion, the grievances put forth by the petitioners were addressed by the respondents by taking note of the queries raised by the petitioners. From the documents produced, it is clear that the grievances voiced by the petitioners were addressed properly, legally and fairly. When such a course was undertaken by the respondents, it cannot be said that petitioner is aggrieved for want of hearing. Moreover, in none of the correspondences, petitioners sought for hearing. There is also no established proof before this Court in respect of any malafide action on the part of the respondents. Therefore, merely because the petitioners were not heard, it cannot be said that there is violation of any principles of natural justice. In that view of the matter, I am of the considered opinion that petitioners have not made out a case warranting interference of this Court under Article 226 of the Constitution of India, there being no illegality, arbitrariness, unfairness or any other legal infirmities. 24. However, I find from Ext.P19 that the EMD of the petitioners was forfeited. Petitioners have a case that since the proceedings were contested by the petitioners bonafidely, there is no reason to forfeit the EMD. From Ext.P19, it is clear that such a course was undertaken by relying on the provisions of the ITB. In my considered opinion, the said question can be left open, enabling the petitioners to agitate the said issue. Sequel to the above discussion is that, writ petition fails, accordingly it is dismissed, however, leaving open the liberty of the petitioners to contest the proceedings with respect to forfeiture of EMD.