Kalika Swachchhanda Joint Venture Private Limited v. Secretary, Bihar Rural Works Department
2018-08-08
NILU AGRAWAL
body2018
DigiLaw.ai
JUDGMENT : NILU AGRAWAL, J. 1. Heard learned counsel for the petitioner and the learned counsel appearing on behalf of the State. 2. The petitioner seeks following reliefs: "(I) To issue a writ in the nature of certiorari for quashing of the order dated 18.12.2017 passed by the Respondent no.6 communicated through the letter dated 04.01.2018 bearing memo No. BRRDA(HQ)- PMGSY-304/2016-66 (Annexure-P/38), issued under the signature of the Respondent No.7, by which the communication was made with respect to the fact that the claim of the petitioner was rejected. (II) To issue a writ in the nature of certiorari for quashing of the order dated 18.12.2017 (Annexure-P/38) passed by the Respondent No.6, by which the Respondent No.6 in complete departure of the notice dated 05.10.2013 issued under the signature of the Respondent No.5, by which the tender of the petitioner was rescinded on the ground that the work assigned to the petitioner was not concluded within the time frame. (III) To issue a writ in the nature of certiorari for quashing of the order dated 18.12.2017 (Annexure- P/38) passed by the Respondent No.6, by which the Respondent No.6 failed to appreciate that the bank guarantee provided by the petitioner was duly accorded and approved by the Departmental Tender Committee in its meeting 27.02.2009 communicated through the letter dated 02.03.2009 bearing Memo No. 38 (Annexure-13). (IV) To ask an explanation-cum-show cause from the Respondents No. 2 to 5, asking therein that under what statutory authorization, they used to change their stand in rescinding the work allotted to the petitioner. (V) To issue a writ in the nature of mandamus commanding the Respondents No. 2 to 5 to revalidate the agreement including the rate of tender work bearing 01-SBD/2009-10 dated 25.05.2009, because the petitioner is still ready to complete the work subject to revision of rate. (VI) To stay the operational effect of the order dated 18.12.2017 passed by the Respondent No.6 communicated through the letter dated 04.01.2018 bearing memo No. BRRDA(HQ)- PMGSY-304/2016-66 (Annexure-P/38), issued under the signature of the Respondent No.7, because the Respondent Authorities are adamant to forfeit the bank guarantee of the petitioner. (VII) To issue a writ in the nature of mandamus commanding the Respondent Authorities from taking any coercive steps pertaining to the forfeiture of the bank guarantee provided by the petitioner. (VIII) Any other relief or reliefs." 3.
(VII) To issue a writ in the nature of mandamus commanding the Respondent Authorities from taking any coercive steps pertaining to the forfeiture of the bank guarantee provided by the petitioner. (VIII) Any other relief or reliefs." 3. The facts of the case is that the petitioner was allotted work order and an agreement was entered into between the petitioner and Respondent No.5 under Agreement No. 01-SBD/2009-10 for construction of road under the Bihar Rural Roads Development Agency in the district of Sheohar bearing Package No. BR32R/ Sheohar II (No. of Road 07, Total length - 31.755 Kms.). The period of commencement of work was 18.05.2009 and was to be completed within one year i.e. 17.05.2010. After commencement of the work, there were certain obstructions for which the petitioner corresponded with the respondent - authorities, but having not completed the work order within the time frame, a notice was published in the daily newspaper Prabhat Khabar dated 30.09.2013 mentioning that since the petitioner had not completed the work, he was directed to file show cause on or before 23.09.2013, failing which the process to rescind the agreement shall be made. A show cause notice by Letter No. 633 dated 14.09.2013 requiring compliance by 23.09.2013 was served on the petitioner on 24.09.2013, a day after the date fixed for filing show cause reply, which the petitioner replied on 30.09.2013. However, the termination order dated 05.10.2013, Annexure-P/2 was issued without taking notice of the show cause reply. Aggrieved by the termination order, the petitioner moved this Court in CWJC No. 6186 of 2014 and by order dated 24.08.2015, termination order dated 05.10.2013, Annexure-P/2 was set aside on account of being in violation of principles of natural justice with liberty to the respondents to issue a fresh show cause. A fresh show cause was issued by the respondents asking the petitioner to submit reply within a period of 7 days, which is Annexure-P/4. Petitioner submitted reply stating therein that as per clause 24 of the terms of contract, there was a Dispute Redressal System by referring the matter to the Empowered Standing Committee and requested to constitute an Empowered Standing Committee to settle the disputes.
Petitioner submitted reply stating therein that as per clause 24 of the terms of contract, there was a Dispute Redressal System by referring the matter to the Empowered Standing Committee and requested to constitute an Empowered Standing Committee to settle the disputes. Empowered Standing Committee having not been constituted, the petitioner moved this Court in CWJC No. 6389 of 2014, which was disposed of on 05.11.2015 wherein this Court directed the petitioner to approach the Empowered Standing Committee as per clause 24 of the agreement, yet when the respondents failed to constitute an Empowered Standing Committee, the petitioner again approached this Court in CWJC No. 6357 of 2016 and CWJC No. 9157/16. The petitioner had challenged the letter dated 09.05.2016 in CWJC No. 9157/16 whereby his tender- agreement was rescinded and in CWJC No. 6357 of 2016, the petitioner had sought constitution of Empowered Standing Committee. During course of hearing of the said two writ applications, respondents informed this Court that an Empowered Standing Committee has already been constituted on 11.07.2016. Hence, this Court disposed of the writ application on 17.03.2017, Annexure-P/8 with a direction to the petitioner to nominate any one person by him and approach the Empowered Standing Committee, which will be obliged to adjudicate the dispute between the parties. The petitioner has challenged the order dated 18.12.2017 passed by the Empowered Standing Committee which was constituted to settle the disputes. During course of adjudication, it came to light that the bank guarantee submitted by the petitioner is of a bank situated in Nepal, hence, as per Standard Bidding Document, clause 32.2, the bank guarantee had to be of a Schedule Bank. The Empowered Standing Committee also opined that although the bank guarantee of Nepal bank was accepted, but the said acceptance is not in accordance with the Standard Bidding Document, hence, the order passed by the Executive Engineer dated 11.11.2013 and subsequent order dated 09.05.2016 calls for no interference and the order rescinding the contract also calls for no interference. 4. It has been submitted by the learned counsel for the petitioner that the Empowered Standing Committee was for redressal of disputes as per clause 24 of the agreement, which is extracted below: "24.
4. It has been submitted by the learned counsel for the petitioner that the Empowered Standing Committee was for redressal of disputes as per clause 24 of the agreement, which is extracted below: "24. Dispute Redressal System - If any dispute or difference of any kind what-so-ever shall arises in connection with or arising out of this Contract or the execution of Works or maintenance of the works there under, whether before its commencement or during the progress of work or after the termination, abandonment or breach of the Contract, it shall be referred to Empowered Standing Committee which will consist of: I. One official member, Chairman of the Standing Empowered Committee, not below the rank of Additional Secretary to the State Government; II. One official member not below the rank of Chief Engineer and III. One non-official member who will be technical expert of Chief Engineer's level selected by the Contractor from a panel of three persons given to him by the Employer. Such decision in respect of every matter, so referred shall, subject to review as hereinafter provided, be final and binding upon the contractor. In case, the works is already in progress, the contractor shall proceed with the execution of the works, including maintenance thereof, pending receipts of the decision of the competent authority as aforesaid with all the diligence." 5. It has been submitted by the counsel for the petitioner that the said Empowered Standing Committee could only resolve disputes arising out of the contract, execution of works, maintenance of works, progress of work or after the termination abandonment of breach of contract. It was not entitled to go into the genuineness or otherwise of the bank guarantee, which was furnished by the petitioner and which was deliberated upon by the Departmental Tender Committee on 27.02.2009, which is AnnexureP/12 of the writ application. The Departmental Tender Committee had found that the petitioner was the single tenderer and had furnished bank guarantee of Nepal Investment Bank Ltd., Annexure-P/11 of Rs. 17,17,15000/-, hence the said bank guarantee of Nepal Investment Bank Ltd. was accepted by the Departmental Tender Committee consisting of four Chief Engineers of the Rural Works Department, one Engineer-in-Chief, one Joint Secretary-cum- Internal Adviser and Secretary of the Rural Works Department. The said approval of the Departmental Tender Committee was signed by 7 members on 20.03.2009 i.e., Anneuxre-P/12 of the writ application.
The said approval of the Departmental Tender Committee was signed by 7 members on 20.03.2009 i.e., Anneuxre-P/12 of the writ application. He submits that since the bank guarantee was already accepted by the Departmental Tender Committee and that was not in dispute to be decided by the Empowered Standing Committee, the said order passed by the Empowered Standing Committee dated 18.12.2017, as contained in Annexure-P/38 is fit to be quashed. 6. However, learned counsel appearing on behalf of the State submits that the Empowered Standing Committee has passed a reasoned order as the bank guarantee furnished by the petitioner for the work order in question was of a bank of Nepal and in view of clause 32.2 of the Standard Bidding Document, the bank guarantee of Schedule Bank had to be furnished. He submits that the Standard Bidding Document a uniform bidding document is a model bidding document containing terms and conditions, which has been published in the Extraordinary Gazette of the Government of Bihar with prior approval of the Finance and Law Department and approved by the Cabinet. 7. Having heard the rival submissions of the parties, I am in agreement with the contention of the learned counsel for the State, as the agreement which was entered into between the petitioner and the respondents was upon furnishing bank guarantee of Bank of Nepal, which is not as specified in clause 32.2 of the Standard Bidding Document in which the bank guarantee has to be furnished of a Schedule Bank. The very acceptance of such bank guarantee was altering the requisites of clause 32.2 of the Standard Bidding Document, as such, the agreement without adhering to clause 32.2 of the Standard Bidding Document is void and no interference is required in the order dated 18.12.2017. 8. The writ application is dismissed. 9. It is, however, made clear that the claims of the petitioner as contained in Annexure-P/6 to the writ application dated 30.04.2016 would be scrutinized and dues paid to the petitioner within a period of three months from the date of receipt/ production of a copy of this order. 10.
8. The writ application is dismissed. 9. It is, however, made clear that the claims of the petitioner as contained in Annexure-P/6 to the writ application dated 30.04.2016 would be scrutinized and dues paid to the petitioner within a period of three months from the date of receipt/ production of a copy of this order. 10. Since, it has been brought to light that the bank guarantee of a foreign bank has been submitted for procurement of tender duly approved by the officials of the Rural Works Department, which is in violation of clause 32.2 of the Standard Bidding Document, a copy of this order be transmitted to the Chief Secretary, Government of Bihar for necessary action.