Allahabad High Court
M/S Classic Enterprises Thru. Its ... vs N.H.A.I.Ministry Of Road Transport And ... on 17 April, 2025
Author: Rajan Roy
Bench: Rajan Roy
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Neutral Citation No. - 2025:AHC-LKO:21501-DB
A.F.R.
High Court of Judicature at Allahabad
Lucknow
******
Reserved on : 21.03.2025
Delivered on : 17.04.2025
Court No. - 2
Case :- WRIT - C No. - 386 of 2025
Petitioner :- M/S Classic Enterprises Thru. Its Partner Tarun Tandon
Respondent :- N.H.A.I.Ministry Of Road Transport And Highways Thru. Its Chairman And 3 Ors
Counsel for Petitioner :- Chandra Shekhar Sinha,Akshat Sinha,Gaurav Verma
Counsel for Respondent :- Sarvesh Kumar Dubey,A.S.G.I.,Abhishek Pathak
Hon'ble Rajan Roy,J.
Hon'ble Om Prakash Shukla,J.
(Per : Om Prakash Shukla, J.)
(1) Heard Shri Chandra Shekhar Sinha, learned Counsel for the petitioner, Shri Abhishek Pathak, learned Counsel for the opposite parties no.1 to 3 and learned Counsel for the Union of India/opposite party no.4.
(2) By means of the present writ petition, the petitioner has invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India, praying inter alia for the following reliefs :-
"(i) Issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 20.12.2024 vide letter No. 23001 / 1 / RP-W-UP / A-K / Pkg-IV / NH-34 / FOB / 25292 passed by the O.P. No.1 through the Regional Officer (O.P. No.2), contained in Annexure No.1 to the writ petition;
(ii) Issue a writ, order or direction in the nature of mandamus commanding the opposite parties to reinstate the tender process of the petitioner firm from the stage it was cancelled and proceed with transparency and fairness;
(iii) Issue writ, order or direction in the nature of mandamus to stay on any further tender process or decision-making related to the project pending final adjudication...."
(3) The factual matrix of the present writ petition would reveal that the National Highways Authority of India (NHAI) had invited bids through e-tendering process for construction of Foot Over Bridge (FOB) on Aligarh Kanpur Section of National Highway-34 (91) in the State of Uttar Pradesh having its tender ID:2024_NHAI_194363_1, wherein the petitioner firm had participated. The technical bid was opened on 14.6.2024 and although initially vide office order dated 9.7.2024, the petitioner firm was declared "Non-Responsive" and the bid was rejected, however, on an explanation and representation dated 10.07.2024 of the said firm, the competent authority of NHAI i.e. DGM (Tech) RO-UP (West) with the approval of Regional Officer declared the bid of the firm as 'Responsive'. The financial bid of the petitioner firm was opened by NHAI on 9.8.2024 along with other bidders and NHAI declared the petitioner firm as the lowest bidder i.e 'L1'. Thus, the Regional Officer UP (West) of NHAI issued letter of Acceptance (LOA) dated 20.8.2024 and notified the petitioner firm that their bid for Construction of Foot Over Bridge (FOB) for the quoted bid price amounting to Rs.5,30,06,222.71 (Rupees Five Crore Thirty Lakh Six Thousand Two Hundred Twenty Two and Seventy One Paisa) has been found to be the lowest evaluated bid.
(4) As per the aforesaid Letter of Acceptance (LOA), the petitioner firm was required to furnish a Bank guarantee of Rs. 53,00,622/- (Fifty Three Lakhs Six Hundred Twenty Two), which was 10% of bid price, towards performance security for a period of three years and as per the terms of Request for Proposal (RFP) since the bid amount was 26.97% below the estimated cost, the petitioner firm was also required to deposit an Additional Performance Security of Rs.36,95,121/- as per Clause 33.1 of RFP valid up to completion of the work, within 10 days of receipt of the Letter of Acceptance. In case of failure, the award was to be deemed to be cancelled and the bid security would be forfeited as per Clause 33.3 of RFP and the petitioner firm would be debarred for a period as specified in Clause 16.7 of RFP. The petitioner firm was also asked to return duplicate of the LOA as an acknowledgment and sign the Contract Agreement within the period prescribed in the bid document.
(5) According to the petitioner, there was some discrepancy in Clause 33.1 and Clause 47.1 of the RFP, therefore, partner of the petitioner firm Shri Amit Khatri approached the Regional Head Office at Lucknow and pointed out the same, whereupon the Regional Head asked the petitioner firm to deposit ten per cent and not three per cent of the bid amount. From the document annexed as Annexure-6, it appears that this happened on 27.08.2024/28.08.2024 and on the same day as asserted in para-11 of the writ petition, as Additional Performance Guarantee amounting to Rs.36,95,121/- (Rupees Thirty Six Lakhs Ninety Five Thousand One Hundred Twenty One) was required to be deposited, but due to disruption in banking services on account of ongoing festival break and illness of the signing authority, ten days further time was prayed for depositing the additional security, which, according to the petitioner firm, was allowed by the Regional Head orally. Thereafter, on the very next day i.e. on 29.08.2024, the petitioner firm submitted the bank guarantee dated 29.08.2024 towards performance security of Rs.53,00,622/- (Rupees Fifty Three Lakhs Six Hundred Twenty Two) and subsequently deposited the original bank guarantee in the office of NHAI at Lucknow. The petitioner firm sent a letter dated 30.08.2024 by e-mail to the Regional Office of NHAI narrating the entire incident including the meeting which took place with the Regional Officer in his office on 28.08.2024 when he allowed the petitioner to deposit the Additional Performance Security within ten days. Copy of the said letter dated 30.08.2024 sent through e-mail is annexed as Annexure-6 to the writ petition. On 07.09.2024, a communication was sent to the Chairman, National Highways Authority of India, submitting the original bank guarantee for the Additional Performance Security to the tune of Rs.3695121/-, copy of which has been annexed as Annexure-7 to the writ petition.
(6) As the petitioner firm did not receive any communication for signing of the agreement, therefore, it sent a letter dated 26.09.2024 to the Regional Office of NHAI, mentioning the bank guarantee submitted by the petitioner firm and also detailing the events which took place prior to such deposits including the meeting held on 28.08.2024 in which as claimed ten days further time was granted orally for submission of Additional Performance Security.
(7) On 01.10.2024, for the first time, the D.G.M. (Technical) refuted the claim in the letter dated 26.9.2024 regarding acceptance of any such claim of the petitioner for deposit of Additional Performance Security within an extended period as claimed clearly stating that proposal of consideration of eight days' delay in submission of Additional Performance Security having been sent to the competent authority NHAI Headquarter and on receipt of the same, the petitioner would be intimated accordingly.
(8) Thereafter, the petitioner submitted a letter dated 19.11.2024 addressed to the Regional Office, NHAI mentioning therein about the hospitalization of the partner of the petitioner firm from 26.08.2024 to 05.09.2024 with medical certificate annexed in support thereof and that after discharge from hospital, the Additional Performance Guarantee was submitted on 07.09.2024 and accordingly a request was made for condoning the delay in submission of the Additional Performance Guarantee with a further recital that the petitioner was ready to accept and furnish the financial penalty for the delay.
(9) On 26.11.2024, the D.G.M. (Technical) Regional Office U.P. (West) sent a letter to the petitioner firm requesting it to deposit Rs.42,405/- (Rupees Forty Two Thousand Four Hundred and Five)as damages for eight days' delay in submission of Additional Performance Security in the bank account mentioned therein. Further, the petitioner was requested to submit original bid document and to attend the office for signing of the agreement after deposition of the damaged mentioned above. In this letter dated 26.11.2024, there was no such mention that the delay was not liable to be condoned or that the matter was still pending, instead the petitioner was asked to act upon the said letter dated 26.11.2024 and deposit damages for the delay of eight days to the tune of Rs.42,405/- (Rupees Forty Two Thousand Four Hundred Five) and also to submit the original bid document and to attend the office for signing of agreement after depositing the damages mentioned therein.
(10) Acting upon the said letter, the petitioner deposited the aforesaid damages on 26.11.2024 itself as is mentioned in paragraph-20 of the writ petition.
(11) On 12.12.2024, the D.G.M. (Technical) Regional Office U.P. (West) again wrote to the petitioner firm referring to the LAO dated 20.08.2024 and requesting the petitioner to submit original bid and to attend the office for signing of the agreement on 24.12.2024.
(12) Pursuant to the aforesaid letter dated 12.12.2024 of the NHAI, the signing authority of the petitioner firm reached the office of NHAI on 24.12.2024, whereupon for the first time they were verbally informed that the tender granted to them was cancelled. On being confronted that no such cancellation was received by the petitioner firm, the Officer asked the petitioner's representative to wait and thereafter the petitioner firm received an email on 24.12.2024 at 3:50 PM in which letter No. 23001/1/RO-W-UP/A-K/Pkg-IV/NH-34/FOB/25292 dated 20.12.2024 signed by the Regional Officer UP (west) stated that the 8 days' delay in submission of the additional performance security with damage amounting to Rs. 42,405/- (Rupees Forty Two Thousand Four Hundred Five) was sent to competent authority for approval of delay period but the same has not been agreed. The letter stated that LOA issued vide office letter No. 23820 dated 20.8.2024 has been cancelled due to delay in submission of additional performance security and further that the bid security amounting to Rs.14,51,629 (Rupees Fourteen Lakhs Fifty One Thousand Six Hundred Twenty Nine) submitted with the bid has been forfeited in terms of RFP Clause 33.3.
(13) It is this letter dated 20.12.2024, which has been sought to be challenged by the petitioner before this Court in the present proceedings.
(14) The contention of the petitioner's Counsel was that the bank guarantee pertaining to performance security was deposited within time and as in a meeting with the Regional Officer, ten days further time had been granted to the petitioner orally for depositing the Additional Performance Security on the request of the petitioner, therefore, the same was also subsequently deposited and the entire scenario was intimated to the concerned opposite parties vide letter dated 30.08.2024 sent by e-mail including the factum of the oral permission granted on 28.08.2024 by the Regional Officer and the opposite parties themselves asked the petitioner to deposit damages to the tune of Rs.42,000/- (Rupees Forty Two Thousand) and odd for the eight days' delay vide letter dated 26.11.2024, which was also deposited and vide another letter dated 12.12.2024, the petitioner was also asked to appear for signing of the agreement and completion of other formalities on 24.12.2024, therefore, the impugned action of cancellation of LOA and forfeiture of security money on the ground that approval was not granted by the competent authority for condoning the delay of eight days of the aforesaid deposit, is absolutely unreasonable and unfair. He also submitted that in another case, the delay had been condoned, therefore, there was a precedent for the same and the petitioner acted on the permission granted by the Regional Officer vide letter dated 26.11.2024 and 12.12.2024, therefore, merely on account of delay of eight days in submitting the Additional Performance Security, cancellation of LOA is absolutely unjustified.
(15) Learned Counsel for the petitioner also submitted that the delay was not inordinate and the petitioner furnished the Additional Performance Guarantee as allowed by the Regional Officer vide letter dated 26.11.2024. In any case, according to him, there was no damage or loss incurred by the respondent authority for the said delay as penalty for the delay, as calculated and demanded by NHAI being an amount of Rs. 42,405/-(Rupees Forty Two Thousand Four Hundred Five), was paid to them immediately on the same day and there was no occasion for them for cancellation of the said bid and forfeiture of the guarantee furnished to them. As per RFP, the only competent authority is the Regional Officer, who had approved the delay and got deposited the penalty for the same, however, the Bid was subsequently sought to be rejected on the plea that the competent authority has not given approval and NHAI did not even bother to annex the order of the said competent authority. Learned Counsel also highlighted the timing and manner in which the LOA has been sought to be cancelled inasmuch as, according to him, although the petitioner was called for signing of the contract on 24.12.2024, however, the same very day, they were communicated the impugned letter predated 20.12.2024, which cancelled the LOA vide e-mail dated 24.12.2024. He further submitted that cancellation of the tender would disrupt the procurement process, potentially delaying the public project for which the tender was issued, which would be detrimental to public interest and as such calls for judicial intervention.
(16) On the other hand, learned Counsel appearing for NHAI submitted that admittedly there had been a delay in providing Bank Guarantee in lieu of additional performance security within the stipulated time and there had been a delay of 8 days. According to him, the reasons appended by the petitioner's firm of ill-health of one of the partner was highly unprofessional owing to the gravity of work proposed to be undertaken by them. He submitted that the proposal to condone the delay was conveyed to the competent Authority in good faith by the RO (West), Uttar Pradesh. According to him, the competent authority as per the policy decision of NHAI dated 21.08.2017 for condoning delay was the CGM (HG), NHAI and in any case, the petitioner firm was duly conveyed of the said aspect vide letter dated 01.10.2024. He has further submitted that letter dated 26.11.2024 relating to deposit of damages to the tune of Rs. 42,405/- (Rupees Forty Two Thousand Four Hundred Five) was sent by NHAI on the request of the petitioner's firm and nowhere meant acceptance of the delay and even the letter dated 12.12.2024, whereby the petitioner was directed to be ready with the formalities on 24.12.2024 was merely tentative in nature and the same was subject to the orders of competent authority. He, thus, submits that these communications were issued in the nature of pre-emptive letters only, that too, in good faith.
(17) Learned Counsel has submitted that pursuant to the instruction/clarification dated 13.12.2024 received from the competent authority, the issue was sent to the evaluation committee, which proposed for cancellation of LOA and forfeiture of additional performance security amount of Rs. 36,95,121/- (Rupees Thirty Six Lakhs Ninety Five Thousand One Hundred Twenty One) and return the balance Bank guarantee and refund the deposited damages of Rs. 42,405/- (Rupees Forty Two Thousand Four Hundred Five). Additionally, learned Counsel has questioned the financial capability of the petitioner in executing the work as allegedly the delay in depositing the additional performance security had been due to delay in availing short-term loan by the petitioner. He submitted that the order of cancellation of LOA is passed for violation of mandatory terms and conditions of LOA and RFP and there was not a concluded contract between the parties. It is also submitted that no right is created by mere issuance of letter of acceptance as there is no binding relationship between the parties. In this regard, he has relied on the judgement of Apex Court in South Eastern Coal Fields Limited and other Vs Ms S. Kumars Associates (Civil Appeal No. 4358/2016 decided on 23.07.2021) and Rajasthan Cooperative Dairy Federation Ltd. Vs Maha Laxmi Mingrate Marketing Services (P) Ltd. : (1996) 10 SCC 405.
(18) Learned Counsel has also submitted that the order of cancellation of LOA is passed on account of violation of mandatory terms and conditions of the RFP as mentioned in clause 33.3 of the RFP and that NHAI has performed its statutory duty in utmost fairness and have no personal interest in the matter in dispute. He also submitted that the cancellation is as per the terms of RFP and that the terms of RFP are not amenable to Judicial scrutiny and relies on the judgment of the Apex court in the case of Global Energy Ltd. Vs. Adani Exports Ltd : (2005) 4 SCC 435. He, thus, submitted that cancellation of LOA was permissible before signing of agreement between the parties and the same has been rightly done by NHAI and, as such, the present matter does not call for any interference by this Court.
(19) Having heard the learned counsel for the parties and after perusing the material on records, the first thing, which crops up is as to whether in the facts of this case the impugned action cancelling the LOA is a fair and reasonable exercise of power. Even in contractual matters, especially where contract has not been concluded, statutory authority such as NHAI is obliged to act fairly and reasonably keeping in mind the object sought to be achieved by the contract and such matters are amenable to judicial review under Article 226 of the Constitution of India on the ground of being apparently unreasonable and unfair.
(20) Clause 33 of the RFP relating to performance security based on which LOA has been cancelled reads as under :-
"33. Performance Security
33.1 Within 10 (ten) days after receipt of the letter of Acceptance the successful bidder shall deliver to the Employer a Performance Security of Ten percent of the Contract Price, valid for the period of 28 days after expiry of defect liability of 3 year plus additional security for unbalanced bids in accordance with Clause 28.3 of ITB and sign the contract. The validity shall account for additional 3 months' time to account for BG verification, signing of contract and start date.
33.2 The Performance Security/additional security shall be in the form of a Bank Guarantee, in the name of the Employer, from a Bank as specified in case of bid security.
33.3 Failure of the successful bidder to comply with the requirement of sub-clause 33.1 shall constitute sufficient ground for cancellation of the award and for feature of the bid security and debarment for a period as specified in Clause 16.7. "
(21) The letter of acceptance dated 20.08.2024 was received by the petitioner on 21.08.2024 as is evident from Annexure-8 to the petition. The letter of acceptance dated 20.08.2024 required the petitioner to deposit Performance Security plus Additional Security within ten days of its receipt. According to the petitioner, there was some discrepancy in the requirement as contained in Clause 33.1 of the RFP vis-a-vis Clause 47.1 of the same document. While the former referred to ten percent of the contract price to be deposited, the later referred to only three per cent of the contract price and additional security for unbalanced bids to be deposited. Accordingly, on 28.08.2024, a partner of the petitioner firm approached the Regional Head Office at Lucknow and pointed out the aforesaid discrepancy and enquired whether three per cent or ten per cent of the contract price was to be deposited, whereupon the Regional Head asked the petitioner firm to deposit ten per cent and not three per cent of the bid amount. On the same day, partner of the petitioner firm requested the Regional Officer at Lucknow that since an Additional Performance Guarantee amounting to Rs.36,95,121/- (Rupees Thirty Six Lakhs Ninety Five Thousand One Hundred Twenty One) had been imposed, which was an additional requirement and for which application had been submitted to a bank but due to disruption in banking services on account of ongoing festival break and illness of the signing authority, additional ten days time be granted for depositing the said additional security of Rs.36,95,121/- (Rupees Thirty Six Lakhs Ninety Five Thousand One Hundred Twenty One). The Regional Head, according to the petitioner, orally allowed the petitioner firm to deposit the additional security amount within further ten days.
(22) On the very next day i.e. on 29.8.2024, the petitioner firm got a bank guarantee prepared amounting to Rs.53,00,622/- (Rupees Fifty Three Lakhs Six Hundred Twenty Two) i.e. towards the performance security and deposited it on the same day in original in the office of NHAI at Lucknow.
(23) Further, the petitioner sent an e-mail on 30.08.2024 referring to the meeting held with the Regional Officer in his office on 28.08.2024, wherein it is said that he acceded to the request of the petitioner for additional ten days to deposit the Additional Performance Security. Copy of the mail is annexed as Annexure-6 to the writ petition. Thereafter, as per the commitment, bank guarantee towards Additional Performance Security amounting to Rs.36,95,121/- (Rupees Thirty Six Lakhs Ninety Five Thousand One Hundred Twenty One) was deposited on 07.09.2024 i.e. within the ten days granted by the said officer. This fact was communicated to NHAI vide an e-mail sent to it on 07.09.2024 itself. Thus, according to the petitioner, there was no delay in furnishing the Additional Performance Security in view of the facts noticed hereinabove. Till then there was no rebuttal of the facts as stated in the communication dated 30.08.2024.
(24) As no response was received even after sufficient time having lapsed for signing of agreement by the petitioner, the competent authority was contacted, who conveyed it to the petitioner that it had not deposited the Additional Performance Security within the stipulated time, therefore, additional penalty will have to be imposed. The petitioner firm agreed to deposit the penalty as desired but even this was not communicated to it and, as such, the petitioner firm sent a letter dated 26.09.2024 to the Regional Office, NHAI mentioning the events which had occurred right from the beginning. Copy of it is annexed as Annexure-8 to the petition.
(25) In response, a communique dated 01.10.2024 was received from the D.G.M. (Technical) with approval of Regional Officer UP (West) that the proposal for considering eight days' delay in submission of Additional Performance Security had been sent to the competent authority at NHAI Headquarter for approval and also denying any acceptance of the claim of the petitioner in its letter datd 26.09.2024 regarding acceptance of agreement and performance security etc. The said document is Annexure-9 to the petition.
(26) Thereafter, on 19.11.2024, the petitioner firm sent a letter to the Regional Head enclosings the Medical Certificate of the signing authority/ partner of the petitioner firm certifying that he was hospitalized from 26.08.2024 to 05.09.2024 and prayed for condoning the delay in submission of additional performance guarantee and an undertaking that the petitioner would furnish financial penalty, if any, for the delay, was also given. This document is annexed as Annexure-10 to the writ petition.
(27) In response to the aforesaid, the D.G.M. (Technical) with approval of Regional Officer (West), U.P., sent an e-mail containing a letter dated 26.11.2024 asking the petitioner firm to deposit Rs.42,405/- (Rupees Forty Two Thousand Four Hundred Five) as damages/penalty for eight days' delay in submission of Additional Performance Security and to submit original bid documents and to attend the office for signing of agreement after depositing the damages as demanded. This document is Annexure-11 to the writ petition. The letter dated 26.11.2024 sent by NHAI to the petitioner reads as under :-
"To,
The Authorized Signatory
M/s. Classic Enterprises,
9/82, Arya Nagar, Kanpur-200002
Email : [email protected]
Sub.: Construction of Foot Over Bridge (FOB) on Aligarh-Kanpur section of NH-34 (91) in the State of Uttar Pradesh, FOB at Km. 358.650 & FOB at Km. 368.320.
Ref : 1. Tender ID : 2024_NHAI_194363_1
2. This Offic LOA N. 23820 dated 20.08.2024
3. Your letter dated 29.08.2024.
4. Your letter dated 07.09.2024.
Sir,
In reference to subject Bid and LOA issued vide this office letter dated 20.08.2024, you are hereby requested to deposit Rs.42,405/- as damages for 8 days delay in submission of Additional Performance Security in the following Bank Account :-
Particulars
Details
Account Holder Name
NHAI Regional Office
Account Number
84811010002035
Bank Name
Canara Bank
IFSC Code
CNRB0018481
Further you are requested to submit Original Bid Document and attend the office for signing of the agreement after deposition of the damages mentioned above.
This issue with the approval of RO-UP (West).
Sd/-
(N.P. Singh)
DGM (Tech)
Regional Office-UP (West)"
(28) In this letter dated 26.11.2024, there is no reference to the delay in submission of the Additional Performance Security or that this was subject to any decision to be taken by the competent authority in this regard. The petitioner firm immediately complied the letter dated 26.11.2024 and deposited Rs.42,405/- (Rupees Forty Two Thousand Four Hundred Five) on 26.11.2024 itself. A copy of the NEFT Transaction Slip is annexed as Annexure-12 to the writ petition.
(29) On 12.12.2024, the petitioner received a letter from the D.G.M. (Technical) with approval of Regional Office, U.P. (West) through e-mail requesting the petitioner firm to submit the original bid document and to attend the office for signing of the agreement on 24.12.2024. This letter dated 12.12.2024 also did not express any reservations regarding delay in submission of Additional Performance Security by petitioner rather it gave reasonable basis for the petitioner to believe that the same had been waived.
(30) Thus, apparently, the issue relating to right of NHAI under Clause 33.3 of RFP document regarding delayed furnishing of Additional Performance Security had been waived of with the demand of penalty amount of Rs.42,405/- (Rupees Forty Two Thousand Four Hundred Five) from the petitioner. The said fact is fortified from the subsequent letter of NHAI dated 12.12.2024, wherein the petitioner was called upon to submit the original Bid document and attend the office for signing of the agreement on 24.12.2024 which was also issued with approval of Regional Office-UP (West).
(31) In response, the signing authority of the petitioner firm and an another partner reached the office of N.H.A.I. at Gomti Nagar, Lucknow in the afternoon at 03:30 p.m. on 24.12.2024 and met the Regional Head but to their utter surprise, they were informed that LOA issued to the petitioner firm had been cancelled and security money had been forfeited. A letter dated 20.12.2024 was served on 24.12.2024 by e-mail, as already discussed which inter alia stated as follows :-
"2. Bidder has submitted Performance Security of Rs.53,00,677/- vide banker letter dated 29.08.2024 BG bearing No.00417241PG014967 dated 07.09.2024 which is 08 days' delay after the schedule date of 30.08.2024.
3. But bidder vide letter dated 07.09.2024 submitted Additional Performance amounting to Rs.36,95,121/- BG Bearing No. 00417241PG014 967 dated 07.09.2024 which is 08 days delay after the schedule date of 30.08.2024.
4. As the bidder has submitted additional performance security with 08 days delay, the proposal for consideration of 08 days delay with damages - 5,30,06,222 x 0.01% x 8 = 42,405/- was sent to Competent Authority for approval of delay period. But same has not been agreed.
5. Therefore, LOA issued vide this office letter no.23820 dated 20.08.2024 is hereby cancelled due to delay in submission of Additional Performance Security and bid security amounting to Rs.14,51,629/- submitted with the bid hereby forfeited in terms of RFP Clause 33.3."
(32) This action is apparently contrary to the communication dated 26.11.2024 and 12.12.2024 by the Regional Officer NHAI, as already discussed.
(33) The opposite parties have not denied the fact that the petitioner was asked to deposit a penalty amount of Rs.42405/- (Rupees Forty Two Thousand Four Hundred Five) vide letter dated 26.11.2024, which it did on the asking of the concerned opposite parties nor that the petitioner was asked vide letter dated 12.12.2024 to come for signing of the agreement all of which indicated that the eight days' delay referred, had been waived.
(34) It is the case of the opposite parties in para-11 of the counter affidavit that as per N.H.A.I. Policy/Guidelines dated 21.08.2017, issues pertaining to such condonation of delay were to be dealt with by C.G.M. (Headquarter), N.H.A.I., who was the competent authority, however, in para-14 and 15 of the counter affidavit, the opposite parties categorically admit that considering the request made by the petitioner firm, a letter dated 26.11.2024 was issued by the N.H.A.I. asking the petitioner firm to deposit damages amounting to Rs.42405/-(Rupees Forty Two Thousand Four Hundred Five) for the eight days' delay. However, the explanation offered for it is that the said amount was demanded only to substantiate the bona fide intention and willingness of the petitioner firm and it nowhere meant acceptance of the way. We fail to understand as to what this averment means. This is nothing but an attempt by the opposite parties to wriggle out of the quagmire in which they find themselves on account of their own conduct where they themselves asked the petitioner to deposit the damages which it did and then subsequently cancelled the LOA as alleged arbitrarily.
(35) In para-14, it is also admitted that the damages were calculated in a synonymous manner i.e. the calculation/ formulation of the said amount was done as the same is done in likewise RFPs, wherein the clause of condonation of delay in its calculation exist. In paragraph 15 of the counter affidavit, they also admit to have given a tentative date to the petitioner i.e. 24.12.2024 to be ready with the formalities by the said date. However, it has been further stated that after much deliberation as delay could not be condoned, the same was intimated vide letter dated 20.12.2024 to the petitioner firm, which is impugned in the writ petition. It is said that the communication regarding disapproval of delay was received from the competent authority on 13.12.2024. Copy of the internal correspondence is annexed as Annexure-CA-3. Thereafter, the matter was considered by a Committee which decided to propose cancellation of LA etc. as mentioned in para-17 of the counter affidavit and ultimately, after approval of the said recommendations by the Regional Officer, the same was communicated to the petitioner on 20.12.2024.
(36) The tender process in question was floated in June, 2024. It was in respect of construction of a foot over bridge on Aligarh-Kanpur section of NH-34 (91) in the State of U.P., meaning thereby it was to sub-serve a greater public cause, but on account of the aforesaid action, merely on account of alleged delay of eight days and nothing else, the said cause obviously remains frustrated even after lapse of more than seven months and how far the impugned action has furthered the cause of the opposite parties or that of the public at large, who would have benefitted by construction of the foot over bridge, is any body's guess, as, there is nothing on record to show that any fresh tender process had been initiated.
(37) Looking into the facts as noticed hereinabove, we fail to understand as to what purpose is served by cancellation of the LOA purely in the facts in this case and how far the greater public cause with the tender process sought to serve is furthered. In fact, it appears that it has been frustrated. It is not the case that the petitioner firm was not qualified or was technically deficient in any manner. It is also not the case of the opposite parties that the performance security of Rs.52 Lakhs and odd was not deposited within the stipulated period in terms of the RFP clause. The only issue is regarding eight days' delay in depositing the additional performance security regarding which the petitioner has some explanation to offer, as already discussed. But even without it, there are instances of condonation of such delay in other matters, for whatever reason. Most importent, the Regional Office itself asked the petitioner to deposit penalty amounting to Rs.42405/- (Rupees Forty Two Thousand Four Hundred Five) which was duly deposited by the petitioner, obviously in anticipation of condonation of mere eight days delay in submission of Additional Performance Security but thereafter the competent authority disapproved the condonation of delay, consequently, LOA has been cancelled and the security money deposited by the petitioner has been forfeited. In the counter affidavit, there is no denial of the fact that the Additional Performance Security had also been deposited as claimed by the petitioner within the ten days further time as desired.
(38) Although in their counter affidavit, the opposite parties have denied any meeting and oral permission to the petitioner on 20.08.2024 to deposit the Additional Performance Security within the next ten days but neither the receipt of the e-mail dated 30.08.2024 nor any specific denial of the said meeting and permission in response thereto, has been made, except for refuting the claim raised on 28.09.2024 vide letter dated 01.10.2024 vaguely. Even thereafter vide letter dated 26.11.2024 petitioner was asked to deposit damages for the delay. It is also not denied that in fact the Additional Performance Security was deposited and communicated to the opposite parties and at that point of time, the concerned opposite parties of the Regional Office never informed the petitioner that the same was absolutely illegal and that no such time had been granted rather the Regional Office forwarded the request for condonation of delay and thereafter asked the petitioner vide letter dated 26.11.2024 to deposit the damages to the tune of Rs.42405/- (Forty Two Thousand Four Hundred Five), which was done by the petitioner on the same day.
(39) Annexure-CA3 sent by D.G.M., U.P. (West), which mentions about similar delay of seven days in submission of performance security having been condoned and approved in a similar case during 309th meeting and the agreement was entered into by the N.H.A.I. these were prior precedents in this regard as such, and even otherwise, purely on the facts of this case, there was no justification for cancelling the LOA and forfeiting the security amount as referred hearinabove.
(40) Looking into the overall facts and circumstances of the case, the reason for cancellation of LOA appears to be unreasonable. It appears that the opposite parties could not muster courage to take a pragmatic decision which would have furthered the object for which the tender was issued and the larger public interest which was implied on it, without causing any prejudice financial or otherwise to them but choose to tread a safer route by following the letter of the RFP clause ignoring the spirit and the cause which the tender process sought to achieve.
(41) We, therefore, quash the impugned action of cancellation of LOA and direct the opposite parties to reconsider the matter in the light of the aforesaid, specially the larger public good which is sought to be served by the proposed construction of foot over bridge which in any case stands delayed and also taking into consideration the fact that any fresh tender may result in further delay and possibly increased cost. Let the competent authority of the National Highway Authority of India take a considered decision as aforesaid in the matter positively within fifteen days from the date of receipt of a certified copy of this order.
(42) The writ petition is allowed. Howerver, there shall be no order as to cost.
(Om Prakash Shukla, J.) (Rajan Roy, J.)
Order Date : 17th April, 2025
Ajit/-
