Punya Coal Roadlines vs Western Coalfields Ltd.
2007 Latest Caselaw 806 Bom

JUDGMENT

A.H. Joshi, J.

1. Rule. Rule is made returnable forthwith by consent of parties.

2. The petitioners are aggrieved by the order dated 12-4-2006, Annexure E to the petitions, by which the tender process commenced through notice dated 3-1-2006 has been cancelled and the earnest money deposit furnished by the petitioners while submitting the tender has been forfeited.

3. The dates on which various transactions took place, which are admitted, are as follows:

  (a) Date of Tender Notice                             -  3-1-2006.
(b) Date of opening of technical bid.                 -  6-2-2006.
(c) Date of common withdrawal letter given by
    petitioners,                                      - 13-2-2006
(d) Date of scrutiny of technical bid.                - 20-2-2006.
(e) Fresh Tender Notice                               -  4-3-2006,
                                                      - 10-4-2006.
(f) Cancellation                                      - 12-4-2006.
 

4. According to the respondents, since the withdrawal letter was given by the petitioners on 13-2-2006, it was given before the date of expiry of validity of the tender, the forfeiture of earnest money deposit was imperative.

5. The learned Advocate for the petitioners has placed reliance on the documents received by him, which he has tendered for the perusal of the Court, and particularly on the following observations, which are as under:

1. M/s Avtar and Co.

i) Tenderer has not submitted the details against the requirement of (h) and (i) of Eligibility Criteria as per the Tender,

ii) Tenderer has fulfilled the requirement of qualifying criteria.

2. M/s Punya Coal Roadlines

i) Tenderer has not submitted the details against the requirement of (h) and (i) of Eligibility Criteria as per the Tender.

ii) Tenderer has fulfilled the requirement of (a), (b) and (c) of qualifying criteria but not submitted the details of the requirement of (d) of Qualifying Criteria as per the Tender.

iii) Tenderer has not submitted "Affidavit" on Non-Judicial Stamp Paper as per Annexure-A as per tender document/page 53.

3. M/s B. Himmatlal Agarwal

i) Tenderer has not submitted the details against the requirement of (c), (h) and (i) of Eligibility Criteria as per the Tender.

ii) Tenderer has fulfilled the requirement of qualifying criteria.

The learned Advocate for the petitioners, therefore, urged that since the respondents have found that the petitioners' bid had deficiencies, they were not qualified for the price bid and, therefore, they are entitle to get the refund of earnest money deposit.

6. The learned Advocate for the petitioners placed reliance on the judgment in Andhra Pradesh Paper Mills Ltd. v. State of Maharashtra and Ors. , and urged that unless the transaction results into a concluded contract, it is open for the bidder to withdraw the offer and in that situation, the withdrawal cannot be said to be erroneous and the bidder is entitled to receive the refund of earnest money deposit.

7. Learned Advocate Shri S.C. Mehadia for the respondents urged that in the present case, after the qualification bid was opened and before the decision of allotment or non-allotment of the tender was reached, the petitioners had applied for withdrawal of the earnest money deposit and this was done before the period of validity had expired. According to him, the condition mentioned in the tender document, which are at page 25 of the paper book, provides the situation in which earnest money deposit is liable to be forfeited. Said condition reads as follows:

15(E) The Bid Security/Earnest Money may be forfeited:

a. If the Bidder withdraws the Bid after Bid opening during the period of Bid Validity

OR

b. In the case of a successful Bidder, if the Bidder fails within the specified time limit to:

(i) sign the Agreement; or

(ii) furnish the required Performance Security/Security Deposit.

c. if the bidder does not accept the correction of the bid price pursuant to Clause 26/25 of I.T.B.

According to learned Advocate Shri Section C. Mehadia, the petitioners' case falls under the aforesaid Clause (a), as he has withdrawn the bid after opening and during the validity of bid.

8. Learned Advocate Shri S.C. Mehadia for the respondents then pointed out from the minutes relied upon by the petitioners a narration immediately below the portion quoted in para No. 5, which reads as follows:

TC deliberated on the above and decided to meet again to discuss the points not complied by the tenderers while submitting the tender.

According to Shri S.C. Mehadia, therefore, on about 10-2-2007 to 21-2-2007 final decision as to rejection of petitioners' bid was reached.

9. We have perused the judgment relied upon by the learned Advocate for the petitioners. In that case, the period of validity of the tender was 45 days and the tender was to be allotted after getting approval from the competent authority. The period of validity as well of 15 days fixed for approval had expired, however, no work order was issued. After the expiry of validity period, the bidder had withdrawn and this Court found that he was entitled for the refund of the earnest money deposit. This case, therefore, does not apply as of precedent applicable to the facts of the present case.

10. We find that it is a clear case where the petitioners had by furnishing the tender accepted the terms and conditions subject to which the tender was liable to be dealt with. The petitioners were, therefore, not entitled to withdraw the bid till the period of its validity. The petitioners having applied for withdrawal of offer during the period of validity of bid, necessary consequence to follow is forfeiture of deposit. We find that the respondents' submissions on facts as recorded in paras 7 and 8 go totally unreputed and unchallenged. The petitioners have failed to come out of their fault. They are bound by the terms of contract relating to procedure of tendering, and are liable for the result of breach committed by them. Subsequent cancellation of tender by the respondents has no bearing on the case, as it is a fact subsequent to the breach committed by the petitioners.

11. We find that the decision of the respondents cannot be said to be arbitrary or otherwise violative of the fundamental right of the petitioners. Thus, no interference is called for in the impugned order.

12. The petitions are dismissed. Rule stands discharged.

13. Parties shall bear their own costs.