Calcutta High Court
Reliable Facility Services Private ... vs Government Of West Bengal on 11 December, 2023
Author: Hiranmay Bhattacharyya
Bench: T.S. Sivagnanam, Hiranmay Bhattacharyya
OD-2
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
APOT/328/2023
IA NO. GA/1/2023
RELIABLE FACILITY SERVICES PRIVATE LIMITED AND ANR.
VS.
GOVERNMENT OF WEST BENGAL, SERVICE THROUGH THE FOOD AND
SUPPLIES DEPARTMENT AND ORS.
...........
BEFORE :
THE HON'BLE THE CHIEF JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
DATE : 11TH DECEMBER, 2023.
Appearance :
Mr. Utpal Bose, sr. Adv.
Mr. Soumabho Ghosh, Mr. Pushan Kar,
Mr. Sagnik Majumdar, Mr. Abhidipto Tarafdar,
Ms. Shreya Ghosh Dastidar, Ms. Dolan Saha, Advs.
...for appellants.
Mr. Sirsanya Bandopadhyay, Mr. Arka Kumar Nag, Advs.
...for respondents.
The Court :- This intra court appeal by the writ petitioner is directed
against the judgment and order dated 6.9.2023 in WPO/1434/2023. The
appellant participated in a tender called for by the department namely, The
Food and Supplies Department of the Government of West Bengal for
engagement of a contractor or agency for facility management services for
Khadyashree Bhawan in the second floor of Old Khadya Bhawan and in Lake
Garage. The appellant participated in the tender and it is not disputed that the
bid submitted by the appellant was evaluated as L-1. The appellant was called
for a meeting by the authorities on 24.5.2023 in the office of the respondent
regarding a discussion pertaining to the financial bid evaluation and settling
disputes, if any. The appellant participated in the said meeting. It appears that
before the said meeting the appellant was informed by communication dated
6.4.2023 seeking justification of the price bid quoted by them as in the opinion
of the Tender Inviting Authority the price bid was less than the estimated price
in terms of the clause 8.9.5 of the Bid Conditions. Much earlier on 17.4.2023,
the appellant was directed to demonstrate a sample of the work in presence of
the Deputy Secretary of the respondent Department which they have performed
and from the minutes of the tender committee dated 24.5.2023 it appears that
there was some disputes with regard to the brand of glass cleaner which was to
be used by the appellant in the cleaning process as and when tender being
awarded to the appellant. We need not go into the said controversy as what we
are concerned is as to whether the respondent Department was justified in
canceling the bid submitted by the appellant forfeiting the earnest money
deposit and also debarring the appellant from participating in future bids for
five years. Elaborate submissions appear to have been made before the learned
single Judge, who has upheld the decision of the respondent and aggrieved by
the same the appellant has preferred this appeal. The entire dispute is in a very
narrow campus involving interpretation of clause 8.9.5 of the Bid Conditions,
which reads as follows :
"Clause 8.9.5: Additional Performance Security will be as per F.D.'s
Notification No.4608-F[Y], dt.18.07.2018 when the bid price is 80% or less
of the estimated price put to tender.
If the contractor quotes price below than 80% of the estimated price
of the items other than Manpower Price, the contractor/agency will have to
submit justification mathematically along with authenticated documents to
support the low bid-price along with supportive documents, otherwise the
client reserves the right that the bid may be cancelled and it may draw the
forfeiture of the EMD amount along with other conditions to bar the said
low bidder to take part in the future tender process of the Food and
Supplies Department. "
As could be seen from the above Condition, if a contractor quotes a price
below than 80% of the estimated value price of the items other than Manpower
price, the contractor/agency will have to submit justification mathematically
along with authenticated documents to support the low bid-price along with
supportive documents. The Condition also states that upon failure of the
contractor/agency to submit justification mathematically along with
authenticated documents to support the low bid-price the Condition empowers
the respondent for reserving their right to cancel the bid and they may draw
the forfeiture of the EMD amount along with other Conditions to bar the said
low bidder to take part in the future tender process of the Food and Supplies
Department. Admittedly, the bid submitted by the appellant is below the 80%
of the estimated price of the items other than manpower. Hence, they were
required to justify their low bid along with authenticated and supportive
documents. This appears to have been done by the appellant as could be seen
from their letter dated 12.4.2023 addressed to the Deputy Secretary of the
respondent Department. In no uncertain terms they have stated that they get
bulk quantity on the purchases and they are also in control of the material
utilisation which enables them to offer a bid less than 80% of the estimated
price. In the tentative monthly material list as found in Annexure A to the letter
dated 12.4.2023 in serial no.4 the appellant has mentioned the product name
of the glass cleaner as "Colin". The respondent Department has faulted the
appellant for having quoted the said product by its product name since the
appellant by a subsequent letter have withdrawn the same and stated that they
will be using the product with product name R-3. In our considered view, this
issue is of no significance, especially in the light of clause 4.1.19 of the Tender
Conditions which only requires the agency to ensure supply all the best quality
branded materials.
We find from the list of materials only three of the products have got a
brand name namely, "'Harpic, Room freshener [Air] and Odonil'. The products
are all described by the product name and not by the brand name. Therefore,
even assuming that the appellant had offered to use Colin brand glass cleaner,
all that the department could have done is to examine whether R-3 glass
cleaner is equally efficient and if not appropriate advice could have been given
to the appellant. In any event, the Tender Condition does not stipulate the
product 'Colin' to be used. Therefore, we are of the view that the said issue
being of trivial nature has been blown out of proportion for reasons best
known. Be that as it may, what we are required to consider in the facts and
circumstances is the correctness of the decision of the respondent in ordering
forfeiture of EMD and also blacklisting the appellant for a period of five years
from participating in any tender of the Food and Supplies Department. In the
order of cancellation of the bid submitted by the appellant dated 30.6.2023
there is a passing reference that the earnest money deposit given by the
appellant which is being forfeited and they are also barred from participating in
future bids for five years. As seen from clause 8.9.5 of the Tender Condition it
no doubt gives the power to the Tender Inviting Authority to forfeit the EMD
along with other Conditions to bar the lower bidder from taking part in future
tender process. The earlier part of clause 8.9.5 would also be relevant since a
bidder, who quotes less than 80% of the estimated price is not automatically
disqualified but he has given an opportunity to justify their low price by
mathematical calculation and authenticated documents. Therefore, the
respondents have reserved their liberty and their discretion to decide as to
whether a person who has offered less than 80% of the estimated price can be
awarded the contract. Therefore, an offer which is less than 80% of the
estimated price would not result in automatic rejection of a tender. Thus, there
is discretion vested with the appellant at that stage as well.
The second limb of clause 8.9.5 empowers the respondent Department to
do one or both of the actions proposed therein. The use of the expression 'may'
is very relevant which clearly indicates that there is discretion vested with the
appellant to forfeit EMD along with other Conditions to bar the bidder from
taking part in future tender process of the said Department. Thus, clause 8.9.5
gives the discretion to the authority and it cannot be right to state that merely
because a bidder has offered less than 80% of the estimated price his bid will
automatically be rejected and this will automatically result in forfeiture of EMD
and as well as debarring the bidder from participating in the future tenders.
The law is well settled that blacklisting of a contractor would tantamount to a
civil death and since blacklisting results in serious civil consequence. It has
been held that prior to taking such a drastic step an opportunity should be
granted to the concerned person and such opportunity should be an effective
opportunity and not a mere eye wash. That apart, the opportunity which has
been held to be necessary in this aspect pre-supposes that the
bidder/contractor is informed by a notice in writing which should clearly state
as to how in the opinion of the Tender Inviting Authority, they are of the prima
facie view that the earnest money paid by them is liable for forfeiture and that
blacklisting should also be resorted to. Admittedly, in the facts and
circumstances no such notice was given to the appellant. The reasoning given
by the learned single Bench in this regard is not acceptable as we have found
that clause 8.9.5 of the Tender Condition does not result in automatic
cancellation of the bid and automatic forfeiture of the EMD or automatic
blacklisting. That apart, on perusal of the resolution of the Tender Committee
dated 24.5.2023 we find that nothing adverse has been recorded by the
respondent Department except to state that the appellant had forwarded a legal
notice alleging bias and arbitrary action on the part of the Food and Supplies
Department and they have also stated that they are not willing to serve the
department. This can hardy be a reason to blacklist the appellant for a period
of five years and also simultaneously forfeit the earnest money deposit.
Furthermore, we note that the entire tender has been cancelled and
subsequently fresh tender appears to have been invited and third party has
been awarded the contract.
Thus, for all the above reasons, we are of the view that the forfeiture of
earnest money deposit of the appellant and blacklisting the appellant for a
period of five years from participating in any tender process of the respondent
Food and Supplies Department is arbitrary, illegal and not sustainable in law
apart from being grossly disproportionate to the allegations made against the
appellant.
Thus, for all the above reasons, the appeal is allowed.
The order passed by the learned single Bench is set aside. Consequently,
the writ petition is allowed and the order impugned in the writ petition dated
30.6.2023 is quashed and the respondent Department are directed to refund
the earnest money deposit which was forfeited within a period of fifteen days
from the date of receipt of the server copy of this order.
Consequently, the application, IA NO. GA/1/2023 stands closed.
.
( T.S. SIVAGNANAM)
CHIEF JUSTICE
( HIRANMAY BHATTACHARYYA,J.)
pkd/S.Das.
