Calcutta High Court (Appellete Side)
Harji Engineering Works Pvt. Ltd vs Union Of India And Another on 6 July, 2023
6th July,
2023
(AK)
30
W.P.A 12900 of 2023
IA No: CAN 1 of 2023
Harji Engineering Works Pvt. Ltd.
Vs.
Union of India and another
Mr. Kishore Dutta
Mr. Rupak Ghosh
Mrs. Sweta Gandhi
...for the petitioner.
Mr. Asit Kumar De
...for the Union of India.
Mr. Rohit Das
Ms. Kishwar Rahman
Mr. Preetam Majumdar
...for the respondent no.2.
Learned senior counsel for the petitioner contends
that the respondent authorities have acted in
contravention of law and natural justice in floating a new
tender for the completion of the balance work, which was
yet to be completed by the petitioner in terms of a
contract awarded to the petitioner, without permitting the
petitioner to conclude its work.
It is submitted that despite the private respondents
having given the petitioner an option to complete the
balance work, prior to such extension itself, the new
tender was floated.
It is submitted that during pendency of the writ
petition, a termination notice was issued against the
petitioner by the respondent authorities, which is also
required to be challenged.
Learned counsel appearing for the respondent
authorities controverts the submissions of learned senior
counsel for the petitioner and argues that sufficient
opportunities were given to the petitioner to complete the
work awarded to the petitioner.
However, in spite of such option being given and a
further extension being given even after the floating of the
impugned new tender, the petitioner failed to complete
such work in time, due to which the contract of the
petitioner was terminated on June 11, 2023.
It is further argued that, in the meantime, the new
tender has been given effect to by awarding the balance
work to a third party, which has already undertaken such
balance work.
Learned counsel appearing for the respondent
authorities also places reliance on the relevant clauses of
the fresh tender, floated in the meantime by the
respondents, and indicates that the same included a
procedure for subsequent reverse auction after the
technical bid opening date.
That apart, it is submitted that a six-month window
was left for awarding the contract in terms of the new
tender, which gave ample time to the respondent
authorities to assess whether the petitioner is able to
complete the work awarded to the petitioner, in terms of
the extension, in the meantime.
However, in view of the petitioner having failed to
utilize such opportunity, the new tender was given effect
to subsequently.
Learned counsel for the respondents cites two
judgments of the Supreme Court in support of the
contention that the window of interference under judicial
review in a tender process is extremely limited,
particularly in respect of public projects.
The first judgment cited is N.G. Projects Limited vs.
Vinod Kumar Jain and others reported at (2022) 6 SCC
127 and the second Food Corporation of India and others
vs. Jagannath Dutta and others reported at 1993 Supp (3)
SCC 635.
Upon a consideration of the submissions of parties,
the chronology of events in the present matter can be
summed up as follows:
After the petitioner having sought to foreclose the
contract on certain allegations on January 5, 2023, a
communication was issued by the respondent - Bharat
Heavy Electricals Limited (BHEL) on January 6, 2023
whereby the BHEL warned the petitioner that the
petitioner had not submitted any request letter for time
extension nor had taken any action from their side to
continue the work.
It was also mentioned in the said letter that, despite
lot of persuasions by BHEL vide previous letters, the
petitioner had allegedly failed to submit request letter for
time extension in line with Clause 2.11.1 of the General
Conditions of Contract (GCC), along with balance work
completion plan, within the stipulated time period, that
is, by January 3, 2023.
However, in the second paragraph of the letter dated
January 6, 2023, the BHEL gave a further opportunity to
the petitioner to arrange for immediate submission of a
request for time extension, along with taking corrective
measures regarding augmentation of manpower etc.
towards fulfillment of contractual obligations, failing
which the BHEL might be left with no option other than
exercise its right to complete the work through suitable
alternatives at the 'Risk and Cost' of the petitioner in line
with the provision of the contract (2.7.2 of the GCC).
Thereafter, the BHEL, upon the petitioner having
not applied for extension till then, floated the impugned
new tender on February 2, 2023.
Subsequently, on February 10, 2023, an application
for extension was made by the petitioner, upon which an
extension was granted on April 1, 2023, till April 4, 2023.
However, thereafter, the petitioner's contract was
apparently terminated on June 11, 2023, upon giving a
notice of termination on June 10, 2023 by the BHEL, on
the allegation that despite the time having been extended,
the petitioner failed to complete its work in terms of the
contract awarded to it.
Upon a perusal of the communication dated
January 6, 2023, it is evident that the same was not
merely a reminder to the petitioner to apply immediately
for submission of request for time extension, but also a
warning to the petitioner that they had failed to avail
previous opportunities of applying for extension of time
and/or completion of the work.
After having waited for a reasonable period, for
almost one month, awaiting such extension application
from the petitioner, the BHEL floated the new tender on
February 2, 2023.
Notably, in Clause 17.0 of the said tender
document, it was stated that the validity of the offer shall
be for six months from the latest due date of offer
submission (including extension, if any), unless specified
otherwise.
Clause 18.0 of the same also stipulated that the
BHEL shall resort to Reverse Auction for the tender.
Reverse Auction was to be conducted among the techno-
commercially qualified bidders.
The date of opening of the tender, on the techno-
commercial aspect, was February 13, 2023. Hence, the
BHEL kept sufficient leeway reserved for awaiting the
completion of the work by the petitioner within the time
which was extended at the behest of the BHEL.
Such floating of the tender at the relevant juncture,
that is, on February 2, 2023, thus, cannot be faulted per
se, since the BHEL could not have waited till the eleventh
hour, till after failure of the petitioner, to initiate
proceedings for floating a tender completion of the
balance work by a third party sufficiently in advance,
keeping in view the urgent and public nature of the work
contemplated.
Subsequently, on February 10, 2023 upon the
petitioner having applied for extension of time to complete
its work, an extension was duly granted by the BHEL on
April 1, 2023 till April 4, 2023.
It is relevant to mention that in the meantime, no
effect had been given to the new tender floated by the
BHEL by awarding work to any third party.
However, after waiting sufficiently for two months
thereafter, a termination notice was issued on June 10,
2023 and the termination of the petitioner's contract was
effected on June 11, 2023, on the allegation that the
petitioner, despite getting such extended time and two
months thereafter, failed to complete its work.
Even without going into the veracity of such
allegations and/or the merits of the said allegations, it is
clear that as on the date of filing of the writ petition, there
was no irregularity or illegality on the part of the BHEL
merely by floating the new tender which has been
assailed in the writ petition.
In view of the above developments, it can be seen
from the records that the BHEL had acted sufficiently in
consonance with the principles of natural justice and in
terms of the contract, rather, going out of its way to give
several extensions to the petitioner for completion of the
work.
Hence, the writ petition, as it stands, does not
justify any interference with the tender process.
However, a subsequent cause of action arose for the
petitioner during pendency of the writ petition, by
termination of the contract.
The termination of the contract of the petitioner on
June 11, 2023, during pendency of the writ petition, is
not the subject matter of the present writ petition and is
only a subsequent cause of action which has been
brought to the notice of the court by way of an
interlocutory application filed in connection with the writ.
Hence, the right of the petitioners has to be reserved
with regard to intended challenge, if any, against such
subsequent termination.
However, insofar as the present writ petition is
concerned, the same cannot succeed in view of the
observations made above.
Accordingly, WPA 12900 of 2023 is dismissed on
contest, without any order as to costs. CAN 1 of 2023 is,
accordingly, dismissed as well.
Nothing in this order shall preclude the petitioner
from challenging the subsequent termination of the
petitioner on June 11, 2023 and/or the notice of
termination which resulted in such termination by way of
a fresh writ petition.
If a fresh writ petition is so filed against such
termination by the petitioner, the writ court shall decide
the same afresh, in accordance with law and without
being swayed in any manner by any of the observations
made herein.
It is further made clear that since an objection as to
maintainability of the present writ petition and the
prospective writ petition on the ground of availability of
an arbitration clause in the contract between the parties
has been taken by the respondents, the question of
maintainability of the subsequent writ petition, if so filed,
is left open to be decided in the fresh writ petition.
Since no affidavits have been called for, it is deemed
that none of the allegations made by the parties are
admitted by the other parties.
Urgent photostat copies of this order, if applied for,
be given to the parties upon compliance of all requisite
formalities.
(Sabyasachi Bhattacharyya, J.)
