Arun Kumar Gupta vs State Of Chhattisgarh
2022 Latest Caselaw 2478 Chatt

                                  1

                                                             NAFR

       HIGH COURT OF CHHATTISGARH, BILASPUR

               Writ Petition (C) No. 1030 of 2019

              Judgment Reserved on : 05.04.2022

              Judgment Delivered on : 18.04.2022

Arun Kumar Gupta, S/o Shri Mangli Sao, age about 55 years, R/o.
Darripara, Ambikapur, District Surguja (C.G.)

                                                     ---- Petitioner

                              Versus

1. State of Chhattisgarh through its Secretary, Department of
Water Resources, Mahanadi Bhawan, Mantralaya, P.S. & Post-
Rakhi, Atal Nagar, Raipur, District Raipur (C.G.)

2. Chief Engineer, Hasdev Ganga Basin Water Resources,
Ambikapur, District Surguja (C.G.)

3. Executive Engineer, Water Resources Department, Division
No. 1, Ambikapur, District Surguja (C.G.)

                                                  ---- Respondents



For Petitioner                 : Mr. K.R. Nair, Advocate.
For Respondents                : Mr.Gagan Tiwari, Dy. Govt. Adv.


             Hon'ble Shri Justice Goutam Bhaduri
            Hon'ble Shri Justice N.K. Chandravanshi

                         CAV JUDGMENT

Per N.K. Chandravanshi, J.

1. Challenge in this writ petition is to the order/letter dated 10.09.2018 (Annexure P-1) passed by respondent No. 2 whereby Earnest Money Deposit (for short, "EMD") amount of Rs. 2,38,400/- deposited by the petitioner has been forfeited.

2. As per pleadings of the petitioner, on 12.11.2017 respondents had invited online tender at an estimated cost of Rs.4,76,60,765/- for construction of Diversion Weir & Earth Work of L.B.C. from RD.O to 1530 M & R.B.C. from RD.O to 450M including 14 numbers structures of Dabardand Diversion Scheme. The last date for submission of tender was 21.12.2017. As per Notice Inviting Tender (NIT), the tender was to be submitted in three parts-ABC. Envelope "A" was to contain valid registration, valid solvency certificate, Valid Bid Security (Earnest Money), affidavit, etc. Envelope "B" was to contain eligibility document for award of contract, the income tax returns, etc whereas Envelope "C" was to contain price-bid in the prescribed formate.

3. The petitioner submitted his tender online on 15.12.2017. Price-Bid was to be opened on 05.01.2018 but opened only on 13.03.2018 and when the said price-bid was opened on 13.03.2018, he came to know about the fact that by mistake, he has quoted his rate as "Zero" in the price-bid, therefore, immediately on the same day he wrote a letter (Annexure P-4) to the respondents stating that he did not quote any rate, instead he has quoted "Zero" by mistake in the column prescribed for quoting the rate. Despite that, the petitioner was declared L-1 bidder and vide letter dated 12.4.2018 (Annexure P-6), he was asked by respondents to deposit original documents as per Clause 2.1.5 of tender document, which, the petitioner handed over to them. Since, the respondents did not send a letter to the petitioner asking him to enter into contract agreement before expiry of valid period of the tender, therefore, the petitioner wrote a letter on 25.6.2018 (Annexure P-7) stating that period of tender was over on 5.5.2018, hence, EMD money be refunded to him. He again wrote a letter on 20.8.2018 (Annexure P-8) for the same purpose, but instead of refunding the EMD amount, respondents had

informed him vide letter dated 10.9.2018 [obtained under RTI on 21.2.2019] that the EMD amount has been forfeited, hence, the petitioner has filed instant writ petition challenging therein that alleged forfeiture of EMD amount was against the terms and conditions of the NIT, as the petitioner did not quote any amount in the Price-Bid by mistake, therefore, he could not be declared as L-1 bidder by the respondents and no contract has been awarded to the petitioner, hence, forfeiting of EMD amount is not in accordance with law.

4. In the return filed by the respondents, they have stated that since tendering process has been conducted through online and the petitioner has quoted the amount "Zero" in Price-Bid, hence, he was declared as L-1 bidder, which was duly informed by respondents. Since the petitioner was declared L-1 contractor, hence, as per clause 2.1.5 , he ought to have invariably submitted the required documents within seven working days. Instead thereof, by violating the terms and condition of the tender, he submitted an application dated 13.3.2018 to the respondents stating therein that by mistake, he has quoted his rate as "Zero" in the online tender, hence, he cannot perform the work and execute the agreement and, therefore, Term Deposit Receipts (in short "TDR") of the petitioner be returned to him. Despite, letter dated 12.04.2018 written by respondents, the petitioner did not deposit the documents within prescribed period. For the subject tender, 13 tenderers had successfully submitted tender document and the petitioner was L-1 bidder, as he has quoted his rate as "Zero". Due to aforesaid act of the petitioner, entire tender process was vitiated, hence, by invoking clause 2.1.6 of the NIT and clause 13 of part -I, "Information & Instructions for Tenderers before submission of tender", the respondents have forfeited the EMD amount deposited by the petitioner.

5. Learned counsel appearing for the petitioner would submit that by mistake, the petitioner quoted his rate as "Zero" in the online tender inadvertently, as on the same day, he had submitted 4/5 tenders online. It is further submitted that on the day when price-bid was opened i.e. on 13.3.2018, he himself came to know about the mistake and on the same day, he informed the respondents in this regard vide Annexure P-4 and also shown his inability that he cannot perform the work and execute the agreement, therefore, his TDR be returned to him. Despite that, respondents treated him as L-1 contractor, which is per se illegal, as no rate was quoted by the petitioner in the price-bid, instead thereof, only "Zero" was quoted, hence, it cannot be presumed that his rate is lowest, to propose to award contract to him, because it is common sense that no contractor will do the work for the respondents free of cost. There is no such condition in the NIT, authorizing the respondents to accept the tender, which does not bear any rate. Instead thereof, clause 2.1.1 of the NIT clearly speaks that price-bid be filled in the figures , hence, quoting rate as "Zero" cannot be assumed any rate / figure for such type of work. The petitioner fairly admitted his mistake, that too, on the same day when the Price-Bid was opened, therefore, as per Clause 2.1.6, he could not be held responsible for vitiation of tender process. Even otherwise, as per aforesaid clause, the EMD amount could have been forfeited only after re-tendering for aforesaid work but in the instant case, no re-tendering was done by the respondents for the same work. Although after filing of this petition, the respondents have informed that after 2-3 year, re- tendering process has been done but considering the time gap, forfeiting of EMD of the petitioner could not be justified. Learned counsel for the petitioner also submitted that impugned order / letter (Annexure P-1) does not show that either the petitioner had submitted un-true or false information with regard to his

qualification or re-tendering has been made because of vitiation of alleged tender, only on account of such act of the petitioner. Further, the petitioner has not been afforded any opportunity of hearing, before passing of the impugned order/letter dated 10.09.2018, which is not in accordance with law. Hence, impugned order/letter dated 10.9.2018 in respect of forfeiture of EMD amount deposited by the petitioner is unsustainable in the eye of law, which is liable to be set-aside.

6. On the other hand, learned counsel for the State would submit that since the petitioner, who is "A" class contractor, has quoted his amount / rate "Zero" in online tender process, hence, his overall ranking was declared as L-1 bidder because the said amount quoted by the petitioner is 100 percent low as per the estimated cost of the alleged work. But neither the petitioner submitted the documents as provided in clause 2.1.5 within seven working days nor he submitted alleged documents, after issuance of letter dated 12.4.2018 by the respondents. Further, it was found that under pre-planned way, the petitioner has vitiated the tender process and he indulged the respondents in various proceedings with an intention that they could not take any decision within valid period of tender. Hence, as per clause 2.1.6 and Clause 13 of "Information and Instructions for Tenderers before submission of tender", EMD amount deposited by the petitioner has been forfeited, which by any means is not against the provisions of NIT.

7. We have heard learned counsel appearing for the parties and perused the material available on record.

8. It is not in dispute that in the instant case, petitioner had participated in the online tender process, price-bid was opened on 13.03.2018 and on the same day, the petitioner has written a

letter (Annexure P-4) to the respondents informing therein that inadvertantly, he did not quote any rate in his tender, hence, he cannot perform the work and execute the agreement, therefore, his TDR be returned to him.

9. According to counsel for the petitioner, since no rate was quoted by the petitioner, hence, in absence of any consideration, there cannot be a valid contract between the parties, therefore, assuming the petitioner as lowest bidder / L-1 bidder by the respondents is totally illegal and malafide.

10. To consider the dispute raised at the bar, it would be appropriate to quote relevant clauses of the tender document, which are as follows : -

"2.1.1 Submission of tender with pre qualification of tenders:

      Envelope "A"         xxx           xxx        xxx

      Envelope "B"         xxx           xxx        xxx

Envelope "C" should contain scanned copies of the following

1. xxx xxx xxx

2. Price Bid in the prescribed format online by the tenderer duly filled in with the Price Bids in the figures in the appropriate place of template meant for it."

2.1.6 Disqualification :-

Even though the Tenderers satisfy the above, they are subject to be disqualified if:

i. Made misleading, incorrect, incomplete or false representation in the forms, statements, affidavits and attachment submitted in proof of the qualification requirements.

ii. The tenderer produces untrue or false information regarding qualification requirement then the EMD produced for the tender

shall be forfeited and his registration may be suspended for a period of minimum six months to a maximum 2 years or his registration may be cancelled. In case contractors enters into agreement and commences the work and it is found that he has been awarded the contract based on incorrect /false/incomplete information the security deposit of such contracts will be forfeited and also action indicated above may be taken against the contractor.

iii. Tenderer not produce all original certificates for verification of the certificates submitted for pre-qualification requirements as and when demanded by the department.

iv. Participated in the previous bidding for the same work and not executed the agreement.

v. Record of poor performance such as abandoning the work, not properly completing the contract, unsatisfactory quality of work, inordinate delays in completion, claim and litigation history, or financial failures etc. in any department of Govt. of Chhattisgarh or the State Govt. organization/Services/ corporations/local body etc. (by whatever names these are called).

vi. One person involving in two or more registration in the same tender.

vii. If the tenderer whose bid is found lowest does not submit the required documents of Envelope - A time limit, the tender process stands vitiated. Such tenderer is responsible for causing wilful disruption of tender process Action of de- registration shall be recommended for a period of minimum two years for such tenderer in conformance with the provision made in order vide Govt. C.G. PWD. no. F-5-8/19/2013 fufonk Dt. 29- 10-2014.

viii. The tender has to be re-invited. The amount of EMD shall be recovered from the defaulted tenderer of the Second call from his ongoing works within the WRD and amount deposited during

unified registration in PWD or from revenue recovery."

Clause 13 of Information & Instructions for Tenderers before submission of tender:

13. If the tenderer produce untrue or false information regarding his qualification requirements then Earnest Money Deposit shall be forfeited immediately."

11. A bare perusal of Clause 2.1.1 of the tender document would go to show that Price-Bid be filled in the figures in the appropriate place of template meant for it, but in the instant case, it is undisputed that the petitioner has not quoted any rate and, instead thereof, he has quoted "Zero" rate. "Zero" rate cannot be assumed any rate for the alleged construction work. The alleged tender was invited for the work of estimated cost of Rs.4,76,60,765.00. It is surprising, that for such huge costing work, as to how an amount of "Zero" can be treated the rate / cost of alleged work, because why any Contractor will do the work for the respondents free of cost. Although such an act could have been done by malafide intention also, but in this case nothing has been produced by the respondents, which would demonstrate that the petitioner has quoted "Zero" with any malafide intention to vitiate the tender process. Moreover, according to the petitioner, on the date of filing of online tender he submitted 4/5 tenders online, therefore, inadvertently alleged mistake has occurred, about which, he himself came to know on 13.03.2018, when price-bid was opened and immediately on the same day, he wrote a letter to respondents informing them about alleged mistake. This fact shows bonafids of the petitioner.

12. Sub clause ii of Clause 2.1.6 and clause 13 of Information & Instructions for Tenderers before submission of tender, provides power to forfeit the EMD amount produced by tenderer, in case of untrue or false information provided by him regarding his qualification. Sub Clause viii also provides such power, in the event of tender proceeding

getting vitiated on account of the act of tenderer and the tender proceedings is cancelled and re-tendering is ordered. But none of these conditions were found present in the instant case, till filing of instant petition. Although respondents have informed that re-tender has been ordered for the same work, but it has been done after more than 2 year whereas order impugned for forfeiture of alleged EMD amount was passed on 10.9.2018, therefore, re-tendering has no consequence in the instant case.

13. The impugned order / letter dated 10.09.2018 reflects that respondents have held responsible the petitioner for vitiation of tender process, hence, EMD amount deposited by the petitioner has been forfeited, but no opportunity of hearing has been afforded to him before passing of the impugned order.

14. In the matter of Gorkha Security Services v. Government (NCT of Delhi) and others 1, their Lordships of the Supreme Court held as under :-

"21 . The Central issue, however, pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of Show Cause Notice is to make the noticee understand the precise case set up against him which he has to meet. This would require the statement of imputations detailing out the alleged breaches and defaults he has committed, so that he gets an opportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach.

That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/ breaches complained of are not satisfactorily 1 (2014) 9 SCC 105

explained..................................."

15. In the matter of UMC Technologies Private Limited v. Food Corporation of India and another 2, their Lordships of the Supreme Court held as under :-

"13 . At the outset, it must be noted that it is the first principle of civilized jurisprudence that a person against whom any action is sought to be taken or whose right or interests are being affected should be given a reasonable opportunity to defend himself. The basic principle of natural justice is that before adjudication starts, the authority concerned should give to the affected party a notice of the case against him so that he can defend himself. Such notice should be adequate and the grounds necessitating action and the penalty/action proposed should be mentioned specifically and unambiguously. An order travelling beyond the bounds of notice is impermissible and without jurisdiction to that extent. This Court in Nasir Ahmad v. Assistant Custodian General, Evacuee Property, Lucknow and Anr3., has held that it is essential for the notice to specify the particular grounds on the basis of which an action is proposed to be taken so as to enable the noticee to answer the case against him. If these conditions are not satisfied, the person cannot be said to have been granted any reasonable opportunity of being heard."

16. Reverting back to the facts of the case in light of the afore-cited judgments of the Supreme Court in the matter of Gorkha Security Services (supra) & UMC Technologies Pvt.Ltd. (supra), it is quite apparent that in the instant case, no opportunity of hearing has been

2 (2021) 2 SCC 551 3 (1980) 3 SCC 1

afforded to the petitioner before passing of the impugned order, wherein the petitioner has been held responsible for vitiating the tender process. It is also pertinent to mention here that as to how, the petitioner could have been held responsible for causing willful disruption of whole tender process, when he himself has informed the respondents about his alleged mistake and his inability to perform the work and execute the agreement. As per the respondents, 13 tenderers had successfully submitted the tender document, hence, the respondents may have awarded the alleged contract to L-2 by declaring him L-1, but it remains unanswered that why it was not done. Considering aforesaid facts as discussed above, hearing opportunity was required to be provided to the petitioner, which has not been provided to him and the same is not in consonance with the law settled by the Apex Court in the aforesaid cases.

17. In view of the foregoing discussions, we find that the grounds raised by respondents for forfeiture of EMD amount deposited by the petitioner in respect of alleged NIT are unsustainable in law, thus, order/letter dated 10.9.2018 forfeiting the EMD amount of Rs.2,38,400/- deserves to be and is hereby quashed. It is directed that respondents shall refund the EMD amount of Rs.2,38,400/- to the petitioner within a period of 60 days from the date of receipt / production of certified copy of this order.

                Sd/-                                              Sd/-

        (Goutam Bhaduri)                                (N.K. Chandravanshi)
           Judge                                              Judge



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