Vna Security Services P.Ltd. vs Union Of Inida & Ors.
2015 Latest Caselaw 6349 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                       Date of decision: 27th August, 2015.

+                              RFA 511/2005

       VNA SECURITY SERVICES P.LTD.               ..... Appellant
                    Through: Mr. Jatin Rajput and Mr. Anupam
                             Dubey, Advs.

                               Versus

    UNION OF INIDA & ORS.                     ..... Respondents

Through: Mr. Ashutosh Jha, Adv.

CORAM:

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1. This appeal under Section 96 of the Code of Civil Procedure, 1908

(CPC) impugns the judgment and decree dated 26th April, 2005 of the Court

of Sh. N.K. Kaushik, Additional District Judge (ADJ), Delhi of dismissal of

Suit No.340/2004 filed by the appellant/plaintiff for recovery of

Rs.15,95,131/- from the respondents/defendants namely, (i) Union of India,

Ministry of Health and Family Welfare; (ii) Medical Superintendent, VMMC

& Safdarjung Hospital; and, (iii) Medical Superintendent, VMMC &

Safdarjung Hospital, for compensation for breach of contract.

2. The appeal was admitted for hearing and Trial Court record

requisitioned. The counsels have been heard.

3. The undisputed facts are, (i) that the appellant/plaintiff was a

participant in a tender floated by the respondents/defendants for engagement

of Security Personnel to control the crowd and guide the large number of

patients and their relatives in Safdarjung Hospital, New Delhi; (ii) the

respondents/defendants vide letter dated 2nd August, 2003 informed the

appellant/plaintiff that it had been approved by the competent authority and

asked the appellant/plaintiff to convey its acceptance in writing; it was

further stipulated that ―the contract has to be carried out as per terms and

conditions accepted by you in the tender and at the rates quoted therein‖; (iii)

the appellant/plaintiff vide its letter dated 11th August, 2003 conveyed to the

respondents/defendants its acceptance of the contract and requested ―that the

contract may please be awarded to us at your earliest‖; (iv) the

respondents/defendants vide their letter dated 23rd August, 2003 to the

appellant/plaintiff awarded the contract to the appellant/plaintiff ―subject to

fulfillment of all the terms and conditions of the contract‖ and ―with effect

from 1st October, 2003 to 31st March, 2004 (subject to review after every

three months)‖; the appellant/plaintiff, vide the said letter, was also

requested to ensure the following points:

"1. The original copy of Registration Certificate to your firm obtained from Govt. of Delhi may be submitted in the office of the undersigned for verification.

2. To submit a Demand Draft of Rs.2 Lacs in favour of

Medical Superintendent, Safdarjung Hospital toward Earnest Money Deposit before 30.8.03.

3. To submit Ex. Servicemen Service Books including Para-military personnel in original in the office of Addl. M.S. (Security) alongwith the list of personnel to be engaged in the hospital.

4. To submit an undertaking that the required No. Of Guards (including Ex. Servicemen & Para-military personnel) will be provided daily.

5. To make the arrangement for parade up of 150 Guards (including 20% Ex. Servicemen and 30% personnel retired from Para-military forces) in front of CMO Security for physical check up before the commencement of this assignment. Date of parade should be intimated to CMO Security.

6. All the Guards should be in proper uniform with their Identity Card.

7. All the Guards deputed will be medically fit and no Guard will be put on double duty.

Please ensure the acceptance of this and compliance on or before 30.8.2003 positively."

(v) the appellant/plaintiff, under cover of its letter dated 27 th August, 2003,

forwarded a pay order for Rs.2,00,000/- as security deposit to the

respondents/defendants and receipt whereof was acknowledged by the

respondents/defendants on 28th August, 2003; (vi) however, the

appellant/plaintiff under cover of its another letter dated 12th September,

2003 bearing the acknowledgement dated 13 th September, 2003 of the

respondents/defendants forwarded a copy of its Registration Certification

and also informed the respondents/defendants that ―desired man power shall

be paraded in uniform in batches on 27th - 30th September, 2003--time of

same shall be decided after mutual discussion and as per convenience of

CMO, Security‖; it was also informed to the respondents/defendants that the

desired list and ex-servicemen service books shall also be produced; (vii) the

respondents/defendants vide letter dated 26th September, 2003 informed the

appellant/plaintiff that the matter relating to award of the contract to the

appellant/plaintiff had been reviewed and it had been decided to withdraw

―the offer of contract earlier awarded to your agency due to financial

implications and administrative exigencies in public interest‖ and returned

the pay order for Rs.2,00,000/- forwarded by the appellant/plaintiff towards

earnest money deposit.

4. It was/is the case of the appellant/plaintiff that it is entitled to recover

from the respondents/defendants, compensation in the aforesaid amount

comprising of (i) Rs.2,30,000/- towards placement expenses for staff; (ii)

Rs.2,43,350/- towards uniform and accessories issued to staff; (iii)

Rs.2,03,670/- being the loss of security service charges from the contract

from 1st October, 2003 to 31st March, 2004; (iv) Rs.8,71,031/- towards one

month notice period; (v) Rs.10,800/- towards advertisement expenses; (vi)

Rs.6,280/- towards I Card expenses; and, (vii) Rs.30,000/- towards

miscellaneous expenses.

5. The learned ADJ has dismissed the suit holding, (i) that the

appellant/plaintiff was required to comply with the requirements of contents

in the letter dated 23rd August, 2003 on or before 30th August, 2003; (ii) that

however the appellant/plaintiff complied only with the requirement of

deposit of security money before the said date and did not comply with the

other requirements of the letter dated 23rd August, 2003; (iii) that the

appellant/plaintiff had not even placed before the Court the initial contract or

the terms and conditions on the basis of which tender was floated and the

appellant/plaintiff made his offer; (iv) that a contract with the

respondents/defendants has to be inconformity with Article 299 of the

Constitution of India and which had admittedly not been entered into; (v)

that no contract came into being on the acceptance letter dated 11 th August,

2003 aforesaid of the appellant/plaintiff, inasmuch as the

respondents/defendants vide letter dated 23rd August, 2003 made a counter

offer and which was not accepted by the appellant/plaintiff within the time

limited for acceptance thereof; (vi) that there was thus no legally enforceable

contract between the parties and the question of awarding any damages for

breach thereof did not arise.

6. I have also at the outset enquired from the counsel for the

appellant/plaintiff about the tender document inasmuch as the same would be

necessary to understand the correspondence aforesaid proved before the

Court and to determine when the binding contract was to come into being.

7. The counsel for the appellant/plaintiff has fairly admitted that the

same has not been filed or proved and is not even available.

8. I am of the opinion that without the tender document it is not even

possible to determine the compensation if any to which the

appellant/plaintiff would be entitled to inasmuch as the letter dated 23 rd

August, 2003 supra does not contain any of the terms and conditions, not

even the rates at which the payments was to be made by the

respondents/defendants to the appellant/plaintiff.

9. The counsel for the appellant/plaintiff has however contended that

since the respondents/defendants had reneged from the contract only on the

ground of financial implications and administrative exigencies and in public

interest, the same was not deemed relevant and no issue was also framed

thereon.

10. I am unable to agree.

11. The respondents/defendants vide letter dated 26th September, 2003

supra did not terminate the contract. What they did, was to withdraw the

offer. It was thus for the appellant/plaintiff to prove before the Court that the

matter had proceeded beyond the stage of offer and that a binding contract

had come into being between the parties. The petitioner has however utterly

failed to do so.

12. Though I entertain doubts as to the correctness of the observation of

the learned ADJ, of the letter dated 23rd August, 2003 being in the nature of a

counter offer, inasmuch as the contract had to be in terms of the tender and

the letter dated 23rd August, 2003 did not claim to vary the said terms but the

same would not come in the way of myself otherwise agreeing with the

reasoning of the learned ADJ that the appellant/plaintiff has failed to prove

that a binding contract had come into being between the parties. It cannot be

lost sight of that the appellant/plaintiff, vide its letter dated 11 th August,

2003, while conveying its acceptance had called upon the

respondents/defendants to award the contract at the earliest and the

respondents/defendants vide letter dated 23rd August, 2003 awarded the

contract, subject to the compliance by the terms and conditions mentioned

therein and which the learned ADJ has rightly held that the

appellant/plaintiff has failed to prove / establish that it did comply with all

the terms and conditions which were to be complied with by 30 th August,

2003. Merely because the appellant/plaintiff may have complied with one of

the terms and conditions of deposit of security money would not absolve the

appellant/plaintiff in the absence of any waiver, from performing the other

tasks for the award of contract.

13. Thus, on the basis of the documents and oral evidence adduced before

the Trial Court, no fault can be found with the conclusion arrived at by the

Trial Court, of no binding contract having come into existence between the

parties.

14. Not only so, as aforesaid, the appellant/plaintiff has totally failed to

prove that it has suffered any damages. Though the Director of the

appellant/plaintiff in his evidence claimed that he has engaged the Guards

and expended money thereon but failed to establish the same by producing

before the Court the witnesses in support thereof. As aforesaid, even the rate

at which the appellant/plaintiff was entitled to claim from the

respondents/defendants has not been proved. The appellant/plaintiff which

is otherwise in the business of providing security services failed to prove that

the amount claimed to have been spent by it was wasted or was not utilised

for the purposes of performance of other contracts of the appellant/plaintiff.

15. There is thus no merit in the appeal, which is dismissed.

No costs.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J.

AUGUST 27, 2015 bs