Delhi High Court
Gvr Infra Projects Ltd. vs Natiional Highway Authority Of ... on 8 September, 2015
Author: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 8th September, 2015
+ W.P.(C) No.2037/2012 & CM No.4421/2012 (for stay)
GVR INFRA PROJECTS LTD. ..... Petitioner
Through: Mr. A.D.N. Rao, Mr. A. Venkatesh
and Ms. Neelam Jain, Advs.
Versus
NATIIONAL HIGHWAY AUTHORITY OF INDIA
AND ORS ..... Respondents
Through: Ms. Meenakshi Sood, Adv. for NHAI.
Mr. Vikas Mahajan, CGSC with Mr.
Rohan Gupta, Advs. for R-3.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This petition was filed impugning the letters dated 13 th March, 2012
and 2nd April, 2012 of the respondents No.1&2 National Highways
Authority of India (NHAI), (respondent No.3 is Union of India) to the
petitioner notifying the petitioner that the bid submitted by it to the tender
for construction of new bridges / structures, repair of existing four lane
highway from Baleshwar to Kharagpur Section of NH-60 in the State of
Orissa / Odhisha & West Bengal was incomplete (non-responsive) and
asking the petitioner to, in terms of the tender conditions, deposit 5% of the
value of the bid security i.e. Rs.23.55 lakhs with the respondent No.1 NHAI
within seven days and threatening to otherwise partially encash the Bank
Guarantee (BG) submitted by the petitioner along with the bid.
2. The petition was entertained and referring to the judgment dated 10 th
March, 2011 of the Division Bench of this Court in W.P.(C) No.8418/2010
titled M/s. Madhucon Projects Ltd. Vs. National Highways Authority of
India, the encashment of BG by the respondents No.1&2 NHAI was stayed,
subject to the petitioner keeping the BG submitted alive to the extent of
Rs.23.55 lakhs.
3. The respondents No.1&2 NHAI has filed a counter affidavit. The
order dated 19th May, 2015 records that the Special Leave Petition (SLP)
preferred by the respondents No.1&2 NHAI against the judgment aforesaid
in M/s. Madhucon Projects Ltd. supra was dismissed by the Supreme Court
on 17th March, 2015.
4. The counsels have been heard.
5. Clause 3.2.2 of Volume No.I titled "Instruction to Bidders" of the
tender documents provided for the "Tests of Responsiveness" and Clause
2.20.7(a) under the head of "Bid Security" provided for the consequence of
payment of damages restricted to 5% of the value of the bid security for
submitting a non-responsive bid.
6. The respondents No.1&2 NHAI vide the impugned letter dated 13th
March, 2012 informed the petitioner that upon opening of the bids in the
presence of the representative of the petitioner, the online bid submitted by
the petitioner was found to be incomplete and vide impugned letter dated 2nd
April, 2012 asked the petitioner as aforesaid to deposit 5% of the value of
the bid security amounting to Rs.23.55 lakhs.
7. The counsel for the petitioner has raised two contentions. Firstly, it is
contended (i) that the bid, as per the tender conditions, was required to be
submitted in a hard copy as well as online; (ii) that no default was found in
the bid submitted by the petitioner in the form of hard copy; (iii) though the
petitioner had submitted the same bid online but the same, for reasons
beyond the control of the petitioner and owing to technical glitches,
remained to be received by the respondents No.1&2 NHAI; (iv) the
petitioner thus cannot be said to have submitted a non-responsive bid; and,
(v) that once the bids were required to be submitted in physical form as well
as online, even if the bid in the online form remained non-responsive, the
same was immaterial, since the same was only by way of abundant caution
and the bid submitted in physical form was enough. Reliance in this regard
is placed on Poddar Steel Corporation Vs. Ganesh Engineering Works
(1991) 3 SCC 273 in para 6 whereof it was held that as a matter of general
proposition, it cannot be said that an authority inviting tenders is bound to
give effect to every term mentioned in the notice in meticulous detail and is
not entitled to waive even a technical irregularity of little or no significance.
8. The second contention of the counsel for the petitioner is that the
Division Bench of this Court in M/s. Madhucon Projects Limited supra has
held the said clause of payment of 5% of the bid security for submitting a
non-responsive bid to be bad in law. However, the counsel has fairly stated
that the respondents No.1&2 NHAI in this regard is relying on the order
dated 18th March, 2015 of the Supreme Court in Civil Appeal No.3053/2015
titled National Highways Authority of India Vs. MEIL-EDB LLC (JV)
with respect to the same clause inter alia holding that the question whether
any damage has occurred to the respondents No.1&2 NHAI owing to
submission of non-responsive bid should be left to be considered by the
Civil Court and a Writ Court should refrain from adjudicating the said
controversy. The counsel for the petitioner thus fairly admits that the
judgment of the Division Bench of this Court in M/s. Madhucon Projects
Limited supra holding the said clause to be per se bad, can no longer be said
to be good law.
9. It thus follows, that if NHAI claims to have suffered a loss on account
of the bid submitted by petitioner being a non-responsive one and claims to
invoke the BG therefor and the petitioner controverts, the same question has
to be adjudicated in a Civil Court and not in a writ jurisdiction.
10. As far as the first of the aforesaid contentions of the petitioner is
concerned, in my view the adjudication thereof also would require
examination and cross-examination of witnesses, to determine whether the
bid submitted by the petitioner indeed was responsive or non-responsive.
Even otherwise, it is felt that once the claim is to be relegated to the Civil
Court, there should not be any piecemeal adjudication and the entire
controversy should be decided by the same Court. Such piecemeal
adjudication has always been deprecated. Reference in this regard can be
made to Moolchand Khairati Ram Hospital & Ayurvedic Research
Institute Vs. Secretary (Labour), GNCTD MANU/DE/1135/2001, Al-
Qahtani Pipe Coating Terminal Vs. Minerals Sales (P) Ltd.
MANU/MH/1278/2008, Claridges Hotel Pvt. Ltd. Vs. M.M. Bhagat & Co.
92 (2001) DLT 61 and also to D.P. Maheshwari Vs. Delhi Administration
(1983) 4 SCC 293. It will have to be determined, whether the requirement
of submitting the online bid was a superfluous requirement for the said
clause to be covered by the dicta of the Supreme Court in Poddar Steel
Corporation supra. Moreover, in Poddar Steel Corporation the question
was, whether the authority inviting the tender is entitled to vary the
non-essential terms thereof or not and whether the acceptance of the bid can
be challenged on this ground. Conspectus of the controversy in Poddar
Steel Corporation supra was thus in an entirely different context from as has
arisen in the present case. Here, it is not the respondents No.1&2 NHAI
which is seeking to tweak with the tender conditions but it is the bidder, who
after having agreeing to the tender terms and of submitting a bid, is now
wanting to contend that non-compliance with one of the conditions of the
tender would not invite the penal clause. I am therefore of the view that in
terms of the judgment of the Supreme Court in MEIL-EDB LLC (JV), the
parties, for adjudication of the said controversy also, are required to be
relegated to the Civil Court.
11. It is however found that the respondent NHAI, in the impugned letters
dated 13th March, 2012 and 2nd April, 2012, demanded the amount aforesaid
of Rs.23.55 lakhs being 5% of the value of Bid Security, merely in
accordance with Clause 2.20.7 of the tender document and without claiming
to have suffered any damage. Even in the counter affidavit filed to this
petition, no plea of having suffered any damage or to the extent of Rs.23.55
lakhs is to be found. Now, the Supreme Court, in MEIL-EDB LLC (JV)
supra has held that it is for the Civil Court to determine whether any damage
is suffered by NHAI and if so, whether deduction of 5% was a fair pre-
estimate or was punitive in nature. However, before the said adjudication is
relegated to the Civil Court, as done in the judgment supra, it is deemed
appropriate that first NHAI takes a decision in this respect in the light of the
said judgment of the Supreme Court. If NHAI itself, which till now was
claiming in the said amount under the belief that it was due under Clause
2.20.7 supra, decides that now, in the light of dicta of the Supreme Court it is
not to be claimed, there would be no need to relegate the parties to the Civil
Court.
12. Accordingly, this writ petition is disposed of with the following
directions:
A. NHAI to, on or before 31st October, 2015 take a decision afresh
on its claim for the aforesaid sum of Rs.23.55 lakhs against the
petitioner and if decides to persist in the claim, to communicate the
same, with reasons, to the petitioner before the said date; else the BG
furnished by the petitioner for the said amount be released /
discharged by the said date.
B. If the NHAI persists in its claim, the petitioner shall be entitled
to contest the same by instituting a suit / arbitration, as may be
applicable and if the said suit is instituted by the petitioner on or
before 4th December, 2015, the same shall be entertained on its merits
without going into the aspect of limitation.
C. The petitioner shall keep the BG, as was being kept alive during
the pendency of this petition, till 31st January, 2016.
D. The question, whether the petitioner is entitled to stay of
encashment of BG beyond 15th January, 2016 shall be decided in the
fora invoked by the petitioner.
E. If there is no stay after 15th January, 2016 against encashment
of BG, NHAI shall be entitled to invoke the same and realize monies
thereunder subject of course to decision in the proceedings aforesaid.
13. Needless to state that it having been held that this Court is not the
appropriate Court to adjudicate the lis, none of the observations contained in
this order would influence the decision in the proceedings aforesaid.
No costs.
RAJIV SAHAI ENDLAW, J.
SEPTEMBER 8, 2015
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