Conclave Pharma Pvt Ltd. vs Govt Of Nct Of Delhi & Anr.
2016 Latest Caselaw 3627 Del

$~5
*       IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Judgment delivered on: 16.05.2016

+       W.P.(C) 1955/2016 & CM No.8423/2016 (stay)


CONCLAVE PHARMA PVT LTD.                                            ..... Petitioner
                              versus

GOVT OF NCT OF DELHI & ANR.                                          ..... Respondents


Advocates who appeared in this case:
For the Petitioner           :       Mr Kirti Uppal, Sr Advocate with Mr Rajan
                                     Bajaj and Ms Wamika Trehan, Advocates.

For the Respondent            :        Mr Peeyoosh Kalra with Mr Ankit Khurana,
                                       Advocates for respondent Nos.1 and 2.

CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SANJEEV SACHDEVA

                                  JUDGMENT

BADAR DURREZ AHMED, J (ORAL)

W.P.(C) 1955/2016 & CM No.8423/2016 (stay)

1. This writ petition pertains to an invitation for E-tender for the

supply of Anaesthesia and Bio-medical Waste Items being Tender

No.1514 issued in September 2015 by the Govt. of NCT of Delhi

(Directorate of Health Services). The petitioner participated in the tender.

As per the tender conditions and, particularly, Clause 3.1 of the

Instructions To Bidders, the bidders were required to submit an earnest

money deposit. The petitioner submitted the EMD by way of a bank

guarantee. The bank guarantee submitted by the petitioner is as under:-

2. The last date of submission of the bids was 03.11.2015. One day

prior to that, the period of the bank guarantee dated 27.10.2015 for Rs

5,00,000/- was extended by the Bank (Canara Bank, Uttam Nagar, New

Delhi). The said letter reads as under:-

"UTTAM NAGAR

"WZ-259, Saheed Chander Marg, Uttam Nagar, New Delhi 110 059 Ph:25375091/92 Tel

fax:25376750 LETTER FOR EXTENSION OF PERIOD OF GUARANTEE

Date: 02/11/2015

To The Director, Health services, G.N.C.T.D, Delhi

Dear Sir,

Sub: Our Guarantee no.L78GPGE153000001 Dated 27/10/2015 FOR Rs.500000/- Issued to you on behalf of M/S CONCLAVE PHARMA PVT. LTD.

1. The period of the subject guarantee issued in your favour on behalf of M/S CONCLAVE PHARMA PVT LTD O is. Hereby extended up to 27/01/2018.

2. Our liability under this guarantee shall be restricted to an amount not exceeding Rs.500000/- (Rupees Five lacs only) unless a demand or claim under the guarantee hereby renewed/extended is made on us in writing on or before 27/01/2018. We shall be discharged from all liability under the said guarantee thereafter.

3. Notwithstanding anything herein contained our liability under the guarantee hereby renewed/extended shall:

a) Be limited to a sum of Rs.500000/- (Rupees five lacs only)

b) Stand completely discharged and all your rights

under the guarantee shall stand extinguished if no claim or demand is made upon us in writing on or before 27/01/2018.

c) This letter forms an integral part of the original guarantee referred to above and may be kept attached thereto.

Yours faithfully, For CANARA BANK

Sd/-

Sr. Manager."

3. The technical bids were opened sometime in January 2016. The

petitioner is aggrieved by the letter dated 03.02.2016, which was

addressed to it, whereby the EMD submitted by it in the form of the said

bank guarantee dated 27.10.2015, issued from the Canara Bank for the

said amount of Rs 5,00,000/- in respect of the subject tender was

released. No reasons were communicated to the petitioner as to why the

bank guarantee was returned.

4. Mr Kalra, appearing on behalf of the respondents, has brought the

relevant files with him and, based on the said documents, he submitted

that the bank guarantee was non-compliant and, therefore, the petitioner's

bid was found to be non-responsive. According to Mr Kalra, the bank

guarantee was non-compliant because the petitioner had incorrectly filled

in the date "27/10/17" after the words "are bound unto.......". In that

place in the format of the bank guarantee, the petitioner, according to the

respondents, was required to fill in - "The Director Health Services,

GNCT of Delhi, Karkardooma, New Delhi." According to Mr Kalra, this

was an error of a substantial nature in respect of an essential condition of

eligibility. It was further submitted that the condition requires strict

literal compliance and since the bank guarantee was incorrectly filled in,

the respondents were left with no option but to reject the petitioner's bid

as being non-responsive.

5. On the other hand, Mr Uppal, Senior Advocate, appearing on

behalf of the petitioner, submits that this was an inadvertent error and did

not, in any way, diminish the liability of the bank towards the

respondents. He pointed out that the stamp paper itself clearly indicated

that the bank guarantee was addressed to the Director, Health Services,

GNCT, Delhi, Karkardooma, New Delhi. Secondly, the third line of the

bank guarantee itself referred to the "purchaser's tender enquiry No.1514

dated 28.10.2015" and it is only the respondents which could be

construed as being the purchaser and the bank was bound unto the

purchaser. Furthermore, it was pointed out that this inadvertent mistake

had occurred in the recital whereas in the main clause where the bank

binds itself, there is no error, as the bank has undertaken to pay the

purchaser, which clearly happens to be the respondents.

6. In any event, prior to the last date on which the bids were to be

submitted, the bank also issued a letter for extension of the period of the

bank guarantee. The very same guarantee is referred to by the said bank

and the subject matter itself indicated that the said bank guarantee had

been issued to the Director, Health Services, GNCT, Delhi on behalf of

the petitioner. Clearly, the bank had bound itself under the guarantee to

the respondent. This is also evident from paragraph 3(c) of the letter

dated 02.11.2015, issued by the bank, which reads as under:-

"This letter forms an integral part of the original guarantee referred to above and may be kept attached thereto."

In other words, the bank had clearly bound itself under the guarantee to

the respondent on 02.11.2015 itself i.e., before the last date of submission

of bids, which was 03.11.2015.

7. We agree with the submissions made by the learned counsel for the

petitioner that the bank guarantee read alongwith the extension letter

dated 02.11.2015 clearly indicates that the bank had bound itself under

the said guarantee to the respondent. We also agree that the mistake of

filling in "27/10/17" after the words "are bound unto", appearing in the

bank guarantee, was an inadvertent mistake and did not alter the liability

of the bank under the said bank guarantee.

8. The decision of this Court in PES Installations Pvt. Ltd v. Union

of India: AIR 2015 Del 108 has been correctly relied upon by Mr Uppal.

Taking a cue from the said decision, we are clear that no unfair advantage

had been gained by the petitioner because of the inadvertent mistake and

that the petitioner was not stealing a march over any of its competitors

because of it. The bank had also categorically bound itself under the

guarantee to the respondent when the bank guarantee and the extension

letter dated 02.11.2015 are read together in the correct perspective.

Rejecting the bid of the petitioner in these circumstances would be a very

hyper-technical view of the matter when the position of the respondents

was not, in any way, altered to their detriment.

9. The decision cited by Mr Kalra, on behalf of the respondents, in the

case of Titagarh Wagons Ltd. v. Container Corp. of India Ltd.: 2009(2)

AD (Delhi) 748 is distinguishable and not applicable in the facts of the

present case. In that case, the petitioner was required to submit an

unconditional bank guarantee which it did but the bank guarantee was

short by 30 days. Subsequently, an extension of a bank guarantee was

submitted but that extension was conditional. The Court found that the

petitioner's extension of the bank guarantee had been done only for the

purposes of the said writ petition and that the petitioner therein did not

deserve to have the benefit of the equitable jurisdiction of a writ Court.

The facts in the present case are entirely different as already noted above.

10. Consequently, the letter dated 03.02.2016 is quashed and the

petitioner's bid is to be treated as responsive on this ground.

11. The writ petition is allowed as above.

BADAR DURREZ AHMED, J

SANJEEV SACHDEVA, J MAY 16, 2016 st