Jammu & Kashmir High Court
Pooja Devi Wd/O Sh. Sandeep Kumar vs State Of J&K Through Principal Chief on 21 October, 2024
Author: Moksha Khajuria Kazmi
Bench: Moksha Khajuria Kazmi
-1- OWP No.439/2018 C/w OWP No.53/2018
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Reserved on: 10.10.2024
Pronounced on: 21.10.2024
Case: OWP No. 439/2018 &
OWP No. 53/2018
1. Pooja Devi Wd/o Sh. Sandeep Kumar
2. Miss Divya Devi D/o Late Sh. Sandeep
Kumar.
3. Master Divam (Minor) S/o Late Sh.
Sandeep Kumar. .....Petitioner(s)
Through :- Mr. R K Gupta, Sr. Advocate with
Ms. Ishna Vaid, Advocate.
v/s
1. State of J&K through Principal Chief .....Respondent(s)
Conservator of Forests, Van Bhawan,
Gulab Singh Marg, Jammu.
2. Conservator of Forest, Chenab Circle,
Doda.
3. Divisional Forest Officer, Batote Forest
Division, Batote.
4. Chief Conservator of Forest, Project
Cordinator, CAMPA, Van Bhawan,
Gulab Singh Marg, Jammu.
Through :- Mr. Amit Gupta AAG
CORAM: HON'BLE MS. JUSTICE MOKSHA KHAJURIA KAZMI, JUDGE
ORDER
01. These petitions were initially filed by the then sole Proprietor of the
firm M/s Sandeep Kumar- Government Contractor, who died on 15-09-
2021. In terms of order dated 09.11.2021 passed by this Court in an
application (CM No. 8330/2021), his legal heirs were impleaded as
petitioners in these petitions.
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02. Petitioners by way of OWP No. 53/2018 have challenged order No.
3826-33/BFD dated 31.12.2017, issued by respondent No. 3, whereby the
said respondent, i.e., Divisional Forest Officer, Batote Forest Division,
Batote, has recommended cancellation of contract of 'Construction of
Chain Link Fencing at compartment 9/Btt; 10a/Btt and 10b/Btt., Patnitop
area Batote Range, Forest Division Batote' in pursuance to e-NIT no. 01 of
2017 dated 29.05.2017. Petitioner has also challenged by way of OWP No.
439/2018 order bearing no. CAMPA order no. 284/Forest dated 09.02.2018
issued by respondent no. 4 i.e. Chief Conservator of Forest, Project
Coordinator, CAMPA, whereby the tender allotted to the petitioner in terms
of e-NIT No. 01 of 2017 dated 29.05.2017, for Construction of Chain Link
Fencing at compartment 9/Btt; 10a/Btt and 10b/Btt., Patnitop area Batote
Range, Forest Division Batote has been cancelled.
02. Since the issues in both the petitions are same, the parties are also the
same, as such, these petitions are taken up for hearing analogously and are
being disposed of by this common judgment.
Factual Matrix
03. The Government o f Jammu and Kashmir through the Divisional
Forest Officer, Forest Division Batote issued e-NIT No: 01 of 2017 dated
29.05.2017, for construction of Chain Link Fence at Compartment, C O -
9t, 10A, 10B/ Patnitop area, Batote Range Forest Division Batote. The
bid was opened on 12.06.2017. The time for completion of the project
was fixed as four months. In response to the NIT, the petitioner offered
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to execute the Contract on the terms and conditions referred in the NIT
through its bid. The bid of the petitioner which were complete in all
respects along with CDR of ₹ 3.25 lacs as earnest money was also
deposited.
04. It is stated that the petitioner firm was informed vide letter dated
15.07.2017 that the rates offered by the petitioner-firm are below 25.57 of
the estimated /advertised cost, therefore, he was required to furnish 5%
additional amount as security. Accordingly, the petitioner firm deposited
CDR amounting to ₹ 8,13,000/- pledged in favour of DFO Batote. After
submission of Additional CDR, the petitioner was waiting for the approval
and allotment of the contract by the higher authorities, the petitioner firm
received a notice No. 2744-49/BFD dated 03.10.2017, issued by respondent
no.3 where by petitioner firm was informed that the allotment of the work
order in respect of the contract work in question has been issued by the
Office of the Principal Chief, Conservator of Forest vide order passed on
06.09.2017.
05. It is stated that the petitioner had no knowledge about the approval
granted to the petitioner firm vide letter dated 06.09.2017 and for the first
time it was communicated by the respondent no.3 vide letter dated
03.10.2017. The DFO, Batote desired the petitioner firm to start the work
immediately as the area of contract work was falling in the snow zone
which has very limited working period. The petitioner firm as such
responded to the notice and made clear that no such formal allotment order
has been issued by any higher authorities and Departmental approval cannot
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substitute as a formal allotment order. Moreover, it was stated that the
working season in the snow bound area is between Apr-May to September-
Oct and the contract can be executed only when the next working period
resumes.
06. Finally, the allotment order was awarded in favour of the petitioner
firm by the respondent no.2 i.e. Conservator of Forest, Chenab Circle, Doda
vide Order F.O.24/CAMPA/CFC/2017-18 dated 08.11.2017. It is stated that
as per the directions contained in the allotment order dated 08.11.2017, the
petitioner firm attended the office of DFO, Batote along with requisite
documents for drawing up an agreement but the petitioner firm was
informed that the format of the agreement was not available and as such was
asked to commence the work immediately without the formal execution of
the agreement. Since the winter season had already commenced and the
working season had ended, as such it was impossible to execute the work in
the extreme cold climatic conditions.
07. It has been further stated that respondent no.3 issued several notices
in the month of November and December, 2017, thereby directing the
petitioner firm to execute the work, knowing well that the same was not
possible in the snow bound areas where the site of work is situated. The
respondent no. 3 issued notice dated 16.12.2017, whereby the petitioner
firm was directed to execute the agreement and in the event of failure, he
would recommend to the higher authorities for cancellation of contract and
forfeiture of earnest money deposit and additional security deposited with
the Department.
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08. The aforesaid notice was appropriately replied by the petitioner firm
vide its letter dated 22.12.2017 but the same was not considered.
Respondent no.3 issued impugned communication No. 3826-33 / BFD dated
31.12.2017, thereby recommending cancellation of the contract work and
re-tendering of the contract work in question. Respondent no. 3 forfeited the
earnest money (EMD) deposited by the petitioner firm and also the
additional security amount deposited to the department in the shape of CDR
pledged in favour of Divisional Forest Officer.
09. Being aggrieved of the action of the respondent No.3 in terms of
communication No. 3826-33/ BFD dated 31.12.2017, the petitioner
challenged the same by way of filing the writ petition being OWP No. 53 of
2018, before this Court, This Court, in terms of order dated 19.01.2018, had
directed the respondents not to encash the earnest money and additional
security furnished by the petitioner from the concerned bank in response to
e-NIT No. 01 of 2017.
10. Respondent no.4 vide impugned order being CAMPA Order No.
284/Forest dated 09.02.2018 cancelled the tender which had been allotted to
the petitioner in terms of e-NIT No. 01 of 2017. Thereafter, respondent no.3
issued a short term tender notice being e-NIT No. 10 of 2017-18 dated
02.03.2018, for inviting fresh tenders for the execution of the same contract
work which had been allotted to the petitioner in terms of e-NIT No. 01 of
2017.
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11. Petitioner-firm herein has challenged action of the respondents for
recommending and consequently cancelling the contract which was allotted
to him in terms of e-NIT No. 01 of 2017. He has also challenged forfeiture
of earnest money deposit and additional security deposited with the
Department on the ground that respondent no.3 Divisional Forest Officer,
Batote directed petitioner firm to commence the work even before the
issuance of formal allotment order by the competent authority and drawing
up of the agreement, which is absolutely unlawful and no party can force the
other contracting party to execute the work before a contract is duly allotted
and a formal contract agreement is entered into between the parties.
Moreover the petitioner was not communicated regarding the approval
accorded by the higher authorities and it came to his knowledge only after
receipt of notice dated 03.10.2017, whereas the approval was granted by
respondent No.1 on 06.09.2017.
12. The allotment Order came to be issued in terms of order No.F.O.
24/CAMPA/CFC/2017 -18 dated 08.11.2017, as such department took four
months to issue formal allotment order in favour of petitioner firm and by
that time the working season had already ended in the snow bound area, as
such, petitioner-firm could not commence the work in the non-working
season.
13. It is also stated that it is evident from order dated 06.09.2017 that it
was forwarded to the petitioner vide dispatch No. 2531/BFD dated
19.09.2017, and respondent no.3 had received the said order in his office on
22.09.2017 vide receipt No. 3375. It is an admitted case between the parties
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that the period of four months had to commence from the date of the
allotment order/ drawing up of an agreement and by the time the order of
allotment came to be issued on 08.11.2017, severe winter season had
already commenced in which no work could be executed. He has also stated
that fresh tender was issued in the month of March, 2018, by that time even
the petitioner firm could have executed the work allotted to him in the
month of April onwards.
14. Per contra, reply stands filed on behalf of the respondent no. 3, it is
stated that the petitioner did not take any step for execution of the allotted
work after receiving the letter of allotment and reminder notices issued to
start the execution of contract work within stipulated period.
15. The fencing work of both Patnitop Sanasar road falling in Comptt.
10c/Btt, 11/Btt. 17/Btt. and village Korthri to Padora falling in Comptt.
9/Btt, 10a/Btt and 10b/Btt, was e-tendered and allotted to Sh. Abdul Latief
Natnoo and Sh. Sandeep Kumar Contractor (Husband of the petitioner) vide
CAMPA order No: 166/Forests dated 06.09.2017 and CAMPA order no.
67/Forests dated 06.09.2017. The work in Comptt. 10c/Btt, 11/Btt and
17/Btt was taken up by Sh. Ab. Latief Natnoo, who completed the same
within stipulated time, whereas Sh. Sandeep Kumar contractor (husband of
the petitioner No.1) did not start the work and preferred to file the instant
petition stating that the climatic conditions do not suit for execution of the
work.
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16. It is stated that the petitioner firm was not willful to execute the work
allotted to him. He did not even pay any heed to attend the office of
respondent no.3 in execution of the agreement. There is complete breach of
agreement on the part of the petitioner. Accordingly, the case of the
petitioner -firm was considered and he was found as defaulter. The action
under Clause 11 of the tender documents of e-NIT of 2017 dated 29.05.2017
stands taken vide order No. 3826-33/BFD dated 31.12.2017 wherein the
contract allotted in favour of the petitioner-firm was recommended for
cancellation and re-tendering of the approved work and the amount of
earnest money along with additional security amount deposited in shape of
CDRs pledged to DFO Batote, stood forfeited in the best interest of the
Government to penalize the contractor who failed to comply with the terms
and conditions, to execute the work and complete the contract.
Consequently, the allotment of work order issued in favour of the contractor
was cancelled vide CAMPA order No: 284/Forests dated. 09.02.2018 and
work was executed through lowest bidder (Ll) in response to re tendering of
the approved work vide E NIT No. 10/2017 dated 02.03.2018.
17. It is submitted that the petitioner did not participate in the retendering
process and the bid of the lowest bidder was considered and work has
already been executed by him. It is also submitted that formal agreement
was never executed with the petitioner as he never bothered to appear before
the respondent no.3. He has falsely tried to implicate respondent no.3
thereby stating that the agreement was not drawn between the parties
because of the delay on the part of respondents.
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Submissions made by learned counsel for the petitioner
18. Mr. R K Gupta, learned Senior counsel for the petitioner, has stated
that during the pendency of the instant petitions, husband of the petitioner
no.1, Mr. Sandeep Kumar has died and the petitioners herein have no source
of income. In terms of impugned order dated 31.12.2017, respondent no.3-
Divisional Forest Officer had recommended to respondent no.2-
Conservator of Forest for cancellation of the allotment made in favour of the
petitioner and also sought re-tendering of the approved work but he has
forfeited the earnest money (EMD) and 5% of additional amount deposited
by the contractor in the shape of CDR pledged in the name of respondent
no.3, without seeking any approval by the competent authority. Mr. Gupta
has relied upon the judgment passed by the Supreme Court reported as
Joshi Technologies International Inc. v. Union of India and others,
(2015) 7 SCC 728. He has stated that, though, the petitioner had not prayed
for the release of the earnest money (EMD) and 5% of additional amount
deposited by the contractor in the shape of CDR but this Court has power to
cull out the prayer from prayer no. (e) which is residual in nature.
Observations of the Supreme Court in para 51 of Joshi Technologies (supra)
are reproduced hereunder:-
"51. Mr. Ganesh, however, submitted that such a prayer
should be culled out from prayer no. (iii) which is residual
in nature. Ordinarily, it would be difficult to read into this
prayer clause a relief of substantive nature of issuing the
writ of mandamus. However, we find that there are
specific averments to this effect in the body of the writ
petition as well as in the grounds. More pertinently this
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relief was specifically pressed and argued in the High
Court which was even entertained by the High Court
without any objections from the respondent to the contrary.
Therefore, we are inclined to examine the plea on merits,
though reluctantly."
Submissions made by learned counsel for the respondents
19. Mr. Amit Gupta, learned counsel for the respondent, has stated that
respondent no.3 in terms of Government order No. 233-F of 2012 dated
12.10.2012 is the competent authority to forfeit the said amount. It is
further stated that the fresh tenders were retendered in the month of March,
2018 after cancellation of the tender allotted to the petitioner on 09.02.2018.
The same stands executed, as such, no cause of the petitioners survives in
terms of the prayer made in the instant petitions.
20. Heard learned counsel appearing for the parties, considered their
submissions and perused the material available on record.
21. In order to appreciate the challenge which is being raised by the
petitioners, it would be pertinent to extract the relevant Clause of the e-
bidding process which was set out in the short term tender Notice E-NIT
No.10 of 2017 dated 02.03.2018.
"11. Default: In the event of failure on the part of contractor to achieve
the required periodical progress or complete the contract in time, the
Department shall without prejudice to the remedies available to the
Government under any law for the time being in force, be competent to
adopt all or any of the following courses.
Rescind the contract for which rescission notice of 10 days in writing
to the contractor shall be conclusive evidence and in which case the
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security deposit and CDR of the contractor shall be forfeited and be at
the disposal of the Department and OR
Employ labour and supply materials to carry out works or any part of
the work debiting the contractor with cost of the labour and the price of
the material. Certificate of the Incharge Engineer/Range Officer in
respect of the coast (cost) of the material and wages of labour shall be
final and conclusive against the contractor.
Measure up the work executed by the contractor and to take such part
thereof as shall be unexecuted out of his hand and get the same
executed/completed through alternate means/agency/contractor, at the
risk and cost of the original contractor.
Impose and recover such penalty as may be determined by the Incharge
Engineer/Range Officer in addition to the forfeiture of security deposit.
In the event of any of the above courses being adopted by the
Department, the contractor shall have no claim to compensation for any
loss sustained by him for reasons of his having purchased or procured
any material/equipment, or entered into agreement or paid any advance
on account of or with a view to the execution of the work. In case the
contract is rescinded under aforesaid provisions the contractor shall not
be entitled to be paid any sum for any work actually performed by him
under this contract.
In any case, in which the powers conferred upon the Conservator of
Forests, Chenab Circle, Doda/ In charge Engineer, by any clause under
this notice shall have become exercisable, the on exercise thereof shall
not constitute waiver of any of the conditions.
In the event of the Department putting in force any of the powers
vested in it under the preceding clauses, it may, if so desired, take
possession or order to take possession of any materials, tools, plants,
stores, etc lying in or upon the works or the site thereof, belonging to
the contractor or procured by him and intended to be used for the
execution of the work or any part thereof. The Department may choose
to remove them at the contractor's expenses or sell them by auction or
private sale and debit the amount towards contractor penalty. The
certificate of the Incharge Engineer/ Range Officer in respect expenses
incurred or the amount debit-able to the contractor on account of any
such sale shall be final, conclusive and binding on the contractor."
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22. From Clause 11 (supra) it becomes clear that for invoking the
provisions of Clause 11, there has to be failure on the part of the contractor
to complete the contract within the time prescribed in terms of the contract
made between the parties. It is admitted by the parties that no formal
agreement was even signed by the parties till passing of the impugned order
dated 09.02.2018.
23. This court on 18-10-2022 passed an order as under, which reads as
under:-
"1. Learned senior counsel appearing for the petitioner submits
that the contractor- husband of the petitioner had died and the said
contractor had deposited two FDRs with the department.
However, no agreement was executed between the parties yet
there was an allotment with regard to the execution of the work,
which was later on again allotted to some other contractor.
2. Learned counsel for the petitioner submits that deceased
contractor has left behind his widow and two children, who have
no source of income. He further submits that department may
sympathetically consider the request for settlement by releasing
the amount of FDRs, which is only source of survival of the
petitioner.
3. Learned counsel for the respondents submits that he has already
taken the matter with the department for the settlement of this
issue. He also submits that he will seek instructions in the matter
and report on the next date of hearing. He further submits that he
will take necessary steps for the settlement of the matter within
two weeks."
24. Respondent no.3, in terms of order dated 18-10-22, supra, after
considering the claim of the petitioner firm, vide order no. 416 5-68/BRO,
22-11-2022, rejected the claim for the release of the security amount/EMD
to the tune of ₹3.25 lakhs and additional security in the shape of CDR to the
tune of ₹8, 13, 000/- lying with the respondents, without taking any
sympathetic view.
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25. The respondent no.3 has rejected the claim of the petitioner firm on
the same grounds as have been taken in the reply filed by the respondent
no.3 in both writ petitions. Nowhere he has been able to substantiate as to
what authority he had to impose penalty on the petitioner for forfeiture of
the security amount and the EMD deposited by the petitioner firm without
seeking prior approval from respondent no.2 conservator of forest, Chenab
circle Doda, who as per clause 11 is the sole authority to take any action in
case of default on the part of the contractor.
26. The allotment order was issued in favour of the petitioner firm by
respondent No.2 i.e. Conservator of Forest Chenab Circle, Doda on
08.11.2017, whereas acceptance letter of the bid was issued on 15.07.2017.
The department took four months to issue formal allotment order.
Respondent No.3 issued first notice on 16.12.2017, which was appropriately
replied by the petitioner (deceased) on 22.12.2017. Thereafter, respondent
No.3 issued impugned communication dated 31.12.2017, thereby
recommending to respondent No.2 for cancellation of contract and re-
tendering of the contract work. The respondent No.3 sought approval from
respondent No.2 for rescinding the contract duly approved and allotted in
favour of petitioner firm but without asking for any approval from
respondent No.2, forfeited the earnest money deposited (EMD) and the
additional security amount deposited by the petitioner firm in the shape of
CDR pledged in favour of respondent No.3.
27. If Respondent no.3 had no authority to approve the rescission of
contract in terms of clause 11 of e - NIT 01 of 2017, then respondent no.3
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also had no authority for forfeiture of EMD and additional security
deposited by the petitioner firm, on his own, without seeking prior approval
from the competent authority i.e. Respondent no.2. As such penalty of
forfeiture of EMD and additional security deposited by the petitioner firm
imposed by an incompetent authority i.e. respondent No.3 is nullity the eyes
of law.
28. Viewed on the aforesaid pedestal this Court finds itself unable to
uphold the action of respondent no.3. Not only he has failed to seek prior
approval of the competent authority i.e. Conservator of Forest-respondent
no.2, which would constitute a breach, he has also fundamentally failed to
justify its action as being warranted under law. Respondent no.3, had no
authority to unjustly enrich itself based on the preconceived or assumed
power to forfeit security deposit and earnest money deposited by the
petitioner firm. The facts obtaining here constrain this Court to hold that the
action of forfeiture was clearly unjustified. This court thus has no hesitation
in recording that the action taken by respondent no.3, without any
competency is also manifestly arbitrary, thus, cannot be sustained.
29. Since the work which was allotted to the petitioner firm, has already
been executed by some other contractor, after being retendered by the
respondents as such learned counsel for the petitioners has made a very
limited prayer only for release of the security deposit/EMD amounting to
Rs. 3.25 lakhs and ₹8, 13, 000/-as additional security deposit, it comes out
to the total amount of ₹11,38, 000/-, on the ground that the husband of the
petitioner No.1, who was the contractor, had died in the year 2021, during
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the pendency of these petitions and is survived by his widow and children
who need this money for survival. Though, this prayer has not been made in
the writ petition but the relief can be culled out from the prayer No.(e)
which is residual in nature.
30. Accordingly, and for all the aforesaid reasons, these petitions are
allowed. Impugned order dated 31-12-2017, is quashed to the extent of
forfeiture of Earnest Money (EMD) and 5% Additional amount deposited
by the contractor in the shape of CDRs/FDRs pledged to Divisional Forest
Officer, Batote, issued by respondent no.3. Respondents are directed to
release the Earnest Money Deposit to the tune of ₹3.25 lakhs and additional
security deposit to the tune of ₹8, 13, 000/-, total amount of ₹11, 38, 000/-,
lying with the respondents, in favour of the petitioners within a period of
two months from the date of passing of this order.
31. Disposed of.
(MOKSHA KHAJURIA KAZMI)
JUDGE
Jammu
21.10.2024
Sunita/PS
Whether order is reportable: Yes
