Kerala High Court

M/S. Irikkur Construction ... vs Superintending Engineer on 12 January, 2021

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT

                 THE HONOURABLE MR.JUSTICE N.NAGARESH

      TUESDAY,THE 12TH DAY OF JANUARY 2021/22TH POUSHA, 1942

                      WP(C).No.12882 OF 2018(I)


PETITIONER:

               M/S. IRIKKUR CONSTRUCTION COMPANY
               REPRESENTED BY K.T.ZIYAD, MANAGING PARTNER,
               S/O.MAMMU HAJI, AGED 38 YEARS, AMEENA MAZIL,
               P.O.IRIKKUR, KANNUR DISTRICT, PIN-670 593.

               BY ADVS.
               SRI.K.R.AVINASH (KUNNATH)
               SRI.ABDUL RAOOF PALLIPATH

RESPONDENTS:

      1        SUPERINTENDING ENGINEER,PWD,
               NATIONAL HIGHWAYS (NORTH) CIRCLE,
               KOZHIKODE-673 001.

      2        CHIEF ENGINEER, PWD,
               NATIONAL HIGHWAYS,
               THIRUVANANTHAPURAM-695 001.

      3        SUPERINTENDING ENGINEER,
               PWD ROADS AND BRIDGES (NORTH) CIRCLE,
               KOZHIKODE-673 001.

      4        STATE OF KERALA REPRESENTED BY THE SECRETARY,
               PUBLIC WORKS DEPARTMENT,
               THIRUVANANTHAPURAM-695 001.

               BY SENIOR GOVERNMENT PLEADER SRI K.V.MANOJ KUMAR

     THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD         ON
12.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C)No.12882/2018

                                2




                         JUDGMENT

Dated this the 12th day of January, 2021

The petitioner seeks to direct the 1st respondent to

recall Ext.P13 order forfeiting the Earnest Money Deposit of

`38,70,000/- and direct to release the EMD to the petitioner.

2. The petitioner submitted his bid pursuant to

Ext.P1 notification inviting bids for the work namely, CRF

2015-16 Improvements to Oduvallithattu - Naduvil

-Kudiyanmala Road in Kannur District in the State of Kerala

from KM 0/000 to 18/000. The petitioner was the lowest

bidder. The petitioner had to submit Audited Accounts duly

certified by the Chartered Accountant along with the bid.

Since the Income Tax Authorities raided the office of the

petitioner and seized documents, the petitioner could not

produce its statement of accounts before the respondents.

The petitioner had quoted 22.47% below the bids. By WP(C)No.12882/2018

Ext.P2 letter, his bid was accepted by the respondents

subject to confirmation of statement of accounts by

Chartered Accountant.

3. The petitioner says that he could not produce the

statement of accounts authenticated by the Auditor in view

of the detention of documents by the Income Tax

Authorities. The respondents issued Ext.P7 letter dated

11.01.2017 intimating the petitioner that if the confirmation

from the Chartered Accountant of the Profit and Loss

Statement for the year ending 31.03.2016 is not received

from the petitioner, the same will be taken from the Income

Tax Department.

4. Subsequently, the 2nd respondent Chief Engineer

by letter dated 21.10.2016 stated that the bid of the

petitioner could not be submitted to the Government due to

the delay on the part of the petitioner in making available

Audited Reports. The petitioner was directed to give WP(C)No.12882/2018

reasons for not submitting the same. In the letter dated

21.10.2016, it was also stated that the petitioner is

disqualified from the work in question and that the action

will be taken against him.

5. The Superintending Engineer by Ext.P13 letter

dated 04.12.2017, stated that the reply submitted by the

petitioner and explanations furnished by them for not

submitting Audited Accounts are insufficient to condone

gross violation of tender conditions. Accordingly, the the

Superintending Engineer decided that the EMD amount for

`38,70,000/- be forfeited to the Government. The petitioner

thereupon preferred Ext.P14 representation to the

Secretary, Government of Kerala, Public Works

Department. Ext.P14 did not yield any result. It is in the

said circumstances that the petitioner is before this Court

seeking release of EMD.

WP(C)No.12882/2018

6. The petitioner would contend that even at the

time of submission of the tender, the petitioner had

disclosed that Audited Accounts are not available with the

Company due to the seizure by the Income Tax Department

and the petitioner will be able to produce the documents

only as and when the Income Tax Department release the

documents. The respondents were aware of the situation

and inspite of that, the bid of the petitioner was accepted as

the petitioner's bid was of considerable monetary

advantage to the respondents. Unfortunately, the petitioner

could not produce the required Audited Statement due to

the fact that documents were not released by the Income

Tax Department.

7. The petitioner pointed out in Ext.P7, the

respondents themselves had agreed to obtain the Account

Statements from the Income Tax Department. This would

show the respondents were aware of the situation in which WP(C)No.12882/2018

the petitioner is placed. Therefore, Ext.P13 order of the

Superintending Engineer, forfeiting EMD of the petitioner is

highly arbitrary and unjustified. The petitioner is therefore

entitled to receive EMD deposited by him.

8. Respondents 1 and 2 filed counter affidavit

resisting the contentions of the petitioner. Respondents 1

and 2 stated that the petitioner was only provisionally

qualified and his selection was subject to production of

Audited Annual Financial Statements. The petitioner

produced only self attested Annual Financial Statements.

Even after the repeated demand from the Office of the

Chief Engineer and inspite of the instructions, the petitioner

did not produce the Audited Annual Statements.

9. The petitioner was issued Annexure R1(b) series

letter dated 18.07.2016, 31.08.2016, 19.09.2016,

21.10.2016 and 11.01.2017, requiring the confirmation from

the Chartered Accountant. The petitioner failed to do so. WP(C)No.12882/2018

Subsequently, pursuant to the orders of this Court in

another writ petition the respondents awarded the work to

another bidder. The action of the petitioner in bidding for

the work without producing required documents resulted in

rejection of the bid. Action of the petitioner has caused

financial loss to the respondents. Therefore forfeiture of

EMD is amply justified, contended the learned Government

Pleader.

10. I have heard the learned counsel for the

petitioner and the learned Government Pleader appearing

for the respondents.

11. Going through the pleadings in the writ petition, it

is evident that the respondents accepted the bid of the

petitioner even though the requisite audited financial

statements were not produced. The respondents could

have rejected the bid of the petitioner at the initial stage

itself which was not done, perhaps on the belief that the WP(C)No.12882/2018

petitioner would be able to produce the requisite

documents.

12. The PWD Manual Revised Edition 2012 (Clause

2009.5.) states that the firm period of a tender is the period

from the date of opening of the tender to the date upto

which the offer given in the tender is binding on the bidder.

The firm period is fixed as the maximum time required

within which a decision can be taken on the tender and

order of acceptance issued in writing to the bidder which

shall not exceed two months. The Manual further provides

that if delay is anticipated, the officer who invited the

tenders shall get the consent of the lowest two bidders for

extending the firm period by one month or more as

required. Clause 2009.6 further provides that after it is

decided to accept a tender, selection notice in the form of

letter of acceptance as per bidding documents shall be

days or before the expiry of firm period whichever is earlier.

13. The facts of the case would reveal that the bid

submitted by the petitioner was not accompanied by the

requisite documents. However, from Ext.P7, this Court

finds that the respondents were aware of the non

submission of documents and showed leniency to the

petitioner granting time to produce documents.

14. Taking into consideration the entire facts and

circumstances of the case, this Court is of the considered

opinion that the petitioner can be relegated to approach the

Chief Engineer for reliefs. If the petitioner files a

representation seeking return of refund of EMD, the Chief

Engineer shall consider such representation taking into

account the entire facts and circumstances of the case and

Ext.P9 communication of the Additional Chief Secretary to

Government to the Chief Engineer. If the petitioner files a

Engineer shall take final decision thereon within a further

period of 90 days.

The writ petition is disposed of as above.

Sd/-

APPENDIX PETITIONER'S EXHIBITS:

EXHIBIT P1 TRUE COPY OF THE INVITATION FOR BIDS (IFB) DATED 20-5-2016.

EXHIBIT P2 TRUE COPY OF MINUTES OF THE FINANCIAL BID OPENING COMMITTEE MEETING HELD ON 14-7-2016.

EXHIBIT P3 TRUE COPY OF LETTER DATED 21-10-2016 OF THE 2ND RESPONDENT ADDRESSED TO THE PETITIONER.

EXHIBIT P4 TRUE COPY OF RELEVANT PAGES OF THE STANDARD BID DOCUMENT (SBD).

EXHIBIT P5 TRUE COPY OF THE REPLY TO EXHIBIT-P3.

EXHIBIT P6 TRUE COPY OF LETTER DATED 25-1-2017 FORWARDING A COPY OF LETTER DATED 12-1-

2017 OF INCOME TAX, ASSISTANT COMMISSIONER EVIDENCING SEIZURE OF BOOK OF ACCOUNTS.

EXHIBIT P7 TRUE COPY OF LETTER DATED 11-1-2017 OF THE 2ND RESPONDENT.

EXHIBIT P8 TRUE COPY OF LETTER DATED 21-10-2016 OF THE 2ND RESPONDENT TO GOVERNMENT FORWARDING THE EVALUATION DETAILS OF FINANCIAL BIDS.

EXHIBIT P9 TRUE COPY OF GOVERNMENT LETTER DATED 23-

12-2016, REJECTING THE PROPOSAL OF 2ND RESPONDENT MADE IN EXHIBIT-P8.

EXHIBIT P10 TRUE COPY OF LETTER DATED 21-8-2017 OF THE PETITIONER TO THE 2ND RESPONDENT REQUESTING TO RELEASE THE EMD.

EXHIBIT P11 TRUE COPY OF LETTER DATED 3-8-2017 OF THE 1ST RESPONDENT ADDRESSED TO THE PETITIONER.

EXHIBIT P12 TRUE COPY OF THE REPLY DATED 18-9-2017 TO EXHIBIT P11.

EXHIBIT P13 TRUE COPY OF ORDER DATED 4-12-2017 OF THE 1ST RESPONDENT FORFEITING THE EMD.

EXHIBIT P14 TRUE COPY OF LETTER DATED 9-3-2018 OF THE PETITIONER TO THE 4TH RESPONDENT TO WITH COPIES TO 1ST RESPONDENT AND 2ND RESPONDENT.

EXHIBIT P15 TRUE COPY OF LETTER, DELIVERED TO 2ND RESPONDENT BY HIS OFFICE ON 14-3-2018 REQUESTING HIM TO PAY PERSONAL ATTENTION TO DIRECT THE 2ND RESPONDENT TO RECALL THE DECISION TO FORFEIT THE EMD.

RESPONDENTS' EXHIBITS:

EXHIBIT R1(a) TRUE COPY OF THE LIST OF DOCUMENT AS PART OF SBD

EXHIBIT R1(b) TRUE COPY OF THE LETTER DATED 18.7.2016, 31.8.2016, 19.9.2016, 21.10.2016 AND FIALLY ON 11.1.2017

EXHIBIT R1(c) TRUE COPY OF THE LETTER DATED 01.08.2017

EXHIBIT R1(d) TRUE COPY OF THE CONDITIONS OF TECHNICAL BID EVALUATION COMMITTEE

EXHIBIT R1(e) TRUE COPY OF THE TECHNICAL BID EVALUATION COMMITTEE MINUTES.

EXHIBIT R1(f) GOVERNMENT ORDER NO.59/2013/PWD DATED 17.07.2013