WPMS/3063/2018
2022 Latest Caselaw 3008 UK

      IN THE HIGH COURT OF UTTARAKHAND
                 AT NAINITAL
                      SRI JUSTICE VIPIN SANGHI, C.J.
                                  AND
                       SRI JUSTICE R.C. KHULBE, J.

19th September, 2022 WRIT PETITION (M/S) NO. 3067 OF 2018 Between:

Unicon Builders and Contractors ......Petitioner.

And

State of Uttarakhand and another. ....Respondents & WRIT PETITION (M/S) NO. 3063 OF 2018 Between:

Unicon Builders and Contractors ......Petitioner.

And

State of Uttarakhand and another. ....Respondents

Counsel for the petitioner : Mr. Bhuwan Bhatt.

Counsel for the respondents : Mr. B.P.S. Mer, learned Brief Holder for the State of Uttarakhand / respondent No. 1.

Mr. Pradeep Chamiyal, learned counsel for respondent Nos. 2 & 3.

Upon hearing the learned Counsel, the Court made the following

COMMON JUDGMENT : (per Sri Vipin Sanghi, C.J.)

The petitioner has preferred these two writ

petitions in similar circumstances.

2. The petitioner participated in the tendering

process in relation to two works, namely

UDRP/PWD/07/RD/118 and UDRP/PWD/07/RD/119. Writ Petition (M/S) No. 3063 of 2018 relates to the first of

these works, whereas Writ Petition (M/S) No. 3067 relates

to the second work aforesaid.

3. For the purpose of ease, we are treating Writ

Petition (M/S) No.3067 of 2018 as the lead matter, and

taking note of the facts and circumstances in relation to

the said case. The facts of the other case are also similar.

4. The estimated cost of the work in relation to the

Package No. UDRP/PWD/07/RD/119 was Rs.1528.53 lacs.

The bid submitted by the petitioner in response to the said

Package was of Rs. 15,24,91,267.15. Thus, the bid of the

petitioner was only about four lacs less than the estimated

cost. The respondents issued the Letter of Acceptance on

23.09.2017, wherein the respondents, inter alia, required

the petitioner to submit an Additional Security

Performance Security to the tune of ₹2,88,69,664.72 "for

unbalanced bids in terms of ITB Clause 40". The

Communication, however, did not state as to how the

petitioner's bid was claimed to be "unbalanced". It merely

stated that the total Contract Price "excluding of GST and

inclusive of levies and other duties is ₹12,92,29,887.40",

and that the "Total amount of GST payable at the time of

deadline bid submission @ 18% is ₹2,32,61,379.73".

5. Since the petitioner did not agree to furnish the

Additional Performance Security-claiming that the same

was contrary to the terms of the Contract, the

respondents sought to forfeit the bid security of the

petitioner.

6. The petitioner earlier preferred Writ Petition

(M/S) No. 2798 of 2017. The case of the petitioner was

that the respondents had not given any basis to claim that

there was any justification to require the petitioner to

furnish additional performance security under Clause 40.1

of the ITB. The said Clause reads as under:-

"40.1 If the bid, which results in the lowest Evaluated Bid Price, is seriously unbalanced, front loaded or substantially below updated estimates in the opinion of the Employer, the Employer may require the Bidder to produce detailed price analyses (with breakdown of unit rates) for any or all items of the Bill of Quantities, to demonstrate the internal consistency and justification of those prices with the construction methods and schedule proposed. After evaluation of the price analyses, taking into consideration the schedule of estimated contract payments, the Employer may require that the amount of the performance security be increased at the expense of the Bidder to a level sufficient to protect the Employer against financial loss in the event of default of the successful Bidder under the Contract."

7. The said writ petition was disposed of by the

learned Single Judge with a direction to the respondents

to consider the case of the petitioner in terms of Clause

40.1 of the Instructions to Bidders (ITB). The petitioner

was required to give its explanation within a week, and

the respondent-Employer was required to pass an order in

accordance with law. The order further stated that "If the

employer comes to the conclusion that the bid price of the

petitioner is extremely low and work cannot be done, the

employer would always be at liberty either to ask for the

additional performance guarantee, or to cancel the bid and

go for fresh bid, after explaining the changed

circumstances in terms of public money".

8. The respondents have now passed the

impugned order dated 31.08.2018 stating it to be in

compliance of the said order, wherein the respondents

have stated as follows:-

"ek0 mPp U;k;ky; uSuhrky }kjk ikfjr vkns'k ds dze esa vk[;k fcUnqokj fuEukuqlkj gS& fufonknkrk M/s Unicon Builders & Contractors] }kjk vius i=kad UBC/PB/2018/551 fnukad 02-07-2018 }kjk bl dk;kZy; dks fnukad 02-07-2018 esa ek0 mPp U;k;ky; }kjk nh x;h ,d lIrkg dh le; lhek ds vUrxZr viuk Explanation fn;k x;k gS ftlesa muds }kjk fy[kk x;k gS fd%& "Further it is submitted that, your office will always have our performance BG @6% of the entire contract amount, till the completion of work and 5% security will be deducted from our every running bill. That means our huge amount will always remain with your office till the completion of work, in such case there is no question arise of leaving any work incomplete, we assure you that we will complete the work to the entire satisfaction within time limit. So kindly allot the work without considering any Additional performance Bank Guarantee."

fufonknkrk M/s Unicon Builders & Contractors] }kjk nh x;h fufonk esa 42 Nos. Items of Work eas fufonk njsa foHkkxh; Lohd`r vkax.ku ds lkis{k Substantially Low FkhA Bid Document ds ITB Clause No. 40.1 "If the bid, which results in the lowest Evaluated Bid Price, is seriously unbalanced, front loaded or substantially below updated estimates in the opinion of the Employer, the Employer may require the Bidder to providuce detailed price analyses (with breakdown of unit rates) for any or all items of the Bill of Quantities, to provide justification for the quoted price and to demonstrate the internal consistency and justification of those prices with construction method and scheduled proposed. After evaluation of the price analyses, taking into consideration the scheduled of estimated contract payments, the Employer may require that the amount of the performance security be increased at the expense of the Bidder to a level sufficient to protect the Employer against financial loss in the event of default of the successful Bidder under the Contract." ds vuqikyu esa fufonknkrk dh 42 Nos. Items of Work eas fufonk njsa foHkkxh; Lohd`r vkax.ku ds lkis{k Substantially Low gksus ds dkj.k] fufonknkrk ds Default gksus dh n'kk esa foHkkx dks gksus okyh foRrh; gkfu;ksa dks n`f"Vxr djrs gq, mRrjk[k.M 'kklu ds 'kklukns'k la0 [email protected](2)/17-20(lkekU;) /2011 Vh0lh0] nsgjknwu fnukad 12-06- 2017 }kjk fu/kkZfjr ekudksa ds vuqlkj Additional Performance Security ₹2,88,69,664.72 vkadfyr dh x;h FkhA fufonknkrk }kjk fufonk esa nh x;h vR;f/kd de njksa dks n`f"Vxr djrs gq, Hkfo"; esa fufonknkrk }kjk dk;Z djus ;k u djus ds fo"k; esa fVIi.kh ugha dh tk ldrh gS] vfirqw foHkkx }kjk fufonknkrk dks l{ke ekurs gq, fufonknkrk dks bl dk;kZy; ds i=kad 1646/UDRP/PWD/07/RD/119 fnukad 23-09-2017 }kjk Letter of Acceptance (LOA) fuxZr fd;k x;kA fufonknkrk }kjk LOA esa mYysf[kr Bid Document dh ITB Clause No. 40.1 ,oa mRrjk[k.M 'kklu ds 'kklukns'k la0 770/III(2)/17-20 (lkekU;) /2011 Vh0lh0] nsgjknwu fnukad 12-06- 2017 ds vuqikyu esa vkadfyr Additional Performance Security fnukad 31-10-2017 rd Hkh tek u djus ds dkj.k Bid Document ds ITB Clause No. 45.1 ,oa Clause No. 45.2 ds vuqikyu esa bl dk;kZy; ds i=kad 1781/UDRP/PWD/07/RD/119 fnukad 01-11- 2017 ds }kjk iznRr LOA i=kad 1646/UDRP/PWD/07/RD/119 fnukad 23-09-2017 dks fujLr djrs gq, Bid dks iwoZ esa gh cancel fd;k tk pqdk gSA orZeku ifjfLFkfr;ksa esa ;w0Mh-vkj0ih0 ifj;kstuk le;c) gksus ds dkj.k ifj;kstuk dk vfUrehdj.k ekg twu] 2019 esa fd;k tkuk gSA fo"k;d dk;Z dks iw.kZ djus dh dk;kZof/k 15 ekg Fkh ,oa orZeku esa fufonk izfdz;k ,oa

dk;ksZa dks iw.kZ djus gsrq ek= 10 ekg dk le; gh vo'ks"k gSA vr% orZeku ifjfLFkfr;ksa esa l{ke vf/kdkjh }kjk dk;Z dks fujLr djus dk fu.kZ; fy;k x;k gSA ;fn fufonknkrk }kjk fu/kkZfjr le;kfof/k ds vUrxZr Performance Security tek dj nh gksrh rks ;g ifjfLFkfr mRiUu u gksrh rFkk dk;Z fu/kkZfjr le;kof/k ds vUrxZr iw.kZ gks tkrkA"

9. A perusal of the impugned order would show

that the respondents have not undertaken the exercise

that was expected of them, which was to clearly state in

respect of which item the rates submitted by the

petitioner were found to be unbalanced, or substantially

low.

10. Mere submission that the petitioner's rates were

substantially low would not suffice, since the petitioner

claims that its bid was merely four lacs below the

estimated cost and invocation of Clause 40 of the ITB

required the respondents to arrive at an objective

conclusion that the bid submitted by the bidder was

substantially low.

11. We find that the impugned order does not

comply with the order passed by the learned Single Judge

in Writ Petition (M/S) No. 2798 of 2017 dated 25.06.2018

in either letter or spirit.

12. We, therefore, quash the impugned order, and

once again remand back the matter to the respondents to

clearly state as to on what basis the respondents have

claimed that the bids / rates submitted by the petitioner

were substantially low. The respondents should take into

consideration the analysis of rates furnished by the

petitioner on 02.07.2018 in compliance of the order dated

25.06.2018 passed in Writ Petition (M/S) No. 2798 of

2017, and after considering the same and granting

personal hearing to the petitioner, the respondents should

pass a reasoned order.

13. We make it clear that we have not ourselves examined the aspect whether the rates/ quotations submitted by the petitioner were substantially low, or not, as that aspect would fall for consideration of the respondents, who submitted that the rates / quotations submitted by the petitioner were substantially low, without objectively disclosing as to on what basis the said conclusion was reached. The aforesaid exercise should be completed by the respondents within four weeks from today.

14. Both the writ petitions stand disposed of in the aforesaid terms.

________________ VIPIN SANGHI, C.J.

____________ R.C. KHULBE, J.

Dt: 19th September, 2022 Rathour