IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH, NAGPUR.
A.S. Chandurkar, G.A. Sanap, JJ.
V.N. Reddy Through its Proprietor – Shri V. Narsimha Reddy S/o Obula Reddy, – Appellant
Versus
Superintending Engineer, Vidarbha Irrigation Development Corporation and Others – Respondents
Writ Petition No.1787 of 2021
Decided On : 25-03-2022
Tender Conditions - Work Order Issuance - Clause 2.22.0(ix) - Government Resolution dated 23.06.2020 - The court found that the Tender Issuing Authority could not have extended the period of two days for furnishing the additional performance security under Clause 2.22.0(ix). The consequences for not furnishing the additional performance security within a period of two days having been provided in that Clause itself, the Tender Issuing Authority would be required to act accordingly.
Fact of the Case:
The petitioner challenged the issuance of a work order to the third respondent, alleging that the third respondent failed to submit additional performance security within the prescribed time and raised concerns about the validity of documents submitted by the third respondent.
Finding of the Court:
The court found that the Tender Issuing Authority could not have extended the period for furnishing the additional performance security and quashed the work order issued to the third respondent.
Issues: The main issue was whether the Tender Issuing Authority had the authority to extend the period for submitting additional performance security, and whether it was in the public interest to interfere with the decision.
Ratio Decidendi: The court held that the Tender Issuing Authority was not permitted to extend the duration of two working days for submitting additional performance security, as it was a mandatory condition prescribed by the tender notice. The court also found that public interest was involved, justifying interference under Article 226 of the Constitution of India.
Final Decision: The work order issued to the third respondent was quashed and set aside, and the second respondent was free to take further steps in accordance with Clause 2.22.0(ix).
JUDGMENT :
A.S.Chandurkar, J.
1. Rule. Rule made returnable forthwith and heard the learned counsel for the parties.
2. The challenge raised in this writ petition is to the issuance of work order dated 07.05.2021 by the Executive Engineer, Lower Wardha Project, Division Wardha-second respondent in favour of the third respondent.
3. The facts relevant for considering the challenge to the issuance of the work order are that the second respondent on 18.01.2021 issued a tender notice calling upon interested bidders to submit their bid documents with regard to three works. The work at serial no.1 which is “construction of land development works (Part-I) of Gadegaon main minor off-taking @ R.D. 4995 M on Nandgaon Dy” is the subject matter of the writ petition. Pursuant to the tender notice three bidders submitted their bids. The technical bids were opened on 08.02.2021 and the bids submitted by the petitioner and the third respondent were found to be eligible. On opening of the financial bid on 12.03.2021 it was found that the financial bid of the third respondent was lowest and therefore as required by Clause 2.22.0 the third respondent was required to furnish additional performance security within a period of two working days. According to the petitioner, the third respondent furnished such additional performance security on the third working day and hence the third respondent ought to be debarred from the tender process for failure to submit the additional performance security within the prescribed time. Ancillary grounds also raised pertain to certain shortcomings in the documents submitted by the third respondent. In the aforesaid factual backdrop, the petitioner has challenged the issuance of work order to the third respondent as having been issued disregarding the mandatory tender conditions.
4. Shri S.D.Chopde, learned counsel for the petitioner has invited attention to various tender conditions and especially Clause 2.22.0. According to him, as per sub-clause (ix) thereof the lowest bidder was required to submit the additional performance security in the form of Demand Draft/Bank Guarantee or Fixed Deposit Receipt within two working days of opening of the financial bid. This period of two working days was not liable to be relaxed under any circumstances and therefore since the third respondent furnished such additional performance security beyond the period of two working days, the second respondent was not justified in issuing the work order to the third respondent. It was submitted that the financial bid was opened on 12.03.2021. 13.03.2021 was a Saturday and 14.03.2021 was a Sunday. The next two working days were 15.03.2021 and 16.03.2021. The third respondent submitted the additional performance security in the form of a Fixed Deposit Receipt on 17.03.2021 which was beyond the period of two working days. The learned counsel submitted that with regard to other works that were the subject matter of the same tender notice wherein the bids were to be submitted as per similar schedule, the bidders for other two works had furnished additional performance security within a period of two working days. Inviting attention to the Government Resolution dated 23.06.2020 which was also referred to in Clause 2.22.0 it was submitted that reading of paragraph 18 thereof indicated that the mandatory period of two days was not liable to be extended for any reason whatsoever. The third respondent had sought to rely upon a communication dated 11.05.2021 that was issued by the Branch Manager of the Bank of Maharashtra that on 15.03.2021 and 16.03.2021 there was a strike of bank employees due to which there were no banking transactions. Since the third respondent had approached the bank on 17.03.2021, the Fixed Deposit Receipt was issued on that date. On the aforesaid basis, it was submitted that the Executive Engineer had no authority to accept the additional performance security beyond the period of two working days. If the bid of the third resp
B.S.N.Joshi & Sons Ltd. vs. Nair Coal Services Ltd. and others
Bharat Coking Coal Limited and others vs. AMR Dev Prabha and others (2020) 16 SCC 759
Jagdish Mandal vs. State of Orissa and others
Ramana Dayaram Shetty vs. The International Airport Authority of India and others
Shobikaa Impex (P) Ltd. vs. Central Medical Services Society
The court emphasized the importance of strict compliance with tender conditions and the exercise of judicial review in contractual matters, particularly when public interest is involved.
(1) Constitutional courts must defer appreciation of tender documents by employer unless there is mala fide or perversity in understanding or appreciation.(2) Tendering authority cannot be expected t....
The main legal point established in the judgment is the importance of adhering to the terms and conditions of the tender notice in commercial transactions, and the court's interpretation of the Gener....
The court emphasized the need for fairness and transparency in the tender process and held that the principles of judicial review apply to prevent arbitrariness or favoritism in the exercise of contr....
The petitioner's lack of locus standi due to not fulfilling the technical qualification criteria and gross delay in approaching the court led to the dismissal of the writ petition.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.