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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SUNIL B. SHUKRE, JITENDRA JAIN, JJ.
M/s.API Civilcon Private Limited - Petitioner
Versus
Municipal Commissioner, Municipal Corporation of Greater Mumbai & Ors. - Respondents
Writ Petition No. 3467 of 2018
Decided On : 22-06-2023
Mandamus - Refund of Earnest Money Deposit (EMD) - Tender - Non-curable Defects - [TENDER] - [Section 2, Clause 3(a) and (b)] - The court discussed the definition of 'Non-curable Defects' as per the tender, the criteria for technical capacity, and the nature of the defects mentioned in the communication dated 28th April 2017. The interpretation of the tender conditions and the communication led to the conclusion that the defects were curable and did not fall within the meaning of 'Non-curable Defects' as per the tender, thereby entitling the Petitioner to the refund of the EMD amount.
Fact of the Case:
The Petitioner seeks a refund of Earnest Money Deposit (EMD) paid for a Tender issued by the Respondents. The Respondents contended that 10% of the EMD shall be forfeited due to non-curable defects as per the tender conditions.
Finding of the Court:
The defects mentioned in the communication dated 28th April 2017 were found to be curable and did not fall within the meaning of 'Non-curable Defects' as per the tender, entitling the Petitioner to the refund of the EMD amount.
Issues: The main issue was whether the defects mentioned in the communication dated 28th April 2017 constituted 'Non-curable Defects' as per the tender, justifying the non-refund of 10% of the EMD amount.
Ratio Decidendi: The court analyzed the tender conditions, the nature of the defects, and the subsequent clarifications to determine that the defects were curable and did not meet the criteria for 'Non-curable Defects' as per the tender.
Final Decision: The Petitioner was entitled to a refund of Rs.12 lakhs, and the Respondents were directed to donate a sum of Rs.11,99,999/- to an Animal Welfare Trust in the name of the Petitioner. The Writ Petition was disposed of accordingly.
JUDGMENT :
Jitendra Jain, J.
The Petitioner seeks a writ of mandamus against the Respondents to refund to the Petitioner a sum of Rs.1.20 crores, being the amount of Earnest Money Deposit (EMD) paid by the Petitioner in respect of the Tender issued by the Respondents. During the pendency of the Petition, vide order dated 20th December 2018, the Respondents made a statement that they have no objection to refund 90% of the EMD amount to the Petitioner. Accordingly, a sum of Rs.1.08 crores was refunded to the Petitioner. Therefore, the relief now subsists is only relating to refund of amount of Rs.12 lakhs.
2. The Respondents had issued a Tender in the year 2016 for construction of exhibit for wolf, sloth bear, jackal, otter, Madras pond turtle, hyena, cat complex leopard, bird aviary and reptile house in VJB Udyan Zoo, Byculla, E-ward, Mumbai. The Petitioner responded to the tender and deposited 1% of the amount as EMD amounting to Rs.1.20 crores.
3. On 28th April 2017, the Respondents informed the Petitioner that on scrutiny of documents submitted in Packet-B, the tender condition No.3 (a & b) does not fulfill the criteria due to reasons mentioned therein which are reproduced hereunder :-
(ii) As per the certificate, the exhibit constructed by MOU firm is open exhibit, whereas the exhibit prescribed in tender are closed exhibit.”
The reason mentioned in the communication dated 28th April 2017 records that as per the certificate issued by the General Manager, Aamby Valley, the work is carried out from 17th November 2007 to 17th May 2009. After recording the said fact, the reason states that however, area of animal holding and viewing shelter is not mentioned in the certificate. The second reason given for the document not being in accordance with the tender condition was that as per the certificate, the exhibit constructed by MOU firm is open exhibit, whereas the exhibit prescribed in tender are closed exhibit.
4. Immediately thereafter, the Respondents sought clarification from the General Manager, Aamby Valley in regard to the certificate issued by them and which formed the basis of the communication referred to hereinabove i.e. communication dated 28th April 2017. The said clarification was sought to confirm whether the certificate has been issued by the General Manager of Aamby Valley City or not and it further requested to forward various information inter alia area of Animal Holding, area of Animal Viewing Shelters etc.
5. The above referred clarification sought for was complied with by the General Manager, Aamby Valley Corporation to the Respondents by a letter wherein the area of Animal Holding was mentioned 1500 sq.ft. and it was further stated that the said area is closed enclosure.
6. Thereafter, various communications were addressed by the Petitioner to the Respondents for considering the tender and in the alternative to refund the EMD amount. However, the Respondents did not refund the EMD amount of Rs.1.20 crores and ultimately the legal notice was sent by the Petitioner to the Respondents for refund of the EMD amount. The Petitioner, having not received the EMD amount, filed a Writ Petition in this Court for refund of the same.
7. The Respondents have already refunded a sum of Rs. 1.08 crores as per the statement made and recorded in the order dated 20th December 2018 but the Respondents contended that the balance amount of 10% EMD shall be forfeited on account of non-curable defect and as per the tender in case of non-curable defect, 10% of EMD shall be forfeited.
8. Therefore, now the short controversy before us is whether the reason mentioned in the communication dated 28th April 2017 namely, (a) area of Animal Holding and Viewing shelters not mentioned in the certificate and (b) as per the certificate, th
The interpretation of tender conditions and the determination of whether defects are curable or non-curable as per the tender's definition of 'Non-curable Defects' are crucial in deciding the entitle....
Tender authorities possess the discretion to define submission requirements for bids, and courts should not intervene unless there is clear irrationality or arbitrariness in their decisions.
The court emphasized the authority's discretion in interpreting and accepting tender conditions, cautioning against unnecessary interference in commercial matters and emphasizing the limitations of j....
The timing of offer acceptance and withdrawal in relation to EMD forfeiture is crucial in determining the applicability of tender clauses and the entitlement to EMD return.
Presence of an arbitration clause would oust jurisdiction under Article 226.
A bidder cannot claim EMD refund due to an inadvertent error in a bid amount when sufficient safeguards exist in the bidding process to prevent such mistakes.
The sanctity of the offer made by the tenderer must be respected, and once a bid has been submitted pursuant to a tender, it has to be the price which the tendering authority is bound to consider whi....
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