The computation of time as per the General Clauses Act, 1897 can be used to determine the validity of submissions in contractual matters.

Badar Durrez Ahmed, J.

1. The petitioner had participated in tender No.79/14-15 dated 18.07.2014 for the work “House Keeping of Yamuna Rest House, Rail Niwas, Annexe Yamuna & ORH near Rail Club in the section of SSE/W/Transit Camp under ADEN/E-II”. The petitioner’s bid was accepted by the competent authority. The petitioner had made, inter alia, an earnest money deposit of Rs1.80 lakhs alongwith the tender and the same was retained as security money of the work. A letter of acceptance was issued to the petitioner by the competent authority of the Northern Railways on 12.08.2014. It was indicated in the letter of acceptance that the contract value of the work would be Rs. 66,34,505.04 and that the performance guarantee amounting to Rs. 3,31,730/- was required to be deposited within 30 days failing which penal interest @ 15% per annum would be charged as per tender condition No.5.2.1(a). The said tender condition No.5.2.1(a) reads as under:-

“5.2 Performance Guarantee:

5.2.1 The procedure for obtaining Performance Guarantee is outlined below:

(a) The successful bidder shall have to submit a Performance Guarantee (PG) within 30 (Thirty) days from the date of issue of letter of Acceptance (LOA). Extention of time for submission of PG beyond 30(Thirty) days and upto 60 days from the date of issue of LOA may be given by the Authority who is competent to sign the contract agreement. However, a penal interest of 15% per annum shall be charged for the delay beyond (Thirty) days, i.e. from 31st day after the date of issue of LOA. In case the contractor fails to submit the requisite PG even after 60 days from the date of issue of LOA, the contract shall be terminated duly forfeiting EMD and other dues, if any payable against that contract. The failed contractor shall be debarred from the participating in re-tender for that work.

(b) xxxx xxxx xxxx xxxx

2. The petitioner did not deposit the performance guarantee within the initial period of 30 days stipulated in the said tender condition. However, the petitioner deposited the performance guarantee alongwith interest @ 15% per annum on 13.10.2014. The respondent thereupon issued a letter dated 23.12.2014 terminating the contract and forfeiting the earnest money of Rs1.80 lakhs. The respondent also debarred the petitioner from participating in future tenders for the subject work. The petitioner is aggrieved by the said letter dated 23.12.2014.

3. The impugned letter dated 23.12.2014 is set out hereinbelow:-

“NORTHERN RAILWAY DRM OFFICE NEW DELHI

128-W/269/79/14-15/WE

Dated: 23.12.2014

M/s. N. Kumar Associates International, Starlink Navalkunj Building, Linking Road (Bandra), Mumbai-400050

Sub:- House Keeping of Yamuna Rest House, Rail Niwas, Annexe Yamuna & ORH near Rail Club in the section of SSE/W/Transit Camp under ADEN/E-II.

Ref:- Acceptance letter of even no. dated 12.08.2014.

Dear Sir,

The contract for the above mentioned work has awarded to you vide this office acceptance letter of even no. dated 12.08.2014. As per tender condition No.5.2.1(a) you were required to deposit P.G.@ 5% of contract value amounting to Rs.3,31,730/- positively within 30 days from the date of issue of acceptance letter failing which interest @ 15% p.a. was leviable from 31st days to 60 days i.e. upto 10.10.2014.

As per tender condition No.5.2.1

(a) The successful bidder shall have to submit a Performance Guarantee (PG) within 30 (Thirty) days from the date of issue of letter of Acceptance (LOA). Extension of time for submission of PG beyond 30(Thirty) days and upto 60 days from the date of issue of LOA may be given by the Authority who is competent to sign the contract agreement. However, a penal interest of 15% per annum shall be charged for the delay beyond (Thirty) days, i.e. from 31st day after the date of issue of LOA. In case the contractor fails to submit the requisite PG even after 60 days from the date of issue of LOA, the contract shall be terminated duly forfeiting EMD and other dues, if any payable again