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2021 Supreme(Del) 2178

IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Sachdeva, J.
M/s Jai Durga Enterprises - Appellant
Versus
UOI & Ors. - Respondents
W.P. (C) No. 7611 of 2020; C.M. Appls No. 25237 of 2020, 13915 of 2021
Decided On : 24-05-2021

Advocates appeared:
Saurabh Bajaj, Advocate, Rashmi Malhotra, Advocate

The main legal point established in the judgment is the application of the General Clauses Act, 1897, Section 9, in excluding the day of the date when calculating the period for performing an act from a certain date.

Headnote:

Performance Guarantee - Termination of Contract - General Clauses Act, 1897, Section 9 - The judgment discusses the interpretation of the General Clauses Act, 1897, Section 9, and its application in calculating the period for furnishing a performance guarantee. It highlights the legal principle that the day of the date is to be excluded when a particular time is given from a certain date within which an act is to be done.

Fact of the Case:

The petitioner challenged the termination of a contract due to the alleged failure to submit a performance guarantee within the stipulated period. The main issue was whether the performance guarantee was furnished within the prescribed time period.

Finding of the Court:

The court found that the performance guarantee was furnished within the stipulated period when applying the interpretation of the General Clauses Act, 1897, Section 9. As a result, the termination of the contract and the consequential debarring of the petitioner and forfeiture of the earnest money deposit were set aside.

Issues: The main issue was the calculation of the period for furnishing the performance guarantee and whether the termination of the contract was justified based on the timing of the guarantee submission.

Ratio Decidendi: The court applied the legal principle that the day of the date is to be excluded when calculating the period for performing an act from a certain date, as per the General Clauses Act, 1897, Section 9. This interpretation influenced the court's decision to set aside the termination of the contract.

Final Decision: The termination letter dated 18.08.2020 was set aside, and the petitioner was allowed to participate in the re-tendering process, with the forfeiture of the earnest money deposit also being set aside.

JUDGMENT

Sanjeev Sachdeva, J. - The hearing was conducted through video conferencing.

2. Learned counsel for respondent submits that reply to CM Application No.13915/2021 has been filed vide diary No. E-380690/2021 on 22.05.2021. However, the same is not on record, but a copy has been furnished on the e-mail of the Court Master. The same is taken on record. The Registry is also directed to place the reply on record.

3. Learned counsel submits that the reply along with its documents be read in addition to the short reply to the writ petition filed by the respondents.

4. Petitioner impugns termination letter dated 18.08.2020, whereby the contract awarded to the petitioner has been rescinded on the ground that he has failed to submit the requisite performance guarantee even after 60 days from the issue of Letter of Award (LOA) i.e. 03.01.2020 and further, every member/partner as an individual or as a partnership firm/joint venture has been debarred from participating in the re-tendering process and the earnest money deposit forfeited.

5. Learned counsel for the petitioner submits that the termination is bad in law inasmuch as the performance guarantee was submitted on the 60th day and not on the 61st day as alleged by the respondents. He submits that since the performance guarantee was submitted within time, the termination on the ground that it was not submitted even after 60 days is bad in law and the consequential debarment of the petitioner and the proprietor as well as the forfeiture of the earnest money deposit is liable to be set aside.

6. Learned counsel appearing for the respondent submits that the performance guarantee was submitted on the 61st day from the date of issuance of the Letter of Award (LOA) and not on the 60th day as alleged by the counsel for the petitioner. She submits that in terms of the Letter of Acceptance, the performance guarantee was to be submitted within 21 days, which was extendable to 60 days by the competent authority and since the petitioner had failed to submit the performance guarantee within 60 days, respondents had rightly terminated the contracted, debarred the petitioner and forfeited the bank guarantee.

7. The facts leading to the present petition are that on 26.07.2019, a notice inviting bids was issued by the respondent for indoor and outdoor RRI Signalling work at B-Panel and addition and alternation at Anand Vihar station in connection with part commissioning of 3rd and the 4th line between Sahibabad-Anand Vihar in Delhi Division of Northern Railway.

8. Petitioner submitted his bid and his bid was accepted and a Letter of Acceptance dated 03.01.2020 was sent by e-mail on 03.1.2020 at 15:16:31.

9. The admitted position is that as per the Letter of Acceptance, the performance guarantee was to be submitted as per the General Conditions of Contract (GCC), tender document.

10. As per the General Conditions of Contract, the successful bidder had to submit a performance guarantee within 21 days from the date of issue of Letter of Acceptance (LOA). Extension of time for submission of performance guarantee beyond 21 days and upto 60 days from the date of issue of Letter of Acceptance can be given by the authority, who is competent to sign the contract again. However, a penal interest of 12% per annum is to be charged for the delay beyond 21 days. It further provides that in case the contractor fails to furnish the requisite performance guarantee even after 60 days from date of issue of LOA, the contract is liable to be terminated and the earnest money deposit forfeited.

11. The admitted position is that the petitioner submitted the performance guarantee on 03.03.2020.

12. The Letter of Award was issued on 03.01.2020 at 3.16 P.M.. Though the contention of learned counsel for the petitioner is that the document was first viewed only on 04.01.2020 at 10.56 P.M. It will not make a difference as to whether petitioner read the email on 03.01.2020 of 04.01.2020. The crucial fact would be as to when the e-mail

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