IN THE HIGH COURT OF DELHI AT NEW DELHI
Subramonium Prasad, J.
Veena Garg - Appellant
Versus
Delhi Development Authority - Respondent
W.P.(C) 6297 of 2020 and CM Appls. 22390 of 2020, 20540 of 2021 and 20541 of 2021
Decided On : 19-04-2022
Forfeiture - E-Auction - Clauses 2.2, 2.4.3, 2.4.7, 4 - The court dismissed the writ petition seeking refund of EMD and extension of time for depositing bid premium. The court held that the petitioner's failure to deposit 20% of the bid premium within 7 days as per the tender document led to forfeiture of the 5% EMD. The court emphasized that seeking deviation from the tender document after acceptance violates contractual obligations and principles under Article 14 of the Constitution. The judgment in Kailash Nath and Associates v. Delhi Development Authority was distinguished as it did not apply to the facts of this case.
Fact of the Case:
The petitioner failed to deposit 20% of the bid premium within 7 days as required by the tender document, leading to forfeiture of the 5% EMD. The petitioner sought refund of the EMD and extension of time for depositing the balance amount.
Finding of the Court:
The court found that the petitioner's failure to comply with the tender document's requirements resulted in the forfeiture of the EMD. The court dismissed the writ petition as it lacked merits.
Issues: Failure to deposit bid premium within stipulated time, refund of EMD, extension of time for payment, constitutional and contractual obligations.
Ratio Decidendi: Participating in the tender, a bidder cannot seek deviation from the tender document accepted by them. Forfeiture of EMD and refusal of extension were in accordance with the tender document and did not violate constitutional principles. The judgment in Kailash Nath and Associates v. Delhi Development Authority did not apply to the facts of this case.
Final Decision: The writ petition was dismissed, and pending applications were disposed of.
ORDER
Subramonium Prasad, J. - This writ petition has been filed seeking the following prayers:-
'a) Allow the Present petition;
b) Direct DDA to refund the amount illegally retained by them to the Petitioner along with interest of 18% p.a. from the date of deposit'
2. The facts, in brief, leading to the instant petition are as follows:-
i. It is stated that on 09.03.2019, the Respondent/DDA had issued notice that e-auction of industrial property on 'as is where is basis' would be conducted. The application for e-auction was made available from 01.04.2019 and the last date for submission of the mandatory documents, along with Earnest Money Deposit (EMD) was 21.04.2019.
ii. The Petitioner herein sought to bid for sub-unit No.128, plot No. B-351, Mangolpuri Industrial Area Phase-1, and consequently, she submitted her online application on 16.04.2019, along with EMD of Rs.10,51,259/- (5% of the reserve price).
iii. The Petitioner received an e-mail dated 27.04.2019 informing that her bid stood the highest, subject to acceptance of the bid by Department/Corporation. Thereafter, another e-mail dated 01.06.2019 was received by the petitioner with the subject 'Letter of Intent'. The award value was stated to be Rs.3,21,24,000/-.
iv. As per the Tender Document for E-Auction (2018-19), the Petitioner was expected to deposit 20% of the bid premium and the difference of 5% reserve price at second stage within 7 days from issuance of the Letter of Intent after acceptance of the bid by the competent authority.
v. It is stated that on account of ill health, the Petitioner failed to deposit 20% of the bid premium as was required. Accordingly, the Petitioner sent a letter dated 10.06.2019 to the Deputy Director (Industrial), DDA, stating that she had only received information about her bid being accepted on the night of 07.06.2019. It is stated that since the petitioner had been hospitalised, she was unable to deposit the requisite amount. The petitioner accordingly sought for an extension of 15 days to deposit the balance amount. In response to this letter dated 10.06.2019, the Deputy Director (Industrial) vide letter dated 01.07.2019 rejected the Petitioner's request for grant of extension for a period of 15 days.
vi. It is stated that the Petitioner has sought for a refund of the 5% EMD that had been deposited by her during the first stage. A legal notice dated 21.09.2019 has also been sent to the Respondent. However, the Petitioner is yet to receive any response with regard to the refund of the EMD.
vii. Aggrieved by the same, the Petitioner has approached this Court by way of the instant writ petition.
3. Heard Mr. Akash Nagar, learned counsel for the Petitioner, Mr. R. K. Dhawan, learned Standing Counsel for the DDA and perused the material on record.
4. Mr. Akash Nagar, learned Counsel for the Petitioner, contends that the Petitioner only came to know that she was the highest bidder on 07.06.2021, with the Letter of Intent having been issued to her on 01.06.2021 demanding a payment of 20% of the bid premium which was to be paid within 7 days of the issuance of the said Letter.
5. Learned Counsel for the Petitioner states that the Petitioner was ill from 02.06.2019 and had been advised to take bed rest. He contends that she had been admitted in the emergency ward of Satyawadi Raja Harish Chandra Hospital, Narela, Delhi and, therefore, she was precluded from making the payment because of reasons beyond her control. He states that she had written a letter on 10.06.2019, i.e. three days after the due date, explaining her condition and had sought for a concession from the Respondent/DDA to condone the delay and grant an extension of 15 days.
6. Learned Counsel for the Petitioner states that the rejection of the request of extension of time by the DDA is unconstitutional and arbitrary. He states that it is not as if the Petitioner was running away from her liability to make the payment and that the DDA ought to have considered the case sympathetically. He
Kailash Nath Associates vs. Delhi Development Authority and Anr.
Compliance with tender document requirements, forfeiture of EMD, and refusal of extension must be in accordance with contractual obligations and constitutional principles.
Bidders must adhere to tender conditions, and failure to comply results in forfeiture of earnest money, as upheld by relevant clauses in the contract.
Auction /Bid - Bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested pe....
Bidders in a tender process must adhere to the terms and conditions outlined in the auction documents; failure to comply justifies cancellation of bids and forfeiture of earnest money.
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.
Presence of an arbitration clause would oust jurisdiction under Article 226.
Participants in an auction must adhere strictly to payment timelines; forfeiture of the Earnest Money Deposit is justified for failure to comply with clearly defined contractual terms.
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