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2018 Supreme(Raj) 979
IN THE HIGH COURT OF RAJASTHAN AT JAIPUR BENCH
Pradeep Nandrajog, G.R. Moolchandani, JJ.
GIEPL-HSEPL (JV) - Appellant
Vs.
Additional Chief Engineer, Water Resource Department - Respondent
Special Appeal Writ No. 1362 of 2018
Decided On : 31-10-2018
Advocate Appeared:
R.N. Mathur, Prateek Singh, Shovit Jhajharia, Nikhil Saini, J.M. Saxena, S.S. Hora
A bid security for a joint venture bid must be in the name of the joint venture, and an agreement between the partners to form a joint venture in the future is not sufficient to satisfy this requirement.
Headnote:
TENDER - INTERPRETATION OF CLAUSE 3.10.14 OF SECTION 1 OF THE TENDER DOCUMENTS - JOINT VENTURE BID SECURITY - REQUIREMENT FOR BID SECURITY TO BE IN THE NAME OF THE JOINT VENTURE - AGREEMENT BETWEEN PARTNERS TO FORM JOINT VENTURE IN THE FUTURE NOT SUFFICIENT - BID SECURITY IN THE NAME OF LEAD PARTNER ONLY - BID NON-RESPONSIVE.
Fact of the Case:
Appellant, a joint venture between two companies, submitted a bid for a project. The bid security was furnished in the name of the lead partner only. The Water Resource Department of the State of Rajasthan held that the bid was non-responsive as the bid security was not in the name of the joint venture. The appellant challenged this decision before the First Appellate Authority, Second Appellate Authority, and the High Court, but all appeals were dismissed.
Finding of the Court:
The court held that clause 3.10.14 of the tender documents required the bid security to be in the name of the joint venture. The agreement between the partners to form a joint venture in the future was not sufficient to satisfy this requirement. The court also held that the bid security was in the name of the lead partner only, and there was no declaration in the agreement that the lead partner was authorized to submit the bid security and that the same would bind the minor partner as well.
Issues: Whether the bid security was required to be in the name of the joint venture.
Ratio Decidendi: The court interpreted clause 3.10.14 of the tender documents and held that the bid security had to be in the name of the joint venture. The court also held that the agreement between the partners was not an agreement to enter into a Joint Venture Agreement should the Letter of Intent be issued. Thus, the bid security had to be in the name of the Joint Venture.
Final Decision: The court dismissed the appeal and upheld the decision of the Water Resource Department that the bid was non-responsive.
Pradeep Nandrajog, J.
The only issue which arises for consideration in the appeal is whether the decision taken by the Water Resource Department of the State of Rajasthan that bid by the appellant was non-responsive is correct.
2. We note that the decision dated 05.01.2018 was challenged by the appellant before the First Appellate Authority. The appeal was dismissed on 29.01.2018. Second appeal was dismissed by the Second Appellate Authority vide order dated 13.04.2018.
3. The said decisions were challenged by way a writ petition before the learned Single Judge and the writ petition has been dismissed vide impugned order 26.10.2018.
4. Learned counsel for the parties do not dispute that the issue centres around interpretation of clause 3.10.14 of Section 1 of the tender documents, containing Instructions to Bidders. The agreement dated 30.11.2017 purporting to be a Joint Venture Agreement between M/s Ghanaram Infra Engineers Pvt. Ltd. and M/s Hoisto Structures & Equipment Pvt. Ltd. The bank guarantee furnished.
5. Clause 3.10.14 reads as under:-
"The Bid Security of a Joint Venture, Consortium or Association must be in the name of the Joint Venture, Consortium or Association that submits the Bid. If the Joint Venture, Consortium or Association has not been legally constituted at the time of Bidding, the members of the proposed consortium or JV shall enter in to an Agreement that they shall form a legally constituted JV after the issue of Letter of Acceptance/Letter of Intent to them and shall also declare a partner as the lead partner in whose name the Bid Security may be submitted."
6. The Joint Venture Agreement dated 30.11.2017 reads as under:-
"JOINT VENTURE AGREEMENT
This Joint Venture Agreement (hereinafter referred to a "JV") is made and entered into this 30/11/2017 ("effective date") BETWEEN M/s Ghanaram Infra Engineer Pvt Ltd a company incorporated, and having its registered office at 8/18, West Patel Nagar New Delhi 110008. (Hereinafter referred to as the "First Party" And M/s Hoisto Structures & Equipment Pvt Ltd, A company incorporated, and having Registered Office at 21 D, D1 Kalipared Industrial Area Berasia Road Bhopal (hereinafter referred to as the "Second Party") Hereinafter jointly referred to as the "Parties" and individually as "Each Party" or "a Party" as the case may be.
WHEREAS,
A. The Governor of Rajasthan, Water Resources Department (hereinafter referred in as the WRD) invited bid for "Planning, Investigation, Design, Drawing and Construction of Isarda Dam across Banas river for Drinking Water near Village Baneth, District Tonk, Rajasthan on Engineering, Procurement and Construction Basis (Single Responsibility Turn-Key Project) including its Operation & Maintenance for Five Years", on Engineering, procurement and construction basis (Single Responsibility turn-key project and its operation & maintenance (O&M) for 5 years. Vide NIT No.07/2017- 18 dated 10/10/2017"
B. The Parties hereto formed a Joint Venture or will form a Joint Venture (hereinafter referred to as the "JV") to jointly execute the above project in all respect NOW THEREFORE IT IS HEREBY AGREED as follows:
ARTICLE 1: JOINT VENTURE
1.1 The parties hereto agree to form the Joint Venture with M/s.Ghanaram Infra Engineers Pvt Ltd, designated as the Lead Partner.
1.2 M/s. Hoisto Structures & Equipment Pvt Ltd shall be other Partner.
ARTICLE 2: JOINT VENTURE NAME:
2. The JV shall do business in the name of "GIEPLHSEPL(JV)"
ARTICLE 3: JOINT AND SEVERAL LIABILITIES:
3. The Parties hereto shall, for the above referred Projects, be jointly and severally liable to the WRD for the execution of the Projects in accordance with the Contract till the actual completion of Contract including defect liability period and operation & maintenance as per bid conditions.
ARTICLE 4: PROPORTIONATE SHARE:
4.1 Each member of the Joint Venture agrees to place at the dispo
