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2018 Supreme(Jhk) 471
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Rajesh Shankar, J.
M/s. ARETPL-AT (JV) – Petitioner
Versus
M/s. Central Coalfields Limited and Ors. – Respondents
W.P. (C) No. 6106 of 2017
Decided On : 28-02-2018
For the Petitioner: Mr. Anil Kumar Sinha, Miss Amrita Sinha.
For the Respondent: Mr. A.K. Das.
Headnote:
The court held that the impugned order of cancellation of tender, forfeiture of security deposit, and blacklisting was passed in violation of the principles of natural justice as no opportunity of hearing was given to the petitioner before passing the impugned order. The court further held that the delay of 2 days in depositing the bank guarantee was not intentional and was caused due to technical default of the bank for which the petitioner could not be penalized.
Fact of the Case:
The petitioner was awarded a contract by the respondents being a L1 bidder. As per the condition of contract, the petitioner had to furnish the bank guarantee within a period of 28 days from the date of issuance of letter of acceptance i.e., till 13.09.2017. The petitioner furnished the bank guarantee on 15.09.2017 i.e., after 2 days from the due date of submission of bank guarantee. Vide letter dated 12.10.2017 which was received by the petitioner on 13.10.2017 through e-mail, the respondent no. 5 cancelled the tender awarded to the petitioner and imposed penalty of forfeiture of earnest money of Rs.50,00,000/- deposited by the petitioner and also debarred it for a period of three years from participating in future tenders of CCL relying upon Clause 23 of the Instructions to bidders and on Clause 4 of the General Terms and conditions of the Contract.
Finding of the Court:
The court held that the impugned order of cancellation of tender, forfeiture of security deposit, and blacklisting was passed in violation of the principles of natural justice as no opportunity of hearing was given to the petitioner before passing the impugned order. The court further held that the delay of 2 days in depositing the bank guarantee was not intentional and was caused due to technical default of the bank for which the petitioner could not be penalized.
Issues: 1. Whether the impugned order of cancellation of tender, forfeiture of security deposit, and blacklisting was passed in violation of the principles of natural justice? 2. Whether the delay of 2 days in depositing the bank guarantee was intentional and was caused due to technical default of the bank for which the petitioner could not be penalized?
Ratio Decidendi: The court held that the impugned order of cancellation of tender, forfeiture of security deposit, and blacklisting was passed in violation of the principles of natural justice as no opportunity of hearing was given to the petitioner before passing the impugned order. The court further held that the delay of 2 days in depositing the bank guarantee was not intentional and was caused due to technical default of the bank for which the petitioner could not be penalized. The court relied on the following principles of law: 1. The power under Article 226 of the Constitution of India is plenary in nature and is not subjected to any of the other provisions of the Constitution. 2. The High Court has discretion to exercise or not to exercise such discretion having regard to the facts of each case. However, the High Courts have imposed self-restraints in such exercise of extraordinary jurisdiction of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction. 3. The party issuing the tender (the employer) has the right to punctually and rigidly enforce the terms of the contract.
Final Decision: The court allowed the writ petition and quashed the impugned order of cancellation of tender, forfeiture of security deposit, and blacklisting with a direction to the respondents to proceed further with the petitioner as per the terms of the Instructions to Bidders with respect to the tender in question.
The present writ petition has been filed for quashing the letter no. GM(B&K)/SO(M)/CT/AKK OCP/OB/DEBARRING/179 dated 12.10.2017 issued by the Staff Manager (Mining) of M/s Central Coalfields Limited (respondent no. 5) whereby the Letter of Acceptance in favour of the petitioner vide LOA No. CCL/GM(CMC)/B-K/2017/51/57 dated 15.08.2017 and work order no. GM(B&K)/SO(M)/CT/AKK OCP/OB/WO/107 dated 29.08.2017 have been cancelled and imposed penalty by way of forfeiture of earnest money of Rs.50,00,000/- deposited by the petitioner and also debarred the petitioner for a period of three years from participating of future tenders of Central Coalfields Limited (hereinafter referred to as “the CCL”) in individual capacity or as joint venture. Further prayer has been made for issuance of direction upon the respondents to execute formal contract between the parties in terms of Clause 23 of the Instructions to Bidders with respect to Tender of “Hiring of HEMM for removal of OB at outsourcing patch of Konar part of AKK OCP of B-K Area for a period of four years”.
2. The factual background of the case as stated in the writ petition is that the respondent no. 1 published an e-Tender Notice being NIT No. CCL/GM(CMC)/B-K/2017/51 dated 15.05.2017 inviting bids for the Hiring of HEMM for removal of OB including blast hole drilling, blasting, excavation loading and transportation of all kinds of soil, rocks, broken rocks, hard rocks, extraneous materials including mixed soil, mixed hard soil, clay soil, pebbles, stone etc. and dumping outside the working zone including spraying at haul road face at dump yard. The job involves making access trench/haul road with dozing grading maintenance and water sprinkling as may be required, face pumping or excavation operation as per instruction of the engineer-in-charge of AKK OCP Mine of B&K Area for a period of four years. The petitioner found itself eligible for the work and submitted its bid on 30.05.2017 and in financial bid it was found L-1 bidder. The respondent intimated the petitioner on 15.08.2017 via email that it has been awarded the work and served it a letter of acceptance vide Ref. No. CCLGM(CMC)/B-K/2017/51/57 dated 15.08.2017. As per the Letter of Acceptance, the petitioner had to deposit the Performance Guarantee of Rs. 2,04,04,894/- in the forms as detailed in clause no. 24 of the Instructions to Bidders and to submit additional performance security of Rs. 16,06,24,850/- alongwith normal performance security as per clause 20.2 of the Instruction to Bidders within a period of 28 days from date of issuance of Letter of Acceptance. The petitioner duly applied for the Bank Guarantee on 16.08.2017 to the satisfaction of the Banking authorities before the bank namely State Bank of India SME Branch, Dhanbad. The project site was handed over to the petitioner by the respondents vide letter dated 18.08.2017 for starting of work with immediate effect. Thereafter the petitioner deputed its man and machinery and arranged finance to start the work. The work order being No.GM(B&K)/SO(M)/CT/AKK OCP/OB/WO/107 dated 29.08.2017 was also issued in favour of the petitioner. The Respondent No.5 also informed vide letter dated 06.09.2017 received on 12.09.2017 by the petitioner for furnishing performance security and additional performance security alongwith normal performance security within time. The Bank Guarantee was delayed by the Bank and accordingly the Bank vide email dated 08.09.2017 informed the respondent no. 3 that the Bank is under process of issuing the Bank Guarantee in favour of the respondent-CCL on request of the petitioner and the same will be issued shortly in terms with above Letter of Acceptance dated 15.08.2017. The petitioner, vide letter dated 12.09.2017 also informed the respondent no. 3 about the said delay on the part of the Bank in handing over the Bank Guarantee to the petitioner and thus the petitioner sought extension of three days from the respondent for submitting the Bank
