THE HON’BLE SRI JUSTICE PULLA KARTHIK

ORDER:

This Writ Petition, under Article 226 of the Constitution of India, is filed seeking the following relief:

“…to issue an Order or Direction more particularly a direction in the nature of Writ of Mandamus declaring the action of the 3^rd Respondent in terminating the work through notice dated 12.07.2010 pertaining to a non-existent agreement as arbitrary, illegal, without any authority and against the principles of natural justice. In consequence the Hon’ble Court will also be pleased to declare forfeiture of an amount of Rs.31,30,000/- paid towards EMD and an amount of Rs.5,00,000/- paid by way of Bank Guarantee though notice dated 25.09.2010 as arbitrary, illegal, without any authority and consequently direct the Respondents 2 and 3 to refund an amount of Rs.31,00,000/- paid towards EMD and Rs.5,00,000/- towards Bank Guarantee with interest @ 14% p.a. from 23.02.2010 till the date of payment on both the amounts and pass…”

2. Heard Sri Vemulapally Prasad Rao, learned counsel appearing for the petitioner and Sri P. Sri Harsha Reddy, learned Standing Counsel appearing on behalf of the respondents.

3. Learned counsel for the petitioner submitted that in pursuance of a tender notice, for construction of three roads in Singareni coal mines in Bhupalapalli, issued by respondent No.2, the petitioner submitted its bid duly accompanied by the required EMD of Rs.31,30,000/-, and having satisfied with the qualifications of the petitioner, respondent No.3 has accepted its bid, through letter dated 09.09.2009. The initial value of work was Rs.7,19,05,364.60, excluding contingencies, and the entire work had to be completed within 15 months from the date of mark outs. However, assailing the acceptance letter and award of contract to the petitioner, an unsuccessful bidder, M/s. Sri Venkateswara Constructions, who stood second in the tender process, had filed W.P.No.21975 of 2009 before this Court, alleging that the petitioner did not possess an independent PF registration, as required under Condition No.XI (3) of the tender conditions. This Court, on 10.12.2009, granted interim stay of award of contract to the petitioner, if the petitioner did not process the independent PF registration. Subsequently, the said writ petition was dismissed by this Court vide order dated 16.12.2009.

4. It was further submitted that in view of the stay granted by this Court, the agreement was not entered into between the petitioners and the respondent Company, and the relationship of employer and employed or principal and contractor was not established. Further, the respondents did not handover the site nor were anymark outs givento comments the work. However, immediately after the dismissal of the aforesaid writ petition, respondent No.2, on 26.12.2009, called upon the petitioner to furnish the Bank Guarantee for an amount of Rs.5,00,000/-, valid for 5 years, in addition to furnish other relevant documents and requested to get registered with the respondents as a Special Class Contractor. Accordingly, the petitioner company furnished the said Bank Guarantee on 23.02.2010, along with the other documents as desired by the respondents. While so, aggrieved by the dismissal of W.P.No.21975 of 2009, the petitioner therein filed a writ appeal and the petitioner herein received a notice from the counsel of the appellant on 01.04.2010. On the same, the petitioner also received a letter from respondent No.2, directing to pay an amount of Rs.4,000/- for registration as a Special Class Contractor of the respondent Company. However, since the issue pointed out by the unsuccessful bidder appeared to be genuine, the petitioner was in a difficult situation whether to proceed further or await the result of the writ appeal, and hence, sent a letter to respondent No.1 on 05.04.2010, requesting to cancel the tender and return the bid securities.

5. It was further submitted that without regard to the pendency of the litigation before this Cour