IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.4200 of 2009 1. M/S ARUN CONSTRUCTION CO. AT MAHABIR PRASAD LANE, NAYACHAK, P.O. & P.S. ISHAKCHAK, DISTRICT BHAGALPUR THROUGH ITS PARTNER SRI ARUN KUMAR. 2. ARUN KUMAR SON OF LATE KRISHNA PRASAD RESIDENT OF MAHABIR PRASAD LANE, NAYACHAK P.S. & P.O. ISHAKCHAK, DISTRICT BHAGALPUR AND PARTNER OF M/S. ARUN CONSTRUCTION CO., MAHABIR PRASAD LANE, NAYACHAK, BHAGALPUR. Versus 1. THE STATE OF BIHAR THROUGH THE CHIEF SECRETARY, GOVERNMENT OF BIHAR, OLD SECRETARIAT, PATNA. 2. THE SECRETARY, DEPARTMENT OF WATER RESOURCES AND IRRIGATION, GOVERNMENT OF BIHAR AT PATNA. 3. THE ENGINEER IN CHIEF, WATER RESOURCES AND IRRIGATION, GOVERNMENT OF BIHAR, PATNA. 4. THE CHIEF ENGINEERR, WATER RESOURCES AND IRRIGATION DEPARTMENT AT BHAGALPUR. 5. THE SUPERINTENDING ENGINEER, WATER RESOURCES AND IRRIGATION DEPARTMENT, IRRIGATION DIVISION, KHARAGPUR (DISTRICT MUNGER) 6. THE EXECUTIVE ENGINEER, WATER RESOURCES AND IRRIGATION DEPARTMENT, IRRIGATION DIVISION, TARAPUR (DISTRICT MUNGER) 7. THE DEPUTY SECRETARY, TOURISM DEPARTMENT, GOVERNMENT OF BIHAR AT PATNA. ----------- For the Petitioners :- Mr. N. K. Agrawal, Sr. Advocate & Mr. Diwakar Upadhyaya, For the State :- Mr. P. K. Verma, AAG XI -------- 3 25/01/2010 Communication dated 28.11.2007 issued by the Executive Engineer, Water Resources and Irrigation Department, Tarapur is under challenge in the present writ - 2 - application. The relevant annexure is annexure-1 to the writ application. By virtue of the said communication the respondents authorities have decided to forfeit a sum of Rs.6,32,000/- after rescinding the contract awarded in favour of the petitioners. The origin of the present dispute is a notice inviting tender no. 2 of 2007-08 relating to work of construction of certain ‘Yatri Niwas”, shops, cafeterias- cum-recreation centres for the benefit of the so called Kanvarias who undertook annual pilgrimage from Sultanganj falling in the district of Bhagalpur to Deoghar (now Jharkhand). As per the notice inviting tender various dates of pre-bid and opening of technical and financial bids were fixed in the month of June, 2007. The original estimate for the work in question was estimated to be about three crores fifteen lacs and odd for which Rs.6,32,000/- was required to be deposited as earnest money. Subsequently, based on the bids the estimate came to be revised at rupees three crores thirty seven lacs and odd. In view of the said revision the petitioners being - 3 - the successful bidder were directed to deposit a sum of Rs.16,88,397/- which is 5% of the estimated amount as security money. The security money was to include the earnest money which was deposited earlier. There was delay on the part of the petitioners to deposit this additional security amount which was to be furnished as Bank guarantee and even execution of the agreement. There is no dispute that the onus or responsibility thrust upon the petitioners by the respondents was not carried out within the time frame. The matter dragged on and the respondents considered lack of response from the petitioners’ side as loss of interest in carrying out the contract which led to rescinding of the contract and forfeiture of the earnest money. The decision in question has been communicated via Annexure-1 to the writ application which is the subject matter of challenge in the present writ application. Submission of the learned Senior counsel representing the petitioners is that unnecessary harsh order has come to be passed against the petitioners without there being much of blame lying at his door step. No doubt, the - 4 - petitioners were successful bidder but the work in question never came to be awarded in their favour nor any final contract was executed in this regard for the reasons best known to the Executive Engineer. Delay of such kinds was also one of the reasons while the petitioners also took their time to furnish the additional security amount by way of Bank guarantee. Issuance of Bank guarantee also takes time and the concerned Bank did issue such a Bank guarantee which would be evident from Annexure-6 to the writ application which is dated 27.11.2007. It is also the submission of the learned Senior Counsel that materials have emerged from the official communications that many a home work was not done or carried out by the concerned Executive Engineer before notice inviting tender. The land on which the buildings were to be constructed never came to be acquired and possession handed over to the petitioners. There are other aspects which have been pointed out by the Superintending Engineer in his communication which has been brought on record as Annexure-11 series. In view of the above, if the respondents were dragging their feet for - 5 - obvious reasons, then obviously the petitioners could not have come ahead and complete the work on the basis of the work order issued in their favour. The respondents have, probably, well realised the totality of the situation and only to save their skin Annexure-1 came to be issued trying to put blame upon the petitioners. They have lost the work as well as their earnest money which is more than rupees six lacs. The question being raised by the learned Senior Counsel is whether in view of the undisputed facts, would the petitioners be saddled with the order of forfeiture of their earnest money or security in such a circumstance. The stand of the State, on the other hand, which emerges from the counter affidavit is that there was lack of interest on the part of the petitioners after the work was awarded to them. Work order had been issued in their favour and the other consequential requirements would have been fulfilled in due time. The petitioners were requested many a time to come and execute the contract after depositing the additional security amount but since there was total silence on their part, it was presumed on - 6 - behalf of the respondents that they wanted to be out of the contract or atleast not complete the work assigned to them. The action taken against the petitioners is based in terms of the provisions of the contract itself and nothing which was demanded of the petitioners was either un-reasonable or beyond the terms and conditions of the notice inviting tenders. Annexure-1 is fall out of the exercise of option of clause 1.1(e) of the notice inviting tenders. As the petitioners did not even fulfill the basic requirement of depositing the security amount within the time frame, the authorities exercised their power conferred upon them. From the two rival stands taken on the issue, even though the basic facts are not disputed, there does not seem to be any common meeting ground on some of the issues. No doubt, the petitioners were considered to be the successful tenderer for the work assigned but from the official communication itself it emerges that the work could not be carried out or completed only on the basis of the allotment of work order issued to the petitioners. The value of the contract being what it is, the petitioners also wanted to be well fortified by execution of the agreement, - 7 - furnishing of proper plans as well as identification of land on which the construction had to be carried out. Many a act of omission and commission seems to be pointed out in the letter of the Superintending Engineer addressed to the Chief Engineer. If all that is stated in the said communication contained in Annexure-11 is correct, then the Court has no hesitation in recording that even if the petitioners went ahead with the contract and did some work, he was heading into some serious problems and disputes at a subsequent stage and time. When the respondents realised that the work cannot be carried out and completed within the time frame, obviously Annexure- 1 has been issued to save their skin more at the level of the Executive Engineer. In view of the above stated position, the petitioners have made out a case for interference with Annexure-1 so far as it directs forfeiture of the security/earnest amount deposited by the petitioners. Accordingly, Annexure-1 stands quashed to the above extent. The security/earnest amount of Rs.6,32,000/- deposited by the petitioners should be returned to them - 8 - preferably within a period of eight weeks from the date of production/communication of a copy of this order. This writ application is allowed to the extent indicated above. AMIN (Ajay Kumar Tripathi, J.)