CWP No. 11153 of 2011 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No. 11153 of 2011 Date of Decision: 29.8.2011 M/s Jain Infraprojects Pvt. Ltd. ....Petitioner. Versus State of Haryana and others ...Respondents. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL, ACTING CHIEF JUSTICE. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. P.C. Markanda, Senior Advocate with Ms. Kavita Markanda, Advocate and Mr. S.K. Singhi, Advocate for the petitioner. Mr. Vinod S. Bhardwaj, Additional Advocate General, Haryana, for the respondents. AJAY KUMAR MITTAL, J. 1. In this petition filed under Articles 226/227 of the Constitution of India, the petitioner has sought issuance of a writ in the nature of certiorari for quashing the letter of acceptance dated 27.5.2011 (Annexure P-6) and also for a direction to the respondents not to give effect to the said letter of allotment. 2. Briefly stated, the facts necessary for adjudication as narrated in the petition are that respondent No.4 had invited bids for the CWP No. 11153 of 2011 -2- work of 4-Lanning of Jhajjar-Badli Road (under CRF Scheme) with an estimated cost of Rs.63.74 crores. The earnest money for the said work was to be deposited at Rs.127.48 lacs. The notice was also published on the internet portal on 15.1.2011 and the bidders were allowed to download the tender documents for bidding from 17.1.2011 and the bid was to be submitted online by 4.2.2011. The bid was to be submitted in two envelopes, i.e. technical bid and financial bid. The technical bid was to contain various documents as mentioned in the notice inviting tender whereas the financial bid was to contain the rates of the bidder. The petitioner submitted the bid on 4.2.2011 along with earnest money in the form of bank guarantee for Rs.1,27,48,000/-. The technical bid was opened on 10.3.2011 and the bidders whose bids were found to be as per the criteria laid down in the bid documents were called upon to participate in the financial bid. The petitioner was also found suitable and was called to participate in the financial bid. As per tender documents, the security amount of Rs.64 lacs was to be deposited. As the petitioner had submitted the bank guarantee for an amount of Rs.127.48 lacs which was in excess of the security required in terms of the downloaded tender documents, it filed a representation dated 7.2.2011 praying the respondent to reduce the value of bank guarantee to the required limit. The financial bid of the petitioner was for an amount of Rs.51,11,99,997.43. As per the tender documents, the materials specified under item Nos. 4(i), 4(ii) and 4(iii) in the BOQ description were to be issued by the respondents to the successful bidders and as such the rate quoted by the bidder for the aforesaid items was to be deducted out of the total contract value/bid amount CWP No. 11153 of 2011 -3- since that represented the “purchase rate by the agency”. In view of the above, while filing the E-Tender, as soon as the rates were inserted for the aforesaid items, the amount column should have reflected minus figure (-), meaning thereby that the said amount was to be deducted out of the total contract value. The reserve price against item Nos. 4(i), 4(ii) and 4(iii) had been mentioned in the description of the item. It was mentioned that if the quoted price was less than the reserve price, the bid shall be rejected. Under item No. 4(ii), unit of measurement was based on per 1000 bricks and the petitioner quoted a rate of Rs.3370/- per 1000 bricks in the bid. However, when the rate of Rs.3370/- was inserted in the rate column, the amount column automatically reflected an amount of Rs.3370/- multiplied by the quantity (Rs.146,52,76,000/-) which was irrational and the quantity being already prefixed in the format could not be varied. As such instead of showing the price per 1000 bricks in the amount column, it showed as Rs.3370/- per brick and, thus,there was an apparent error in the format set by the respondent on the portal. Further, instead of showing the amount after duly divided by 1000, the amount column showed the figure as inserted by the bidder multiplied by the quantity and there was no minus sign showing that the amount would be added to the bid price. The petitioner contacted the respondents for clarification with regard to the aforesaid defect in the format system, upon which the petitioner was advised that they could quote the rate per brick instead of per 1000 number and at the time of opening of the bids, adjustment would be done manually and the figures quoted against item Nos. 4(i), 4(ii) and 4 (iii) would be read as minus figures. Accordingly, the petitioner quoted CWP No. 11153 of 2011 -4- the figure of Rs.3.37 per brick in the rate column whereby the total amount in the last column worked out to be Rs.14,67,015.20 and taking this figure into consideration, the final bid amount of the petitioner was Rs.51,11,99,997.43. On the date of opening of the financial bids, the representative of the petitioner lodged protest over the adjustment being done by the respondents contrary to the assurances and also against the implied principles of law. Thereafter, letter of acceptance dated 27.5.2011 (Annexure P-6) issued by respondent No.2 was received by the petitioner informing that its bid had been accepted at the contract price of Rs.42,69,71,752/-. Through the said letter, the petitioner was asked to furnish a performance security and an additional performance security in terms of Clauses 34.1 and 52 of the conditions of the bid documents within 21 days from the date of receipt of the letter and also to sign the contract. The petitioner vide letter dated 28.5.2011 lodged protest over the price on which the contract was awarded and requested for refund of the earnest money deposited with the respondents. The respondent vide letter dated 6.6.2011 directed the petitioner to furnish performance security as well as the additional performance security within the time mentioned in letter Annexure P-6. The total bid price quoted by the petitioner was Rs.51,11,99,997.43 whereas the respondents had accepted the bid for Rs.42,69,71,752/- for the same quantum of work. As the bid price of the petitioner had been reduced without any concurrence of the petitioner, therefore, the acceptance letter was not binding on it. Feeling aggrieved by the action of the respondents to encash the bank guarantee, the petitioner is approaching this Court by way of instant petition. CWP No. 11153 of 2011 -5- 3. The claim of the petitioner has been resisted by the respondents by filing a written statement. It was pleaded that the petitioner after going through the bid documents filled up the tender for the work of 4-lanning of Jhajjar-Badli Road (under CRF Scheme). The bid of the petitioner being lowest one, letter of acceptance was issued to the petitioner and it was asked to furnish the performance security and additional performance security. It was further pleaded that as per Clause 25 of the contract, the matter comes under the ambit of Arbitration and Conciliation Act, 1996 and the petitioner should have availed the remedy of arbitration. Further, as per the standard bid document, the bid security was 1% for the work above Rs.50 crores and the contractor had to download the tender document from the internet. In the tender document, the cost of work was shown as 63.74 crores and bid security was shown as Rs.64 lacs, therefore, the earnest money was Rs.64 lacs. The petitioner had itself wrongly deposited the earnest money of Rs.127.48 lacs. As per the terms of the tender documents under item Nos. 4(i) to 4(iii) in bid document, scarified material was to be obtained by the petitioner by scarification of the existing road and as such the rate quoted by the bidder for the aforesaid item was to be deducted out of the total contract value/bid amount. The price shown by the bidder against item No.4 could not be added in the total amount at the time of processing of tender but it was required to be deducted from the total amount of all items except item No.4. It was denied that there was any minus column in the bid document. According to the respondents, the amount of recoverable items under item No.4 comes out to Rs.4,21,14,122/-. The amount of Rs.51,11,99,997.43 comes out CWP No. 11153 of 2011 -6- after adding Rs.4,21,14,122/- whereas the said amount of Rs.4,21,14,122/- has to be deducted, meaning thereby a total amount of Rs.8,42,28,245/- (Rs.4,21,14,122/- + Rs.4,21,14,122/-) has to be deducted from the computerized total of Rs.51,11,99,997.43 and after that an amount of Rs.42,69,71,752/- has come out. Therefore, the amount of the petitioner being lowest one, was issued the letter of acceptance. It was further pleaded that in para 21 of the writ petition, the petitioner had wrongly mentioned the rate of bricks as Rs.3370/- per thousand bricks and Rs.3.37 per brick whereas in the bid document, the petitioner had shown the rate of bricks as 3.374 per brick. By not responding to the letter of acceptance by the petitioner, its earnest money of Rs.127.48 lacs was encashed on 21.6.2011 by respondent No.4 as per the conditions of bidding document. In view of the above, the respondents have prayed for dismissal of the writ petition. 4. We have heard learned counsel for the parties. 5. Learned counsel for the petitioner submitted that the State was required either to accept the offer made by the petitioner in its entirety or in the event of non-acceptance of the same to return the security deposited with the respondents. It was urged that the respondents have forfeited the security deposit without affording an opportunity of hearing which is violative of principles of natural justice. 6. On being confronted with the aforesaid submission, learned State counsel submitted that the respondents shall pass a fresh order after affording an opportunity of being heard to the petitioner. 7. After hearing learned counsel for the parties and in view of the above and without expressing any opinion on the merits of the case, CWP No. 11153 of 2011 -7- we dispose of the writ petition with a direction to the respondents to pass a fresh order in accordance with law after affording an opportunity of hearing to the petitioner, within a period of six weeks from the date of receipt of a certified copy of this order. (AJAY KUMAR MITTAL) JUDGE August 29, 2011 (ADARSH KUMAR GOEL) gbs ACTING CHIEF JUSTICE