State Of Haryana & Ors vs M/S Malik Traders

3. Facts in brief are stated hereunder:

5. Since M/s. Gaurav Traders was found to be the highest bidder, a letter of acceptance was issued to it on 25.9.2008.

However, it failed to deposit the security amount and the first instalment as per the letter of acceptance. Therefore, as per condition No. 9.3(B) of the Detailed Notice Inviting Tender (DNIT) and condition No. 6 of the acceptance letter, the Bid Security of 20 lakhs deposited by M/s. Gaurav Traders was forfeited and the letter of acceptance was cancelled and withdrawn vide letter dated 16.10.2008 of the competent authority. Thereafter, a letter of acceptance dated 26.11.2008 was issued to the respondent M/s.

Malik Traders who was the second highest bidder. As per condition No. 6 of the said letter of acceptance, the respondent was required to deposit the security amount and the first instalment within 21 days from the receipt of the letter of acceptance. However, the respondent failed to deposit the security amount and the first instalment as required by the letter of acceptance. Hence, vide Memo No. 5029 dated 17.12.2008 issued by the Executive Engineer, Provincial Division No. III, PWD, B&R Branch, Karnal, the letter of acceptance was cancelled and withdrawn and the Bid Security of 20 lakhs was forfeited.

The respondent again participated in the bid, offering an amount of 4,94,91,810/-. It may be noted that the amount offered by the respondent in the subsequent bid was less than its offer in the first bid with a difference of 3.03 crores. Since the respondent's 5 bid was the highest bid among the bids submitted pursuant to the Bid Notice dated 31.12.2008, a letter of acceptance was issued to the respondent on 6.2.2009. The respondent deposited the security amount and the first instalment in terms of the said letter of acceptance.

8. After the second letter of acceptance dated 6.2.2009 was issued to the respondent, the respondent on 7.2.2009 filed C.W.P. No. 2266 of 2009 in the Punjab & Haryana High Court praying for quashing the first letter of acceptance dated 26.11.2008 of the Executive Engineer and the Memo No. 5029 dated 17.12.2008 cancelling the said letter of acceptance and forfeiting the Bid Security of 20 lakhs. Even though the appellants opposed the grant of prayers in the writ petition, a Division Bench of the High Court vide order dated 7.7.2009 allowed the writ petition quashing the letter of acceptance dated 26.11.2008 and the Memo dated 17.12.2008 and also directed the Executive Engineer (appellant No. 5) to refund the Bid Security amount of 20 lakhs to the respondent within two months from the date of receipt of a copy of the order. Aggrieved by the said order dated 7.7.2009 passed by the High Court in C.W.P. No. 2266 of 2009, the respondents in the writ petition have filed this appeal.

We respectfully agree with the above view of this Court.

12. Hence, the High Court was not justified in quashing the letter dated 26.11.2008 accepting the bid of the respondent and the letter dated 17.12.2008 forfeiting the Bid Security amount of 20 lakhs. The appeal is allowed and the order dated 7.7.2009 passed by the High Court of Punjab & Haryana in C.W.P. No. 2266 of 2009 is set aside. Consequently, the writ petition stands dismissed. There will be no order as to costs.

August 17, 2011.