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Judgment
The present petition under Article 226 of the Constitution of India has been filed seeking following reliefs :
The Hon’ble Court may kindly be pleased to quash order dated 11.5.2012 (Annexure P-5).
The Hon’ble Court may kindly be pleased to quash the order dated 20/11/2012 blacklisting the petitioner.
The Hon’ble Court may kindly be pleased to hold that the acceptance dated 24.4.2012 was beyond the validity period of the offer and thus, the petitioner was not bound to execute any contract with the respondents.
The Hon’ble Court may kindly be pleased to direct the respondents to refund the earnest money of the petitioner along with the interest.
Any other writ, order/orders or direction, which this Hon’ble Court deems fit and proper under the facts and circumstances of the case, may also be passed with cost of the petition in the interest of justice.
The petitioner is a Construction Company registered under the Public Works Department and participates in government contracts in the State of Madhya Pradesh. The respondents issued NIT Annexure P/2 dated 14.11.2011 for Construction of Main Academic Block (Phase-I) I/C Water supply, sanitary fittings and Electrification works and development work at Government Polytechnic District Anuppur. The Contract amount was estimated Rs.523.58 Lacs and the earnest money was to be deposited was Rs.2,61,800/-. The petitioner participated in the NIT dated 14.11.2011 and deposited the earnest money as required as per Clause 3.1 of the condition of NIT. As per the tender schedule the opening of financial/price bid was on 24.12.2011 at 10:30 AM and it expired on 24.12.2011 at 5:30 PM.
It is submitted that more than 4 months the respondents did not pass any order of allotting the tender to the petitioner and also did not issue any work order in favour of the petitioner. Therefore, the petitioner could not apprehend that the respondents have awarded the NIT in favour of the petitioner. It is submitted that as per the conditions of the NIT specifically Clause 4.7, the validity of the offer for tenders within the competence of sanction of Board i.e. above Rs. 150 lacs has a maximum period of is 120 days, therefore, the petitioner forwarded a letter dated 27.4.2012 whereby the petitioner intimated the respondents that the bid submitted by the petitioner was on 18.12.2011 and the period of 120 days expired on 17.4.2012 and thus after the expiry of period of 120 days, the validity of the offer of the petitioner has expired. It is submitted that by way of the said letter dated 27.4.2012, the petitioner demanded for refund of earnest money deposited by the petitioner as till that date no work order had been issued in favour of the petitioner and also no order had been passed allotting a tender to the petitioner. Thereafter, the petitioner on 07.05.2012 Annexure P/4 received a letter from the respondents dated 24.04.2012, whereby the respondents have directed the petitioner to execute a contract with the respondents pursuant to the NIT dated 14.11.2011 within 15 days from the date of receipt of the said letter. It is submitted that the petitioner had already forwarded letter dated 27.04.2012 whereby the petitioner had intimated the respondents that since the validity of the offer of the petitioner has expired as per the conditions of NIT, the petitioner is entitled for the refund of the earnest money and that the petitioner is not bound to execute the contract.
It is submitted that the petitioner received the order dated 11.05.2012 Annexure P/5 whereby the respondents intimated the petitioner that since the petitioner has not executed the contract within 15 days pursuant to the letter dated 24.04.2012 (Annexure P/4), the respondents have forfeited the earnest money as per Clause 8.1.1 of the conditions of the NIT and have cancelled the allotment of the tender. It is submitted that since the respondents did not refund the earnest money, the petitioner forwarded notice dated 04.01.2013 to the respondent explaining that since the validity of the offer has expired, therefore, the petitioner is not bound to execute the agreement. Therefore, the petitioner served 30 days notice dated 04.01.2013 to the respondents for refund of the earnest money of Rs. 2,62,000/- along with 18% interest.
It is further submitted that the petitioner submitted his bid on 18.12.2011 and thus, the validity of the offer expired on 17.4.2012 and since, the respondents accepted the offer of the petitioner on 24.4.2012, the same cannot be termed as a valid acceptance. It is also submitted that even if the start day of the validity of the offer is taken as 24.12.2011 (which is the last day of the submission of financial bid), thus, the validity of the offer expires on 23.4.2012 and even in that scenario also, the acceptance of the respondents dated 24.4.2012 is beyond the validity period and hence, the petitioner has not erred in any manner in not executing the contract with the respondents and also the petitioner is entitled for the refund of the earnest money. To support his contentions, learned counsel has relied on the judgment of the Hon'ble Apex Court in the case of Ramesh Kumar Agarwal vs. Food Corporation of India & another reported in 2018 SCC OnLine Jhar 1220.
It is further submitted that the respondents have blacklisted the petitioner for the reasons mentioned in letter dated 20.11.2012 issued by the respondent No.3. It is submitted that the respondents have not intimated the petitioner regarding the blacklisting and have not served the letter dated 20.11.2012 to the petitioner.
Per contra, learned counsel for the respondent submits that the petitioner has submitted the tender bid on 18.12.2011 and upon submitting the lowest tender bid, the same has been accepted by the respondent vide letter dated 18.04.12 which was informed to the petitioner vide order dated 24.04.12, hence, the petitioner’s bid was accepted by the respondent while the bid was still valid as the validity of the bid is 120 days. It is submitted that the petitioner was required to execute an agreement by depositing a sum of Rs. 11,06,950/- (2% of the total amount of contract) in favour of the answering respondent. The EMD which was to be submitted by the petitioner was received by the respondent on 24.12.2011. As per the tender schedule, the bid opening date was 24.12.11. It is submitted that the bids were opened on 24.12.11 and so the validity of the offer made by the petitioner would commence from 24.12.11 and it would remain valid till 24.04.12 i.e.120 days as per Clause 4.7 of the NIT.
It is submitted that since, the petitioner bid was accepted vide letter dated 18.04.12 (Annex. R/1) which was within the validity period and it was further informed vide Annexure-P/4 dated 24.04.12, to execute the contract else appropriate action would be taken as per the terms of the tender. The petitioner did not execute the contract and instead requested for withdrawal of earnest money. Therefore, the impugned order dated 11.05.12 was passed by the respondent due to failure on the part of the Petitioner to execute the agreement, in terms of Clause 8.1.1 of the NIT.
In respect of blacklisting of the petitioner, it is submitted that the order dated 20.11.12 was passed due to non-execution of contract by the petitioner with the respondent within stipulated time period, whereon the Sub-committee, which is empowered to take decision on such matters, has barred the petitioner from participating in any tender declared by the respondent for a period for one year. It is submitted that there is no illegality in the impugned order dated 11.05.12 and the petition deserves to be dismissed.
Heard learned counsel for the parties and perused the record.
Clause 4.7 of the NIT, reads as under :
4.7. Validity of offer :-
Period of validity of offer of tenders will be as follows :
1.Tenders within the competence of sanction of 30 days (Thirty days) Executive Engineer ie upto Rs. 20.00 lac.
2.Tenders within the competence of sanction of 45 days (Forty Five Days) Dy. Housing Comm. i.e. upto Rs. 40.00 Lac
3.Tenders within the competence of Sanction of 60 days (Sixty days) Addl. Housing Commr i.e. upto Rs. 75.00 Lac.
4.Tenders within the competence of sanction of 90 days (Ninety days) Housing Commissioner i.e. upto Rs. 120 Lac.
5.Tenders within the competence of sanction of 90 days (Ninety days) Chairman i.e upto Rs. 150 Lac.
6.Tenders within the competence of sanction of 120 days (Hundred twenty days) Board i.e. above Rs. 150 Lac)
In the event of the tenderer withdrawing the offer, before the aforesaid period, for any reason whatsoever earnest money deposited with the tender shall be forfeited by the Executive Engineer.
4.7.1.In the event of the tenderer withdrawing the offer, before the expiry of the period of validity of offer failing to execute the contract Agreement as required by the condition8.1.1. of the Notice Inviting Tender he will not be entitled to tender for this work in case of recall in addition to forfeiture of his earnest money. If the tenderer has committed a similar default, on an earlier occasion as well, his registration in the Board may be suspended temporarily for a period of six months from such date as may be ordered by the competent Authority which has registered him.
From the perusal of the record, it is found that the NIT was issued on 14.11.2011 Annexure P/2. Tender was opened on 24.12.2011. Clause 4.7 of the NIT provides that the validity of the offer is 120 days. The petitioner on 07.05.2012 vide Annexure P/4 received a letter from the respondents dated 24.04.2012, whereby the respondents have directed the petitioner to execute a contract pursuant to the NIT dated 14.11.2011 within 15 days from the date of receipt of the letter, however, the petitioner sent letter dated 27.04.2012 seeking refund of earnest money.
As per the respondents the period commences from 24.12.2011 i.e. date of opening of bids, whereas, as per the petitioner, it should commence from the date of submission of bid 18.12.2011.
In the present case in hand, the bid was opened on 24.12.2011 and as per clause 4.7, the validity of the offer was 120 days which extended till 23.04.2012. The bid of the petitioner was accepted by the respondent vide letter dated 18.04.12 which was informed to the petitioner vide order dated 24.04.12.
In the case of Ramesh Kumar Agarwal (supra) , it has been held as under :
(xi)For the ready reference Section 4 of the Indian Contract Act, 1872 reads as under:
“4.Communication when complete-The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. The communication of an acceptance is complete,-as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer. The communication of a revocation is complete,-as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge.”
(emphasis supplied)
(xvii)It has been held by Hon'ble the Supreme Court in the case of Riya Travel & Tours (India) (P) Ltd. v. C.U. Chengappa reported in (2001) 9 SCC 512 as under:
“6.From the facts enumerated hereinabove, it is evidently clear that the offer of the appellant was a qualified one. The bid was not open for acceptance for an indefinite period. In the offer made by the appellant, it was clearly stated that the acceptance should be conveyed within three months which was subsequently extended up to July 1999. When, admittedly, there was delay in the acceptance of the bid, the appellant was at liberty to ask for the refund of money already paid and to withdraw from the bid at least after 9-7-1999. 7 . We, accordingly, allow this appeal and set aside the order of the High Court insofar as it has accepted the bid of the appellant and has directed it to make the payment. The Official Receiver will refund to the appellant the earnest money deposited along with such interest as may have accrued thereon. The refund should be made within eight weeks from today.”
(Emphasis supplied)
(xviii)Thus, it appears from the facts of the case that once the validity period of the offer comes to an end, on 10th April, 2012 and the said validity has not been extended by mutual consent, it could not have been accepted by respondent no. 1. The offer is accepted on 12th April, 2012 and not on 10th April, 2012. The date of acceptance is not to be looked into at all, but, the date on which the acceptance is put in transmission is to be looked into (As per Section 4 of the Indian Contract Act, 1872). In the facts of the present case, acceptance was put in transmission on 12th April, 2012 (page no. 112 of the memo of this Letters Patent Appeal). Thus, there is no consensus ad-idem and hence, also such type of acceptance of the offer cannot be resulted into a valid contract because there was no valid acceptance of the offer at all on 12th April, 2012. The offer was over on 10th April, 2012.
Clause 8.1.1 of the NIT provides for forfeiture of earnest money if the bidder fails to execute the agreement.
However, in the present case in hand, it has come crystal clear that the tender was opened on 24.12.11 and the period of validity from opening date had come to an end on 23.04.12, calculating 120 days, starting from 24.12.11 till 23.04.2012. The letter which has been issued is dated 18.04.12, however informed to petitioner vide order dated 24.04.2012. Therefore, the acceptance of offer in terms of Section 4 of the Contract Act is beyond period of validity of bid. It is also found that the petitioner has received the letter Annexure P/4 dated 24.04.12 on 07.05.12. Therefore, otherwise also that was much beyond the validity period. The petitioner prior to said communication had written to the respondent vide letter dated 27.04.12 that as the validity of the bids are expired, petitioner is entitled for refund of earnest money.
In the considered opinion of this court, the petitioner has made out the case and accordingly, it is found that the order impugned dated 11.05.2012 Annex P/5, forfeiting the earnest money of the petitioner and debarring the petitioner to participate in further contract is beyond the scope of the contract and, therefore, are hereby quashed.
So far as, the order dated 20.11.2012 is concerned, whereby the petitioner has been de-barred from participating in any tender declared by the respondent for a period of one year, no order is warranted, as the said period is already over.
Consequently, impugned orders dated 11.05.2012 Annexure P/5 and order dated 20.11.2012 are hereby quashed. Respondents are directed to refund the amount of forfeited earnest money to the petitioner.
With the aforesaid, the petition is allowed.