Mirz Infrastructure Builders vs State of JandK and Others

Ali Mohd. Magrey, J.â€"In its writ petition, OWP No. 1483/2013, the petitioner claims to have stood the lowest bidder in the tendering process

initiated by the Srinagar Municipal Corporation pertaining to the project of establishing of modern Abattoir and the allied and ancillary works

related thereto, detailed in paragraph I of the writ petition, at Allochibagh, Srinagar. The petitioner has projected a grievance in the writ petition

that despite the above, the respondent Corporation has taken decisions in its meetings held on 10.04.2013 and 14.07.2013 which were

communicated to the petitioner vide the impugned communication dated 14.08.2013, whereby the tendering process for construction of the

modern abattoir has been cancelled on the ground that the lowest tenderer, i.e., the petitioner herein, had failed to submit the design, drawings and

BOQ within the prescribed time and consequently, on request of the petitioner, the earnest money deposit made by him has been released in his

favour. In the writ petition, the petitioner, apart from seeking quashing of the decisions taken by the Corporation to cancel the tendering process,

and the communication dated 14.08.2013, the petitioner has sought for issue of Mandamus to command the respondents to release 10% of the

cost of the Project for drawing and design and allow the petitioner to execute the work; to award the construction work of the Project to him; and

not to re-tender the Project for construction of modern abattoir in Srinagar. Alongwith the writ petition, the petitioner moved a miscellaneous

petition, CMP No. 2434/2013, for issuance of an ad interim stay, praying therein that respondents be directed to maintain status quo with regard

to the fresh tender process for construction of the modern abattoir and also for staying operation of the decisions dated 10.04.2013 and

18.07.2013 and the impugned communication dated 14.08.2013.

The writ petition came up for consideration before the Court for the first time on 23.10.2013 and a Coordinate Bench of this Court, while

ordering issue of notice, directed that subject to objections of the other side and till next date before the Bench, the respondents shall not resort to

fresh tender process. The interim direction was subsequently extended from time to time and continues to be in force.

The respondents have filed their reply to the writ petition. They have also filed miscellaneous petition, CMP No. 437/2014, praying for vacation

of the interim order dated 23.10.2013 passed in CMP No. 2434/2013. The writ petitioner, too, has made another miscellaneous petition, CMP

No. 1348/2014, to direct the respondents to reconsider and review the decisions taken by them on 10.04.2013 and 18.07.2013 communicated to

the petitioner vide letter dated 14.08.2013.

The learned counsel for the parties, instead of arguing the main writ petition which is at its admission stage, have been pressing hard for disposal

of the three miscellaneous petitions, two filed by the writ petitioner and one by the respondents and, in fact, have been insistent on such prayer.

Consequently, with the consent of the learned counsel for the parties, rather at their insistence, the three miscellaneous petitions were taken up for

hearing and consideration.

I have heard learned counsel for the parties, perused the record and considered the matter.

It needs to be reiterated here that by virtue of interim direction dated 23.10.2013, which has been extended from time to time, it has been

ordered that the respondents shall not resort to fresh tender process. The said order was passed subject to objections from the other side, i.e., the

respondents. The respondents have filed their reply affidavit in the main writ petition and have also filed CMP No. 437/2014 with the prayer to

vacate the interim order dated 23.10.2013.

In order to sustain the ad interim order of stay granted by the Court, the petitioner is essentially required to show that it has a prima facie case in

its favour.

Perusal of the letter addressed by Joint Commissioner (Adm), SMC, Srinagar, to the petitioner, placed at page 259 of the writ petition, reveals

that the petitioner had been informed that after evaluation of technical bids and opening of financial bids, he has been declared as the lowest

tenderer by the Committee constituted by the Government vide order No. 188-HUD of 2012 dated 27.09.2012. By the said communication, the

petitioner was advised to furnish the detailed drawings and specifications, including BOQ, as per the requirement of the tender document, within

two weeks from the date of receipt of the communication so that the case could be submitted to State Level Contract Committee for further

examination and final decision. The contents of this communication are wholly relied upon by the petitioner. In response to the aforesaid offer and

communication, the petitioner addressed letter dated 01.01.2013 to the Joint Commissioner (Adm), SMC, to the following effect:

As regards the preparation and submission of Design and Drawings of the project, we would like to mention here that we have accepted the

concept drawings, specification given in your tender documents and have submitted no deviation statement to confirm this. As per the terms and

conditions of the tender clause 3.37.1, this design and drawings of the project are to be prepared and submitted only after the receipt of advance

payment of 10% against the Bank Guarantee after receipt of the final order and the agreement. You will appreciate that at this stage we are not in

position to take a risk of investing 10% of the project cost without even getting confirm order and SLCC clearance. If still required to be

undertaken by us at this stage only, we would request you to kindly release 10% payment against the bank guarantee we would submit. However,

if any clarification required at SLCC meeting we would bring our experts/additional documents to fulfill their requirements.

The Joint Commissioner, vide his communication dated 05.01.2013, informed the petitioner that the issue had been discussed in a meeting

chaired by the Commissioner, SMC, and that it had been agreed that the designs, detailed drawings and specifications would have to be submitted

by the tenderer within the stipulated time period to enable the Corporation to submit the case before the State Level Contract Committee for final

decision.

It appears that the petitioner was insistent on what it had said in the aforesaid communication 01.01.2013. However, there is yet another

communication placed at page 278 of the writ petition, having been written by the petitioner to the Joint Commissioner (Adm), SMC, Srinagar. It

bears No. MIB/711/2013 but does not bear any date. It, nonetheless, is shown to have been written in response to communication dated

31.12.2012 from the Joint Commissioner. The contents of this communication are quite contrary to what had been said by the petitioner in his

communication dated 01.01.2013 quoted above, and are, therefore, reproduced hereunder:

Please refer your letter vide No. SMC/PS/JCA/2256-67 dated 31st December, 2012 offer for establishment of Modern Abattoir at Allochibagh

Srinagar. The letter refers evaluation of technical bids and opening of financial bids, where we have been declared as the lowest tenderer i.e. (L/I),

by the Committee constituted by the Govt. vide order N0.188-HUD of 2012 dated 27.09.2012.

Further we were advised to furnish the detailed drawing and specification including BOQ as per the requirement of the Tender, so that the case

could be submitted to State Level Contract Committee for further examination. Therefore we would like to request for the extension of three

weeks in time period. It would be appropriate to mention here that the preparation and submission of Design and Drawing of the project has

financial and expert implications which needs time and appropriate measures for which we seek to get at least three weeks of time which starts

from today onwards.

Since detailed drawing and specification including BOQ as per your requirements which involves expert inputs and consultants from outside State

and outside country for which this company has hired the specialized and specific people in this regard. Again this consultation and drawing,

specification (designing) has incurred lot of finances that this company has invested in the pie-allotment which needs to be taken care.

The contents of the two communications are contradictory in terms and mutually destructive, reflecting upon the case of the petitioner. In any

case, the fact remains that the petitioner by the aforesaid communication had sought three weeks' time for submission of drawing and

specifications, including BOQ, as per the respondents' requirements and had intimated the Joint Commissioner that the company has incurred lot of

finances for the consultation, drawings, specifications and designing, suggesting thereby that such drawings, specifications, designs and BOQ were

ready. In the said communication, the petitioner did not raise any demand for advance payment of 10% amount. However, it said that care of the

company should be taken in that regard.

Now the question is, if the petitioner had failed to comply with the terms of the letter dated 31.12.2013, whether the respondents were within

their rights to cancel the tender process and seek to re-tender the project. Learned counsel for the petitioner in this regard relied upon and invited

the attention of the Court to Clause 3.37.1 of the tender document. Learned counsel for the respondents, on the other hand, relying upon Clauses

3.12.1 and 1.3 of the tender document, submitted that the petitioner was required to submit the design, detailed drawings, specifications and BOQ

so as to enable the technical committee constituted by the Government to sum up over all concept etc. so that the case was prepared for

submission to the State Level Contract Committee for their consideration of allotting the work to the lowest tenderer and follow up action,

including execution of the contract between the parties. Learned counsel for the respondents submitted that since the petitioner had failed to

comply with the requirement of clauses 3.12.1 and 1.3, the technical committee could not prepare the case for submission to the State Level

Contract Committee for their consideration. Resultantly, the work could not be allotted in favour of the petitioner and no contract was executed

between the parties. Consequently, the petitioner could not have claimed release of 10% advance payment.

Clause 1.3, cited and relied upon by the learned counsel for the respondents, is extracted hereunder:

1.3 Scope of Work:

The bidder shall have to prepare detailed design for all civil. Electrical and mechanical components for Modern Abattoir facility for goat/sheep

(HALAL) as per required capacity, as per Specification, Design, Supply, Erection and Successful testing and commissioning of which shall include

utility services block, effluent treatment plant, common hot water generator, cold and hot water supply, hydro pneumatic pumps and piping

The bidder shall prepare all detailed designs with regard to Architectural, Structural, Mechanical, Electrical Air-conditioning and other related items

of work which shall have to be got approved from the State Government before the start of execution of the work. Any deviation in the quantum of

the work during the approval shall not affect the contract price.

A bare perusal of this clause would show that it definitely prescribed that the Bidder shall have to prepare the detailed design of all civil, electrical

and mechanical components, but it does not envisage that such designs shall have to be submitted by the lowest bidder before signing of the

contract. However, the second paragraph of the clause makes the things clear that the bidder shall have to prepare all detailed designs with regard

to Architectural, Structural, Mechanical, Electrical Air-conditioning and other related items of work which would have to be got approved from the

State Government before the start of execution of the work. The clause does not make it obligatory for the lowest bidder to prepare or submit

such detailed designs before signing the contract; the words used are ""before start of execution of the work"". Execution of the work would not start

unless the work is formally allotted and the contract is signed. In that view, this clause does not help the learned counsel for the respondents.

Coming to Clause 3.12.1 of the tender document, it prescribed as under:

3.12.1 Technical Bid:

Technical Bid shall contain the following:

(a) Documentary evidence regarding eligibility criteria as required under invitation to bid Clause 2.3 & instruction to bidder Clause 3.5 along with

Qualification Application duly filled.

(b) Bid security as per clause 3.19.

(c) General Arrangement Design of all Civil Structures with typical details and item-wise specifications.

(d) Technical specifications, origin with item wise commentary and non priced BOQ, Technical Brochures of all the sections.

(e) Technical Deviation Statement Part ""A"" and ""B"".

(f) In case the tender document is downloaded, the bidder shall also enclose a demand draft amounting to Rs. 15000/- favouring CAO.SMC

(refer invitation to Bid clause 2.2).

(g) Original Tender Document duly signed and Stamped by the Bidder.

Commercial Bid

(a) Price Schedule as per the format of the Bidding Document.

(b) Bidder shall also submit the Terms & Conditions including the amount on monthly/yearly basis payable by the Corporation to the Bidder for

Maintenance and Running of the Plant for 5 years.

Both bids shall be sealed separately and put in one envelope in the manner as specified in the clause 3.12.0

The aforesaid clause would have to be read conjointly with Clause 3.37.1 of the tender document, heavily relied upon and pressed into service

by the petitioner. It reads as under:

3.37.0 Mode of Payment:

Payment for supply of Indian/imported items:

3.37.1 10% mobilization advance payment of the contract value for Indian/Imported items shall be released within seven days on signing of the

contract, against an irrevocable bank guarantee of equal amount for Pre-Engineering and preparation of drawings, design, layout plans by bidder

and his Foreign Principal including the visit of his Engineers.

Reading the two clauses conjointly, it becomes clear that the respondents were obliged to allot the contract, execute the agreement, release

10% mobilization advance payment of the contract value within seven days on signing of the contract, against irrevocable bank guarantee of equal

amount for pre-Engineering and then require the contractor to prepare and submit the drawings, design, layout plans etc. Clause 3.37.1 makes it

abundantly clear that for preparation of drawings, design, layout plans by bidder and his Foreign Principal including the visit of his Engineers, the

respondents were obliged to release 10% mobilization advance payments in favour of the contractor, which they did not do. It is also admitted by

the respondents that the petitioner through his consultant did make the presentation developed in rabbit software displaying a 3D design conceptual

of the modern abattoir in respect of the layout plan and design of the civil works. Apparently, therefore, it was not open to the respondents to have

cancelled the tender process on the ground of the petitioner's failure to submit the drawings, designs etc., since the same was a step to follow the

execution of the contract, and it is nobody's case that the contract between the parties stood executed.

However, there is a snag; the respondents state that the petitioner has accepted the decision of the respondents to cancel the tender process

and re-tender the work. In this connection, it is submitted that after the initial decision to cancel the tender process was taken 10.04.2013, the

petitioner moved representation on the same day 10.04.2013 to release the earnest money deposit (EMD), i.e., the bid security to the tune of Rs.

72 lacs and, in that regard, he submitted an affidavit dated 30.07.2013, inter alia, to the effect:

That the deponent had deposited EMD (Bank Guarantee) against the execution of construction and maintenance of Modern Abattoir at

Allochibagh, Srinagar, Kashmir. Later on the execution of said work has not taken place, later on thereof;

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That I solicit this affidavit for release of EMD (Bank Guarantee) only and we will never claim any other amount;

That some letter pads were misplaced and somebody has misused them on our name. We have nothing to do with these letters and the said

letter pad shall be treated as cancelled.

That in future if any NIT is advertised we shall participate in the same.

That 1 solicit this affidavit before the SMC authorities for release of our ED (Bank Guarantee) in our favour.

Pursuant to the above representation and affidavit, the respondents state that in terms of the committee's decision taken on 18.07.2013, the

EMD was released in favour of the petitioner. This is not denied by the petitioner.

The question that arises is whether, after the withdrawal of the earnest money, i.e., the security for satisfactory performance of the contract the

petitioner's claim would survive? If nothing, withdrawal of the earnest money by the petitioner establishes the fact that he has accepted the decision

to cancel the tendering process and re-tender the construction work of the abattoir in question and has, in terms of clause 6 at the affidavit, rather

undertaken to participate in the fresh tendering process. By his act of withdrawing the earnest money, the petitioner has, in fact, withdrawn from

whatever interest he could have claimed as having been declared as the lowest tenderer. In fact, withdrawal of earnest money by itself terminated

any contractual relation between the parties. In that view of the matter, the writ petition seems to have been an after-thought. In any case there is

no occasion or reason to direct the respondents to review their decision and reconsider the case of the petitioner, or to restrain them from taking

appropriate steps to re-tender the construction of the abattoir.

Expressing urgency in the matter of re-tendering the works, the learned counsel for the respondents also submitted that the respondents are

hard pressed to ensure early establishment of the abattoir and that in this connection, the Division Bench of this Court in OWP (PIL) No.

156/2002, titled Syed Tahir Iqbal Geelani v. State of J&K, has been pleased to pass such directions in the name of the respondents.

For all what has been discussed above, I feel that the petitioner has not been able to make out a prima facie case so as to entitle him to the

interim direction in the name of the respondents not to put the construction work of the abattoir to re-tender and/or to direct the respondents to

review its earlier decision and to reconsider the case of the petitioner. Consequently, CMP Nos. 2434/2013 and 1348/2014 made by the

petitioner are dismissed and, in consequence thereof, the interim direction dated 23.10.2013, extended from time to time, shall stand vacated.

Resultantly, CMP No. 437/2014, filed by the respondents is allowed. It is, however, made clear that any observation made in this order shall not

constitute expression of any opinion on the merits of the main writ petition.