Sabroop Feed & Dairy Farm Village Taj Pur Road Ludhiana v. The Punjab State Cooperative Supply And Marketing Federation Ltd
!"#$%& '( Date of Decision: 03.10.2018 Sabroop Feed & Dairy Farm Village Tajpur Road, Ludhiana .....Petitioner versus Punjab State Cooperative Supply & Marketing Federation Ltd. (MARKFED) .....Respondent ') *+'
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Mr. Shiv Kumar, Advocate, for the petitioner. Mr. Anhad S.Miglani, Advocate, for the respondent. **** - ,'
. , Petitioner a sole proprietorship firm engaged in the business of manufacturing of Benola Khal, Dalia and cattle feed etc. has filed the instant writ petition seeking a writ of certiorari to quash the order dated 10.11.2017 forfeiting the earnest money deposited against the tender. 2.
We have heard Shri Shiv Kumar, learned counsel for the petitioner and Shri Anhad S.Miglani, learned counsel appearing for the respondent.
3.
The facts relevant for the purpose of adjudicating the issue raised herein in brief can be summarized as under:8 Respondent8 Punjab State Cooperative Supply & Marketing Federation Ltd. (hereinafter referred to as 'the MARKFED') invited e8tenders for purchase of lot wise damaged wheat which was unfit for human consumption. The bids were closed on 22.03.2017. The terms and
conditions enumerated in the Notice Inviting Tender (NIT) stipulate that the tenderers were required to quote the rates in the financial bid and were at liberty to quote for any or all the lots put together separately for lot wise. The condition further stipulated that the rates offered will be valid up to 30 days further extendable to another 15 days from the date of opening of the tenders. As per Clause 12, the tenderers were required to pay the earnest money through RTGS/NEFT. NIT also contained a condition that the tenderer after submitting his tender in case does not keep his offer open or does not deposit the requisite security within a week's time from the date of acceptance of the offer or modify the terms and conditions thereof in a manner not acceptable to the MARKFED, then the same shall be rejected and the earnest money shall be forfeited. It may be relevant to quote the relevant clauses of the NIT which read as under:8
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Admittedly, the petitioner submitted offer for two lots i.e. lot Nos. 383 and 384 through a single tender. A sum of 1,76,614/8 was deposited as earnest money towards lot No.383 and a sum of 43,386/8 towards lot No.384. In so far as lot No.383 is concerned, the rate of 1107.86 per quintal quoted by the petitioner was found to be lower than the bids of other tenderers, hence it was rejected and the same is not subject matter of dispute in the present petition.
5.
On receiving an information through e8mail, the petitioner vide communication dated 29.03.2017 informed the respondent that the rate of 10097.9 per quintal for lot No. 384 was quoted on account of a mistake
and hence the offer be treated to be withdrawn and the bid may not be accepted. An identical communication was again issued to the respondents on 07.04.2017. On 07.04.2017 itself a communication was issued by the respondent to the petitioner conveying acceptance of its bid for lot No.384 and informing him that a sum of 2,20,000/8 deposited as earnest money has been converted into the security amount and the balance security amount of 3,01,554/8 be deposited by means of a demand draft. A reminder dated 17.04.2017 was issued by the respondents requiring the petitioner to deposit the balance security amount within two days failing which suitable action as per the terms and conditions of the tender notice shall be initiated.
However, when the petitioner failed to deposit the balance security amount, the respondent vide letter dated 10.11.2017, which is impugned in this petition, communicated to the petitioner that since it has failed to deposit the balance security amount, as such, in accordance with the terms and conditions of the NIT, the security amount of 2,20,000/8 deposited stands forfeited and lot No.384 has been included in the next tender to be opened on 15.11.2017. Aggrieved by the aforesaid communication/order, the petitioner has approached this Court.
6.
Learned counsel for the petitioner vehemently contended that since the offer made by the petitioner in the form of bid on 22.03.2017 was withdrawn on 29.03.2017, much before the acceptance of the bid on 07.04.2017, thus the acceptance of the offer by the respondent on 07.04.2017 is of no consequence and the forfeiture is illegal. In reply it has been submitted that the petitioner in accordance with the terms and conditions of the NIT while offering the bid kept it open till 30 days of the opening of the tender, hence the same could not have been withdrawn within that period and since the offer was accepted within the period of 30 days,
there is a concluded contract between the parties and for non8compliance of the terms and conditions, that is failure to deposit the security amount, consequences of forfeiture ensued and the same has rightly been made. 7.
We have considered the arguments advanced by learned counsel for the parties.
8.
Section 5 of the Contract Act, 1872 provides that a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer. Admittedly, in the case in hand, the petitioner while offering the bid had agreed to keep his bid open for acceptance for a period of 30 days from the date of opening of the tenders. There is no dispute that the tender was opened on 27.03.2017 and the acceptance was communicated to the petitioner vide letter dated 07.04.2017 within 30 days from the opening of the tender. Whether the forfeiture in such a situation is legally justified is no more res8integra and stands settled by a decision of the Hon'ble Apex Court. Reference may be made to the decision of the Hon'ble Apex Court in case
"## & (,/$#.rendered in a similar case.
In the said case National Highways Authority of India issued a Notice Inviting Tender 31.07.1997 inviting tenders for collection of toll on a highway. The NIT required the bidders to furnish a bid security for a sum of 40 lacs through a bank draft or by means of a bank guarantee and a performance security of Rs. 2 crores by way of a bank guarantee. The NIT contained a further condition that the bid offered was to remain valid for a period of 120 days after the last date of the submission of bid and the bid security was liable to be forfeited in case the bidder withdrew his bid during the validity period of bid or failed within the specified period to furnish the performance security. The bidder therein withdrew the bid within a period of
120 days from the last date of submission of the bids and thus the bid security was forfeited. The dispute travelled up to the Hon'ble Apex Court and while considering the issue it has been held as under:8 < .
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Same view was again reiterated in a more recent judgment in the case of "#$$&$ (, "## In identical facts and circumstances a Division Bench of this Court
while allowing the writ petition quashed the letter of acceptance and the order forfeiting the bid security and directed the respondents to refund the same. Hon'ble Apex Court while allowing the appeal and setting aside the order passed by this Court held as under:8 " "
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In view of the settled proposition of law by the aforesaid pronouncements of the Hon'ble Apex Court and in the facts and circumstances, no illegality can be attributed to the action of the respondents in forfeiting the EMD/security amount and the same is not liable to be refunded to the petitioner. The impugned communication dated 10.11.2017 does not require any interference and the writ petition accordingly fails and stands dismissed.
However, in the facts and circumstances we do not make any order as to costs.
!"#$%& Whether speaking/reasoned √Yes/No Whether reportable √Yes/No