Allowed

Silpa Projects and Infrastructure (I) Pvt. Ltd. v. Thiruvantnhapuram Development Authority (Trida)

Kerala HC4 Sept 2018WP(C)/10024/2018

Case brief

AI extract

What is this about?

This judgment holds that a contractor is entitled to the return of earnest money deposited after participating in a tender and seeking withdrawal before any official award of work was made to them.

What did the court decide?

Return of earnest money deposit of Rs.42,90,000/- to the petitioner within two months from the date of receipt of the judgment copy, without interest.

Silpa Projects and Infrastructure (I) Pvt. Ltd. Vs Thiruvantnhapuram Development Authority (Trida) — Kerala HC (2018) — LawSathi Research

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN

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TUESDAY ,THE 04TH DAY OF SEPTEMBER 2018 / 13TH BHADRA, 1940

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WP(C).No. 10024 of 2018

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PETITIONER/S:

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SILPA PROJECTS AND INFRASTRUCTURE (I) PVT. LTD REPRESENTED BY ITS MANAGER (PROJECTS COORDINATION),PARAMARA ROAD, KOCHI - 18.

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BY ADV. SRI. P.K. RAVISANKAR

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RESPONDENT/S:

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1 THIRUVANTNHAPURAM DEVELOPMENT AUTHORITY (TRIDA) REPRESENTED BY ITS SECRETARY,JAYA MANSION, VAZHUTHACAUD, SASTHAMANGALAM POST, TRIVANDRUM - 695 010.

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2 HINDUSTAN PREFAB LIMITED REPRESENTED BY ITS REGIONAL IN CHARGE (S.Z.),T.C. 24/656 (F.F), THYCAUD, THIRUVANANTHAPURAM - 695 014.

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3 DEPUTY GENERAL MANAGER ENGINEERING TENDER CELL, HINDUSTAN PREFAB LIMITED,JANGPURA, NEW DELHI - 110 014.

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BY ADVS. THIRUVANANTHAPURAM DEVELOPMENT AUTHORITY (TRIDA) SC SRI.M.RAJAGOPALAN NAIR SMT.AYSHA YOUSEFF

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09.98.2018, THE COURT ON 4.9.2018 DELIVERED THE FOLLOWING:

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ANU SIVARAMAN, J.

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W.P(C).No. 10024 of 2018

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Dated this the 4^th day of September, 2018

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JUDGMENT

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The petitioner seeks a direction to respondents 2 and 3 to refund the earnest money deposit of Rs.42,90,000/- paid by the petitioner as per Exhibit P5 with interest from 22.11.2017 till payment. The petitioner, which is a private limited Company, had participated in the e-tender process for construction of a Shopping Complex-cum-Parking Plaza at Palayam, Trivandrum. The contractor, who had submitted the lowest financial bid in the tender, was disqualified in the technical evaluation process and the petitioner filed W.P(C).No.11624 of 2017 challenging the action of the 2^nd respondent in considering the financial bid of the said tenderer, M/s.South Indian Constructions Private Limited. This Court, by Exhibit P3 judgment dated 24.10.2017, set aside the award of work to M/s.South Indian Constructions Private Limited and directed that the petitioner, if otherwise eligible, will be awarded the work. Thereafter, Exhibit P4 communication was sent by the 2^nd respondent requiring the petitioner to submit the earnest money deposit (EMD) for the work within four days and the petitioner remitted the same

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WP(C).10024/18

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which is evidenced by Exhibit P5 covering letter. All original documents were sought for, for verification by Exhibit P6 proceedings dated 22.11.2017 and the petitioner submitted the same as well. It is stated that after the EMD was received, the 2^nd respondent took up Exhibit P3 in writ appeal, which was also disposed of by Exhibit P8 judgment dated 20.12.2017. Even after Exhibit P8, no steps were taken to award the work of the petitioner and the petitioner submitted Exhibit P9 request dated 9.2.2018 to cancel the award of work and refund the EMD. This was answered by Exhibit P10 communication dated 21.2.2018. It is contended that thereafter, the respondents issued Exhibit P12 communication stating that the documents submitted by the petitioner did not match the originals produced for verification and therefore, action is being taken against the petitioner for violation of the tender conditions. The petitioner preferred Exhibit P13 reply stating that they did not intend to proceed with the work and that the EMD may be returned. When no action was taken thereon, the petitioner has approached this Court.

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A detailed counter affidavit has been filed on behalf of the 2^nd respondent, wherein it is contended inter alia that the petitioner was directed by Exhibit P6 e-mail dated 22.11.2017 to submit the original of the documents for verification. It is stated that the representative of the petitioner had submitted necessary documents for verification and it was

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WP(C).10024/18

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found that the bifurcation form and performance report of work completion are not matching the original documents produced by the petitioner at the time of verification. This was informed the petitioner by Exhibit P7. It is stated that the documents produced by the petitioner were not in accordance with the tender conditions, but the same had been overlooked by the tender committee at the time of the technical evaluation. It is stated that going by Exhibit P1, the 2^nd respondent has the right to proceed against the contractor and to withhold the entire EMD if the contractor committed any breach of the terms and conditions. It is stated that the respondents have not taken any decision with regard to the penal deduction as per the integrity clause and the process will be finalised at the earliest. It is contended that there is no merit in the allegations that the petitioner had remitted the EMD and action had been taken to cancel his contract thereafter as a retaliatory measure for the petitioner having approached this Court against the award of work to an ineligible contractor.

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A reply affidavit has been filed stating that the petitioner had made the request for cancellation of contract and refund of EMD, since the work was not awarded to him and no concluded contract existed between the parties. It is stated that the question with regard to breach of contract would not arise because Exhibit R2(b) integrity pact would also show that it was not signed by both parties and therefore there was

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WP(C).10024/18

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no contract between the parties.

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I have considered the contentions advanced. It is the specific case of the petitioner that the petitioner had paid the EMD on the assumption that the work would be awarded without delay. Exhibit P3 judgment is dated 24.10.2017 and the petitioner had submitted the EMD on 21.11.2017. Thereafter, it appears that a writ appeal was filed and no steps were taken to award the work to the petitioner or to execute any agreement with them. Exhibits P6 and P7 refer to the verification of the documents. However, the petitioner had intimated their inability to enter into the contract and had sought release of EMD before any decision was taken by the 2^nd respondent to award the work to the petitioner. Exhibit R2(b), which is relied upon to contend that the amounts due are liable to be recovered, if there is any violation of the integrity pact, shows that it is signed only by one party, i.e., the petitioner herein. Page 8 of Exhibit R2(b) shows that it is signed on behalf of the bidder contractor and by one witness, who was the manager of the petitioner. The signature of the first party to the contract, who is the Principal/owner and the second witness is conspicuously absent. It is the specific case of the petitioner that there was no concluded contract between the parties and that the withdrawal of the petitioner from the bid before any decision is taken to award the work to the petitioner cannot result in any financial implications to the petitioner and the petitioner cannot be mulcted with

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WP(C).10024/18

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any liability for violation of conditions of contract, since there is no concluded contract.

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In the facts and circumstances of the instant case, I am of the opinion that the reasons alleged by the respondents for refusal to release the EMD to the petitioner cannot be sustained. The petitioner's bid had admittedly been considered by the bid evaluation committee and no defect had been found in respect of the same. It is true that the petitioner was successful in the writ petition filed by him as against the award of the work to a technically unqualified contractor. The petitioner at that stage was willing to take up the work and execute the same as well. However, in spite of requiring them to remit the EMD and produce the originals of the documents relied by them for verification, no final decision was taken by the 2^nd respondent with regard to the award of work to them. Since there was no award of work pursuant to Exhibits P4 and P5 to the petitioner, the contention that amounts are liable to be recovered for the violation of the integrity pact also cannot be countenanced, since Exhibit R2(b), which is produced and relied on would itself show that it had not been duly executed and signed by the parties to the same. In the above view of the matter, I am of the opinion that the contention that the petitioner would be liable to forfeit the EMD paid by him cannot be countenanced in the absence of a contract between the parties. Therefore, I am of the view that since no contract is entered into

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WP(C).10024/18

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between the parties and since Exhibit P1 did not contain a condition that EMD would be forfeited in case of any discrepancy in the documents produced by the tenderer, the contention that the issue is being considered by the respondents cannot be accepted.

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Since the petitioner has withdrawn from the tender before any award has been made in their favour and since it is not disputed before me that the work has been re-tendered, I am of the opinion that the petitioner is entitled to return of the EMD paid by them. In view of the fact that there was a bona fide dispute between the parties to the contract, no interest need be paid on the EMD retained by the 2^nd respondent. The amount of EMD shall be released to the petitioner within

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two months from the date of receipt of a copy of this judgment.

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The writ petition is ordered accordingly.

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Sd/-

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ANU SIVARAMAN JUDGE

vgs

WP(C).10024/18

APPENDIX

PETITIONER'S/S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE NOTICE INVITING E-TENDER NO.NIT NO.HPL/DGM(C)/TC/TRIDA/2016-17/95 DATED 15/12/2016.

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EXHIBIT P2 TRUE COPY OF THE I.A.NO.15629 OF 2017 IN WP(C) NO.11624 OF 2017 OF THIS HONOURABLE COURT.

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EXHIBIT P3 TRUE COPY OF THE JUDGMENT DATED 24/10/2017 IN WP(C) NO.11624 OF 2017 OF THIS HONOURABLE COURT.

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EXHIBIT P4 TRUE COPY OF THE E-MAIL DATED 20/11/2017 ISSUED BY THE TENDER CELL OF THE 2ND RESPONDENT.

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EXHIBIT P5 TRUE COPY OF THE COVERING LETTER DATED 21/11/2017 ISSUED BY THE PETITIONER TO THE DEPUTY GENERAL MANAGER (C) - TENDER CELL OF THE 2ND RESPONDENT.

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EXHIBIT P6 TRUE COPY OF THE E-MAIL DATED 22/11/2017 ISSUED BY THE TENDER CELL OF THE 2ND RESPONDENT TO THE PETITIONER.

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EXHIBIT P7 TRUE COPY OF THE E-MAIL DATED 28/11/2017 ISSUED BY THE PROJECT MANAGER, TENDER CELL OF THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P8 TRUE COPY OF THE JUDGMENT DATED 20/12/2017 IN W.A.NO.2474 OF 2017 OF THIS HONOURABLE COURT.

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EXHIBIT P9 TRUE COPY OF THE LETTER NO.SPI/2058/2017-18 DATED 9/2/2018 ISSUED BY THE PETITIONER TO THE DEPUTY GENERAL MANAGER (C)-TC OF THE 2ND RESPONDENT.

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EXHIBIT P10 TRUE COPY OF THE LETTER

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WP(C).10024/18

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NO.HPL/DGM(ENGG.)/TC/2017-18/149/1438 DATED 20/21, FEBRUARY, 2018 ISSUED BY THE 3RD RESPONDENT.

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EXHIBIT P11 TRUE COPY OF THE LETTER NO.SPI/2142/2017-18 DATED 22/2/2018 ISSUED BY THE PETITIONER.

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EXHIBIT P12 TRUE COPY OF THE LETTER NO.HPL/PM(C)/TC/2017-18/151/1453 DATED 22/23, FEBRUARY, 2018 ISSUED BY THE PROJECT MANAGER (C)-TC OF THE 2ND RESPONDENT TO THE PETITIONER.

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EXHIBIT P13 TRUE COPY OF THE REPLY NO.SPI/2170/2017-18 DATED 26/2/2018 ISSUED BY THE PETITIONER TO THE PROJECT MANAGER (C)-TC OF THE 2ND RESPONDENT.

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RESPONDENTS' EXHIBITS :

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EXHIBIT R2(a) : COPY OF JUDGMENT IN WPC.NO.3365/2018 DATED 26.3.2018.

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EXHIBIT R2(b) : COPY OF INTEGRITY AGREEMENT EXECUTED ON 30.12.2016 BETWEEN THE DEPUTY GENERAL MANAGER (C) HINDUSTAN PREFAB LTD AND THE PETITIONER M/S.SILPA PROJECTS AND INFRASTRUCTURE (PVT) LIMITED.

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EXHIBIT R2(c) : COPY OF COMPLETION COST BIFURCATION CERTIFICATE AND PERFORMANCE REPORT IN DUPLICATE OF PETITIONER ISSUED IN FORM E BY THE PEARLS INFRASTRUCTURE LTD.

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PS TO JUDGE

Silpa Projects and Infrastructure (I) Pvt. Ltd. v. Thiruvantnhapuram Development Authority (Trida)

Case brief

What is this about?

What did the court decide?

Silpa Projects and Infrastructure (I) Pvt. Ltd. v. Thiruvantnhapuram Development Authority (Trida)

Case brief

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What did the court decide?

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