This writ petition challenged the forfeiture of bid security after the respondent awarded work to the petitioner long after the stipulated bid opening date, despite the petitioner's written refusal to execute at quoted rates due to loss of time.
Petitioner admitted to bid security by the third respondent to return within one month.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
FRIDAY, THE 3RD DAY OF SEPTEMBER 2021 / 12TH BHADRA, 1943
WP(C) NO. 20955 OF 2020
PETITIONER:
JOSEPH R.V., S/O. VARKEY, PWD CONTRACTOR, RATHAPPULLIYIL HOUSE, KATTAYAD P.O, VELLAMUNDA, WAYANAD DISTRICT 670 731.
BY ADVS. ABRAHAM MATHEW (VETTOOR) SRI.ANIL ABEY JOSE
RESPONDENT:
1 STATE OF KERALA REPRESENTED BY THE SECRETARY TO GOVERNMENT, PUBLIC WORKS DEPARTMENT, THIRUVANANTHAPURAM PIN 695 004.
2 CHIEF ENGINEER, PWD (ROADS AND BRIDGES), LMS VELLAYAMBALAM RD, PALAYAM, THIRUVANANTHAPURAM, KERALA 695 033
SMT.PRINCY XAVIER GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
2
W.P.(C) No.20955 of 2020
W.P.(C) No.20955 of 2020
J U D G M E N T
Petitioner is a registered contractor undertaking civil
works of the Public Works Department of the State Government. He submitted bids in response to Exts.P1 and P2 notices of invitation for execution of two road works. In terms of Exts.P1 and P2 notices, the bids received pursuant to the same were to be opened on 20.03.2019. The bids were however opened only on 17.05.2019 and 18.05.2019 respectively. The petitioner was the lowest bidder in the said bid process for both the works. He was accordingly issued Exts.P9 and P11 communications by the third respondent on 17.06.2019 requiring him to inform as to whether he is willing to reduce the rate quoted for the works. The petitioner sent Exts.P10 and P12 replies to Exts.P9 and P11 communications stating that he has
3
W.P.(C) No.20955 of 2020
participated in the bid processes on the assumption and belief that the bids will be opened on 20.03.2019 and the works will be awarded soon thereafter and since the bids were not finalised within the firm period, he is unable to execute the works as he is likely to incur loss, if the works are executed now at the rates quoted by him. Despite the stand aforesaid of the petitioner, the third respondent awarded the works to the petitioner in terms of Exts.P14 and P17 communications on 16.07.2019. The petitioner sent replies to Ext.P14 and P17 communications also reiterating the stand taken by him in Exts.P10 and P12 replies. Ext.P15 and P18 are the replies of the petitioner to Exts.P14 and P17 communications. In terms of Exts.P15 and P18 replies, the petitioner has also requested the third respondent to return the bid securities furnished by him for the works. The writ petition is instituted thereafter seeking directions to the respondents to return the bid securities furnished by the petitioner for the works covered by Exts.P1 and P2 notices.
4
W.P.(C) No.20955 of 2020
of Clause 4.9 of Exts.P1 and P2 notices, the petitioner was not entitled to withdraw from the bid process after the date and time fixed for receipt of the bids. It is also submitted in the counter affidavit that in the light of Clause 3.6.6 of Exts.P1 and P2 notices, insofar as the petitioner has not executed agreements on receipt of Exts.P14 and P17 communications awarding the works to him, the bid securities furnished by him
in respect of the said works are liable to be forfeited. It is explained by the third respondent in the counter affidavit that the bids received pursuant to Exts.P1 and P2 notices could not be opened on 23.03.2019 on account of the restrictions imposed in connection with the election held to the Parliament during the relevant time.
W.P.(C) No.20955 of 2020
5
the date of opening of the tender to the date upto which the offer given in the tender is binding on the bidder. As such, the employer is bound to take a decision on the tender and communicate the decision to the eligible bidder for his acceptance within the firm period. There is no dispute between
the parties to the aforesaid facts. The relevant portion of the PWD Manuel dealing with 'firm period' reads thus:
“The firm period of a tender is the period from, the date of opening of the tender to the date upto. which the offer given in the tender is binding on the bidder. The firm period is fixed as the maximum time required within which a decision can be taken on the tender and order of acceptance issued in writing to the bidder which shall not exceed two months in the normal course. The consideration of tenders and decision there on shall be completed well before the date of expiry of the firm period noted in the tender so that the letter of acceptance is sent before the expiry of the firm period. If delay is anticipated, the officer who invited the tenders shall get the consent of the lowest two bidders for extending the firm period by one month or more as required. In case the lowest or any bidder refuses to extend the firm period that tender cannot be considered. All officers concerned with the consideration of tenders, shall deal with them expeditiously to settle the contract before the expiry of the
6
W.P.(C) No.20955 of 2020
firm period.”
The firm period fixed for the bids covered by Ext.P1 and P2 notices is 60 days. As noted, in Exts.P1 and P2 notices, it is mentioned that the bids received pursuant to the same will be opened on 20.03.2019. If the firm period for the bids is reckoned from 20.03.2019, it expired on 20.05.2019. Admittedly, the works were awarded to the petitioner long after 20.05.2019, on 16.07.2019 and if so, the petitioner had no obligation to execute the work at the rate quoted by him. This fact is not disputed by the respondents. Instead, on their behalf, the learned Government Pleader submitted that the firm period in the instant cases is liable to be reckoned only from the actual dates of opening of the bids namely 17.05.2019 and 18.05.2019 and if the firm period is reckoned accordingly, it can be seen that the works were awarded to the petitioner within the firm period. In other words, the stand of the respondents is that the petitioner was obliged to execute the works when the same were awarded to him. I am unable to
W.P.(C) No.20955 of 2020
7
accept the stand taken by the respondents, for if this stand is accepted, a bidder would be compelled to execute a work even after several years of the opening of the bids and such an interpretation would defeat the very concept of firm period. I take this view in this case especially for the reason that Clause
5(1) of Exts.P1 and P2 tender notices categorically provides that the bids will be opened on the specified date and time and in the event of the specified date of bid opening being declared a holiday for the employer, the bids will be opened at the same
time on the next working day. Clause 5.1 of Ext.P2 tender notice reads thus :
“5.1. Bid Opening
5.1.1. Bids shall be opened on the specified date & time, by the tender inviting authority or his authorised representative in the presence of bidders or their designated representatives who choose to attend.
5.1.2. Opening of bids shall be carried out in the same order as it is occurring in invitation of bids or as in order of receipt of bids in the portal. The bidders & guest users can view the summary of opening of bids from any system. Bidders are not required to be present during the bid opening at the opening location if they so desire.
5.1.3. In the event of the specified date of bid opening being
8
W.P.(C) No.20955 of 2020
declared a holiday for the Employer, the bids will be opened at the same time on the next working day.”
That apart, the provisions in the PWD Manual extracted above indicates that if delay is anticipated in finalising the tender after its opening, within the firm period, consent of the lowest two bidders shall be obtained for extending the firm period. In the circumstances, I am of the firm view that the firm period in the instant cases is to be reckoned from the date of opening of the bids as mentioned in the invitation. If that be so, the petitioner cannot be blamed for having refused to execute the works at the rates quoted by him.
with forfeiture of the bid security reads thus:
“3.6.6. The Bid Security may be forfeited:
a) if the Bidder withdraws the Bid after Bid opening during the period of Bid validity including extended period of validity; or b) if any modification is effected to the tender documents.or c) in the case of a successful Bidder, if the Bidder fails within the specified time limit to:
a.i. sign the Agreement; or
a.ii. Furnish the required Performance Guarantee or
9
W.P.(C) No.20955 of 2020
a.iii. If the bidder fails to convince the Employer about the reasonability of his bid prices in the case of an unbalanced bid.
d) In such cases the work shall be rearranged at the risk and cost of the selected bidder.”
The learned Government Pleader relied on clause (c)(a.i) of the extracted clause to justify the forfeiture of the bid securities furnished by the petitioner. A conjoint reading of sub clause (a) and sub clause (c)(a.i) of the extracted clause would indicate that the sub clause (c)(a.i) will not have any application, if the bidder withdraws the bid after the bid validity period. In other words, as far as the present case is concerned, in so far as the bidder has withdrawn the bids after the bid validity period, the bid security cannot be forfeited on the ground that he has not executed the agreement, not withstanding the fact whether the withdrawal of the bids is before or after the award. Clause 4.9 of the notices inviting bids dealing with withdrawal of bids was relied on by the learned Government Pleader to contend that the petitioner was not entitled to withdraw the bids after the
10
W.P.(C) No.20955 of 2020
date and time for receipt of the bids. The said clause reads
thus :
4.9. Modification, Resubmission and Withdrawal of Bids
4.9.1. Resubmission or modification of bid by the bidders for any number of times before the date and time of submission is allowed. Resubmission of bid shall require uploading of all documents including price bid afresh.
4.9.2. If the bidder fails to submit his modified bids within the predefined time of receipt, the system shall consider only the last bid submitted.
4.9.3. The Bidder can withdraw his/her bid before the date and time of receipt of the bid. The system shall not allow any withdrawal after the date and time of submission.
The clause extracted above, according to me, cannot have any application as regards the right of the bidders to withdraw the bid after the firm period.
the view that the third respondent is not justified in forfeiting the bid security furnished by the petitioner in respect of the works covered by Exts.P1 and P2 notices. I take this view also for the reason that the Government has not incurred any loss in connection with the works covered by Exts.P1 and P2 notices,
11
W.P.(C) No.20955 of 2020
for it is admitted that the second lowest bidder has executed the works at the rate quoted by the petitioner.
In the result, the writ petition is allowed and the third respondent is directed to return the bid securities submitted by the petitioner in respect of the bids covered by Exts.P1 and P2 notices. This shall be done within one month.
Sd/-
P.B.SURESH KUMAR, JUDGE.
YKB
12
W.P.(C) No.20955 of 2020
APPENDIX OF WP(C) 20955/2020
PETITIONER EXHIBITS
EXHIBIT P1 A TRUE COPY OF THE RELEVANT PAGES OF THE BID DOCUMENT IN RESPECT OF BM AND BC TO THONICHAL-PALLIKKAL ROAD BETWEEN KM0/000 TO 3/200 EXHIBIT P2 A TRUE COPY OF THE BID DOCUMENT FOR THE WORK PROVIDING BMBC TO MANANTHAVADY KONDOTHUVAYAL ROAD BETWEEN KM 9/002 TO 11/200 EXHIBIT P3 A TRUE COPY OF THE BID SUBMISSION CONFIRMATION UNDER TENDER ID NO. 2019 PWD 271936 1 AND BID ID NO 667532 WITH RESPECT TO THE WORK UNDER EXT P1 DATED 13-03-2019 EXHIBIT P4 A TRUE COPY OF THE BID SUBMISSION CONFIRMATION UNDER TENDER ID NO. 2019 PWD 272524 1 AND BID ID NO 668287 WITH RESPECT TO THE WORK UNDER EXT P2 DATED 13-03-2019 EXHIBIT P5 A TRUE COPY OF THE E-MAIL RECEIVED IN RESPECT OF EXT P1 WORK INFORMING POSTPONEMENT OF TENDER OPENING TO 25TH APRIL 2019 DATED 20-03-2019 EXHIBIT P6 A TRUE COPY OF THE INTIMATION REGARDING POSTPONEMENT OF TENDER OPENING IN RESPECT OF EXT P2 WORK DATED 20-03-2019 EXHIBIT P7 A TRUE COPY OF THE TENDER SUMMERY REPORT IN RESPECT OF EXT P1 WORK UPDATED ON 1705-2019 AND DOWNLOADED BY THE PETITIONER ON 19-07-2019
EXHIBIT P8 A TRUE COPY OF THE TENDER SUMMARY REPORT IN RESPECT OF EXT P1 WORK UPDATED ON 1805-2019 AND DOWNLOADED BY THE PETITIONER DATED 19-07-2019 EXHIBIT P9 A TRUE COPY OF THE LETTER ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER WITH
13
W.P.(C) No.20955 of 2020
| RESPECT TO EXT P1 DATED 17-06-2019 | |
|---|---|
| EXHIBIT P10 | A TRUE COPY OF THE REPLY FURNISHED BY THE PETITIONER TO THE 3RD RESPONDENT WITH RESPECT TO EXT P1 DATED 04-07-2019 |
| EXHIBIT P11 | A TRUE COPY OF THE LETTER ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER WITH RESPECT TO EXT P2 DATED 17-06-2019 |
| EXHIBIT P12 | A TRUE COPY OF THE REPLY FURNISHED BY THE PETITIONER TO THE 3RD RESPONDENT WITH RESPECT TO EXT P2 DATED 04-07-2019 |
| EXHIBIT P13 | A TRUE COPY OF THE LETTER NO. DC 02/2018/10921 ISSUED BY THE SUPERINTENDING ENGINEERING TO THE PETITIONER DATED 16-07- 2019 |
| EXHIBIT P14 | A TRUE COPY OF THE LETTER NO. DC 02/2018/10921 ISSUED BY THE SUPERINTENDING ENGINEER TO THE PETITIONER DATED 16-07- 2019 |
| EXHIBIT P15 | A TRUE COPY OF THE REPLY DATED 27-07-2019 ISSUED BY THE PETITIONER TO THE 3RD RESPONDENT |
| EXHIBIT P16 | A TRUE COPY OF THE LETTER NO. 02/2018/10224 ISSUED BY THE SUPERINTENDING ENGINEER TO THE PETITIONER DATED 16-07- 2019 |
| EXHIBIT P17 | A TRUE COPY OF THE LETTER NO. 02/2018/10224 ISSUED BY THE SUPERINTENDING ENGINEER TO THE PETITIONER IN RESPECT OF EXT P2 WORK DATED 16-07-2019 |
| EXHIBIT P18 | A TRUE COPY OF THE REPLY DATED 27-07-2019 ISSUED BY THE PETITIONER TO THE 3RD RESPONDENT. |
3 issues framed by the court
Whether the firm period of a tender should be reckoned from the date of invitation or the actual date of bid opening when there is a significant delay beyond the stipulated bid opening date.
Whether a bidder is liable to forfeit bid security if the tender process exceeds the original firm period due to the employer's delay in opening bids.
Whether the Government can forfeit bid security when the lowest bidder refuses to execute works after a substantial delay in award and the government incurs no loss.
Joseph R.V.
State of Kerala represented by the Secretary to Government, Public Works Department
Chief Engineer, PWD (Roads and Bridges)
Superintending Engineer, PWD (Roads) North Zone
P.B.Suresh Kumar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
