The respondents have been served and have entered appearance through a counsel. However, today, there is no representation for the respondents inspite of sufficient opportunity. This only shows the disinterest and indifference on the part of senior officials to matters pending before Court.
2. The writ petitioner is engaged in business of supply, installation, testing and commissioning of diesel generator sets. The respondent/ BSNL advertised in news papers calling for tenders to set up SITC of 40 KVA E/A with sound proofing arrangement in various TE Buildings of Chennai Telephones for 4 jobs.
3. The petitioner obtained tender documents and submitted the tender in BSNL form-VI along with letter dated 25.10.2005 and FDR No 870950 for a sum of Rs.35,928/-, dated 18.10.2005. This amount was deposited as Earnest Money Deposit as per terms and conditions of the BSNL Form-6. The tender was opened on 27.10.2005 and the petitioner was declared as lowest tenderer. Negotiations took place on 29.11.2005. Thereafter, the petitioner submitted a letter dated 30.11.2005 stating that the offer excludes the supply of Static Battery Charger and if supplied, it would be provided at extra cost. This was followed by another letter dated 16.12.2005 whereby, the letter dated 30.11.2005 was withdrawn and an alternative offer was made.
4. The learned counsel drew the attention of this Court to paragraph 4 of the letter dated 16.12.2005 wherein modification has been sought for by the petitioner as follows:-
" In the AMF Control Panel, we shall use 4 pole power contactors of 140 Amps of "AC1" rating, since AC3 rating 4 pole contactors are not available in the market. Barring the above, the AMF panel will be as per NIT Specifications. The control Panels will be installed outside the canopy.
5. On receipt of such letter, the impugned proceedings dated 27.5.2005 has been passed, which reads as follows:-
" Sub: SITC of 40 KVA EA set with sound proofing arrangement for various TE buildings of Chennai Telephones Forfeiture of 50% of EMD reg.
Due to the post Tender modification regarding control panel is not acceptable by the BSNL. The competent authority has decided to forfeit 50% of EMD remitted by for the above work, as per the provisions of C1.24 of BSNL Form 6, which in a part of the tender document submitted by you.
You are therefore requested to remit the 50% of Rs.35,925/- (i.e. Rs.17964/-) (Rupees seventeen thousand nine hundred and sixty four only) for the above work by way of DD/Cash in favour of AO Elect. Dn.III, Chennai, on or before 5.1.2006.
Clause 24 of the BSNL form 6 reads as follows:-
" The tenders for the work shall remain open for acceptance for a period of 90 days from the date of opening of the tenders.
If any tenderer withdraws his tender before the said period or makes any modification in the terms and conditions of the tender which is not acceptable to the BSNL shall, without prejudice to any other right of remedy be at liberty to forfeit 50% (fifty percent only) of the said earnest money absolutely."
6. Aggrieved by the order directing the petitioner to remit 50% of the Earnest Money Deposit, the present writ petition has been filed. It is now stated by the learned counsel for the petitioner that the respondents have recovered 50% of the amount by invoking the forfeiture clause and the balance amount has been returned to the writ petitioner.
7. The main grievance of the petitioner is that the tender has not been finally concluded and therefore, the respondents have no justification in invoking clause 24 to forfeit 50% of the Earnest Money Deposit. In other words, he pleaded that since there is no acceptance of offer resulting in work order, the forfeiture is bad. Hence, the direction to remit 50% of the Earnest Money Deposit is contrary to the terms and conditions of the offer.
8. In the instant case, the writ petitioner has made his offer and submitted the Earnest Money Deposit subject to the conditions as contained in Form-6. Further clause 24 provides for forfeiture of 50% of the Earnest Money Deposit if the tenderer withdraws the tender before the period prescribed or makes any modification in the terms and conditions which is not acceptable by the respondents. If the petitioner pleads that the respondents are not entitled to invoke forfeiture clause on the ground that the offer has not been accepted and there is some dispute with regard to manner in which the contract should be concluded, then the relief sought for by the petitioner has to be agitated before the competent Civil Court. The dispute with regard to the acceptance or non acceptance on modification of the tender conditions and the action relating to forfeiture of Earnest Money Deposit cannot be gone into by this Court under
Article 226 of the Constitution of India.
9. This has been emphasized by the Apex Court in very many decisions, more particularly, in the decision reported in National Highways Authority of India Vs. - Ganga Enterprises and Another (2003, S.C.C. 410) wherein, paragraph 6, it has been held as follows:-
" The respondent then filed a writ petition in the High Court for refund of the amount. On the pleadings before it, the High Court raised two questions viz. (a) Whether the forfeiture of security deposit is without authority of law and without any binding contract between the parties and also contrary to
Section 5 of the Contract Act; and (b) Whether the writ petition is maintainable in a claim arising out of a breach of contract. Question (b) should have been first answered as it would go to the root of the matter. The High Court instead considered Question (a) and then chose not to answer question (b). In our view, the answer to question (b) is clear. It is settled law that disputes relating to contracts cannot be agitated under
Article 226 of the Constitution of India. It has been so held in the cases of Kerala SEB v. Kurien E. Kalathil, State of U.P. - V. - Ajai Pal Singh. This is settled law. The dispute in this case was regarding the terms of offer. They were thus contractual disputes in respect of which a writ court was not the proper forum. Mr. Dave, however, relied upon the cases of Verigamto Naveen -V.- Government of Andhra Pradesh and Harminder Singh Arora Vs. - Union of India. These, however, are cases where the writ court was enforcing a statutory right or duty. These cases do not lay down that a writ court can interfere in a matter of contract only. Thus on the ground of maintainability the petition should have been dismissed."
10. Since the issue in the present writ petition relates to interpretation of tender conditions and the right of the respondents to invoke forfeiture clause', which is based on disputed fact, the same can be agitated before the competent Civil Court. This Court, under
Article 226 of the Constitution of India is not inclined to go into the factual aspects of the offer and acceptance of the tenders and the action of the respondents relating to forfeiture on facts in dispute.
11. On this premise, this writ petition fails and the same is dismissed. No costs. It is open to the petitioner to agitate his claim before the competent Civil Court in accordance with law.
ra To
1. The Chief Engineer (E), Bharat Sanchar Nigam Ltd., Chennai Telephones, O/o the GM (W), Nelson Manickam Road, Chennai.29.
2. The Superintending Engineer(E), Bharat Sanchar Nigam Ltd., Electrical Circle-II, 62 Jeenis Road, Saidapet, Chennai.15.
3. The Executive Engineer (E), Bharat Sanchar Nigam Ltd., Electrical Division-III, 62, Jeenis Road, Saidapet, Chennai 15