IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.1567 OF 2016(GM-TEN) BETWEEN:
SRI.K.GANESH S/O LATE SHANKARNARAYANA AGED ABOUT 48 YEARS NO.555, JOGIMATTI ROAD 4TH CROSS, CHITRADURGA - 577 501.
(By Mr.RAMESH CHANDRA, ADV.) AND:
1. MANAGING DIRECTOR KSRTC CENTRAL OFFICE K.H.ROAD SHANTHINAGAR BENGALURU – 560 027.
2. DIVISIONAL CONTROLLER KSRTC DAVANAGERE DIVISION P.B.ROAD DAVANAGERE – 577 002.
(By Mr.P.D.SURANA ADV. FOR R1 & R2) - - -
… PETITIONER … RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH ANNEXURE-A PSSED BY THE R2 DATED 7.4.2015 CONSEQUENTLY DIRECT THE R2 TO RETURN THE E.M.D DEPOSITED BY THE PETITIONER.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Mr.Rameshchandra, learned counsel for the petitioner.
Mr.P.D.Surana, learned counsel for respondent Nos.1 & 2.
2. The writ petition is admitted for hearing.
With consent of the parties, the same is heard finally.
3. In this petition under Article 226 & 227 of the Constitution of India the petitioner has assailed the validity of the order dated 07.04.2015 passed by respondent No.2, by which amount of Earnest Money Deposit has been forfeited by the respondent No.2. The petitioner also seeks a direction to the respondents to release the amount of Earnest Money Deposit to the petitioner.
4. Facts giving rise to filing of the petition briefly stated are that the Divisional Controller, KSRTC, Davanagere Division invited tenders for a period of three years vide tender Notification dated 07.01.2015 for allotment of shops at Davanagere Bus Station. The petitioner responded to the aforesaid tender notification by submitting a bid. The petitioner submitted a sum of Rs.8,346/- as Earnest Money Deposit along with his bid. The tender was opened on 16.02.2015, in which one Prakash was declared as a successful bidder as he had quoted a monthly fee of Rs.28,678/- for the shop in question. The Divisional Controller, by communications dated 19.02.2015 and 28.02.2015 asked him to submit necessary documents and to execute the agreement. However, he did not comply with the terms and conditions of the tender and by an order dated 30.03.2015 the tender of the aforesaid Prakash was cancelled and the Earnest Money Deposit was forfeited.
5. The petitioner thereafter by a communication dated 10.03.2015 was called upon to enter into a contract as he was selected as the highest bidder. Again a communication was sent to the petitioner on 02.04.2015 and 16.04.2015, by which the petitioner was informed that in case, he fails to enter into an agreement his Earnest Money Deposit shall be forfeited. The petitioner in response to the aforesaid notices submitted a representation, in which a request was made to return the amount of Earnest Money Deposit. However, by impugned order dated 07.04.2015, the Earnest Money Deposit of the petitioner was forfeited. In the aforesaid factual background, the petitioner has approached this court.
6. Learned counsel for the petitioner while inviting the attention of this court to Clause 2.4 of the General Standing Order dated 23.04.2001 issued by respondents submitted that the Earnest Money Deposit amount to the unsuccessful tenderers was required to be returned within six working days from the date of auction of the tender. Therefore, the amount due to the petitioner ought to have been returned within six days of the tender. However, the Earnest Money Deposit was forfeited on 07.04.2015 i.e., beyond the period prescribed in the conditions contained in General Standing Order. It is further submitted that the impugned order is per se arbitrary. On the other hand, learned counsel for the respondents has invited the attention of this Court to Clause 3 of the Contingency provision and has submitted that the action of the respondents is justified in view of the aforesaid Clause contained in the General Standing Order. In support of his submission, reliance has been placed on a decision of Supreme Court in ‘MAULA BUX VS. UNION OF INDIA’, AIR 1970 SC 1955.
7. I have considered the submissions made by learned counsel for the parties and have perused the record. Admittedly, the tender was invited on 07.01.2015 and the same was opened on 16.02.2015. The Earnest Money of the successful tenderer viz., Prakash was forfeited on 30.03.2015. However, much beyond the period of six days, by a communication dated 10.03.2015, the petitioner was informed that he has been declared as successful bidder and was served with notices dated 02.04.2015 and 16.04.2015 to enter into an agreement, failing which he was informed that his Earnest Money Deposit amount shall be forfeited. At this stage, it is relevant to take note of Clause 2.4, Clause 3 and Clause 7 of the General Standing Order, which reads as under:
2.4 Refund of EMD: The EMD amount of the unsuccessful tenderers/auction participants will be refunded through account payee cheque or demand draft at parties cost, preferably within six working days from the date of auction/Tender.
3. Contingency Provision: In the event the highest tenderer or bidder backs out or fail to submit necessary documents and security deposit within the stipulated period the EMD remitted by him/her shall forfeited and the matter be referred to the director/officer in charge of commercial matter be referred to the director/officer in charge of commercial matters to arrive at a decision either to accept the next highest offer or to cancel the tender come auction with specific recommendations.
7. Agreement: The selected tenderer shall enter into an agreement within 3 working days excluding the day of auction/negotiation.
8. Thus, from perusal of the aforesaid Clauses it is evident that the Earnest Money Deposit amount was required to be refunded within six working days from the date of auction of the tender to the unsuccessful bidders and the selected tenderer was required to enter into an agreement within three working days including the day of auction. One Prakash was declared as successful bidder on 16.02.2015. Therefore, he was required to enter into an agreement upto 20.02.2015 and the amount of the petitioner was required to be refunded in the month of February 2015 itself. However, after the expiry of the period prescribed in the General Standing Order, by communication dated 10.03.2015, the petitioner was informed that he is the successful bidder and thereafter his Earnest Money Deposit was forfeited on 07.04.2015, which is not permissible under the General Standing Order. In view of preceding analysis, the impugned order is quashed. The respondents are directed to refund the amount of Rs.8,346/- to the petitioner within a period of one month from today, failing which, the aforesaid amount shall carry interest @ 6% from the date of this order till the payment is made to the petitioner.
Accordingly, the petition is disposed of.
Sd/- JUDGE SS