Assam Power Distribution Company Limited (APDCL) v. M/S Neccon Power and Infra Ltd. (NPIL)

(A.K.Goel, CJ) This order will dispose of Writ Appeal No.166 of 2012 and Writ Appeal No.219 of 2012, as both the appeals are against common judgment or learned Single Judge qu ashing the allotment of work in pursuance of tender notice dated 02.09.2011 to M /S Neccon Power and Infra Ltd. (NPIL) i.e. the appellant in Writ Appeal No.166 of 2012 by Assam Power Distribution Company Limited (APDCL) (appellant in Writ A ppeal No.219 of 2012). Vide tender notice dated 02.09.2011, the APDCL invited bids for ’design, Supply Construction & Commissioning of 33 KV double circuit line’ at Karbi Anglong Dist rict of Assam. The NPIL and the writ petitioner gave their respective bids. The technical bid of the writ petitioner was rejected and by way of negotiation the work was allotted to the appellant who was the only surviving tenderer. The writ petitioner challenged the rejection of its technical bid by alleging de nial of level playing field and award of work to the sole surviving tenderer, th e appellant NPIL. Main grievance of the writ petitioner was that it had complied with all essential conditions of tender and was eligible in all respects. Its b id was rejected only on the ground that the Bank draft given towards earnest mon ey was not given out of the account of the joint venture but from the account of one of the partners of the joint venture i.e. M/S Mega Electricals which was no t legally tenable. This plea was upheld by learned Single Judge. We have heard learned counsel for the parties. Learned counsel for the appellant submitted that rejection of bid of the writ pe titioner was valid as the same did not conform to the essential tender condition s. Earnest money was required to be in the name of joint venture and could not b e in the name of one of the parties. It was also submitted that on 13.01.2012 th e APDCL gave advance payment of Rs.78 lacs to enable the successful bidder i.e. the NPIL to procure material and thus the work was partly executed. In absence o f any element of public interest, interference with the award of contract was no t called for. Learned counsel for the writ petitioner supported the impugned order and pointed out that the Bank draft was from the account of one of the partners and was sen t on behalf of the joint venture as per the covering letter. The draft could be easily encashed. It was further pointed out that the bid was accepted for 5.94 c rores without opening the bid of the petitioner which was for Rs.4.52 crores. Th us, huge loss was caused to the public exchequer which involved element of publi c interest. It was also pointed out that though order of learned Single Judge wa s passed on 17.05.2012, the APDCL has failed to comply with the order for more t han four months without any valid reason which shows element of collusion or ves ted interest in awarding the contract to the appellant even at the cost of huge loss to the public exchequer and causing unnecessary delay in execution of work of urgent nature even when cost is escalating. It was also submitted that the wr it petitioner was even now willing to keep its bid valid for a reasonable period . We have considered the rival submissions. Question for consideration is whether rejection of bid of the writ petitioner wa s for valid ground and whether any element of public interest was involved so as to call for interference with the rejection of bid of the writ petitioner and a warding the work to the appellant who was the sole tenderer left. After due consideration, we are in agreement with the view taken by learned Sing le Judge. We may refer to the operative part of the order of learned Single Judg e :- (cid:28)52. Rs.6.00.000.00 duly pledged in favour of Chief General Manager (RE), ASEB, Guwah ati-1. Significantly, clause 19 (vii) of Section-2 of the Bidding Document did n In the instant case, tender was submitted with earnest money deposit of ot use the word ’earnest money’ but has used the expression ’bid security’. The earnest money deposited by the petitioners in the form of demand draft was also submitted along with a covering letter of the joint venture. It is difficult to accept the submission of the learned senior counsel for the respondents that as the banker’s cheque/demand draft did not contain the names of all the partners o f the joint venture under the heading ’remitted by’, the same did not meet the criteria of clause 19 (vii) of Section 2 of the Bidding Document. There was no c ondition in the tender document that the bank draft/banker’s cheque has to be pu rchased from the bank account of the Joint Venture. No where it has been laid do wn that the bank draft/banker’s cheque must bear the name of the Joint Venture c overing all the partners of the Joint Ventures. This Court also finds it difficu lt to accept ’ shall be in the name of (cid:29) is one of the same thing (cid:28)as remitted by (cid:29) as contended by the learned senior counsel for the respondents. If a tender i s liable to be rejected for non-fulfillment of a term of the NIT, such ter m must be clear and unambiguous and not open to various possible interpretat ions. The demand draft was valid in all respects and after the same had been re ceived by the payee along with the tender, in view of legal position as has been discussed hereinbefore, the payment of the draft could not have been stopped by anyone except on account of dispute relating to title and therefore, the appreh ension expressed by the respondent Board in the affidavit that the respondent wo uld not be able to bind the Joint Venture Consortium for any loss or damage on t he strength of the said draft is wholly misconceived. It is also to be borne in mind that the earnest money deposit is also to be returned to the successful bid der on submission of Contract Performance Gaurantee. Considering the matter in i ts entirety, this Court is of the opinion that in any view of the matter, there is substantial compliance if not complete compliance of clause 19 (vii) of Secti on -2 of Bidding Document, and tender could not have been rejected on the ground of non-compliance of the aforesaid clause and therefore, the rejection of the t ender of the Joint Venture is arbitrary and illegal. (cid:29) Learned counsel for the appellant relied on the judgment of the Hon’ble Supreme Court in GAMON INDIA LIMITED VS. COMMISSION OF CUSTOMS, MUMBAI, (2011) 12 SCC 49 9 [para 30] laying down that joint venture may be treated as a person and, thus, covered by exemption notification issued under the Customs Act. There is no dis pute with this proposition. The draft in question cannot be held to have not bee n sent by joint venture merely because the amount was drawn from the account of one of the partners of the joint venture. The judgment relied upon does not adva nce the case of the appellant. The draft submitted could not be held to be inval id for any reason to exclude the writ petitioner from tender process. Moreover, if only one tenderer was left in the field, after the judgment of learned Single Judge the APDCL should have noticed the huge difference of margin in the two bi ds instead of remaining silent in the matter for so long. Conduct of the APDCL c an hardly be appreciated. Thus, we do not find any merit in the appeals. The same are dismissed. The APDC L may take appropriate decision in the matter expeditiously, preferably within o ne month.