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TMI Blog2015 (3) TMI 1302X X X X Extracts X X X X X X X X Extracts X X X X ..... ponsive on this ground. The Writ Petition is allowed, with no orders as to costs. - WP(C) 1351/2015 & CM No.2374/2015 - - - Dated:- 27-3-2015 - HON BLE MR JUSTICE BADAR DURREZ AHMED AND HON BLE MR JUSTICE SANJEEV SACHDEVA For the Petitioner: Mr Sanjiv Behl with Mr Madhur Dhingra and Mr Eklavya Behl. For the Respondent: Mr Vikram Jetly with Mr Ankur Chibber, Mr P.K. Bansal JUDGMENT SANJEEV SACHDEVA, J. 1. The petitioners have filed the present writ petition for directing the respondents to consider the bid of the petitioners along with the other participants in the tender. The validity of the Bank Guarantee submitted by the Petitioners as Earnest Money Deposit (EMD) along with the Bid was short by 7 days. On the opening of the bids it was discovered that it was short by 7 days and the same day it was extended and the extension was submitted the very next day. The issue that arises for consideration is whether the Bid submitted is substantially responsive and whether the rejection of the bid on a hyper technical ground would be in the public interest requiring wider participation of bidders to ensure healthy competition more so in view of the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the bid of the petitioners be evaluated alongwith other bidders. 5. Learned counsel for the petitioner relied on clause 19.7 to contend that the earnest money deposit was required to protect the purchasers against the risk of the bidder s conduct, which would warrant the forfeiture of the EMD. He contended that the earnest money deposit was to be forfeited in case the bidders withdrew or amended its tender or impaired or derogated from the tender in any respect within the period of forfeiture of its tender or, in case, any information/document furnished in the tender was incorrect, false, misleading or forged. Further, the successful bidder's earnest money was liable to be forfeited, in case, the successful bidder failed to furnish the required performance security within the specified period. 6. Learned counsel for the petitioners contended that the petitioners had furnished the earnest money deposit by way of a bank guarantee prior to the scrutiny of the bids of the various bidders and, as such, no prejudice was caused to the Respondents inasmuch as the earnest money deposit was made valid for the entire period as stipulated. He further contended that the discre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that as per clause 27.5, the tender was liable to be declared non-responsive during the evaluation, if the required EMD (amount, validity, etc.) had not been provided. 11. Learned counsel relied on the decision of the Division Bench in Titagarh Wagons Ltd Vs. Container Corporation Of India Ltd., 2009 II AD (DELHI) 748 to contend that provision of a bank guarantee was an absolute mandatory condition in a tender process and, in case of, non-compliance thereof, the bid was liable to be rejected. 12. Further reliance has been placed on the decision of M/S. Balkrishna Ramkaran Goyal Vs. Union Of India And Others, AIR 2005 Delhi 351 to contend that the tender conditions have to be adhered to scrupulously, for otherwise any relaxation or waiver of a tender condition unless so provided in NIT would encourage and provide scope for discrimination, arbitrariness and favoritism which are totally opposed to rule of law and constitutional values. 13. To resolve the controversy, it would be expedient to examine some of the tender conditions. 14. Clause 19, 27 and 28 of the Tender Document stipulate as under: 19. Earnest Money Deposit (EMD) 19.1 Pursuant to GIT clauses 8.1 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determine whether they are complete and meet the essential and important requirements, conditions etc. as prescribed in the TE document. The tenders, which do not meet the basic requirements, are liable to be treated as non - responsive and will be summarily ignored. 27.5 The following are some of the important aspects, for which a. tender shall be declared nonresponsive during the evaluation and will be ignored; (i) Deleted (ii) Tender is unsigned. (iii) Tender validity is shorter than the required period. (iv) Required EMD (Amount, validity etc.)/ exemption documents have not been provided. (v) Tenderer has quoted for goods manufactured by other manufacturer(s) without the required Manufacturer's Authorisation Form as per Section XIV. (vi) Tenderer has not agreed to give the required performance security of required amount in an acceptable form in terms of GCC clause 5, read with modification, if any, in Section - V- Special Conditions of Contract , for due performance of the contract. (vii) Deleted (viii) Tenderer has not agreed to other essential condition(s) specially incorporated in the tender enquiry like terms of payment, liquidated damages c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Metro JV (Supra) the Division Bench of this court has held as under:- 5. We are of the view that this entire imbroglio has arisen because of the postponement of the date on which the tenders were to be opened, i.e., from 4th January 2007 to 22nd January 2007 (17 days later) by respondent No. 2. If Clause 2.7 of the tender is examined it is evident that it required that the EMD in the form of a bank guarantee was to be valid for a period of 180 days. On the date the bid was submitted by the petitioner, i.e., 5th January 2007 it was valid for 180 days. Even according to the respondent No. 2 if the date of opening the bid was not postponed the petitioner's bid would have been in order. The amount being a large amount (EMD of ₹ 10,000,000/- (Rupees Ten Million only) or US$ 25,0000) the technical non compliance is bonafide and the period taken for rectification of the EMD not so unreasonable so as to completely vitiate the petitioner's bid. Consequently, to accept the respondent No. 2's pleas would be tantamount to invalidating the petitioner's bid on a hyper-technical construction on account of a situation brought about only by the postponement of the bid by r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter, the writ petition is allowed and the letter dated 15th February 2007 is quashed and the bid of the petitioner is directed to be considered in accordance with law by the respondents. 18. The Division Bench in Kapsch Metro JV (Supra) in identical circumstances has laid down that the technical non compliance was bonafide and the period taken for rectification of the EMD was not so unreasonable so as to completely vitiate the petitioner's bid. The Division Bench held that to accept the respondents pleas would be tantamount to invalidating the petitioner's bid on a hyper-technical construction on account of a situation brought about only by the postponement of the bid by the respondent itself. The court further held that it would be wholly unjust to deny the petitioner the opportunity to participate in the tender process, specially since no unfair advantage had been gained by the petitioner in this process. The petitioners were not stealing a march over any of their competitors by altering their bid amount. The petitioners had been conscientious enough by updating the EMD on their own after coming to know of the technical non-compliance. Wider competition in such circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aster Private Limited, would amount to hyper technicality. In our view, the petitioner s bid was substantially responsive and it was well within the right of the respondent to waive the mere technical irregularity referred to above. 20. The Division Bench, relying upon Poddar Steel Corporation (Supra) And Kapsh Metor JV (Supra) held that object of the Bank Guarantee was to secure the Respondent against the risk of the bidder s conduct and the same was not in any way threatened or imperiled. The Division Bench found the bid to be substantially responsive and it was within the right of the respondent to waive the mere technical irregularity. 21. In the present case, 09 amendments were made by the respondent No.2 to the tender document from time to time. As per the NIT dated 03.03.2014, the validity of the BG was to be valid at least 165 days from the date of tender opening. By the amendment No. 9 dated 26.12.2014 and the date of opening was amended from 29.12.2014 to 15.01.2015. Calculated from 29.12.2014 as stipulated by the NIT dated 03.03.2014, the two bank guarantees would have been valid, however the same were short by a period of seven days when calculated in terms of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed into two categories - those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case, the authority issuing the tender may be required to enforce them rigidly. In the other cases, it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases. Poddar Steel Corporation (Supra) 25. The decision in the case of Titagarh Wagons Ltd (Supra) relied upon by the counsel for the Respondent is not applicable in the facts of the present case. In the said case, the Bidder was required to submit an unconditional Bank Guarantee. The Bidder originally submitted an unconditional Bank Guarantee that was short by 30 days and subsequently submitted an extension Bank Guarantee but the extension was not unconditional but conditional. The Division Bench found that the petitioner s version of extension of the Bank Guarantee had been created only for the purpose of the said Writ Petition and consequently the court held that the petitioner therein did not deserve to have the equitable jurisdiction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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