Bharti Construction Co vs Public Works Department & Others

Heard on the question of admission.

By this writ petition, under Article 226 of the Constitution of India, the petitioner is praying for the following reliefs :-

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Facts of the case are that the respondents had floated a tender for procurement of civil works for construction of CC Road from Hasanpalia (SH-

31) to Sarsi-Badawada (SH-17) Jaora-Ujjain Road length 15.90 kms. The petitioner participated in the tender process and the tender has been

awarded to him but after acceptance thereof, the petitioner is intending to withdraw from his bid on the basis of some typographical error in quoting

the rate.

According to the petitioner, due to typographical error, the total amount as reproduced in the financial bid became Rs.2,37,71,462/- (Rupees Two

crores thirty seven lacs seventy one thousand four hundred and sixty two only) whereas, the offer which was given by the petitioner for the total work

was Rs.23,67,71,462/- (Rupees Twenty three crores sixty seven lacs seventy one thousand four hundred and sixty two only).

The submission of the learned Senior Counsel for the petitioner is that due to typographical error, the said discrepancy arised. He further submitted

that by no stretch of imagination, the work of Rs.23,67,71,462/- can attract the price bid of Rs.2,37,71,462/- and the action of the respondents for

awarding the contract to the petitioner as he was the lowest and directing him to accept the agreement failing which they initiate proceedings for

recovery of Earnest Money Deposit (EMD) is illegal and prayed for quashment of the aforesaid communication.

The stand of the respondents is that the petitioner participated in the process and the last date for submission of tender was 06.03.2017. The

petitioner, on or before 06.03.2017 never gave any letter for correction of his offer. The department, after considering the offer decided to award

the contract and issued a letter on 25.03.2017 (Annexure-3). This was replied and for the first time, the petitioner stated that due to typographical

error Rs.2,37,71,462/- has been quoted instead of Rs.23,67,71,462/- and prayed for the aforesaid correction.

The State Government considering the fact that after acceptance of the petitioner's bid, he could not be permitted to withdraw from his bid on the

basis of his typographical error. The terms and conditions of the NIT nowhere permit any contractor for making corrections as sought to be done by

the petitioner. The correction, if any, could have been carried out as per Clause 27 but the petitioner failed to do so inspite of opportunity being given

to him and thus, the department has rightly accepted the bid of Rs.2,37,71,462/- and prayed for dismissal of the writ petition.

Clause 24, 25 and 27 of the tender of NIT are relevant, which reads as under :-

 24. Disputes

24.1 If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contract of that the

decision was wrongly taken the decision shall be referred to the Dispute Review Expert within 14 days of the notification of the Engineer's decision.

 25. Procedure for Disputes

25.1 The Dispute Review Expert (Board) shall give decision in writing within 28 days of receipt of a notification of a dispute.

25.2 The Dispute Review Expert (Board) shall be paid daily at the rate specified in the Contract Data together with reimbursable expenses of the

types.

 27 Correction of errors

27..1 “Financial Bids†determined to be substantially responsive will be checked by the Employer for any arithmetic errors. Errors will be

corrected by the Employer as follows :-

(a) where there is discrepancy between the rates in figures and in words, the rates in words will govern; and (b) where there is a discrepancy

between the unit, rate and the line item total resulting from multiplying the unit rate by the quantity, the unit rate as quoted will govern.

27.2 The amount stated in the “Financial Bid†will be corrected by the Employer in accordance with the above procedure and the bid amount

adjusted with the concurrence of the Bidder in the following manner :

(a) If the Bid price increases as a result of these corrections, the amount as stated in the bid will be the “bid price†and the increase will be

treated as rebate.

(b) If the bid price decreases as a result of the corrections, the decreased amount will be treated as the “bid priceâ€​.

Such adjusted bid price shall be considered as binding upon the Bidder. If the Bidder does not accept the corrected amount the Bid will be rejected,

and the Bid security may be forfeited in accordance with Sub-Clause 16.6(b).

The letter dated 30.05.2017 (Annexure-11), which is at page-40 reads as under :-

This is to notify that your bid dated 17.05.2017 for Construction of Hasanpaliya (SH-31) to Sarsi Badawada (SH-17) Jaora-Ujjain Road length 15.90

km. under CRF for the contract price of Rs.2,37,71,462/- (Rs. Two crores thirty seven lacs seventy one thousand four hundred sixty two point zero

zero only) as corrected and modified in accordance with the instruction to bidders is accepted by MP Govt. Public Works Department Bhopal vide

letter No.F-53/63/2017/19/YO/2663 Bhopal date 19.05.2017.

1- You are hereby requested to furnish performance security in the form detailed in para 34.1 of ITB for an amount equivalent to 5% i.e.

Rs.11,88,573/- (Rs. Eleven lacs eighty eight thousand five hundred seventy three only) for 85 months (Eighty five months) and as per clause 29.5

Additional performance security for unworkable bid of Rs.1,81,11,477/- (Rs. One crore eighty one lacs eleven thousand four hundred seventy seven

only), unbalance bid of Rs.3,52,24,902/- (Rs. Three crore fifty two lacs twenty four thousand nine hundred two only) for 25 months in the name of

Executive Engineer, P.W.D. Division, Ratlam within 21 days from the receipt of this letter of acceptance and sign the contract with undersigned

failing with action as stated in para 34.3 of ITB will be taken.

2- Stamp fees â€" Rs.25,000/-

Clause 27(2)(b) is very clear. Due to the rate quoted by the petitioner, bid price has been decreased and thereafter, the department has taken

the decreased amount as the “Bid Priceâ€​ and accepted his offer and directed to complete all other formalities and execute the work.

The bid submitted by the petitioner is different. The petitioner failed to perform its part of contract and now with an intention to back-out from

the tender process, the present petition has been filed. It is also pointed out to us that the petitioner has initiated arbitration proceedings and filed an

application under Section 9 of the Arbitration and Reconciliation Act, 1996 for grant of injunction restraining the department to encash the bank

guarantee and interim order in favour of the petitioner has been passed by the Trial Court.

During the course of arguments, learned Senior Counsel for the petitioner has made a statement at bar that contract was not concluded and,

therefore, arbitration clause will not be applicable and the present writ petition is maintainable whereas, in a proceeding under Section 9 of the Act of

1996, different stand has been taken and a relief has been granted in favour of the petitioner.

The contract between the parties is not a statutory contract, it is private contract and in view of the law laid down by the Apex Court in the case

of State of U.P. & Ors. vs. Bridge & Roof Co. (India) Ltd., decided on 20.08.1996 [Equivalent Citation JT 1996 (7) 395], the writ petition is not

maintainable.

In the case of State of U.P. & Ors. vs. Bridge & Roof Co. (India) Ltd. (supra), the Apex Court has held that firstly, the contract between the

parties is a contract in the realm of private law. It is governed by the provisions of the Contract Act. Any dispute relating to interpretation of the terms

and conditions of such a contract cannot be agitated and could not have been agitated, in a writ petition. That is a matter for Arbitration Tribunal or

Civil Court, as provided by the contract.

For the above mentioned reasons and in view of the law laid down by the Apex Court in the case of State of U.P. & Ors. vs. Bridge & Roof

Co. (India) Ltd., no case to interfere with the impugned order, as prayed is made out. The writ petition has no merit and is accordingly, dismissed.Â

No costs.