- (1.) Petitioner is before this Court for a direction to declare the termination letter dated 2.7.2014 along with Para 19 (a) preamble and tender clause 1.1.16 as unconstitutional with further direction to the respondents to refund the earnest money deposited.
(2.) It appears from the record that respondent no.2 namely Central Organization Railway Electrification, Allahabad has issued a tender for supply, erection, testing & Commissioning of 25 KV, 50 Hz, Single Phase, AC Electrification Works including OHE, TSS 7 SCADA on 26.3.3003. In response to the said tender notice, the petitioner submitted its tender/offer by letter dated 20.5.2013. It is averred that the respondent no.2 had requested the petitioner several times to extend the validity of its offer, which was expiring and every time the petitioner confirmed the extension of validity of its offer. Ultimately, on 20.03.2014 the respondent no.2 sent letter of acceptance to the petitioner in respect of the offer made by the petitioner by letter dated 20.05.2013 after deletion of supply of 5 power transformers from the tendered TSS works. The petitioner on 25.3.2014 sent a letter for reinstating/ restoring the above mentioned deleted portion of the tender. The respondent no.2 sent a letter dated 27.3.2014 to the petitioner to submit Performance Bank Guarantee etc. Thereafter, the respondent no.2 sent a letter dated 2.4.2014 stating that in accordance with Clause 1.1.16 of the tender, the purchaser (respondent no.2) reserved the right to accept any tender in respect of the whole or any portion of the work specified in the tender papers and further requesting the petitioner to submit Performance Bank Guarantee. The respondent no.2 sent another letter dated 25.4.2014 to the petitioner to submit Performance Guarantee. On 7.5.2014 the petitioner sent a representation to the General Manager of the respondent no.2 requesting for giving an opportunity to explain the contention of the petitioner for restoration of the deleted portion of the tender work. The respondent no.2 by letter dated 20.5.2014 declined to accept the request of the petitioner for restoration of the deleted portion of the tender work and again directed to submit the performance bank guarantee without delay to execute the contract agreement. The petitioner sent a letter dated 21.5.2014 and has affirmed for submitting the performance bank guarantee and requested not to charge penal interest for the delay caused in submitting the performance bank guarantee. Thereafter, the petitioner had submitted the Performance Bank guarantee to respondent no.2 explaining the exact reason of delay in submitting the Performance Bank Guarantee within stipulated time. Consequently, by impugned letter dated 2.7.2014 the contract in question has been terminated and earnest money deposit has been forfeited. Against the same the petitioner has sent legal notice dated 30.07.2014 to the respondent no.2, which was replied on 8.10.2014. Shri Pranjal Mehrotra, learned counsel for the petitioner has challenged the impugned order by submitting that a binding contract, which was entered into between the parties, it was not open to the respondents to delete any part of the tender work, and the petitioner was entitled to execute the entire tender work without any deletion. Having sought extension of validity of offer of the petitioner from time to time and the letter of acceptance having been issued thereafter, it was not open to the respondents on still insisting on deletion of part of tender work. He also apprised to the Court that Tender Clause 1.1.16 provides blanket power to the respondent no.2 and the same is wholly arbitrary and unconstitutional. The action of respondent no.2 is in violation of principle of natural justice. He further made submission that respondent no.2 has not given proper and appropriate reply to para 7 of the legal notice dated 30.07.2014 on the issue of sub clause no.1.2.20.2 for "TSS and SCADA Work" wherein it is clearly specified that railway can supply any equipment, components or materials upto the maximum 10% of the total value of the contract and the 10% of the total value of the contract come to 586.74 lacs and item deleted by the respondent no.2 is for the value of 953.06 lacs and the respondent has given vague reply to the above mentioned para by quoting clause 1.1.16 in support of their termination letter. In support of his submissions, learned counsel for the petitioner has relied upon the judgment of Hon'ble Supreme Court in Union of India & Ors. v. Tantia Construction Provate Ltd., 2011 5 SCC 697 .
(3.) On the matter being taken up today, from the side of the respondents various Division Bench Judgment has been cited ranging from judgment in Writ Petition No. 37639 of 2014 (Sant Lal Yadav Vs. State of U.P. and others) decided on 23 July 2014, Writ Petition No. 25126 of 2014 (M/s Surya Construction Vs. State of U.P. and others) decided on 2 May 2014, Writ Petition No. 15127 of 2014 (M/s M.K. Enterprises Vs. State of U.P. and others) decided on 11 March 2014, Writ Petition No. 11544 of 2014 (M/s R.S. Associate Vs. State of U.P. and others), Writ Petition No. 66545 of 2013 (M/s Bundelkhand Engineering Works Vs. State of U.P. and others) and the judgment of the Apex Court in the case of Kerala State Electricity Board & another Vs. Kurien E. Kalathil & others, 2000 AIR(SC) 2573 for the proposition that in contractual matters the matter should be sent either of adjudication by a civil court or in arbitration, if provided for in contract, as all these questions whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in writ petition and the contractor should have been relegated to other remedies. Once such is the view of the Apex Court and same view has been taken by this Court time and again, then in all these matters, when the rights of the parties are governed by the terms and conditions of the contract and contractor is complaining illegal termination of contract and refund of earnest money, the remedy, in normal course of business, is to get the dispute resolved by the arbitrator and, in case, there is no such provision, then by filing civil suit. In view of this, as far as we are concerned, following the same set of reasoning given in the aforementioned cases, we are not at all entertaining the present writ petition and we relegate the petitioner to pursue his remedy before the civil court or, if there is an arbitration agreement, to invoke the terms of the agreement by getting Arbitrator appointed;