STARMIN RESOURCES PVT. LTD., REPRESENTED BY ITS EXECUTIVE MARKETING SRI. L. SHERIFF FAZIL Vs. THE MYSORE PAPER MILLS LTD.

JUDGEMENT

(1.) THE Petitioner has challenged the order dated 28 -12 -2009 vide Annexure -P issued by the Respondent blacklisting the Petitioner -Firm for a period of 2 years and also sought for direction to the Respondent to refund the EMD amount of Rs. 5.00 lacs, which was forfeited by the Respondent.

(2.) THE Petitioner is a Company incorporated under the Companies Act. It is engaged in the business of importing and supplying of Indonesian Steaming Coal. On 11 -8 -2009 the Petitioner -Company received a communication from the first Respondent informing the Petitioner that they have floated a tender on 5 -8 -2009 for purchase of 45,000 MT on Non -coking steaming imported coal. The said tender was also published in the newspaper Economic Times and requested the Petitioner to participate in the said tender. Pursuant to the same, the Petitioner participated in the tender. The Respondent vide letter dated 10 -10 -2009 informed the Petitioner that their offer has been qualified for e -Reverse auction and Price Bid opening. The e -Reverse auction was scheduled to be held on 12 -10 -2009 between 2.00 p.m. and 3.00 p.m. The Price Bids were scheduled to be open between 4.30 p.m. to 5.30 p.m., on 12 -10 -2009 at the Corporate Office of the Respondent. Thereafter, the Petitioner was requested to meet the Respondent on 15 -10 -2009 for discussions. On 15 -10 -2009, the Petitioner received a Letter of Intent from the Respondent for supply of 56,250 MT + 10% at the rate of Rs. 4.140/ - per MT totaling to Rs. 25,61,62,500/ - and the said Steaming Coal shall be delivered at New Mangalore Port. In their letter, they also requested the Petitioner that the stock of coal in the Respondent -Company is alarming and the Petitioner was requested to send 3 rakes of imported coal approximately 12,000 MTs from the Petitioner's stock at Vishakhapatnam as per the specification in the tender notification. Further, the Respondent issued a Letter of Intent for additional supply of coal of 11,250/ - MT of coal. Thereafter, the Respondent by their letter dated 22 -10 -2009 issued work order for transportation of the coal and other purposes. Further, they also requested the Petitioner to sign the agreement. However, the Respondent has failed to accept the coal, which was stocked in the Vishakhapatnam Yard on the ground that it was not up to the qualified standard prescribed by the Petitioner. The Respondent insisted upon the Petitioner to supply the non -coking steaming coal, since the Respondent was in urgent need of the same. However, the Respondent refused to accept the coal, which was in stock at Vishakhapatnam Yard. In view some technical problem, the Petitioner could not supply the non -coking steaming coal as per the Letter of Intent made by the Respondent. Due to unforeseen circumstances, the Petitioner -Company regrets their inability to accept the Letter of Intent and also sought for an excuse for the inconvenience caused to them. Though the Respondent had accepted the tender of the Petitioner -Company, the Petitioner has not signed any agreement as per the terms and conditions, Further, the Bank Guarantee was also not furnished by the Petitioner. The Respondent insisted upon the Petitioner to supply the coal before entering into any agreement and also before furnishing the Bank Guarantee. In view of the practical difficulty, the Petitioner -company could not import non -coking steaming coal from Indonesia. Accordingly, by their communication dated 18 -11 -2009 expressed their inability to import the Steaming Coal.

(3.) THE Respondents have filed detailed statement of objections contending that pursuant to the tender notification issued by the Respondent, the Petitioner has deposited the EMD amount and participated in the tender. As the Petitioner was a successful tenderer, the Letter of Intent was issued for supply of non -coking Steaming Coal since the stock of coal in the Respondent -company was alarming. The Petitioner accepted the letter of Intent and agreed to supply the same. However at the nick of the moment, they expressed their inability to supply the coal though they were the successful bidder. Because of the action of the Petitioner, the Respondent suffered huge loss to the tune of Rs. 1,31,40,100/ - and they had to purchase the coal from some other company at higher rate. The Petitioner -company has agreed to supply the coal at the rate of Rs. 4,140/ - per MT. As per the conditions of the tender notification, if the successful tenderer fails to sign the contract within 21 days of receipt of the Contract Form, the EMD amount deposited by the Petitioner can be forfeited. Further as per Clause 13.7 of the tender agreement, if a Tenderer withdraws their tender during the period of tender validity specified by the Tenderer on the Tender form or does not accept the correction of errors pursuant to instructions to tenderer or in case of a successful Tenderer, if the Tenderer fails to sign the Contract in accordance with the instructions to the Tenderers Clause 30; or to furnish performance security in accordance with the instructions to the Tenderers, the Earliest Money Deposit can be forfeited and they can be blacklisted. In the instant case, having participated in the tender proceedings and being the successful bidder and after accepting Letter of Intent, the Petitioner cannot go back and express their inability to supply the Coal. In view of the action of the Petitioner, the Respondent had to purchase the coal by paying higher rate. The action of the Petitioner caused loss of more than Rs. 1,31,40,100/ - Taking into consideration all these aspects of the matter, the Respondents have passed the order blacklisting the name of the Petitioner -Company for a period of 2 years, by forfeiting the EMD amount. There is no irregularity or infirmity in the order passed by the Respondent and sought for dismissal of the writ petition.