OMAXE CONSTRUCTION LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) A Notice Inviting Tender (for short NIT) was issued by the Public Works Department of the Government of National Capital Territory of Delhi inviting tenders from reputed firms / willing contractors for the work of construction of the Institute of Liver and Biliary Sciences at Vasant Kunj, Sector-D, New Delhi. In response to the aforesaid NIT, the plaintiff herein submitted its tender giving its offer. The validity of the aforesaid bid was extended by the plaintiff from time to time and the last extension was granted by the plaintiff on 20.1.2004 by its letter written on the same day clearly stating that the plaintiff extends the validity of the submitted bid by 30 days from the last date of the already extended validity. The aforesaid bid of the plaintiff was accepted and a communication thereof was sent on 7.2.2004 under the signature of the Executive Engineer. The said communication reads as follows:

(2.) After the receipt of the aforesaid letter, the plaintiff wrote a letter to the Executive Engineer PWD Div-27 on 16.2.2004 thanking him for awarding the aforesaid work to the plaintiff. In the said letter dated 16.2.2004 it was further intimated that the plaintiff had applied for the 5% Irrevocable Performance Guarantee of the tendered amount which is under process and the same would be available to the plaintiff on 28.2.2004. Accordingly, it was requested under the said letter that the period for submission of the bank guarantee be extended by one week i.e. upto 28.2.2004. The said bank guarantee was finally submitted by the plaintiff with the Public Works Department under letter dated 21.2.2004. Interestingly, however, a letter was written by the Finance Officer of the Public Works Department to the plaintiff on 1.3.2004 stating therein that validity of the bid had expired on 21.2.2004 and, therefore, the plaintiff is to extend the validity period of the submitted bid upto 22.3.2004. A response thereto is also shown to have been sent by the plaintiff to the Finance Officer on 4.3.2004 informing him that the plaintiff was unable to extend the validity of its offer in respect of the aforesaid tender beyond the validity period last extended.

(3.) Arguments have been advanced by the counsel for the parties on the legality and validity and merit of the aforesaid two letters, which would be discussed at an appropriate place. The Finance Officer on 11.3.2004 wrote a letter to the plaintiff stating that since the letter of intent and performance Guarantee had already been submitted by the plaintiff to the Executive Engineer, therefore, the letter dated 1.3.2004 should be treated as withdrawn and cancelled. The said letter of 1.3.2004, which was withdrawn and cancelled by the aforesaid letter, is the same letter which was written by the Finance Officer requesting for extending the validity of the bid. On 13.3.2004 and by the subsequent letter dated 15.3.2004, the plaintiff objected to the manner in which the letter dated 1.3.2004 was withdrawn by the Public Works Department. By writing the said letters, the plaintiff informed the defendants that validity of the bid expired on 21.2.2004 and thereafter the said validity period was not extended and since no letter of intent confirming the acceptance of the competent authority as per clause mentioned in page No.81 to 84 was intimated during the validity of the offer period, therefore, it was submitted that no effective concluded contract came into existence between the parties. It was also submitted that since there was no concluded contract between the parties, therefore, the performance bank guarantee, which is submitted by the plaintiff could not be invoked by the Public Works Department.