ATLANTA LIMITED Vs. UNION OF INDIA AND ANR

JUDGEMENT

(1.) The writ petitioner is aggrieved by clause 2.1.19 of the tender conditions stipulated by the second respondent, National Highway Authority of India ("NHAI" in short) and impugns it as arbitrary.

(2.) The facts in brief are that the petitioner is incorporated under the Companies Act, 1956, and has a diversified work portfolio: Engineering, Procurement, Construction (EPC) & Realty, involved in executing Public Private Partnership (PPP) Infrastructure Development Projects. The petitioner responded to a tender taken out by NHAI for construction, operation and maintenance of six laning from 401.200 km to 494.410 km of NH-8 in the State of Gujarat on Hybrid Annuity basis. In terms of Article 20 of the "Request for Proposal", the Petitioner furnished a bid security of Rs. 10,93,00,000/- (Rupees Ten Crores Ninety Three Lakh Only). The petitioner's bid was accepted and the Letter of Award(LOA) was issued on 24.01.2017.

(3.) In terms of the RFP and LOA, the Petitioner incorporated Sabarkantha Annuity Private Limited (SAPL), for project implementation and execution of the concession agreement. The Concession Agreement was executed between NHAI and SAPL on 28.04.2017. In terms of Clause 9.1 of the RFP the petitioner had to furnish a Performance Security Bank Guarantee, amounting to Rs. 64.60 Crores from a bank within 30 days of the date of agreement on or before 27.05.2017. The petitioner requested for extension of time on 25.05.2017, to submit the performance security; NHAI agreed, by letter, dated 007.2017. It later submitted two bank guarantees in the sum of Rs. 8 crores and Rs. 6.6 crores by its letter dated 01.07.2017. By the said letter, the Petitioner contended that it would furnish the performance seeking guarantee for the balance amount of Rs. 50 crores from State Bank of India in due course, on the premise that a proposal for the same was pending before the Wholesale Bank Credit Committee of SBI. Thereafter, the Petitioner sought for further time to furnish the balance performance guarantee on 08.07.2017. NHAI gave a final opportunity to the Petitioner to deposit the balance performance guarantee in the sum of Rs. 50 crores within five days failing which action as contemplated under Clause 9.1.2 of the concession agreement and termination of the agreement would be initiated. The petitioner failed to comply with this requirement and informed NHAI, on 14.09.2017, that performance bank guarantee limit of Rs. 50 crores had been sanctioned by Punjab & Maharashtra Cooperative Bank Ltd. and the same would be submitted on 20.09.2017. NHAI insisted that the Concessionaire must only furnish a bank guarantee issued only by a nationalized or scheduled commercial Bank, and, therefore, the contract was liable to termination as per Clause 9.1.2 of the Concessionaire Agreement. On 15.09.2017 NHAI terminated the said contract. Aggrieved, the Petitioner filed W.P.(C) No. 8327/ 2017 before this Court, claiming directions to the NHAI to either accept the Bank Guarantee furnished by the Petitioner from Punjab Maharashtra Cooperative Bank or, direct the extension of time so as to enable the Petitioners to get the Bank Guarantee from a nationalized bank as demanded. A restraining order against NHAI not to take any coercive steps in the matter including termination of the contract and invocation of Bank Guarantees (Bid Securities) was sought.