SATYAM CONSTRUCTIONS LIMITED Vs. GOVT OF ANDHRA PRADESH

JUDGEMENT

(1.) In the writ petition the petitioner-Company assails the action of the respondents in rejecting all the tenders/ bids received pursuant to the tender notice dated 16-8-1993 including that of the petitioner after having issued a letter of acceptance on 25-6-1994 accepting its bid and calling upon the petitioner to enter into an agreement, as arbitrary, illegal and void and seeks a consequential direction to the respondents to award the contract to it as per the letter of acceptance and to pass such other order or orders as are deemed fit and proper.

(2.) There is not much controversy over the facts. The work in question, which is designated as Package L6-15, is a part of the various developmental works envisaged under AP II Irrigation Project which are to be executed with the financial assistance (loan or credit) provided by the International Bank for Reconstruction and Development (World Bank). Tenders for this work were invited by the third respondent (Superintending Engineer) by the tender notice dated

(3.) The value of the work as per the sanctioned estimate was Rs.16,98,72,562.00. In response to the tender notice four bids received including that of the petitioner herein. After evaluation of the bids, the bid of the petitioner with a bid value of Rs.40,85,108.00 was found to be the lowest responsive bid and the same was recommended for acceptance to the Government on 24-12-1993. The Government, after examining the matter in its empowered . committee meeting held on 7-4-1994, decided that the bid of the petitioner may be recommended to the World Bank for their 'No Objection' and accordingly the World Bank was addressed for their 'No Objection' to award the contract to the petitioner. In reply the World Bank vide letter dated 14-4-1994 raised certain queries and requested for a revised recommendation clarifying the matters referred to in the said letter. The empowered committee considered the observations of the World Bank in its meetings held on 26-4-1994, 29-4-1994 and 21-5-1994 and decided to recommend to the World Bank to give their 'No Objection' forwarding the contract of L6-15 to the petitioner. The Government of Andhra Pradesh accordingly instructed the second respondent (Chief Engineer) to obtain the 'No Objection' from the World Bank and furnish the same to the Government for approval. Accordingly the World Bank was addressed by the second respondent on 1-6-1994 and the World Bank gave its clearance to award the contract to the petitioner by telegram dated 24-6-1994. In the said telegram it was also mentioned that the World Bank should be informed by cable as soon as the contract is signed and to forward a copy of the signed contract along with the pre-award check-list to enable the World Bank to review and assign the World Bank Register Number (WBR No). Thereupon respondent No.3 issued the letter acceptance to the petitioner on 25-6-1994 and the petitioner was called upon to furnish (a) Construction Programme and (b) Performance Security in the prescribed form, within 30 days from the date of receipt of the said letter. The petitioner was also requested to be present at the office of the third respondent for execution of contract documents. The petitioner, by letter dated 14-7-1994 addressed to the third respondent, informed that it was ready with the Construction Programme and Performance Security since the last ten days and requested the third respondent to let the petitioner know when the petitioner can sign the agreement, The petitioner subsequently sent reminders on 21-7-1994 and 25-7-1994. It is also stated by the petitioner that it furnished the Construction Programme as well as the Performance Security Bond in the prescribed form initially for the period from 27-5-1994 to 24-1-1998 under the Bank Guarantee No.72 of 94 for a sum of Rs.2,04,26,300.00. The petitioner was finally informed by letter dated 16-12-1996 addressed by the third respondent that all the bids received in respect of Package No.L6-15 are rejected in terms of clause 29.1 of Section 1 of the General and Special Conditions of Contract. By another letter of the same date, the bank-guarantee together with the extension bonds and bank-guarantee for Performance Security furnished by the petitioner were returned in original. Hence this writ petition.