SAINIK MINING ALLIED Vs. MAHANADI COAL FIELDS LTD

JUDGEMENT

(1.) IN this writ application, the petitioner-company challenges the letter dated 02.03.2009 under Annexure-1 issued by opposite party no.2, General Manager (Technical Co-ordination), Mahanadi Coalfields Limited (in short 'M.C.L.') threatening to initiate action towards cancellation of contract, forfeiture of earnest money and taking up the contract work at petitioner's risk and cost. The further prayer is to direct the opposite parties to release petitioners' all previous dues concerningdifferent earlier works

(2.) THE case of the petitioner is that the opposite parties,Mahanadi Coalfields Limited and its functionaries issued notice dated26.3.2008 under Annexure-2 inviting tender under Ref. No.MCL/SBP/GM(TC)/NIT-477/2008/2008 for the work Extraction and Transfer ofCoal/Coal measure strata by deploying "Surface Miners" on hiring basisat Kulda OCP, Basundhara- Garjanbahal Area of M.C.L. In pursuance ofthe notice the petitioner participated in the tender process and havingbeen found qualified in both technical and price bids, the said work wasawarded in its favour and acceptance of petitioner's bid wascommunicated by the opposite parties in their letter dated 31.10.2008under Annexure-3. THE petitioner company issued letter dated12.11.2008 acknowledging receipt of opposite parties' letter underAnnexue-3. THE opposite parties also issued work order dated 04.11.2008vide Annexure-5. In the work order the opposite parties acknowledgedreceipt of the earnest money of Rs.7,55,600/- deposited by the petitionerand also asked the petitioner to deposit a further sum of Rs.25,35,732/-,since as per the terms of the bid, the contractor was to depositperformance security @ 5% of annualised value of contract vide letterdated 03.12.2008. In their letter under Annexure-6, the opposite partiesfurther instructed the petitioner for submission of the aforesaidperformance security amount at M.C.L. Headquarters in the form ofDemand Draft. THE petitioner was also further reminded in the said letter to submit other documents like Indemnity Bond, Insurance, updated R.C.Books and fitness certificate of the fleet for execution of agreement. It is the further case of the petitioner that the petitioner-company had executed various works under M.C.L. earlier since 1998 forwhich a sum of about Rs.15.00 crores (roughly) was due to the petitionerfrom the opposite parties, which the latter have not yet released, forwhich the petitioner-company could not furnish the performance securityof Rs.25,35,732/- in connection with the present contract because of itsfinancial stringency. THE petitioner, therefore, in its letter dated13.12.2008 under Annexure-8 requested the opposite parties for 15 daystime beyond 15.12.2008 for maintenance and repair ofmachine/equipments before starting execution of the work. On receipt ofthe aforesaid letter, the opposite parties requested the petitioner vide theirletter dated 17.12.2008 under Annexure-9 to start the work latest by26.12.2008 and also to fulfil the formalities like submission of securitydeposit and the required papers concerning execution of agreement. THEpetitioner-company having expressed their helplessness in arrangingfinances intimated vide letter dated 19.1.2009 under Annexure-12 thatthey were not in a position to take the contract work. In reply, theopposite parties in their letter dated 20.1.2009 (Annexure-13) requestedthe petitioner to start the work within 15 days failing which action wouldbe taken for forfeiture of earnest money as per Clause No.6.1 of GeneralTerms and Conditions of the bid document. THEreafter, the petitioner-company having failed to start the work, the opposite parties issued the impugned letter dated 02.03.2009 (Annexure-1) requesting the petitionerto start the work within 15 days of the issue of the said letter, failingwhich M.C.L. would be compelled to initiate action towards cancellation ofcontract, forfeiture of earnest money deposited and taking up of the workat the risk and cost of the petitioner-company.