MANAGING DIRECTOR Vs. JITF URBAN INFRASTRUCTURE LTD.

JUDGEMENT

(1.) The appellant-Corporation has come up questioning the judgement dated 8th January, 2019 in this intra-court appeal contending that the learned Single Judge overlooking the terms and conditions of the Bank Guarantee for Bid Security as contained in Appendix V to the Request for Proposal has arrived at an incorrect conclusion that the invoking of the Bank Guarantee by the appellant was unjustified. The learned Single Judge on the second issue pertaining to black listing the Company also has erroneously set aside the order impugned contrary to the terms and conditions of the agreement.

(2.) Shri Lalit Kishore, learned Senior Counsel for the appellant advanced his submissions urging that the Corporation was well within its authority under the documents executed by the respondent-petitioner to invoke the Bank Guarantee as the respondent-petitioner refused to sign the agreement after the Letter of Award was issued in its favour and was also acknowledged by the respondent-petitioner. This clearly amounted to a failure on the part of the respondent-petitioner as a successful bidder to comply with the terms and conditions contained in the Bidding Documents. It is urged that the Bidding Documents clearly stipulated the execution of a formal agreement after the letter of award, but the respondent-petitioner voluntarily for no default on the part of the Corporation decided to withdraw and not sign the agreement. Consequently, it was not open to the respondent- petitioner to bring about any challenge to the action taken by the appellant-Corporation.

(3.) Shri Sanjay Singh, learned counsel for the respondent- petitioner urged that the appellant-Corporation had concealed the fact of an earlier agreement relating to the same subject matter dated 9th January, 2010 that was continuing with one M/s. A2Z, and that had not been cancelled, with regard to which two writ petitions had been filed, namely, CWJC No.15855 of 2011 and CWJC No.4117 of 2012 and two LPAs arising out of the said writ petitions, namely, LPA No.729 of 2013 and LPA No.1104 of 2012. The thrust of the arguments is that the project involved a heavy investment and was a high risk financial venture, but without disclosing this background about the project involving the same subject matter, the Corporation virtually by suppressing these material facts made a deliberate misrepresentation by not disclosing the same either in the Request For Proposal documents or in the advertisement or at any stage of the proceedings prior to the issuance of the letter of award. The respondent-petitioner was kept in dark about the same and which litigation had a direct impact on the new contract and, therefore, the respondent- petitioner was well within its rights to seek withdrawal before signing of the formal agreement. Thus, according to the respondent-petitioner, it was in the said background that the respondent-petitioner was compelled to seek refund of its security amount and to drop out from the negotiations any further. It is also urged that the order of black listing is without any justification and clearly in teeth of the ratio of the judgements of the Hon'ble Apex Court. Hence, the learned Single Judge on both counts has rightly allowed the writ petition directing the appellant-Corporation to refund the bid security amount that has been encashed by it through a bank guarantee and has further rightly quashed the decision of the appellant-Corporation relating to the black listing of the respondent-Company.