M/S Praveen Kumar Jain vs. State Of U.P. And 3 Others

Held

The Court held that the petitioner's objection regarding GST was submitted for the first time on 15.09.2017, after the bid was accepted on 04.09.2017 and loaded on the website. Since the petitioner failed to comply with the contract terms after submitting his bid, the cancellation of the bid by the respondents was justified. The forfeiture of the security amount was also deemed correct as per Clause 30.3 of the ITB. Regarding the principles of natural justice, the Court noted that while notice and opportunity are generally required, they are not necessary if no prejudice is caused to the petitioner. The Court found that no prejudice was caused to the petitioner due to the absence of a hearing, and remitting the matter back to the authority would be futile as the defect was incurable and the outcome would not change. Therefore, the order dated 24.10.2017 did not warrant interference under Article 226 of the Constitution.

Facts

The petitioner, M/s Praveen Kumar Jain, a registered Class A Government Contractor, challenged an order dated 24.10.2017 by the Superintending Engineer, Rural Engineering Department, Meerut Division. The petitioner sought to direct the respondent to execute an agreement for package no. 5257, adding the GST amount to his bid. The petitioner submitted a tender for upgrading the Meerut-Karnal road. His bid, accepted on 7.10.2017, did not include GST. The petitioner applied for its inclusion on 10.10.2017. The respondent issued a letter on 12.10.2017 threatening action if performance security was not submitted by 16.10.2017. The petitioner reiterated his stance on 14.10.2017. Subsequently, the respondent rejected the petitioner's claim and forfeited his security amount on 24.10.2017.

Key Issues

1. Whether the order dated 24.10.2017 passed by the respondent no.4 is illegal and arbitrary, particularly concerning the forfeiture of the security amount and rejection of the petitioner's claim for GST inclusion. (Question of law and fact, concerning contract terms and GST applicability). Petitioner's arguments: The order forfeiting security was illegal as the agreement was not executed and GST implementation made its inclusion mandatory. The security could not be forfeited as the bid itself was not accepted. The order was passed without notice or reasons. Respondent's arguments: The petitioner applied for tenders after reviewing standard bidding documents for PMGSY. GST was not included as it was not invoked when bids were invited. The petitioner was duty-bound to execute the bond after being declared the successful bidder, and failure to do so justified action under Clause 30.3. Clause 13.3 of the bid document mandates that all duties, taxes, and levies be included in the bid price. The order dated 24.10.2017 is valid.