Gandharva Infrastructure And Projects Limited vs. Unoin Of INDIA & Ors.

Facts

The Petitioner, Gandharva Infrastructure and Projects Limited, participated in a tender issued by Respondent No. 3, Master Control Facility (MCF), for construction works. The Petitioner submitted its bid on July 25, 2019, depositing Rs. 28,02,000/- as Earnest Money Deposit (EMD). On August 5, 2019, the Petitioner informed Respondent No. 3 of a clerical error, stating that the GST component was inadvertently omitted and requested to modify the bid amount. Despite this, on August 6, 2019, Respondent No. 3 issued a work order accepting the Petitioner's initial offer of Rs. 16,92,35,282.70/-. The Petitioner continued to pursue the matter through subsequent letters. On November 13, 2019, Respondent No. 3 cancelled the work order due to non-fulfillment of contract conditions and forfeited 100% of the EMD. The Petitioner then approached the High Court challenging this forfeiture, arguing that only 50% of the EMD could be forfeited as per Clause 16 of the tender document.

Held

The Court held that the Petitioner's omission to include the GST component in its bid was not an "inadvertent mistake" in the legal sense that would warrant relief. The Court reasoned that any person exercising ordinary care and diligence would not omit the GST component. Furthermore, the Petitioner did not act promptly, as they informed the authority of the alleged mistake 10 days after participating in the tender and exactly one day before the bid was accepted. The Court distinguished the present case from the Apex Court judgment in M/s Shrushti Works and Constructions v. State of Maharashtra & Ors., noting that in that case, the error was discovered and revised within minutes of submission, whereas here, the Petitioner sought to modify the bid after the bids were opened and after the work order was issued. The Petitioner's withdrawal on October 1, 2019, occurred after their offer had been accepted. Therefore, the Court found no infirmity in Respondent No. 3's decision to forfeit 100% of the EMD. The petition was dismissed.

Key Issues

1. Whether the Petitioner's omission to include the GST component in its bid constitutes an "inadvertent mistake" that warrants relief from forfeiture of EMD, particularly in light of Clause 16 of the Notice Inviting Tender (NIT)? (Question of law and fact, turning on the interpretation of "inadvertent mistake" and the application of Clause 16 of the NIT). Petitioner's Contention: The Petitioner argued that the omission of the GST component was an inadvertent clerical error. They relied on the Supreme Court's decision in M/s Shrushti Works and Constructions v. State of Maharashtra & Ors., which held that forfeiture of EMD on account of inadvertent mistakes in a tender cannot be sustained. The Petitioner also contended that Clause 16 of the NIT stipulated that only 50% of the EMD could be forfeited in case of withdrawal or modification of terms not acceptable to the department. Respondents' Contention: The respondents did not explicitly record arguments in the provided text, but their actions (cancelling the work order and forfeiting 100% EMD) indicate a stance that the Petitioner's actions did not qualify for relief and that the forfeiture was justified. The Court's analysis suggests the respondents likely argued that the omission was not an inadvertent mistake, that the Petitioner did not act promptly, and that the Petitioner ultimately withdrew from the contract after the bid was accepted.