Sharma Engineers A Sole Proprietorship Firm vs. State Of Uttarakhand
Held
The Court held that the financial bid of respondent no. 4 was not without consideration. The amounts quoted for minimum wages, EPF contribution, and ESI contribution constitute valid consideration for the contract. The Court observed that the petitioner is a stranger to the contract and therefore cannot challenge the adequacy of consideration. The ground of challenge, that the consideration is inadequate or absent, is available only to the party who entered into the contract, not to a third party. The Court found no reason to interfere with the decision and dismissed the writ petition.
Facts
Sharma Engineers, a sole proprietorship firm, filed a writ petition challenging the decision of the Superintending Engineer, Electricity Distribution Circle, Dehradun (respondent no. 3) to award a contract for maintenance and operation of power substations and lines to respondent no. 4. The petitioner argued that respondent no. 4's bid was void as it did not claim any service charge or profit, thus violating Section 25 of the Contract Act, 1872, making the agreement without consideration. The bid of respondent no. 4 included amounts for minimum wages, EPF, and ESI contributions, with a stated profit of 0.00 and 'GST Extra'. The petitioner was the only other bidder, and respondent no. 4 was the lowest bidder.
Key Issues
1. Whether the financial bid submitted by respondent no. 4, which quoted zero profit, renders the contract void for want of consideration under Section 25 of the Contract Act, 1872, thereby invalidating the award of the contract by respondent no. 3? Petitioner's contention: The petitioner argued that since respondent no. 4 did not claim any service charge or profit in its bid, the agreement would be without consideration and therefore void under Section 25 of the Contract Act, 1872. The petitioner relied on Section 25 of the Contract Act, 1872. Respondents' contention: The respondents did not explicitly record any arguments in the judgment. However, the Court's reasoning implies that the amounts quoted for wages, EPF, and ESI contributions constituted valid consideration, and the petitioner, being a stranger to the contract, could not raise the issue of consideration inadequacy.
Sections Cited
Section 25
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition (M/S) No. 2542 of 2020
Sharma Engineers. …..Petitioner
Versus
Sate of Uttarakhand and others ....Respondents
Mr. Shashank Pandey, Advocate for the petitioner. Mr. T.S. Phartiyal, Additional C.S.C. for the State of Uttarakhand. Mr. N.S. Pundir, Advocate for respondent nos. 2 & 3. Dated: 31st December, 2020 Hon’ble Manoj K. Tiwari, J.
Heard learned counsel for the parties through video conferencing.
This writ petition has been filed by Sharma Engineers, which is a sole proprietorship firm based at Dehradun.
Petitioner responded to a Notice Inviting Tender issued by Superintending Engineer, Electricity Distribution Circle, Dehradun for the work of “maintenance/ operation of 33/11 KV Sub Stations, associated HT/LT lines, attending breakdowns & complaints of consumers under EDD, Mohanpur against O&M head”.
According to the petitioner, in addition to him, there was only one more bidder, namely, respondent no. 4, whose technical bid was found to be responsive. Since respondent no. 4 was found to be
The judgment continues below.
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