A.S Multi Services vs. Union Of INDIA & Ors.
Held
The Court held that the writ petition lacked merit and was accordingly dismissed. The Court noted that the petitioner did not furnish the performance guarantee within the stipulated period of 60 days as per the allotment letter, which expired on 01.02.2021. The petitioner repeatedly sought extensions, citing economic crisis due to COVID-19. The Court found that the termination notice was issued in March 2021 due to the petitioner's failure to deposit the performance guarantee. Crucially, the Court observed that it was nowhere stated in the petition or arguments that the petitioner had offered the reduced 3% performance guarantee and that the respondents had refused to accept it. Therefore, the petitioner's failure to comply with the terms of the allotment letter regarding the performance guarantee deposit was the basis for the termination, and the petitioner's pleas regarding the circulars and reduced guarantee were not substantiated with evidence of a refused offer.
Facts
The petitioner, A.S Multi Services, filed a writ petition challenging a termination notice dated 24.03.2021 issued by Respondent No. 2 (Indian Railways). This notice cancelled the petitioner's bid pursuant to a tender notice dated 11.08.2020 and a letter of allotment dated 02.12.2020. The petitioner sought the refund of Rs. 8,64,652/-. The petitioner argued that the termination was contrary to a circular dated 29.09.2020, which granted extensions due to COVID-19. The petitioner also sought to pay a reduced performance guarantee of 3% instead of 5%, as per a Ministry of Finance office memorandum, and requested more time for deposit. The Railways contended that the petitioner failed to deposit the performance guarantee within the stipulated 60 days from the allotment letter, which expired on 01.02.2021, and the termination was for this failure.
Key Issues
1. Whether the termination notice dated 24.03.2021, cancelling the petitioner's bid and allotment letter, is contrary to the circular dated 29.09.2020 issued by Respondent No. 2, which provided for extensions due to COVID-19. 2. Whether the petitioner was entitled to deposit a reduced performance guarantee of 3% and was wrongly denied further time to do so, in light of the Ministry of Finance's office memorandum and subsequent instructions for commercial contracts in Indian Railways. Petitioner's Arguments: The petitioner argued that the termination notice violated the spirit and letter of the circular dated 29.09.2020, which allowed for extensions in finalizing tenders due to adverse circumstances like COVID-19. They further contended that subsequent instructions from the Ministry of Finance and Indian Railways, reducing the performance guarantee to 3% for contracts issued until 31.12.2021, should have been applied, and they should have been granted more time to deposit this reduced amount. They relied on the circular dated 29.09.2020, the Ministry of Finance's office memorandum (Annexure No. 5), and the Indian Railways' notification dated 04.02.2021. Respondent's Arguments: The respondent-Railway argued that the allotment letter required the petitioner to deposit a 5% performance guarantee within 60 days, which expired on 01.02.2021. They stated that the petitioner's plea for extension could not be considered as the deadline had passed. They also noted that it was not stated that the petitioner offered the reduced 3% performance guarantee and that the respondents refused to accept it.
Sections Cited
Rule 171
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Court No. - 39 Case :- WRIT - C No. - 14963 of 2021 Petitioner :- A.S Multi Services Respondent :- Union Of India & Ors.
Counsel for Petitioner :- Pankaj Kumar Counsel for Respondent :- Rajnish Kumar Rai Hon'ble Mrs. Sunita Agarwal,J.
Hon'ble Mrs. Sadhna Rani (Thakur),J.
By means of the present writ petition, the petitioner seeks to challenge the termination notice dated 24.03.2021 whereby the bid offered by the petitioner pursuant to the tender notice dated 11.08.2020 and the letter of allotment dated 02.12.2020 had been cancelled.
Further prayer in the writ petition is as follows:- "(b) Issue Writ, Order or Direction in the nature of Mandamus directing the Respondent No.2 to refund an amount of Rs. 8,64,652/- in terms of the Rule 171 of GRPs 2017"
The contention of learned counsel for the petitioner is that the respondent No.2 had issued a circular dated 29.09.2020 providing therein that in all such cases where tender could not be finalized within time i.e uptil 10.11.2020 in the prevailing adverse circumstances due to Covid-19, extension of 30 days uptill 09.12.2020 shall be granted. It is contended that the termination order is contrary to the said circular. Further, after issu
The judgment continues below.
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