(Prayer: Plaint filed under Order VII Rule 1 C.P.C. read with Order IV Rule 1 of the High Court Original Side Rules praying for:

(a) Pay to the plaintiff the sum of Rs.17,03,92,315/- (Rupees Seventeen Crores Three Lakhs Ninety Two Thousand Three Hundred and Fifteen Only) together with interest @ 15% per annum on a sum of Rs.14,13,00,000/- from the date of the plaint till date of realization.

(b) pay costs of this suit; and

(c) pass such further or other orders as this Hon'ble Court may deem fit and proper in the circumstances of the case and thus render justice.)

1. The suit has been filed for recovery of a sum of Rs.17,03,92,315/-.

2. The brief facts of the plaintiff case as follows:-

The defendant in order to execute a project named “Sethusamudram Ship Channel Project”, invited Global Tenders on 09.07.2005 from the contractors interested in undertaking and executing the said project. The entire project involved three different works i.e., Work 'A', Work 'B', and Work 'C'. Work 'A' consisted of dredging the shipping channel from Gulf of Mannar to Adam's Bridge, i.e., chainage from 0m to 11000m for the project; Work 'B' consisted of dredging the shipping channel from Adam's Bridge to Palk Bay, i.e., chainage from 11000m to 35050m and Work 'C' consisted of dredging the shipping channel from Palk Bay to Palk Strait, i.e., Section E to E3 for the project. All the Works were distinct and separate works and were tendered by the defendant.

ii) The plaintiff received the tender documents from the Chief Engineer of the defendant on 21.07.2005 and submitted the required bids, i.e., Technical Bids and Price Bids on 03.10.2005. Prior to the submission of the tender bids both technical and financial, there were pre-bid meetings and discussions of the plaintiff's representation with the defendant's representatives. As required by the tender conditions, the plaintiff enclosed the Bank Guarantee in respect of the Earnest Money Deposits in the following manner:-

(a) Bank Guarantee No.0007BG 00192605 dated 26.09.2005 for Rs.3.78 Crores along with an Amendment to the said Bank Guarantee dated 29.09.2005 issued by the ICICI Bank, New Delhi, in respect of Work 'A' of the Project;

(b) Bank Guarantee No.0007BG 00192505 dated 26.09.2005 for Rs.6.46 Crores along with an Amendment to the said Bank Guarantee dated 29.09.2005 issued by the ICICI Bank, New Delhi, in respect of Work 'B' of the Project; and

(c) Bank Guarantee No.0007BG 00192705 dated 26.09.2005 for Rs.3.89 Crores along with an Amendment to the said Bank Guarantee dated 29.09.2005 issued by the ICICI Bank, New Delhi, in respect of Work 'C' of the Project.

3. It is the case of the plaintiff that while submitting the tender bids, the plaintiff duly notified the defendant about its reservations and qualifications in respect of the various terms and conditions of the tender for all the three different Works. Prior to submission of the bids by the plaintiff and other bidders, there was a meeting on 17.08.2005, in which various points of the tender documents were discussed and clarifications were provided by the defendant. The technical bids were opened by the defendant on 03.10.2005, thereafter they were called by the defendant for a meeting on 14.10.2005 at Chennai to discuss the various points of the bid documents and the said meeting was attended by the plaintiff along with other bidders on the one part and the Chairman of the defendant and its Tender Committee Members on the other part. Thereafter, by letter dated 17.10.2005, the defendant listed out the various modifications in the terms and conditions accepted by the defendant. The defendant also requested the plaintiff to send the estimate of additional costs that will be required to be paid by the defendant due to the changes made in the bid conditions. In response to the said letter dated 17.10.2005, the plaintiff by its letter dated 18.10.2005, asked for extension of time for submission of the required details including additional costs and price implications. Subsequently, on 25.10.2005, the plaintiff submitted its detailed response to the letter dated 17.10.2005 of the defendant. The defendant also wrote a letter dated 02.11.2005. On 06.11.2005, the meeting held at Chennai, the plaintiff and other bidders also took part and various issues were discussed and agreed upon by the defendant and duly minuted. The plaintiff in the letter dated 25.11.2005 in respect of Work 'A' of the project, accepted all other stipulations of the defendant and they wanted to discuss in respect of Work 'B' and 'C' of the project and there were several meetings between the the plaintiff and the defendant in this regard and the parties were only negotiating on the terms and conditions of the tender bid and both the parties were modifying/requesting for modification of the tender conditions due to bonafide and genuine reasons and there has been no acceptance of any of the bids of the plaintiff by the defendant and no contract has been concluded between the plaintiff and the defendant. The bid terms and conditions could not have been finalized without a joint soil investigation for its hardness. The defendant, on its own, abandoned and withdrew the entire Tender Process for the project for re-tendering the same after further sub-soil investigations and re-casting the tender document. In a meeting, dated 17.01.2006 the defendant informed the bidders that it will return the Earnest Money Deposits received by it under the withdrawn tender process, to all the four bidders upon receipt of official approval from the Ministry of Shipping. While so, the defendant high-handedly and arbitrarily wrote a letter dated 17.03.2006, to the ICICI Bank, New Delhi and invoked the Bank Guarantee and received a sum of Rs.14.13 Crores from the said Bank. Despite several request made by the plaintiff, the amount has not been paid by the defendant. Hence, the suit.

4. It is the case of the defendant that the technical bids which specifically provides that the “Instruction to Tenderers shall form part of the Contract”. As per Clause 12 of Section 1 – Technical Bid, Instruction to Tenderers, the tenderer shall not give any qualifying condition in his bid. If any qualifying conditions are included in the bid, the same shall be treated as non-responsive. Therefore, the bids submitted by the plaintiff has become non-responsive and liable for rejection. The defendant in the pre-bid meeting held on 17.08.2005 has answered for more than 221 queries covering major technical commercial issues. The technical issues clarified include details regarding soil conditions and its hardness. Clause 11 of Section 2 of General Condition specifically provides that it is the responsibility of the tenderer before submission of the bid to obtain details relating to data on hydrographic and sub-seabed conditions. It is specifically provided in the tender that the contractor shall be deemed to have based his tender on the data made available by the Engineer and on his own inspection and examination. It is the further condition of the defendant that as per the request of the bidders the date of receipt of tender was postponed thrice from 31.08.2005 and finally tender was opened on 03.10.2005. Subsequently, the defendant called the bidders on 14.10.2005 and discussed various issues and finally the defendant accepted some conditions of the bidders and withdraw some conditions. Based on this, defendant required all the bidders to submit their additional cost due to change in conditions in a sealed cover on or before 19.10.2005. But all bidders requested time upto 25.10.2005. Accordingly, extension of time was granted upto 26.10.2005. The second tender committee meeting was held on 26.10.2005. Out of the EMD remitted by the four pre-qualified firms, finally the defendant decided to accept the Bank guarantee of the plaintiff only. The plaintiff and M/s.Jan De Nul NV and M/s.Boskalis BV joint venture only. The above two bidders were called for further discussion on 05.11.2005 and 06.11.2005 to withdraw all the conditions other than those conditions accepted by the defendant and meeting held at Chennai on 14.10.2005, the defendant had agreed to withdraw/modify certain conditions of the tender and based on such modification requested the plaintiff to withdraw all the conditions put forth by them and submit discount offer separately in a sealed cover for modification in tender conditions. In the letter dated 19.11.2005, the defendant again requested the plaintiff to withdraw all the conditions and submit discount offer separately. Again on 16.12.2005, the opening of price bid was communicated to the plaintiff with a specific mention that the plaintiff should withdraw all the conditions put forth by them except those specifically agreed by the defendant. However, the plaintiff instead of furnishing a rebate on the offer submitted by the plaintiff, they had chosen to indicate a further additional cost of Rs.20.93 crores with additional time of six months with a provision of addition three months, if the values of A+B+C were to be carried out by them. This additional cost stipulation is in violation of Clause 11, Section – 1 Technical Bid – Instructions to tenderers which specifically provide that no tenderer will be permitted to alter his tender price after opening of the tender - “Price Bid”. Since the plaintiff had put forth qualifying conditions and quoted additional cost over and above the price quoted by them in the price bid, the defendant had taken action for cancellation of the offer. During non previewing tender, only based on non acceptance by the plaintiff to withdraw the conditions proposed by them and additional costs quoted by them over and above the price quoted in the price bid.

5. It is also stated by the defendant that the contention of the plaintiff that Arbitration Clause is not applicable in this case. The parties are only involved in the tendering process, the contract between the plaintiff and defendant not concluded. Further contention that they never informed bidders that it would return the EMD meeting much less then alleged meeting on 17.01.2006. Further, no such letter dated 20.01.2006 as contented by the plaintiff was sent by the plaintiff to the defendant about the refund of the EMD. Because of the adamant nature of the plaintiff in not withdrawing the condition, the work could not be started and the time over run and cost over run had been taken. Due to the non withdrawing of the condition the plaintiff had forced the defendant to go for re-tender and this delayed the national prestigious project. The plaintiff is solely responsible for time and cost over run of the project for which the plaintiff has to compensate the defendant for the unnecessary delay and the cost escalation incurred due to re-tender, the liquefied damages are specified as EMD which was rightfully invoked by the defendant. It is further contended by the defendant that there is no cause of action or part of cause of arose within the jurisdiction of this Court. Hence the suit is not maintainable before this Court.

6. It is stated in the additional written statement, the offer of the plaintiff was rejected only owing to certain reservations and qualifications put forth by the plaintiff, that there was no written commitment made for refund of EMD in the meeting held on 17.01.2006. This amending rule 2006 meeting, there was no discussion with regard to refund of EMD. Forfeiture of EMD has made as per provision of the tender document before the payment of interest also does not arise. Hence, prays for dismissal of the suit.

7. This Court, vide order, dated 08.12.2010, framed the following issues:-

1. Whether the calling for re-tender by the defendant by letter dated 12.01.2006 would amounts to cancellation of the old tender?

2. By quoting of additional cost in the plaintiff's letter dated 09.01.2006, whether the plaintiff has violated any of the items of the tender?

3. Whether any joint meeting held on 17.01.2006 and the defendant had agreed to refund the EMD in the meeting?

4. Whether the plaintiff is right in getting additional cost after submission of the price bid for the existing soil condition?

5. Whether the defendant is justified in re-tendering the subject works for further sub-soil investigations and recast the tender documents?

6. Whether the defendant is entitled to invoke the bank guarantee?

7. Whether the action of the defendant in forfeiting the EMD is correct and justified?

8. Whether the plaintiff is entitled to a decree for an interest @ 15% p.a. for a sum of Rs.14,13,000/-?

9. To what other relief the plaintiff is entitled to?

8. Upon hearing the learned counsels, the issues framed are recasted as follows:

1. Whether this Court has no territorial jurisdiction to entertain the suit?

2. Whether the defendant was right in enforcing the bank guarantee, even without the contract being concluded?

3. Whether the suit is barred by limitation?

4. Whether the plaintiff is entitled for recovery of the suit amount with interest from the defendant?

5. To what other relief the plaintiff is entitled?

On the side of the plaintiff P.W.1 examined and Ex.P.1 to Ex.P.40 marked and on the side of the defendant, D.W.1 examined and Ex.D.1 to Ex.D.11.

9. The learned counsel appearing for the plaintiff mainly contented that the plaintiff has submitted a bid for three projects and issued a bank guarantee for a sum of Rs.14.13 crores, when the tender has not accepted, the defendant is liable to refund the EMD, all the documents filed by the plaintiff clearly indicate that the tender has not been accepted by the defendant and there were discussions between the plaintiff and defendant on various occasions. At the time of submitting the tender, the plaintiff had invited the defendant about his reservations and qualifications in respect of the various terms and conditions of the tender for all the three different Works. Even in pre-bid meeting, this was informed to the defendant. There were negotiation after submitting the bid. The defendant has not accepted the plaintiff's tender which has been admitted by them in the written statement. Such being a position, as per the tender condition if the tender has not been accepted, EMD made by the plaintiff has to be refunded.

10. It is the further contention of the plaintiff that in the meeting held on 17.01.2006, it is specifically agreed to refund the EMD, whereas in the written statement they denied the very meeting itself. When the plaintiff has shown the documents by way of reply statements, in the additional written statements, the defendant admitted the meeting dated 17.01.2006. The above facts clearly indicate that the defendant's defence is not proved and made only to defeat the case of the plaintiff. Whereas, admittedly the defendant has not accepted the tender. Therefore, the EMD has to be returned to the plaintiff. Whereas, the defendant has encashed the bank guarantee contrary to the tender condition. Hence, it is his contention that part of the cause of action also arose within the jurisdiction of this Court and the meetings were held in Chennai and the leave also obtained from this Court to sue against the defendant and such order has not been challenged. Therefore, the defendant cannot raise the territorial jurisdiction issue. Hence, submitted that the plaintiff, who had parted huge amount of Rs.14 crores, certainly entitled to get back the amount with interest.

11. It is further contended by the plaintiff that the limitation point argued by the learned counsel for the defendant has no relevance and the suit has been filed within the period of limitation. Whereas the learned Additional Solicitor General appearing for the defendant submitted that the suit is not maintainable before this Court, this Court has no jurisdiction. Even the tender condition clearly indicate that except at Tuticorin, in other places suit cannot be filed. Such being the position, it cannot be said that the part of cause of action arose within the jurisdiction. Merely on the basis of some meeting held in Chennai, this Court cannot have jurisdiction. It is contended that the suit is barred by limitation under Section 120 of Major Port Trust Act. The suit ought to have been filed within six months from the date of cause of action. Admittedly, the suit has been filed much beyond the period of six months from the period of cause of action. Therefore, the suit is barred by statutory limitation.

Issue No.1:

12. It is the contention of the defendant that all the contract of tender held at Tuticorin and cause of action arose within the jurisdiction of Tuticorin and even the bank guarantee was encashed, in the bank at Delhi, outside the jurisdiction of this Court. Such being the position, this Court has no territorial jurisdiction. It is to be noted that though the tender in respect of the Port Trust project, near Tuticorin, a perusal of the entire pleadings and documents reveals that after submitting the bid, several meetings and discussions were held in Chennai. As discussed above and the Chairman of the Office also conducted meeting with the plaintiff in the defendant office at Chennai.

13. Admittedly, the Head Office of the defendant is also situated in Chennai where several discussions were held. The main part of the discussions were held in Chennai. The tender has not been finalized. Therefore, merely because of the Bank Guarantee was encashed outside jurisdiction of this Court and the tender was submitted in Tuticorin, it cannot be stated that this Court has no jurisdiction at all. The leave to file the suit before this Court has also been obtained under Clause 12 of the Letter Patent, which is also not challenged. Therefore, the contention of the learned Additional Solicitor General, in this regard cannot be countenanced and the entire dispute arose after submitting tender and several discussions and meeting held in Chennai, same indicate that cause of action arose within the jurisdiction.

14. The learned Additional Solicitor General has relied upon the general condition of the contract which was marked as Ex.P2 to contend that no suit or other proceedings shall be filed or taken by the contractor in the Court of law except at Tuticorin. In this regard, it is to be noted that such condition shall apply only when entire process concluded as a contract. As per the defendant themselves, the tender process has not culminated into the contract and rejected. Such being the position, any clause contained in the contract to exclude jurisdiction of this Court, cannot be pressed into service.

Issue No.2:

15. The other contention of the learned Additional Solicitor General is that the suit itself is barred by limitation under Section 120 of the Major Port Trust Act. According to him, the Bank Guarantee was invoked on 17.03.2006. The suit ought to have been filed within six months, after one month notice as per Section 120 of the Major Port Trust Act, whereas the present suit has been filed in the year 2007 much after limitation. Hence the suit is barred by limitation under Section 120 of the Major Port Trust Act.

16. It is the contention on merits that the plaintiff has made new condition contrary to the bid. Despite the acceptance of the defendant, the various clarification and modification, the plaintiff's exorbitant cause exclation and modification has forced the defendant to order the re-tender which has in fact led to serious financial consequences to the defendant. The delay for not finalysing the tender will attribute to the plaintiff. Therefore, his contention that the suit is liable to be dismissed.

17. Ex.P2, a tender conditions with various documents has been filed. It is not in dispute that the plaintiff participated in tender for project of 3 works, work A, work B, and work C. It is admitted by the defendant that the tender was submitted, the plaintiff in fact submitted a bid and price bids on various dates. This is also not in dispute that the plaintiff also furnished the bank guarantee as pleaded in the plaint. This is also not disputed by the defendant. The tender document Ex.P2, carefully seen though there are various clauses in the conditions, that one of the condition an instruction to the tender is particularly class 7.1, makes it very clear that tenderer will not be permitted to alter the price after opening of the tender and similarly class 7.2 is also stated that any qualifying condition and even tenders clarification any form will be treated as non responsive and will run the risk of rejection. In the above tender conditions, in para 27, Ex.P12, in one of the form of tender, the plaintiff has signed a letter.

18. The learned Additional Solicitor General mainly argued based on the above letters contending that the tender condition is valid for 180 days. Therefore, within such period, the parties are liberty to forfeit the EMD by the plaintiff. On careful perusal of this entire condition, referred by the learned Additional Solicitor General, this Court is unable to agree with such contentions for a simple reason that the condition will apply only when the plaintiff's tender is accepted. Therefore, it cannot be said that the moment the bid is submitted without being accepted the concluded contract reached between the parties, if that was the intention of the parties, the second condition in the above document referred above makes it very clear that if the tender is not accepted, earnest money shall be returned to the plaintiff when intimation is sent to abort rejection and expiry of tender which ever is earlier. The contents of the documents makes it very clear that forfeiting the earnest money will arise only on failure to perform the contract. Several correspondence filed by the plaintiff as a document which is also not disputed by the defendant clearly indicate that after submitting the bid there were discussion between the plaintiff and defendant and also other tenderers who also submitted the bid in respect of projects known as “Sethusamudram Ship Channel Project”.

19. It is also stated by the plaintiff that there are other bidders in the pre bid, there are several discussions between the plaintiff and the defendant. The meeting has conveyed in Chennai at several occasion and various modification in terms and conditions were suggested. Therefore, the same was continued for few months and tenders could not be finalysed.

20. The defendant also admitted in the written statement that since they awaited instruction from the tenderers, the bid submitted by the tenders is non-responsive and liable for rejection. In Para 11, it is also the specific case of the defendant that the contract has not been finalysed. In fact, the defendant requested the plaintiff to withdraw all the condition put forth by them and submit discount offer separately in a sealed cover for the modification in tender conditions. As the additional costs of Rs.20 crores shown by the plaintiff, the defendant, in fact taken action for cancellation and prepared for pre tender, it is also submitted in para 13. In para 14 is also pleaded that the contract has not been concluded. Though, it is stated in the written statement that on 17.01.2016, there was no meeting as alleged in the plaint. But additional written statement, it was admitted by the defendant that there was a meeting. In the nutshell, pleading of defendant indicates that contract was not concluded. In para 16 of the written statement, specific stand of the defendant that even a tendering process of the contract between the plaintiff and defendant are not concluded.

21. Ex.P38 dated 03.12.2007, the letter addressed by the plaintiff seeking to appoint an arbitrator, reply was sent by the Court stating that the plaintiff's tender has not been reached in the contract stage. From the above documents, particularly in the pleadings of the defendant, it can be seen that after submitting the bid, the process is continued, there are sufficient discussion between the parties, not only at Tuticorin mainly at Chennai. The correspondence filed as a final documents, clearly indicate that there were many discussions between the parties.

22. Ex.P18, makes it very clear that there are many discussions held in Chennai between the Chairman of the defendant Port, requesting the plaintiff to withdraw all the conditions other than it was accepted by the Court in the right possible way in 5th November. Ex.P25, letter dated 24.12.2015, issued by the Port, clearly indicate that the negotiations were held at Chennai, all the correspondence Ex.P21 to P.35, clearly indicate that after bids submitted by the plaintiff, there were discussion for finalization of the tender. However, the parties did not reach for consensus and several meeting also held in Chennai. In fact, it is not in dispute and written statement of the defendant and also the documents referred above clearly proves the fact that the contract has not been concluded. It is a specific stand of the defendant in Ex.P39, the tender of the plaintiff has not reached the contract stage there is no contract application as per the tender documents. In the written statement it is pleaded to the effect that the contract has not been concluded or accepted by the plaintiff. Such being the position, now the defendant cannot contend that they have right to forfeit the EMD. It is also to be noted that the very condition in the letter referred above, Ex.P2, makes it clear that if the contract is not accepted or the tender is not accepted, the EMD shall be returned to the plaintiff. The intention of the parties was very clear that in the event of tender being rejected, the amount shall be refunded. Therefore, now it cannot contend that the Port has right to re-forfeit the EMD amount as against the original conditions of contract. Various correspondence referred above also clearly indicate that though the modi

fication is sought by the plaintiff, certain modification also accepted by the defendant. Only with regard to additional cost, there was discussion about prolonging and ultimately, the contract has not been finalised. The discussions were held not only with regard to the plaintiff's bid and also others in Chennai in various occasion. 23. In view of the above, it cannot be said that the EMD encashed by the Port cannot be refunded to the plaintiff. Admittedly, the very contract itself stipulate that if the tender is not accepted, the money shall be returned to the plaintiff. Only rider is that EMD amount will not carry any interest. Such being the position, the contention of the defendant that the amount cannot be refunded cannot be countenanced. In view of the above, the defendant cannot enforce bank guarantee when the contract was not concluded. Issue Nos.3 to 5: 24. It is admitted fact that all the works and service to be provided at the ports by the board as per the Major Port Trust Act. Section 35 of the act deals with the execution of such works by the board. Section 35(h) deals with the work within the limits of the port or beyond those limits, whether in territorial waters or otherwise, for the purpose of towing or rendering assistance to any vessel, whether entering or leaving the Port or bound elsewhere. Therefore, only to execute such works, the tender was called for by invoking the power vested under the Major Port Trust Act. In this regard, it is relevant to extract Section 120 of the Major Port Trust Act:- 120. Limitation of proceedings in respect of things done under the Act.- No suit or other proceeding shall be commenced against a Board or any member or employee thereof for anything done, or purporting to have been done, in pursuance of this Act until the expiration of one month after notice in writing has been given to the Board or him stating the cause of action, or after six months after the accrual of the cause of action. 25. Therefore, it is clear that in Section 120, there are two requirements, that the suit either has to be filed within six months from the date of cause of action or after expiry of one month notice in writing has been given. 26. As per the plaint, the EMD has been encashed on 17.03.2006 itself. On careful perusal of Section 120 of the Major Trust Act, the suit shall be filed within six months from the date of cause of action or after expiry of one month notice. Whereas, the present suit has been filed only on 13.09.2007, which after the six months statutory limitation provided under Section 120 of the Act. When the right to file suit is barred under statute beyond certain period of limitation, suit filed beyond the period of limitation is barred by limitation. Accordingly, issue Nos.3 to 5 are answered against the plaintiff. 27. In the result, the suit is dismissed. No costs.