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M/s Svasca Industries (India) Limited v/s Uttarakhand Power Corporation Limited & Others

    Writ Petition (M/S) No. 28 of 2022

    Decided On, 05 January 2022

    At, High Court of Uttarakhand

    By, THE HONOURABLE MR. JUSTICE MANOJ KUMAR TIWARI

    For the Petitioner: Davesh Bishnoi, Advocate. For the Respondents: Dharmendra Barthwal, Advocate.



Judgment Text

1. By means of this Writ Petition, petitioner has sought following reliefs:-

“ i) Issue a writ, order or direction in the nature of certiorari calling for original records and set-aside the impugned letter/ order no. 17/ MD/ UPCL/ SVASCA dated 01.01.2022 (Annexure no. ) passed by the respondent no. 2 on the petitioner company’s representation dated 06.12.2021 (Annexure no. ), whereby the respondent no. 2 has modified its earlier letter/ order dated 25.11.2021 (Annexure no. ) to the extent that the period of debarment for the company to participate in the future tenders of UPCL (& other government institutional buyers) from one year to three months.

ii) Issue a writ, order or direction in the nature of mandamus, directing the respondents to communicate/circulate the final order as passed by them to all the other government institutional buyers, as it was communicated/circulated earlier vide letter/order dated 25.11.2021 (Annexure no.).

iii) Issue a writ, order or direction in the nature of mandamus, directing the respondents to restore the letter of Intent (Annexure no. ) for supply of transformers from the petitioner company.”

2. Petitioner is a Small Scale Industrial Unit engaged in the manufacture of power transformers, which is registered under Micro, Small and Medium Enterprises Development Act, 2006. Petitioner responded to an e-tender notice issued by Uttarakhand Power Corporation Limited, whereby bids were invited for supply of power transformers, by the reputed manufacturers or their accredited representatives.

3. It is not in dispute that one M/s Century Infrapower Private Limited, Jaipur was found to be the lowest bidder. Petitioner was also chosen for supply of five power transformers in view of the privilege granted to it under Micro, Small and Medium Enterprises Development Act, 2006, however, subsequently on 25.11.2021, respondent no. 3 passed an order by invoking the clause 20 of Tender Specification No. CCP-II/28/2020-2021 and took following action against the petitioner:-

a) Additional 5% security of Rs. 15,35,000/- deposited by petitioner was forfeited.

b) Letter of Intent /counter offer dated 25.05.2021 was cancelled.

c) Petitioner was debarred from participating in future tenders of Uttarakhand Power Corporation Limited for all types of transformers for a period of one year.

4. Petitioner challenged the said order by filing WPMS No. 2534 of 2021, which was disposed of by this Court, vide order dated 03.12.2021 with direction to Managing Director, Uttarakhand Power Corporation Limited to take decision on petitioner’s representation, within two weeks.

5. Pursuant to said order, petitioner submitted representation against the order dated 25.11.2021 passed by respondent no. 3. His representation has been partly allowed by the impugned order dated 01.01.2022 and the period of debarment of petitioner for participating in future tenders of Uttarakhand Power Corporation Limited was reduced from one year to three months from the date of the order i.e. 25.11.2021.

6. In this writ petition, petitioner has challenged the decision taken by Managing Director vide order dated 01.01.2022 on his representation.

7. The relevant conditions of contract have been reproduced in the order dated 25.11.2021 passed by respondent no. 3 (Annexure-6 to the writ petition). The condition, dealing with type test lays down that the offered transformer must be fully type tested from Government Approved/NABL accredited Testing Laboratory. It further provides that in case the bidder does not have valid type test report, then his price bid will be opened subject to condition that in the event of award, he will submit valid type test report within three months from the date of LoI. Clause No. 20 of the Tender Specification further provides that bidder, who is participating in tender process, without valid type test report will have to mandatorily provide additional security @ 5% of FOR destination price of material, including all taxes, within seven days from date of LoI, in the event of award of contract.

8. Admittedly, petitioner was not having type test report at the time of submission of bid. Petitioner was not able to submit type test report within three months from date of LoI and the deadline expired on 22.08.2021.

9. Petitioner sought extension of time in his letter dated 08.09.2021 and assured that test report shall be submitted on or before 20.10.2021, however, petitioner could not meet the deadline and test report was not submitted by him till 20.10.2021. In fact, petitioner had not submitted type test report till 25.11.2021 when respondent no. 3 passed the order, forfeiting the additional security submitted by the petitioner and also cancelling the Letter of Intent issued to the petitioner.

10. The representation submitted by petitioner against the order dated 25.11.2021 passed by respondent no. 3 is on record as Annexure-9 to the writ petition. In his representation, petitioner has submitted that, in view of lockdown imposed due to COVID-19 pandemic, manufacturing activity has suffered a serious jolt and the type test also could not be conducted in time due to restrictions imposed by State and Central Government. In his representation, petitioner also referred to an Office Memorandum issued by Ministry of Finance, Government of India, in which necessary directions were issued to deal with the extraordinary situation prevalent due to lockdown imposed by Central Government. Para 5 of the said Office Memorandum is reproduced below:-

“5. It is clarified that invocation of FMC would be held valid only in a situation where the parties to the contract were not in default of the contractual obligations as on 19th February, 2020. It is further clarified that invocation of FMC does not absolve all non-performances of a party to the contract, but only in respect of such non-performance as is attributable to a lockdown situation or restrictions imposed under any Act or executive order of the Government/s on account of COVID-19 global pandemic. It may be noted that, subject to above stated, all contractual obligations shall revive on completion of the period.”

11. Petitioner also referred to orders passed by Hon’ble Supreme Court, whereby the period of limitation for filing appeal etc. was extended in view of extraordinary situation prevailing in the country due to lockdown.

12. The decision taken on petitioner’s representation is on record as Annexure-12 to the writ petition. Perusal of the said order reveals that Managing Director of the Corporation has dealt with the matter in great detail. In the said order, it has been held that omission on the part of petitioner in supplying type test report within the stipulated period is in breach of conditions of Tender Specifications and for such breach, petitioner is liable to be punished. Since petitioner failed to comply with the condition of contract, therefore, the action taken against him, vide order dated 25.11.2021 cannot be said to be arbitrary or illegal.

13. In his representation to Managing Director, petitioner had referred to the Office Memorandum issued by Ministry of Finance, Government of India. Perusal of the said Office Memorandum reveals that it provided for extension of time for completion of contractual obligation, in view of nationwide lockdown imposed in the year 2020. Petitioner was awarded contract in the month of May, 2021, when lockdown condition was not prevailing in the country. Even otherwise also, the Office Memorandum provided for extension of time for completion of work, while petitioner had defaulted in submission of type test report within time, as per the stipulation made in the contract.

14. Similarly, reliance by the petitioner on the orders passed by Hon’ble Supreme Court is misplaced, as in those orders, Hon’ble Supreme Court had provided that limitation would stop running during lockdown imposed in view of COVID-19 pandemic; benefit of those orders is available at the time of filing appeal/revision against order passed by a Court/Tribunal, before a higher forum and benefit of those orders cannot be claimed in contractual matters.

15. Admittedly, contract was given to the petitioner with certain terms and conditions and one of the conditions was regarding submission of type test report. Petitioner neither could submit type test report at the time of submission of bid nor he could submit such report within three months from the date of award of contract. He sought extensi

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on of time for submission of such report, but, could not submit report within the timeline indicated in his request letter. Petitioner has contended that due to lockdown condition, he was unable to submit the report in time. 16. Since submission of type test report was a necessary condition of contract, which petitioner failed to meet, therefore, the action taken against petitioner cannot be said to be arbitrary or illegal. Moreover, the period for which petitioner was debarred from participating in future tenders has been reduced from one year to three months, by the impugned order by taking a sympathetic view of the matter. 17. In such view of the matter, this Court does not find any reason to interfere with the impugned order dated 01.01.2022 passed by Managing Director. 18. Accordingly, writ petition fails and is dismissed. No order as to costs. 19. Let a certified copy of this order be issued within 48 hours.
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