M/s. API Civilcon Private Limited v. Municipal Commissioner

2. The Respondents had issued a Tender in the year 2016 for construction of exhibit for wolf, sloth bear, jackal, otter, Madras pond turtle, hyena, cat complex leopard, bird aviary and reptile house in VJB Udyan Zoo, Byculla, E-ward, Mumbai. The Petitioner responded to the tender and deposited 1% of the amount as EMD amounting to Rs.1.20 crores.

3. On 28th April 2017, the Respondents informed the Petitioner that on scrutiny of documents submitted in Packet-B, the tender condition No.3 (a & b) does not fulfill the criteria due to reasons mentioned therein which are reproduced hereunder:- “i) As per the certificate issued by General Manager, Aamby Valley the work is carried out from 17th November 2007 to 17th May 2009. However, area of animal holding & viewing shelter is not mentioned in the certificate. ii) As per the certificate, the exhibit constructed by MOU firm is open exhibit, whereas the exhibit prescribed in tender are closed exhibit.” The reason mentioned in the communication dated 28th April 2017 records that as per the certificate issued by the General Manager, Aamby Valley, the work is carried out from 17th November 2007 to 17th May 2009. After recording the said fact, the reason states that however, area of animal holding and viewing shelter is not mentioned in the certificate. The second reason given for the document not being in accordance with the tender condition was that as per the certificate, the exhibit constructed by MOU firm is open exhibit, whereas the exhibit prescribed in tender are closed exhibit.

4. Immediately thereafter, the Respondents sought clarification from the General Manager, Aamby Valley in regard to the certificate issued by them and which formed the basis of the communication referred to hereinabove i.e. communication dated 28th April 2017. The said clarification was sought to confirm whether the certificate has been issued by the General Manager of Aamby Valley City or not and it further requested to forward various information inter alia area of Animal Holding, area of Animal Viewing Shelters etc.

5. The above referred clarification sought for was complied with by the General Manager, Aamby Valley Corporation to the Respondents by a letter wherein the area of Animal Holding was mentioned 1500 sq.ft. and it was further stated that the said area is closed enclosure.

6. Thereafter, various communications were addressed by the Petitioner to the Respondents for considering the tender and in the alternative to refund the EMD amount. However, the Respondents did not refund the EMD amount of Rs.1.20 crores and ultimately the legal notice was sent by the Petitioner to the Respondents for refund of the EMD amount. The Petitioner, having not received the EMD amount, filed a Writ Petition in this Court for refund of the same.

7. The Respondents have already refunded a sum of Rs. 1.08 crores as per the statement made and recorded in the order dated 20th December 2018 but the Respondents contended that the balance amount of 10% EMD shall be forfeited on account of non-curable defect and as per the tender in case of non-curable defect, 10% of EMD shall be forfeited.

8. Therefore, now the short controversy before us is whether the reason mentioned in the communication dated 28th April 2017 namely, (a) area of Animal Holding and Viewing shelters not mentioned in the certificate and (b) as per the certificate, the exhibit constructed is open exhibit, whereas the tender requires certificate with respect to close exhibit, falls within the meaning of term ‘Non-curable Defects’ as mentioned in the tender.

9. Heard learned counsel for the Petitioner and Respondents.

10. Non-curable Defect is defined in the tender to mean:- “a. In-adequate submission of EMD/ASD amount. b. In-adequacy of technical and financial capacity with respect to Eligibility criteria as stipulated in the tender.”

11. The Non-curable Defects defined in the tender means inadequate submission of EMD/ASD amount and/or inadequacy of technical and financial capacity with respect to Eligibility criteria as stipulated in the tender. Admittedly, it is not the case of the Respondents that the basis for non-refunding the 10% EMD is on account of inadequate submission of EMD/ASD amount and/or inadequacy of financial capacity with respect to Eligibility criteria. Therefore, we need to examine whether the reason mentioned for non-refunding the 10% EMD amount would fall within the phrase ‘inadequacy of technical capacity’ stipulated in the tender.

12. Section 2 of the tender prescribes ‘Eligibility Criteria’ and Part A refers to Technical Capacity. Clause 3 of Part A deals with Special Qualifying Criteria for Animal Exhibit and sub-clause (a) and (b) of the said Clause refers to Animal Holding and Animal Viewing Shelters of at least 100 sq.m. The said criteria should have been completed by the person applying for the tender or by the person with whom the tenderer has Memorandum of Understanding (MOU), who has carried out similar works in India. In response to clarification sought by the Respondents from Aamby Valley Corporation with whom the Petitioner had MOU, it specifically clarified that the area of Animal Holding and Viewing Shelters is 1500 sq.ft. and 4000 sq.ft. respectively which is more than 100 sq.m. as required in the tender. Furthermore, the said clarification also stated that area of Animal Holding of 100 sq.m. is of “Close enclosure.” The Respondents action vide communication dated 28th April 2017 read with 29th April 2017 seeking clarification from Aamby Valley Corporation clearly demonstrates that non mentioning of the area in the certificate and exhibit whether open or closed are not Non-curable Defects but are curable defect. If these conditions would have been non-curable then, there was no need for the Respondents to seek clarification. The Respondents after having sought clarification and obtained the clarification which is in accordance with the tender condition now cannot turn around and say that mentioning the area of Animal Holding and exhibit whether open or closed are Non-curable Defects.

13. In the reply of the Respondents, one of the reasons given for non-refunding the 10% of EMD is that the work of construction mentioned in the certificate is beyond 7 years from the date of subject tender.

14. In our view, the communication dated 28th April 2017 records only the fact that the work was carried out by the General Manager, Aamby Valley from 2007 to 2009 but that does not form the basis for rejection of certificate. On the contrary, the reason further states that “However, area of Animal Holding and Viewing Shelter is not mentioned in the certificate.” The phrase used by the Respondents “however” clearly shows that criteria of work experience of last 7 years did not form the basis of communication dated 28th April 2017. It is settled position that the reason cannot be supplemented by subsequent affidavit but has to be tested on the touch stone of what is recorded in the communication dated 28th April 2017. Admittedly, the Respondents did not dispute the clarification issued by Aamby Valley Corporation with respect to the area of Animal Holding and area of Viewing Shelters which is more than 100 sq.m. i.e. more than 1000 sq.ft.

15. The second reason given for withholding 10% of EMD is that the certificate refers to open exhibit, whereas the tender prescribes closed exhibit. We have perused the tender and various communications between the parties.

16. The tender does not specify whether the exhibit should be Open or Closed but the tender only refers to “exhibit.” Reference can be made to pages 23, 26, 28, 30, 79 and 90 of the Petition wherein only “exhibit” is mentioned and not “open” or “closed” exhibit. In all these documents, the reference is only to exhibit and not to closed exhibit. The submission of the Respondents that looking at the nature of the work, it should be inferred that the exhibit has to be closed would not be correct because we have to go by the tender condition as it stands and no inference can be drawn more so on the facts of this case. Furthermore, clarification issued by the Aamby Valley Corporation states that the area of Animal Holding of 1500 sq.ft. is closed enclosure. Therefore, even on this account, the reason mentioned in the communication dated 28th 2017 with respect to open or close exhibit for non-refunding the 10% EMD amount does not hold field.