Case Note & Summary
The petitioner, a partnership firm and long-standing contractor of Western Coalfields Limited (respondent No.1), challenged communications dated 05.05.2010 and 14/17.05.2010 rejecting its representations to rectify a defect in its tender submission. The tender required a bank solvency certificate dated within three months before the tender opening date of 12.04.2010. The petitioner submitted a certificate dated 08.01.2010, which was four days beyond the three-month period. The petitioner sought to replace it with a fresh certificate, but the respondent refused. The court noted that the respondent had previously allowed other contractors to rectify similar defects. The sole issue was whether the term regarding the bank solvency certificate was ancillary or subsidiary. The court held that it was ancillary, as it did not go to the root of the contract. The respondent's refusal was discriminatory and violated the petitioner's legitimate expectation. The court allowed the petition, quashed the impugned communications, and directed the respondent to permit the petitioner to submit a fresh bank solvency certificate and consider the tender afresh.
Headnote
A) Tender Law - Rectification of Defect - Ancillary Term - Bank Solvency Certificate - The petitioner's bank solvency certificate expired by four days before the tender opening date. The court held that the requirement to furnish a bank solvency certificate within three months before the tender opening was an ancillary or subsidiary term, not a fundamental condition. The respondent had allowed other contractors to rectify similar defects, and the petitioner had a legitimate expectation of being treated similarly. The court directed the respondent to allow the petitioner to submit a fresh bank solvency certificate and consider the tender afresh. (Paras 3-6)
Issue of Consideration
Whether the petitioner should have been allowed to rectify the defect of an expired bank solvency certificate, which was an ancillary or subsidiary term of the tender document.
Final Decision
The court allowed the petition, quashed the impugned communications, and directed respondent No.1 to permit the petitioner to submit a fresh bank solvency certificate and consider the tender afresh.
Law Points
- Tender conditions
- ancillary or subsidiary terms
- rectification of defects
- bank solvency certificate
- non-discrimination
- legitimate expectation
Case Details
2010 LawText (BOM) (08) 151
Writ Petition No.2533/2010
S.A. Bobde, A.B. Chaudhari
M.V. Samarth for petitioner, S.C. Mehadia for respondent No.1
Messrs. B. Himmatlal Agrawal
Western Coalfields Limited and another
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Nature of Litigation
Writ petition challenging rejection of representations to rectify a defect in tender document.
Remedy Sought
Petitioner sought quashing of communications rejecting its request to submit a fresh bank solvency certificate and direction to allow rectification.
Filing Reason
Petitioner's bank solvency certificate expired by four days before tender opening; respondent refused to allow rectification despite having allowed other contractors to do so.
Previous Decisions
Respondent rejected petitioner's representations via communications dated 05.05.2010 and 14/17.05.2010.
Issues
Whether the requirement to furnish a bank solvency certificate within three months before tender opening is an ancillary or subsidiary term?
Whether the petitioner should have been allowed to rectify the defect of an expired bank solvency certificate?
Submissions/Arguments
Petitioner argued that the defect was minor and ancillary, and that respondent had allowed other contractors to rectify similar defects.
Respondent argued that the term was mandatory and could not be relaxed.
Ratio Decidendi
The requirement to furnish a bank solvency certificate within three months before tender opening is an ancillary or subsidiary term, not a fundamental condition. The respondent's refusal to allow rectification, while having allowed other contractors to do so, was discriminatory and violated the petitioner's legitimate expectation.
Judgment Excerpts
The only point that arises for our determination is whether in terms of Clause-3.2 (e) of the tender document, the petitioner having submitted bank solvency which had expired by four days and wanted to rectify the defect should have been allowed to do so and whether the said term of furnishing the bank solvency was merely ancillary or subsidiary ?
It is not in dispute that earlier respondent No.1 itself had on several occasions allowed several contractors to remove the said defect regarding furnishing bank solvency certificate vide Annexure – L, Annexure-M and Annexure-N.
Procedural History
The petitioner filed a writ petition in the High Court of Bombay at Nagpur challenging the rejection of its representations. The court heard the matter and reserved judgment on 06.07.2010, pronouncing it on 10.08.2010.
