V.K. Jhanji, A.C.J.
1. In this writ petition, the relief sought for by the writ petitioner is that tender Notice No. S&C/32(3)/J&K STG/2003-04 be quashed.
2. In brief the facts are that Food Corporation of India, Jammu invited tenders for transportation of FCI stocks to various Centres within the State
of Jammu and Kashmir. According to the petitioner his firm is dealing in transportation business in the State and was also keen to submit tender,
but has not been able to do because of the clauses 4 & 5 of he tender notice whereby the earnest money to the tune of Rupees 1.19 Crores in the
shape of Demand Draft has been demanded at the time of submission of tender and the successful tenderer is required to furnish a Security
Deposit of Rupees 4.15 Crores.
3. Clauses 4 & 5 read as under:-
4. Earnest Money: -- Each tender must be accompanied by an Earnest Money of Rs. 1.19 Crore (Rupees one Crore nineteen lacs) in the form of
a Demand Draft issued by the State Bank of India or a Scheduled Bank in favour of the Senior Regional Manager, Food Corporation of India,
J&K Region, Jammu. Tender not accompanied by earnest money shall be summarily rejected. The Earnest money shall be liable to forfeiture if the
tenderer after submitting his tenders resiles from or modified his offer and/or the terms and conditions thereof in any manner, it being understood
that the tender documents have been made available to him and he is being permitted to tender in consideration of his agreement to this stipulation.
The earnest money is also liable to be forfeited in the event of the tenderer's failure, after the acceptance of his tender to furnish the requisite
security deposit by the due date without prejudice to any other rights and remedies of the Corporation under the contract and law. The earnest
money will be returned to all successful tenders, after he has furnished as security deposit, if the successful tenderers does not desire the same to
be adjusted toward the security deposit. No interest shall be payable on the amount of earnest money, in any case.
5. Security Deposit: (1) (a) The successful tenderers shall furnish within a week of the acceptance of his tender a security deposit of Rs. 4.15
Crores (Rupees four Crores fifteen lacs). The successful tenderes shall, however have the option to pay 50 percent of the security deposit within
the above mentioned period and the remaining fifty percent by deduction at the rate of five percent from each admitted bill for work done under the
contract.
X X X X X X X.
4. The case of the petitioner is that clauses 4 & 5 are arbitrary and have been incorporated only to favour some persons, thereby depriving the
petitioner to compete. At the time of hearing of the writ petition, learned counsel for the petitioner submitted that no justification whatsoever has
been given by the respondents in their objections for fixing such an exhorbitant earnest money and the security deposit.
5. Upon notice of the writ petition, the Corporation filed detailed objections in which it is stated that the estimated value of the contract is Rupees
Sixty Crores and the Corporation after taking into consideration various factors has fixed earnest money @ 2% of the contract value and security
deposit @ 7% of the Contract value. It is stated that purpose for doing it is to discourage the parties possessing inadequate resources or quoting
unreasonable rates and subsequently withdrawing the offer made by them. The Security Deposit at the rate of 7% of contract amount is fixed with
an objective that the contractor fulfils the contractual obligations and to safe-guard the property of the Corporation during transportation. Further
according to the respondents the earnest money is refundable to the unsuccessful tenderer as soon as the decision on the tender is finalised. It is
also stated that the daily transportation requirement of the Corporation to the different destinations in the J&K State as per the Notice Inviting
Tender averagely comes to 100 to 200 truck-loads and the value of the goods which would pass to the Contractor daily may be to the tune of
Rupees one/two Crores to two crores. It is further submitted that in the previous year the stocks of the value of Rs. 1.20 Crore were lost during
transportation.
6. I have heard the learned counsel for the parties at length and have carefully gone through the record of the case.
7. The amount of earnest money demanded from the tenderers and the security to be deposited by the successful tenderer cannot be said to be
arbitrary as the amount asked is 2% and 7% of the total value of the contract. The decision in regard to the amount to be fixed towards the earnest
money and the security deposit is purely within the jurisdiction of the Corporation and the Court cannot strike down such a decision merely
because it feels that another decision would have been fairer or wiser or more logical. The Corporation is entitled to make pragmatic adjustment
and take such a decision which may be necessary and called for under the peculiar circumstances. This Court is not concerned with the ultimate
decision of the Corporation in fixing 2% and 7% of the earnest money and security deposit respectively of the total value of the contract, but only
with the fairness of the decision making process and in this case the decision making process has not been shown to be arbitrary. Accordingly, I
am of the considered view that no case is made out for quashing of the tender notice or the clauses with regard to the deposit of earnest money
and security deposit.
8. In view of the above, this writ petition is dismissed. No costs.
