Bidder Can't Seek For Deviation From Tender Document Which Has Been Accepted On His Own Accord: Delhi High Court

The Delhi High Court has observed that when participating in the tender, a bidder cannot seek for deviation from the tender document which has been accepted on his own accord.

Justice Subramonium Prasad added that it goes against contractual obligations steeped in accepting such a tender, and therefore, violates the principles under Article 14 of the Constitution with respect to other bidders.

The Court was dealing with a plea seeking directions on the Delhi Development Authority (DDA) to refund the amount retained by them to the Petitioner along with interest of 18% p.a. from the date of deposit.

In 2019, DDA had issued notice that e-auction of industrial property on 'as is where is basis' would be conducted. The application for e-auction was made available from 01.04.2019 and the last date for submission of the mandatory documents, along with Earnest Money Deposit (EMD) was 21.04.2019.

The Petitioner had sought to bid and consequently submitted online application on 16.04.2019, along with EMD of 5% of the reserve price.

The Petitioner then received an e-mail dated informing that her bid stood the highest, subject to acceptance of the bid by Department or Corporation. Thereafter, another e-mail was received by the petitioner with the subject 'Letter of Intent'. The award value was stated to be Rs.3,21,24,000.

As per the Tender Document for E-Auction (2018-19), the Petitioner was expected to deposit 20% of the bid premium and the difference of 5% reserve price at second stage within 7 days from issuance of the Letter of Intent after acceptance of the bid by the competent authority.

It was stated that on account of ill health, the Petitioner had failed to deposit 20% of the bid premium as was required. Accordingly, the Petitioner sent a letter dated to the Deputy Director (Industrial), DDA, stating that she had only received information about her bid being accepted on the night of 07.06.2019.

It was also stated that since the petitioner had been hospitalised, she was unable to deposit the requisite amount. The petitioner accordingly sought for an extension of 15 days to deposit the balance amount. In response to this, the Deputy Director (Industrial) rejected the Petitioner's request for grant of extension for a period of 15 days.

It was stated that the Petitioner had sought for a refund of the 5% EMD that had been deposited by her during the first stage. A legal notice was also sent to the Respondent. However, the Petitioner was yet to receive any response with regard to the refund of the EMD.

Aggrieved by the same, the Petitioner had approached the High Court.

The Court noted that the Petitioner had deposited 5% of the reserve price, however, had failed to deposit 20% of the bid premium which was to be paid with the acceptance of the bid.

Taking note of Clause 2.4.3 which stated that in case the bidder fails to deposit 20% of the bid premium within 7 days from the issue of Letter of Intent, the first stage of the EMD bid (5% of the reserve price) shall stand forfeited, the Court opined that the Petitioner was praying for a deviation from the terms stipulated in the tender document.

"It is well settled law that participating in the tender, a bidder cannot seek for deviation from the tender document which has been accepted by the petitioner on his own accord. It goes against contractual obligations steeped in accepting such a tender, and therefore, violates the principles under Article 14 of the Constitution with respect to other bidders," the Court observed at the outset.

Perusing the tender document, the Court said that the same showed that persons whose bids had been rejected due to the failure to deposit the amount would result in forfeiture of the 5% of the reserve price which had been filed along with the bid.

Accordingly, the plea was dismissed.

Case Title: VEENA GARG v. DELHI DEVELOPMENT AUTHORITY

Citation: 2022 LiveLaw (Del) 358

Click Here To Read Order