Case Law Details
Mahantesh Vs State of Karnataka (Karnataka High Court)
Karnataka High Court addressed the case of Mahantesh Vs State of Karnataka, where the petitioner challenged the forfeiture of the earnest money deposit (EMD) following a tender process. The petitioner had participated in a tender issued on 15.11.2018, with an original condition (No.10) stating that GST would be paid separately as per a government order. The petitioner was the successful bidder and provided a bank guarantee of Rs. 6,26,310/-. However, a subsequent corrigendum issued on 25.01.2019, amended the GST condition, removing the requirement for separate GST payment. The petitioner requested the respondent to honor the original terms, but instead, the respondent forfeited the EMD, alleging non-performance. The court found the corrigendum and the forfeiture arbitrary, noting that the petitioner had not violated any tender terms. Thus, the court ordered the refund of the EMD within three months, recognizing the petitioner’s compliance with the initial conditions.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
This petition is filed by the petitioner against the tender notification dated 15.11.2018, issued by respondent No.3 inviting bids for various civil works. Condition No.10 of the tender document stipulated that GST would be paid separately on the contract amount in accordance with the Government order dated 10.10.2018. The petitioner participated in the tender process, emerged as the successful bidder, and was issued a letter of intent dated 14.02.2019. In compliance with the letter of intent, the petitioner provided a fixed deposit towards a bank guarantee amounting to Rs.6,26,310/- to respondent No.3.
2. Subsequently, respondent No.3 issued a corrigendum dated 25.01.2019, which amended condition No.10 and withdrew the requirement for separate GST payment on the contract amount. The petitioner submitted a representation requesting respondent No.3 to retract the corrigendum and honor the original condition for separate GST payment as stated in the initial tender document. Instead of addressing the representation, respondent No.3 forfeited the earnest money deposit (EMD) submitted by the petitioner, alleging non-performance of the work under the tender notification. Therefore, this petition has been filed.
3. The arguments of the learned counsel for the petitioner and the learned AGA for the State have been duly considered .
4. Initially, condition No.10 of the tender document mandated separate GST payment on the contract amount as per the Government order dated 10.10.2018. The petitioner, having accepted this condition, participated in the tender process and secured the bid. Therefore, respondent No.3’s decision to issue a corrigendum withdrawing this condition, and subsequently forfeiting the petitioner’s EMD, constitutes an error. The petitioner did not violate any terms specified in the tender notification. Hence, respondent No.3’s action in forfeiting the petitioner’s EMD amount is deemed arbitrary and discriminatory. Hence, I pass the following:
ORDER
i. The writ petition is allowed;
ii. Respondent No.3 is hereby directed to refund the earnest/EMD money deposited by the petitioner following the tender notification dated 15.11.2018, vide Annexure-A, within a period of three months from the date of receipt of certified copy of this order.
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