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2000 DIGILAW 929 (MAD)

The Chairman, T. N. Electricity Board and Another v. G. J. Fernandez

2000-09-19

V.KANAGARAJ, V.S.SIRPURKAR

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Judgment :- V.S. SIRPURKAR, J. In this appeal, the appellant challenges the order of the learned single Judge, by which the writ petition filed by the respondent herein was allowed and a direction was issued to the appellant herein to refund the Earnest Money Deposit of a sum of Rs. 1,00,000/- to the writ petitioner, with interest at 12% p.a. from the date of deposit, till the date of payment, within sixty days from the date of receipt of the order. 2. The following facts would be necessary for the disposal of this appeal. A tender was floated by the Tamil Nadu Electricity Board for a huge construction. The petitioner was one of the tenderers. After initial hurdles were crossed by all the parties who had offered their bids in pursuance of the tender notice, it was found ultimately that the petitioner was the lowest tenderer. As contemplated in the tender notice, the petitioner had deposited a sum of Rs. 1,00,000/- as Earnest Money Deposit. This tender was closed on 5-9-1990 and it was only after the petitioner was adjudged to be the lowest tenderer, the petitioner fired his first salvo, which was his letter dated 14-2-1991. In this letter, very significantly, the petitioner requested for.- (a) Increase of 15 % over his quoted rates on all items; (b) Interest free advance to the extent of 90% of the cost of all non-perishable materials brought to site and intended to be used on construction, based on the voucher submitted by them; (c) Additional 7.5% of contract value to be paid as additional mobilisation advance, bringing the total advance to 15%. The advance was to be reckoned with reference to the tender cost hiked by 15% as suggested in Item (a); and that (d) The work should not be split up among others and, in case it is considered unavoidable, the rates paid to all the agencies should be the same. 3. Now, to this, the 2nd appellant immediately responded and pointed out that this amounted to post-tender offer and that it was not acceptable to the T.N.E.B. at all. The letter dated 14-2-1991 by the petitioner was followed by similar such letter dated 14-3-1991 and the tenor of both these letters, which we have gone through very carefully, is that if fresh offer made by the petitioner was not accepted, then the petitioner was not in a position to work. The letter dated 14-2-1991 by the petitioner was followed by similar such letter dated 14-3-1991 and the tenor of both these letters, which we have gone through very carefully, is that if fresh offer made by the petitioner was not accepted, then the petitioner was not in a position to work. In short, this amounted to the withdrawal of tender, that too, after a point of no return. The appellant, thereafter, sent another letter dated 14-6-1991 whereby the Earnest Money Deposit of Rs. 1,00,000/- was forfeited in pursuance of the tender conditions 3.4.1. This was challenged by the petitioner way back in 1992. The petition came to be allowed by the learned Judge who has directed the return of the Earnest Money. It is this order, which is the subject-matter of this appeal. 4. The learned single Judge has taken stock of the whole correspondence in great details painstakingly. Thereafter, the learned Judge proceeds to mention in Paragraph 15 that it was an admitted fact that the petitioner came forward with a written representation before the respondents with certain conditions and had given in writing that he wanted an increase of 15% over his quoted rates as also he wanted an interest free advance to the extent of 90% besides the other. The learned Judge had also gone to hold thus : "If these four conditions are placed before the respondents 1 and 2 by the petitioner in writing in the natural course after receipt of these additional conditions sent by way of letter by the petitioner, the respondents 1 and 2 are bound to give a written reply to the petitioner stating that the petitioner has violated the condition Clause "d" and hence he is not entitled to get back the earnest money deposit of Rs. 1,00,000/-. Here the petitioner brought four additional requests and those additional four requests amount to nothing but violating the conditions covered under Clause "d". Therefore, when the petitioner placed the four conditions before the respondents for consideration it amounts to violation covered under Clause (d). Therefore, when the petitioner placed the four conditions before the respondents for consideration it amounts to violation covered under Clause "d". Therefore, when the petitioner placed the four conditions before the respondents for consideration it amounts to violation covered under Clause (d). Therefore, when the petitioner placed the four conditions before the respondents for consideration it amounts to violation covered under Clause "d". Under the circumstances, if those conditions are going to be accepted the condition covered under Clause "d" that is violation will be attracted and as such the petitioner has to face the risk of forfeiture of earnest money deposit of Rs. 1,00,000/-". 5. Further, the learned Judge proceeds to hold that for this a notice had to be served by the respondents, meaning appellants herein, soon after the receipt of the requisition of the additional conditions from the petitioner to the effect that the condition Clause (d) was attracted by that time. The learned Judge also proceeds to hold that if such a notice had been served, then the petitioner would have had no cause at all. The learned Judge then proceeds to hold that since such a notice was not given, the forfeiture could not be ordered as has been done by the appellants. 6. With great respect, we are unable to agree with the learned single Judge. Clause 3.4.1 of the Tender Conditions is as follows :- "3.4.1. FORFEITURE OF EMD The EMD made by the TENDERER will be forfeited: (a) if he withdraws his tender after acceptance. (b) if he withdraws his tender before the date mentioned in Clause No. 4 "Validity of Tender". (c) if the successful TENDERER fails to remit the security deposit amount within the stipulated period. (d) if he violates any of the provisions of these regulations or the conditions of tender, issued by the competent authority." 7. It is an accepted case that the petitioner was specifically informed that the petitioner's was the lowest offer ad the discussions also took place in that behalf. It is to be seen that the discussions with all the parties took place on 10-1-1991 and the supplementary bid was also invited in pursuance of those technical discussions on or before 30th of January, 1991. Admittedly, the petitioner gave the supplementary bid on 28-1-1991. Very significantly enough till then, the petitioner did not even mention about anything in respect of the so-called price rise or the price rise caused due to the Gulf war. Admittedly, the petitioner gave the supplementary bid on 28-1-1991. Very significantly enough till then, the petitioner did not even mention about anything in respect of the so-called price rise or the price rise caused due to the Gulf war. It is only thereafter, when the petitioner was confirmed as the lowest bidder and when the further developments began, that the petitioner came out with a brand new proposal, wherein the petitioner asked for a whooping 15% rise to all the items quoted by the petitioners, not to talk of the other demands having been made such as interest free advance to the extent of 90% of the material brought and the 7.5% mobilisation advance. If this was so, this was a clear case where the petitioner had invited the mischief of Clause 3.4.1. As if this was not sufficient, the petitioner was given a clear-cut idea by the appellant by sending a letter dated 9-4-1991, wherein it was specifically informed that the post-tender offer given by the petitioner in his two earlier letters, dated 14-2-1991 and 14-3-1991 was not acceptable to the appellants. Even then, the petitioner persisted in treading the same line. This is absolutely clear from his letter dated 6/14-5-1991. The Board, therefore, went on to forfeit the E.M.D. under Clause 3.4.1 of the Tender Conditions. 8. We are in complete agreement with the learned single Judge when the learned single Judge says that in giving a fresh offer and demanding an increase by 15%, the petitioner had violated the conditions as contemplated in sub-clause (d) of Clause 3.4.1. However, we are unable to agree with the learned single Judge when the learned single Judge says that there was no notice sent to the petitioner. In fact, the letter dated 9-4-1991 was a sufficient notice wherein the offer was specifically refused by the Board, even if we hold that a notice is necessary for forfeiture of the Earnest Money Deposit. 9. In our opinion, therefore, the action taken by the Board in forfeiting the Earnest Money Deposit was absolutely correct. The appeal deserves to be allowed. We, therefore, allow the writ petition, set aside the order passed by the learned single Judge and order the dismissal of the writ petition, but without any order as to the costs. Petition allowed.