Judgment : ( 1 ) TWO things emerge from the affidavit of the Secretary, Building Construction Department; one that the advertisement inviting tenders apparently has been published only in one Hindi local Newspaper. Mr. Poddar, however, submits that it has actually been published in other newspapers as well. The Secretary shall file a fresh affidavit by next date informing us about all such news papers in which the aforesaid advertisement has been published and also enclose therewith copies of the clippings of such news papers. ( 2 ) THE other thing which emerges from the affidavit of the Secretary is with respect to Clause 1. 9 of the Advertisement notice. this Clause reads as under :-"1. 9 : Tenderers are required to deposit only Earnest Money amounting to Rs. 32,06,300. 00 only in the shape of 6 years N. S. C. (8th issue) duly pledged in favour of Executive Engineer, Building Division No. 1, Ranchi. " ( 3 ) WHEN asked by us as to what was the rationale or logic behind the Governments insistence on the tenderers being compulsorily required to deposit the earnest money only through six years N. S. C. (National Saving Certificates), Mr. Poddar, the learned Addl. Advocate General appearing for the respondents actually himself was at a total loss to appreciate or understand the logic or rationale behind such a requirement. He, however, submitted that, perhaps, it was because of some old and outdated rule that such a stipulation may have found a place in the Advertisement Notice. ( 4 ) IT is a common knowledge and it is not disputed by anyone that N. S. Cs. are issued for a six year period. If, therefore, any tenderer is required to provide the earnest money only through a N. S. C. , the amount spent by him in purchasing the N. S. C. would undoubtedly remain blocked for full six years. During this period he cannot convert the N. S. C. into cash. This would be so even in such cases where the stipulated period of completion of a contract might be much lesser than six years. Actually in the present case, as we see, the contract in-question is required to be completed almost in 15 months time. Why should, therefore, the respondents insist upon the aforesaid requirement of the earnest money being deposited only through N. S. C. ? Actually in the present case, as we see, the contract in-question is required to be completed almost in 15 months time. Why should, therefore, the respondents insist upon the aforesaid requirement of the earnest money being deposited only through N. S. C. ? This is absolutely not understood by us. ( 5 ) THE concept of the requirement relating to the payment of earnest money by a tenderer is to secure the interests of the govt. The depositing of earnest money alongwith the submission of the tender document is insisted because the Govt. or for that matter any other contracting party might like to secure its interest one way or the other. Why cannot such interests be duly secured if the tendereres are asked to deposit the earnest money in cash, through a Bank guarantee or by submitting F. D. Rs. valid for the duration of the contract or till its conclusion, also by containing a stipulation of the same being automatically renewed if the contract period is extended for any reason? We are of the considered opinion and view that the insistence on the earnest money being deposited only through N. S. C. is both irrational, illogical and has no nexus with the object sought to be achieved. ( 6 ) THERE is another important and interesting facet to this irrational requirement. Furthermore- even though a large number of tenderers may submit their tenders, only one tenderers tender would ultimately be accepted. but all of them have to deposit earnest money. As already noticed, N. S. Cs. are compulsorily operative for a period of six years from the date of purchase. Therefore, even those tenderers whose tenders would be rejected, would be prevented, by operation of such irrational rule, in getting back their money because such money would remain blocked for a period of six years. Why should a tenderer, therefore, be made to suffer in the matter of his earnest money amount being not refunded to him for full six years even though his tender has not been accepted? This would actually discourage possibly a large number of intending and interested tenderers in submitting their tenders because nobody would like his earnest money amount to be blocked for six years, even though he has not been selected as successful tenderer. ( 7 ) WE are informed at the Bar that N. S. Cs. This would actually discourage possibly a large number of intending and interested tenderers in submitting their tenders because nobody would like his earnest money amount to be blocked for six years, even though he has not been selected as successful tenderer. ( 7 ) WE are informed at the Bar that N. S. Cs. are not issued to companies and Corporations. To that extent also, the stipulation is unworkable. Does it mean that Companies and Corporations are not eligible to bid for a contract-work just because they are not entitled to purchase N. S. Cs. ? The answer has to be in the negative. ( 8 ) SUCH a stipulation as compulsorily requires buying of N. S. Cs. and only through them the furnishing of the earnest money directly hits Article 19 (1) (g) of the Constitution of India because it is a very, very unreasonable restriction on the right of a tenderer to carry on his occupation, trade or business. Apart from directly violating Article 19 (1) (g) it also violates the basic principle behind Article 14 of the Constitution because such a stipulation apart from being unreasonable, irrational and unworkable, is very, very arbitrary. ( 9 ) THERE does not appear to be any valid purpose which might be served by such a stipulation. There is no nexus with the object sought to be achieved. This stipulation/ condition, accordingly, (notwithstanding the same being supported by any Rule or Regulation) is struck down by us as being ultravires Articles 19 (1) (g) and 14 of the Constitution and as also being arbitrary and unreasonable. We, accordingly, direct that the State-respondents in this particular contract as well as in all future contracts shall not insist upon this requirement or prescribe the same with respect to the securing of earnest money. Instead, the State-respondents shall ensure that the earnest money payment is properly secured by whatever possible means and methods, whether it is by payment through cash, furnishing of a Bank guarantee or a proper and valid F. D. R. for such period as may be desirable or required. The purpose is to secure the Govt. interest by ensuring that the deposit of earnest money is properly made. The purpose is to secure the Govt. interest by ensuring that the deposit of earnest money is properly made. The purpose also is to ensure that the earnest money deposit is refunded to the unsuccessful tenderers without any hassles or harassment to them and without waiting for any period longer than even a day required. Without binding the respondents with our observations, we would like to state that furnishing of a Bank guarantee actually is a universally accepted method of payment because it is a very secured document. ( 10 ) WE, therefore, direct the respondents to re-cast Clause 1. 9. The re-cast Clause 1. 9 would be incorporated in the affidavit to be filed by the Secretary before us on the next date. Let the matter appear on 25-1-2002. A copy of this order shall be handed over to Mr. Poddar, learned Addl. Advocate General. Order accordingly. --- *** --- .