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2009 DIGILAW 99 (ORI)

BATAKISHORE MISRA v. M. D. , O. B. C. C. LTD.

2009-02-03

B.P.DAS, B.P.RAY

body2009
JUDGMENT : 1. Heard Mr. Mohanty, learned Counsel for the Petitioner and Mr. M. Kanungo, learned Counsel for opp. party No. 1. 2. The Petitioner in this writ application challenges the order dated 25.8.2007 passed by the Managing Director, Orissa Bridge and Construction Corporation Limited-O.P. No. 1, vide Annexure-7 forfeiting the earnest money of Rs. 23,85,800.00 deposited by him along with the bid document submitted for operating Tomka Toll Gate on Daitari Duburi Expressway Road. 3. The case of the Petitioner is that in response to the Bid Invitation Notice No. 2311 dated 7.05.2007 issued by opp. party No. 1 for operating Tomka Toll Gate on Daitari-Dubury Expressway Road for the period from 1.8.2007 to 31.7.2008, he submitted his offer along with the earnest money of Rs. 23,85,800.00 i.e. 10% of the upset price, within the stipulated time. The last date for submission of sealed bids was fixed to 29.5.2007 (upto to 5 P.M.) and the bids were to be opened on 30.5.2007 at 11.45 A.M. in the Head Office of the Corporation. On 30.5.2007 when the bids were opened, the Petitioner on coming to know that he had inadvertently quoted the upset price withdrew the bid immediately by letter dated 8.6.2007, which was dispatched on 10.6.2007 and received by the opp. party on 11.6.2007. The Petitioner alleges that before acceptance of the bid, he claimed refund of the earnest money deposit (E.M.D.). When the opposite parties ultimately refused to refund the E.M.D., the Petitioner filed the present writ application. 4. The Managing Director of the Corporation-O.P. No. 1 has filed a counter affidavit. The ground taken in paragraph-3 of the counter affidavit, is quoted below: That in reply to averments made in Paragraph-1 of the writ petition, it is submitted that, the Corporation invited sealed bid from the intending bidders for collection of Toll of Tomka Toll Gate in Daitary-Duburi Express way Road for the period from dt. 01.08.2007 to 31.7.2008. The said notice was published in different leading Newspapers. In response to said notice, only one bidder (present Petitioner) participated in the tender process and quoted Rs. 2,76,40,000/- which is 15.85% excess over the upset price. The opp. party, Corporation vide letter dt. 13.6.2007 Annexure-3 intimated the Petitioner to execute the agreement and to deposit the first instalment as his bid has been accepted. But prior to acceptance, the Petitioner revoked his bid on 8.6.2007. 2,76,40,000/- which is 15.85% excess over the upset price. The opp. party, Corporation vide letter dt. 13.6.2007 Annexure-3 intimated the Petitioner to execute the agreement and to deposit the first instalment as his bid has been accepted. But prior to acceptance, the Petitioner revoked his bid on 8.6.2007. Since the Petitioner failed to turn up at the Office of the opp. party, Corporation along with balance bid amount for drawal of necessary agreement, the Corporation as per Clause 14 and 15 of the terms and conditions of NIT, the E.M.D. deposited by the Petitioner stood forfeited. xxxx (Emphasis supplied) 5. From the aforesaid paragraph 3, it is evident that the Petitioner had withdrawn his offer prior to its acceptance. 6. Pursuant to the order passed by a collateral Bench of this Court on 21.1.2009, the relevant records are produced for our perusal. On perusal of the records, we find that the matter was referred to the Law Department, Govt. of Orissa, and the Law Department has given a clear opinion that Clause 15 of the Terms and Conditions of the Tender Notice would not be applicable as the bidder had withdrawn his bid prior to acceptance of his offer and accordingly the Petitioner was entitled to refund of the E.M.D. It is further revealed from the said records that the matter was placed before the Engineer-in-chief-cum-Secretary to the Government, Works Department, and he referred the same to the Advocate General for opinion. The Advocate General opined thus: Once the successful bidder withdrew and the State goes for fresh bidding it incurs expenses and reasonable loss of revenue, which has been caused for irresponsible act of a successful bidder. Since he is to execute works it can not be specifically enforced and therefore I am not in agreement with the Law Department that the earnest money deposit should be returned without reimbursing the loss. I am also of the view that the earnest money deposit is a measure or a pre-estimate of damage, which can be adjusted without evidence of the same. The EMD according to law need not be refunded. 7. Mr. Kanungo, learned Counsel for opposite parties, submits that in view of such decision and the opinion given by the Advocate General, it is not possible on the part of the opposite parties to refund the EMD to the Petitioner. 8. The EMD according to law need not be refunded. 7. Mr. Kanungo, learned Counsel for opposite parties, submits that in view of such decision and the opinion given by the Advocate General, it is not possible on the part of the opposite parties to refund the EMD to the Petitioner. 8. The facts, which are not disputed, are that (i) the Petitioner has withdrawn his bid offer prior to its acceptance; and (ii) there is nothing to show that any damage has been caused to the State exchequer. 9. In this regard we may refer to the decisions of the apex Court in Maula Bux Vs. Union of India (UOI), and Saurabh Prakash Vs. DLF Universal Ltd., wherein it has been held that: While directing forfeiture of the "earnest money" the provisions of the Contract Act, 1872 are to be kept in mind. Forfeiture is permissible only when a concluded contract has come into being and not prior thereto. 10. The aforesaid aspect has been lost sight of by the opposite parties while rejecting the claim of the Petitioner for refund of his E.M.D. In our considered opinion, the claim of the Petitioner for refund of the E.M.D. is legal and justified and the refusal of opp. party No. 1 to refund the same vide Annexure-7 is not sustainable in the eye of law. 11. Accordingly, we quash Annexure-7 and direct the opposite parties to refund the EMD to the Petitioner within a period of one month from the date of communication of this order. 12. The writ petition is allowed to the above extent. 13. Urgent certified copy of this order be granted on proper application. Final Result : Allowed