ORDER 1. The main point involved in this writ petition is, whether there was contract between the parties so as to attract general terms and conditions applicable to a contract. 2. The aforesaid point arises in this case that challenges the recovery notice /order dated 16-7-2010, issued by the South Eastern Coalfields Ltd., Bhatgaon, District Surguja (the SECL) to M/s. S. Kumar’s Associates AKM (JV) (the Petitioner) requiring it to deposit an amount of Rs.78.07,573/- being the difference in getting the alleged remaining work completed. THE FACTS 3. The SECL invited tenders on 23-6-2009 for removal of over burden. The petitioner was the successful bidder and a letter of intent was issued to it on 5-10-2009. 4. In pursuance of the letter of intent, the petitioner was also required to deposit the performance security and security deposit. It neither deposited the performance security nor the security deposit as it was not in a position to carry out the work. 5. The SECL issued fresh advertisement inviting tenders for removal of over-burden on 27-1-2010 and the contract was given to some after other bidder. 6. Subsequently, the SECL issued the recovery letter dated 16-7-2010 for a sum of Rs. 78,07,573/- against the petitioner being the extra amount of money that the SECL had to pay to the subsequent contractor for non performance of the work allotted to the petitioner. Hence, the present writ petition. POINTS FOR DETERMINATION 7. We have heard counsel for the parties. The following points arise for determination: (i) Whether there was any completed contract between the parties; (ii) In case the answer to the aforesaid question is in the negative, then whether the petitioner is liable to pay any amount of damages. 1st POINT : THERE WAS NO CONTRACT 8. The SECL is justifying its recovery on the basis of condition number 9.2 (attached herewith as Appendix-I) of the general terms and conditions of a contract. 9. The general terms and conditions of a contract apply in a case where there is a contract. In case, there was a contract between the parties then condition number 9.2 (see Appendix-I) is applicable and the recovery is valid. But, the question is, was there any completed contract between the parties. 10. The notice inviting tenders (the NIT) contains terms and conditions. It also provide as to when a contract between the parties comes into existence. In case, there was a contract between the parties then condition number 9.2 (see Appendix-I) is applicable and the recovery is valid. But, the question is, was there any completed contract between the parties. 10. The notice inviting tenders (the NIT) contains terms and conditions. It also provide as to when a contract between the parties comes into existence. In this regard Clause No. 29.1, 29.2 and 30.2 (attached herewith as Appendix-II) are relevant. 11. Clause 29.1 of NIT (see Appendix-II) provides that the successful bidders are to be notified of the award. The registered letter of this communication is the letter of acceptance. It indicates the amount to be paid by the SECL on completion of a contract. 12. Clause 29.2 of the NIT states, The notification of award will constitute the formation of Contract, subject only to the furnishing of a Performance Security/Security Deposit in accordance with Clause 30. 13. Section 7 of the Indian Contract Act, 1872 (the Act) is titled Acceptance must be absolute. It provides that the acceptance must be absolute and unqualified. 14. In the present case, the acceptance was subject to furnishing performance security/security deposit. It was not absolute. The Contract could be formed, if the successful bidder had provided performance security and the security deposit in terms of Clause 30 of the NIT. 15. Clause 30.2 of NIT (see Appendix-II) provides as to what would be the amount of performance security and in what form it is to be deposited. The last paragraph of clause 30.2 of the NIT is as follows: Failure of the successful bidder to comply with the requirement as above (failure to deposit performance security) shall constitute sufficient ground for cancellation of the award of work and forfeiture of the bid security. 16. The relevant point to note is that clause 30.2 of the NIT provides cancellation of the award and not the contract, as consequence of failure to deposit performance security. This shows that no contract comes into existence till performances security is deposited. 17. In our opinion. (i) No contract came into existence between the parties, as the performance security was not deposited; (ii) Condition number 9.2 of the general terms and the conditions is not applicable in the present case. 2nd POINT : ONLY BID SECURITY CAN BE FORFEITED. 18. 17. In our opinion. (i) No contract came into existence between the parties, as the performance security was not deposited; (ii) Condition number 9.2 of the general terms and the conditions is not applicable in the present case. 2nd POINT : ONLY BID SECURITY CAN BE FORFEITED. 18. The last paragraph of clause 30.2 of the NIT (see Appendix-II) also provides consequences of non-deposit of performance security. It states that the failure of the successful bidder to deposit performance security ....shall constitute sufficient ground for .... forfeiture of the bid security. 19. In view of above, only bid security of the Petitioner could be forfeited by the SECL. CONCLUSIONS 20. Our conclusions are as follows : (a) The petitioner had neither deposited the performance security nor security deposit. Thus, there was no completed contract between the parties. The general terms and conditions were not applicable; (b) In view of the last paragraph of clause 30.2 of the notice inviting tenders, only bid security could be forfeited. In view of our conclusions, the order/letter dated 16-7-2010 for recovery of the difference is illegal and is set aside. 21. In this case, in pursuance of the interim order dated 4-8-2010, an amount of Rs. 10,00,000/- was deposited by the petitioner with the SECL. It may be returned to the petitioner after deducting the bid security amount. 22. The amount may be returned after the deduction within one month from the date of production of a certified copy of this order on the Chief General Manager, South Eastern Coalfields Ltd., Bhatgaon, district Surguja (Respondent-2 to this writ petition). In case of failure to do so, there will be liability to pay interest @ 6% on the amount from the expiry of the period previously mentioned. 23. With the aforesaid observations, the writ petition is allowed. Petition allowed.