National Milk Suppliers vs Union Of India And Another
2000 Latest Caselaw 907 Del

ORDER

Khan, J.

1. Respondents invited tenders for sale of two units of HTST Pasteurisers--un-chillers on 22.11.88. Petitioner responded and submitted his tender quoting Rs.1,82,000/- against item No.1 under the column "Rates (net) per unit tendered" and also made a security deposit of Rs. 5000/-. Later vide letter dated 23.2.89, Respondent called petitioner for negotiations. There are two versions to what happened during these negotiations. Petitioner's case is that he had clarified that offer made by him of Rs.1,82,000/- was for both units and that he had made a revised offer of Rs. 2,15,000/- for two units plus Rs.6,000/- for 6 pumps. But respondents maintain that they had conducted negotiations only to find out if petitioner could raise the bid and thereafter they had accepted his offer of Rs.1,82,000/- per unit and asked him to deposit the remaining security amount.

2. It transpires that perhaps on failure of negotiations, respondents addressed letter dated 23.8.87 to petitioner accepting his offer and asking him to deposit the remaining security amount. Petitioner reacted to this by his letter dated 5.4.89 referring to his alleged fresh offer of Rs. 2,15,000/- and odd for two units on 4.3.89 and cancellation of his previous offer of Rs.1,82,000/- dated 6.2.1989. No reference is, however, made to any letter/document which contained any such revised offer, in this letter and respondents thereafter issued show cause notice to him which he replied on 26.5.89 reiterating his earlier stand and wanting respondents to accept his offer of Rs.2.15 lacs for two units and for making of proportionate security deposit. Respondents replied this vide communication dated 29.6.1983 and informed him that his security deposit stood forfeited and that he would be liable to make good the loss after reentering. He wrote back to seek reconsideration of his case and refund of security amount deposited by him. But respondents eventually informed him by letter dated 5.12.89 that two units were sold after retendering wherein they had in- curred a loss of Rs.1,12,745/- which was to be paid by him within 15 days. Petitioner disputed the liability again and meanwhile respondents appointed the Arbitrator in terms of Arbitration Agreement who entered the reference. Petitioner is said to have appeared before the Arbitrator and sought stay of proceedings on the plea that there was no valid contract in existence and on his refusal filed Suit No. 711/96 under Section 33 of Arbitration Act seeking declaration that there was no valid and binding contract be- tween the parties. Trial court dismissed the suit by judgment dated 12.12.96 and petitioner has now filed this revision petition to assail it.

3. Petitioner's case in nutshell is that once respondents had failed to accept his offer on 6.2.89 and had taken recourse to negotiations leading to his revised offer of Rs. 2,15,000/- and odd for two units, his first offer, whether for one or two units stood obliterated and acceptance of that offer by respondents vide their letter dated 23.3.89 was inconsequen- tial. L/C for petitioner, Mr. Rajiv Mehra submitted that the contract could be said to be complete in terms of Sections 3 & 5 of the Contract Act only if it was unconditionally accepted by respondents before the revised offer was made by petitioner on 4.3.89. The first offer was superseded by the revised offer and the question of conveying acceptance to the first offer did not arise. He urged that trial court had fallen in error while holding that revised offer was no offer as it was not accepted by respondents. What was material was not whether petitioner's revised offer was accepted but whether it was made and if it was found to be made, it would wipe off the first offer. He asserted that acceptance conveyed to respondents of non- existent offer could not result in a valid and binding contract between the parties.

4. L/C for respondents Ms.Meena Aggarwal disputed this position more on factual matrix borne by official record. She pointed out by reference to record that petitioner had made an offer of Rs.1.82 lacs for one unit and not two units and that he was called for negotiations only to find out if he could pay more and after he had stuck to his position, his offer of Rs.1.82 lacs per unit was accepted.

5. There is no dispute about the legal position enunciated on either side. It is elementary that a valid contract comes into existence after an offer made is accepted and communicated. But the fate of the present case hinges more on factual matrix than anything else and it remains to be seen whether petitioner had in fact made a revised offer of Rs. 2.15 lacs on 4.3.89. Trial court has expressed its doubts on this rightly. As it is, the record shows that petitioners alleged revised offer is surrounded by none too happy circumstances and so is his claim that he had offered Rs.1.82 lacs for two units and not one.

6. I have examined the record of tender documents signed by petitioner including the agreement containing the arbitration clause which is an integral part of these documents. Schedule 1 there of prescribes a form which gives the description of items on sale and the details and nature of the rates, amount of Security deposit, time granted for removal etc. Item 1 of this Schedule describes the units proposed to be sold and column for rates clearly specifies rates per unit under which petitioner records Rs.1,82,000/-.

7. Petitioner's plea that he had later revised his offer to Rs. 2.15 lacs or so during negotiations on 4.3.89 is not borne by any record. His letter dated 4.3.89 of which he makes no reference in his subsequent letter dated 5.4.89, leaves much to be desired. It has no context and its text also leaves much to be desired. It is not shown to be received by anyone on behalf of respondents nor does the record disclose that petitioner was asked to make a revised offer pursuant to negotiations held with him. Therefore, once the factum of his revised offer comes under the cloud, as found by Trial court, his offer dated 6.2.89 could not be said to have evaporated, rendering its acceptance by respondents irrelevant.

8. The other aspect of the matter is that petitioner had signed on tender documents which contained the schedule, the special terms and conditions and an agreement carrying arbitration clause providing that any of the disputes arising out of or in any way touching or concerning this agreement shall be referred to Arbitrator.

9. The dispute admittedly arises out of the agreement he had signed whatever its nature and relates to the offer made by him in his tender, therefore, there is no reason for him to shy away from arbitration and I do not see any prejudice being caused to him by so doing which could provide him the forum for raising all relevant claims and issues. This revision petition accordingly fails and is dismissed.

10. However, any observation made in this order shall have no bearing whatsoever in the ongoing Arbitration proceedings.

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