Villayati Ram Mittal P. Ltd. vs Uoi & Anr.
2008 Latest Caselaw 1819 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+       W.P.(C) 14998/2004

                                                 Date of Decision: 15th October, 2008

        VILLAYATI RAM MITTAL P. LTD.               ..... Petitioner
                     Through  Mr. Sandeep Sharma, Adv.

                        versus

        UOI & ANR.                                          ..... Respondent
                                 Through   Mr. U.L. Watwani, Adv.
        CORAM:
        HON'BLE MR. JUSTICE MUKUL MUDGAL
        HON'BLE MR. JUSTICE MANMOHAN

1.      Whether the Reporters of local papers
        may be allowed to see the judgment?            No
2.      To be referred to the Reporter or not?         Yes

3.      Whether the judgment should be
        reported in the Digest?                        Yes

                                      JUDGMENT(oral)

: MUKUL MUDGAL,J.

1. With the consent of the learned counsel for the parties, this writ petition is

taken up for final hearing.

2. This writ petition has been filed for preventing by way of forfeiture, the

encashment of the earnest money of Rs.40 lakhs deposited by the petitioner with

UTI Bank Ltd., WZ-24-A, Palam Village, Delhi-110045, in the form of Fixed

Deposit bearing No.132010400022835, submitted to the respondent no.2 the

Director General MAP, on 5th May 2004 pursuant to the petitioner's response to

the tender dated 20th April 2004. The relevant Clause of the Notice of the tender

reads as follows:

"6. The 'Earnest Money' as detailed in Appendi 'A' shall be submitted in the form of FDR from a Nationlised Bank drawn in favour of Director General Marries Accommodation Project, Kashmir House, Rajaji Marg, New Delhi A/c Name of firm or demand drawn drawn in favour of Director General Marries Accommodation Project, Kashmir House, Rajaji Marg, New Delhi payable at New Delhi valid for not less than six months from the due date of receipt of tender failing which tender will be treated as non-bonafide and will not be opened. It may be noted that if any revokes his offer during validity period, his Earnest Money shall be forfeited.

The tender and earnest money shall be placed in separate sealed envelopes each marked "Tender" and Earnest

Money" respectively. Both the envelopes shall be submitted together in another sealed envelope. The envelope marked "Tender" of envelope is found in order. The EMD to unsuccessful will be returned duly released within 28 days from the conclusion of contract with successful bidder or within 28 days after expiry of bid validity whichever is earlier."

(emphasis supplied)

3. The learned counsel for the petitioner, Mr. Sandeep Sharma submitted that

for one of the components of the tender instead of Rs.23,76,000/-, the sum of

Rs.32,76,000/- was substituted due to the error having been made in the original

bid. The learned counsel for the petitioner further submitted that on 5th May

2004 the tender was opened. The correction changing the figure of

Rs.23,76,000/- in the original bid with Rs.32,76,000/- was sent by the petitioner

on 6th May 2004 after the opening of the tender on 5th May 2004. The result of

the change of the figures by the petitioner resulted in enhancing the overall initial

bid of the petitioner worth Rs.32 crores to Rs.41 crores.

4. Since the petitioner had not stood by his earlier bid of 32 crores and

instead changed the bid to Rs.41 crores the respondent treated this a revocation

of the original bid and sought to forfeit the earnest money deposit leading to the

challenge in the present writ petition by the petitioner.

5. The learned counsel for the petitioner submitted that forfeiture clause has

been wrongly resorted to as the petitioner has not revoked his tender but merely

changed the figures. In our view, the original tender of Rs.32 crores which was

sought to be corrected to a figure of Rs.41 crores after the opening of the tender

would clearly amount to revocation of the original offer of Rs.32 crores and

forfeiture was justified.

6. In shorter Oxford dictionary, the word 'revoke' has been defined to mean:

"Annul, repeal, cancel, rescind, vetract, withdrawn, recant'. The change of figure

from the initial tender of 32 crores to 41 crores clearly amounts to rescinding or

withdrawing the earlier tender of Rs.32 crores. Thus, the change of figures in the

original tender would clearly amount to revocation of the original tender of

Rs.32 crores and the respondents were fully justified in forfeiting the earnest

money deposit given by the petitioner.

7. The learned counsel for the petitioner Shri Sandeep Sharma further

submitted that the petitioner remained L-1, i.e., the lowest tenderer regardless of

the change of figures and consequently the forfeiture of the earnest money of

Rs.40 lakhs by the respondent was not justified. In our view, this is not a

material circumstance. The change and enhancement of the initial tender amount

after opening of the tender leading to the fact that the petitioner remained L-1

even after change of amount is of no consequence because the figures quoted by

the other tenderers were then known to the petitioner. Accordingly, the writ

petition is dismissed and stands disposed of. The respondent is permitted to get

the the Fixed Deposit of Rs.40 lakhs along with interest accrued thereon, if any,

deposited with UTI Bank Ltd., WZ-24-A, Palam Village, new Delhi-110045

bearing Account No.132010400022835, encashed forthwith.

MUKUL MUDGAL,J

MANMOHAN, J OCTOBER 15, 2008 dr