M/s. Alcon Builders & Engineers v. To be referred to Reporter or not?

In view of the above factual matrix, on which there is W.P. (C) No. 9888/2004 & C.M. No. 6996/2004 no dispute, it is clear that the withdrawal letter dated 17th February 2004 sent by the Petitioner was received in the Office of the Respondent No. 2 on 19th February 2004, and another copy on 20th February 2004 was also hand delivered. Acceptance letter is dated 20th February 2004, dispatched at the earliest on 21st February 2004, which is, naturally, after the bid was withdrawn. Explanation given in the counter affidavit that though the letter dated 17th February 2004 was received through fax on 19th February 2004, but nobody could know about this letter till 24th February 2004 is hardly convincing. That apart, there is no explanation with regard to the receipt of the letter hand delivered by the Petitioner on 20th February 2004. Even if it is taken that 19th February 2004 was a holiday, letter dated 17th February 2004 was received by the Respondent through fax as well as by hand on 20th February 2004. Till that time, there was no acceptance of the bid. Mere acceptance of bid by letter dated 20th February 2004, would not be of any consequence as communication of that acceptance to the Petitioner is also required. This letter was dispatched on 21st February 2004 and received by the Petitioner only on 24th February 2004. Another letter sent through Delhi Office was received through fax only on 23rd February 2004. It is thus clear that the offer was withdrawn before it could be W.P. (C) No. 9888/2004 & C.M. No. 6996/2004 accepted and therefore, no contract came into existence. (See Union of India vs. Maddala Thathiah, AIR 1966 SC 1724) We may refer to Section 5 of the Contract Act, which states that - “A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards.” Section 5 embodies the principle discussed by Anson in “Anson's Law of Contract” 23rd Edition at page 55, in the following words: “Acceptance is to an offer what a lighted match is to a train of gunpowder. It produces something which cannot be recalled or undone. But the powder may have laid until it has become damp, or the man who laid the train may remove it before the match is applied. So an offer may lapse for want of acceptance, or be revoked before acceptance. Also the offeree may decide to reject the offer. Until an offer is accepted, it creates no legal rights, and it may be terminated at any times.” Section 6 of the Contract Act provides that a proposal may be revoked in the following ways: “6. Revocation how made. - A proposal is revoked - (1)by the communication of noticed of revocation by the proposer to the other party; (2)by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is W.P. (C) No. 9888/2004 & C.M. No. 6996/2004 so prescribed, by the lapse of a reasonable time, without communication of the acceptance; (3)by the failure of the acceptor to fulfill a condition precedent to acceptance; or (4)by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance.” A communication of an acceptance is complete as against the proposer, when the acceptance is put in a course of transmission to the proposer so as to be out of the power of the acceptor. (Section 4 Contract Act). In case of acceptance being sent by post, the same is said to be completed when the letter of acceptance is posted. (See Bhagwandas Goverdhandas Kedia v. M/s. Girdharilal Parshottamdas and Co. and others (1966) 1 SCC 656). On the other hand communication of revocation of a proposal is said to be complete as against the person to whom it is made when it comes to his knowledge the person to whom it is made (see Section 4 Contract Act). Therefore, before the communication of acceptance by the respondent was complete, as against the proposer, i.e., the petitioner (which would be 21st February 2004 at the earliest), the proposal had been revoked by the petitioner. Thus, no biding contract came into existence between the parties. W.P. (C) No. 9888/2004 & C.M. No. 6996/2004 In these circumstances, the threatened action of the Respondent to get the work executed at the risks and costs of the Petitioner as contained in letter dated 31st May 2004 is clearly illegal and uncalled for. We may at this stage deal with another objection of the Respondent, which relates to the territorial jurisdiction of this court. It is stated in the counter affidavit that since the tenders were floated by the Respondent's Mumbai Office and were also accepted in Mumbai, Delhi Courts have no jurisdiction to entertain the present petition. Reliance is placed on the judgment of the Supreme Court in the case of Mrs. Kusum Ingots & Alloys Ltd. Vs. Union of India & Anr., JT 2004 (Suppl. 1) SC 475. However, in the counter affidavit, the respondents themselves admitted that acceptance letter was sent by the Mumbai Office to Delhi, and that the Delhi office faxed the letter to the Petitioner who is also having its office in Delhi. This communication is an integral part of the entire transaction, inasmuch as, the purported cause of action on the basis of which Respondent wants to get the work executed at the risk and cost of the Petitioner is based on this letter. This part of the cause of action has arisen in Delhi, and it is because of this purported letter that the letter dated 31st May 2004 has been issued by the W.P. (C) No. 9888/2004 & C.M. No. 6996/2004 respondent. In these circumstances, the Petitioner is forced to file this Petition. Consequently, this court has the necessary territorial jurisdiction to entertain the petition, since a part of the cause of action has arisen within its jurisdiction. The consequence of the aforesaid discussions is that the 'Rule' is made absolute. It is also held that there is no contract between the parties and resultantly, it is not open to Respondent No. 2 to get the work executed at the risk and cost of the Petitioner. Communication dated 31st May 2004 of the respondent is therefore quashed. The recovery of amount made, if any, pursuant to this threatened action, shall be refunded to the Petitioner except the earnest money. Petition stands disposed of. A.K.SIKRI, J. VIPIN SANGHI, J. August 10, 2007 P.K. BABBAR W.P. (C) No. 9888/2004 & C.M. No. 6996/2004