High Court · 2012

(A.K.Goel, CJ) This appeal has been preferred against order of learned Single Judge allowing th e writ petition and quashing the allotment of fishery rights in favour of the ap pellant vide order dated 07.06.2010. The Assam Fisheries Development Corporation Limited issued NIT for giving fisher y rights for seven years. The bid of the writ petitioner was found to be the hig hest but the same was rejected on the ground that the earnest money was deposite d by way of Bank draft instead of call deposit. Fishery rights were given in fav our of the appellant who was next higher bidder and the respondent in the writ p etition. Aggrieved thereby, the respondent-writ petitioner approached this Court under Article 226 of the Constitution by submitting that his bid was wrongly re jected as defective as deposit in the form of Bank draft should have been treate d to be valid and at par with the call deposit. The demand draft enabled the Cor poration to have it encashed whenever it liked. The writ petition was opposed by submitting that the tender conditions were to b e strictly followed and, therefore, rejection of bid of the petitioner was justi fied. After due consideration, learned Single Judge upheld the plea of the writ petiti oner as follows : As noticed above, the petitioner offered the highest amount of Rs.1,71,7 (cid:28)8. 77/- per year as against the offer of respondent No.3, which was Rs.1,65,000/- p er year in respect of the fishery in question. The offer of other tenderers were less than the amount offered by the petitioner and the respondent No.3. The pet itioner’s tender paper was found to be defective on the ground that the earnest money was not deposited in the form of call deposit but was deposited in the for m of demand draft from a nationalized bank though his offer was higher than the offer of the respondent No.3. According to the respondents since there is a cond ition to make such deposit in the form of call deposit, the same has to be compl ied with.

9. The notice inviting tender dated 06.04.2010 issued by the Managing Direc tor of the respondent Corporation provides for purchasing the prescribed form, i n which the tender is to be submitted, along with detailed terms and conditions of the tender on payment of Rs.100/-. The petitioner and the respondent No.3 acc ordingly purchased the form along with the detailed terms and conditions of the tender from the respondent Corporation and submitted their bids. In the detailed terms and conditions it has been stipulated that the offer by the tenderer is t o be made in the form supplied by the Corporation and it should be accompanied b y the documents/ information mentioned in clause 4 of the terms and conditions. One of the requirements in clause 4 is that the tenderer has to furnish the earn est money to the tune of 15% of the minimum value fixed by the Corporation for t he first year. There is no stipulation relating to the form in which such earnes t money is to be deposited like the call deposit, bank draft or bankers cheque. In clause 5 of such detailed terms and conditions of the tender, the said positi on has been reiterated requiring the tenderer to furnish the earnest money to th e tune of 15% of the minimum value fixed by the Corporation for the first year w ith further stipulation that the unsuccessful bidder would be refunded the earne st money deposit and in case of the successful bidder the same would be refunded subject to fulfillment of the conditions of settlement. There is also a stipula tion for forfeiture of the earnest money in the eventualities stipulated in clau se 5.4 of the detailed terms and conditions. In the prescribed form in which the tenderer is to submit his offer, there is a mention in clause 4(ka) to furnish the call deposit number and date as well as the name of the bank issuing such ca ll deposit. In the prescribed form there is also no indication that the earnest money, only in the form of call deposit, would be accepted and not otherwise.

10. The purpose of taking the earnest money deposit is to ensure the sinceri ty of a tenderer to perform the contract in case of awarding the same and in cas e he is defaulted in carrying out his part of the contract, the said amount is f orfeited so that the authority awarding the contract do not suffer any loss for such default of the tenderer. The earnest money is a part of the purchase price and the same is forfeited when the transaction falls through by reason of the de fault or failure on part of the tenderer. The whole purpose of taking the earnes t money, as discussed above, being to ensure the faithful completion of the cont ract and when the record reflects that it is the pursued practice of the respond ent Corporation to encash the earnest money deposited by a successful tenderer a nd to credit the same in Corporation’s account, subject to the refund on complet ion of the contract or forfeiture, as the case may be, there is no significance whether the earnest money deposit is made in the form of call deposit or demand draft, though the period of validity of the bank draft may be 1(one) year, as th e Corporation is not expected to sit over the matter of settlement of a fishery for a period of 1(one) year from the date of issuance of the tender notice. In t he case in hand, the tender notice was issued on 06.04.2010, the order of settle ment was made in favour of the respondent No.3 on 07.06.2010 and the earnest mon ey deposited by the successful bidder, namely, the respondent No.3 was encashed and credited to the account of the respondent Corporation on 03.07.2010 i.e. wit hin 3(three) months from the date of issuance of the tender notice and 1(one) mo nth from the date of issuance of the order of settlement. Therefore, the respond ent Corporation would not have been put to any disadvantageous position had the earnest money furnished by the petitioner, who was the highest bidder, in the fo rm of bank demand draft, been accepted, as the same also could have been encashe d and deposited in the Corporation’s account within the time limit attached to s uch bank draft, as normally done by the Corporation in the matter of settlement. The Corporation in that case would not have suffer any loss of revenue as the p etitioner’s offer was higher than the offer of the respondent No.3.

11. It is no doubt true that if the authority stipulates any condition in th e NIT, those are required to be fulfilled and it cannot deviate from such condit ions unless of course those are essential conditions of eligibility and not mere ly ancillary or subsidiary with the main object to be achieved by such condition . In case any condition stipulated in the NIT is merely ancillary or subsidiary with the main object to be achieved by such condition, it is open to the authori ty to deviate from and not to insist upon the strict compliance of the condition in appropriate cases, as opined by the Apex Court in G.J. Fernandez(supra) [(19 90)2 SCC 488] and Poddar Steel Corporation(supra) [(1991)3 SCC 273]. In the case in hand, as discussed above, there is no stipulation in the 12. detailed terms and conditions of the NIT supplied to the petitioner as well as t o the respondent No.3 and other bidders that the earnest money has to be deposit ed only in the form of call deposit and not in any other form. The prescribed fo rm supplied by the respondent Corporation, in which the offer has to be submitte d by the tenderer, also does not stipulate that such earnest money has to be fur nished in the form of the call deposit though it requires furnishing certain inf ormation relating to the call deposit. Such information as sought for in the for m cannot be treated as terms and conditions of the NIT, having not stipulated so in the detailed terms and conditions supplied to the tenderers, more so, when t here is no stipulation that non-furnishing of the earnest money in the form of c all deposit entails disqualification. (cid:29) We have heard learned counsel for the parties. Learned counsel for the appellant and the Corporation submitted that the tender conditions could not be deviated and it was for the Corporation to decide whethe r the earnest money deposit was required to be in the form of call deposit or by Bank draft. Learned counsel for the appellant also submitted that the appellant had made substantial investment and at this stage the contract was not liable t o be interfered with. After due consideration, we do not find any merit in this appeal. As rightly hel d by learned Single Judge, there was no stipulation in the NIT about the furnish ing of earnest money in the form of call deposit. Thus, there was no violation o f any tender condition in deposit being made by way of Bank draft. Moreover, the deposit by way of Bank draft does not cause any prejudice to the Corporation an d thus form of deposit could not be a ground to reject the highest bid. Thus, learned Single Judge was justified in quashing the contract granted to the appellant ignoring the claim of the writ petitioner. As regards investment alle ged to have been made, it is pointed out by the writ petitioner that the appella nt has already taken substantial benefits from the fishing rights in the last tw o years. In view of illegality mentioned above, it is not necessary to go into t he question. We do not find that any hardship is caused to the appellant. In any case this disputed question of fact can be better gone into in any appropriate forum if and when such question is agitated. We, thus, do not find any merit in this appeal. The appeal is dismissed.