ivil Appeal No 2272 of 1991
From the Judgment and Order dated 12111990 of the Allahabad High Court in CMWP No 11192 of 1990
Sunil Gupta and SSukumaran for the Appellant
Dr Anand Prakash BK Prasad and SN Sikka for the Respondents
698 The Judgment of the Court was delivered by SHARMA J
Special Leave is granted
In response to a notice inviting tenders by the Diesel Locomotive Works
Indian Railways in connection with disposal of one lot of Ferrous Scrap a number of tenders were submitted by the appellant the respondent No 1 and other intending purchasers
The tenders of the respondent No 1 and some other bidders were rejected as defective and the appellant s offer being the highest was accepted and accordingly the appellant deposited a sum of about Rs15 lacs
The respondent no 1 challenged the decision by a writ petition before the Allahabad High Court contending that there was no defect in its tender and that the tender of the appellant could not have been validly accepted as the necessary condition of payment of Rs 50000 as earnest money with the tender had not been complied with
The application was resisted on the grounds i that the respondent No 1 having not deposited the earnest money at all was not entitled to a consideration of its tender and has no locus standi in the present matter and ii that the appellant had substantially complied with the requirement by sending with its tender a Banker s Cheque marked and certified by the Union Bank of India as good for payment
The High Court accepted the appellant s first ground holding that the tender of the respondent had been rightly rejected for failure to deposit the earnest money but allowed the writ petition on the finding that the appellant also did not satisfy the condition no6 of the tender notice as the earnest money was offered by the Banker s Cheque of a bank other than the State Bank of India mentioned in the said clause
The High Court directed the authorities to consider the other valid tenders and further observed that should the other tenders be found to be unacceptable it would be open to the authorities to invite fresh tenders
the present appeal is directed against this judgment
The case of the appellant has been that its tender mentioned the highest amount of one and a half crores rupees for the 2000 MT of Ferrous Scrap which was a very fair price and the authorities were absolutely right in accepting the same
With respect to the alleged deficiency in the matter of deposit of the earnest amount the stand is that a Banker s Cheque is as good as cash and especially so when a verification from the bank in question about its authenticity was made and the Bank s assurance to honour the same was obtained
Admittedly the Tender Committee had taken the precaution of getting the matter confirmed from the appellant s bank before deciding to accept his tender
699 4
The relevant clause 6 of the notice required the tender to be accompanied by earnest money calculated at 5 of the offer under the tender subject to a maximum of Rs 50000 and in terms permitted the deposit by cash or by demand draft drawn on the State Bank of India
the defect pointed out by the respondent No 1 and accepted by the High Court is in the appellant sending the cheque of the Union Bank of India drawn on its own branch and not on the State Bank
By the impugned judgment it has been held that in view of this defect the authorities had no power to accept the appellant s tender
the learned counsel for the appellant has contended that having regard to the circumstances in the case it must be held that the Tender Committee had the power to accept the appellant s tender
Referring to the books Bills of Exchange by Byles and Cheques in Law and Practice by MS Parthasarathy it has been argued that certified cheques are as good as cash and the irregularity relied upon in the appellant s submitting his tender could be validly waived by the Diesel Locomotive Works
Reliance was also placed on Ms BD Yadav and MR Meshram vs Administrator of the City of Nagpur and TV Subhadra Amma vs Kerala Board of Revenue and Others 6
It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank the clause No 6 of the tender notice was not obeyed literally but the question is as to whether the said non compliance deprived the Diesel Locomotive Works of the authority to accept the bid
As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail and is not entitled to waive even a technical irregularity of little or no significance
The requirements in a tender notice can be classified into two categories those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition
In the first case the authority issuing the tender may be required to enforce them rigidly
In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases
This aspect was examined by this Court in GJ Fernandez vs State of Karnataka 7 Ors
  a case dealing with tenders
Although not in an entirely identical situation as the present one the observations in the judgment support our view
The High Court has in the impugned decision relied upon Ramana Dayaram Shetty vs International Airport Authority of India  700 Ors  but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon
The authority in that case by not insisting upon the requirement in the tender notice which was an essential condition of eligibility bestowed a favour on one of the bidders which amounted to illegal discrimination
The judgment indicates that the Court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question
This part of the judgment demonstrates the difference between the two categories of the conditions discussed above
However it remains to be seen as to which of the two clauses the present case belongs
The nature of payment by a certified cheque was considered by this Court in Sita Ram Jhunjhunwala vs Bombay Bullion Association Ltd  Anr Several objections were taken there in support of the plea that the necessary condition in regard to payment was not satisfied and in that context this Court quoted the observations from the judgment in an English decision vide Spargo s case 1873 LR  Ch
407 that it is a general rule of law that in every case where a transaction resolves itself into paying money by A to B and then handing it back again by B to A if the parties meet together and agree to set one demand against the other they need not go through the form and ceremony of handing the money backwards and forwards
This Court applied that the observations to a transaction requiring payment by one to another
The High Court s decisions in BD Yadav s case and TV Subhadra Amma s case are also illustrations where literal compliance of every term of the tender notice was not insisted upon
In the instant case the certified cheque of the Union Bank of India drawn on is own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank
In this situation it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of clause 6 specially when it was in its interest of not to reject the said bid which was the highest
We therefore set aside the impugned judgment and dismiss the writ petition of the respondent No 1 filed before the High Court
The appeal is accordingly allowed with costs through out
RP Appeal allowed


Summary:
The respondent defendant claimed the benefits under Section 274 of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act 1953 alleging that he was a sub tenant cultivating the disputed land
The Compensation Officer accepted his claim and passedan order in his favour under Section 274
The appellants  father Plaintiff challenged the order of Compensation Officer contending that the defendant was not entitled to the acquisition of the proprietary right under section 274 because he was merely a labourer employed by him and he had never cultivated the disputed land
Both the Trial and the Appellate court accepted the plaintiff s case and concurrently held that the defendant was not a sub tenant and consequently the order passed in his favour under Section 274 was without jurisdiction
The plea of Limitation was rejected and the plaintiff s suit was decreed by holding that he being the tenant in possession was entitled to the right under section 274 of the Act
On further appeal the High Court dismissed the plaintiff suit on the ground that the suit having been filed after a period of more than three years from the date of the order under section 274 it was barred by limitation
Hence this appeal against the decision of the High Court
Allowing the appeal and setting aside the judgment of the High court this Court HELD 1
The principle for deciding the question of limitation in 691 a suit filed after an adverse order under a Special Act is well settled
If the order impugned in the suit is such that it has to be set aside before any relief can be granted to the plaintiff the provisions of Article 100 will be attracted and if no particular Article of the is applicable the suit must be governed by the residuary Article 113 prescribing a period of three years
therefore in a suit for title to an immoveable property which has been the subject matter of a proceeding under a Special Act if an adverse order comes in the way of the success of the plaintiff he must get it cleared before proceeding further
On the other hand if the order has been passed without jurisdiction the same can be ignored as nullity that is non existent in the eye of law and it is not necessary to set it aside and such a suit will be covered by Article 65 693C D 11 In the instant case the concurrent findings were that the plaintiff was the owner in cultivating possession of the land and the defendant was merely a labourer without any right of the tenant or a sub tenant
If the land was in cultivating possesion of the plaintiff the compensation Officer did not have the jurisdiction to pass any order in defiance of section 272 and the land did not vest in the State at all
Further for the additional reason that defendant was not a tenant of the land the order passed in his favour under Section 274 was again without jurisdiction
Therefore in absence of the conditions necessary for the exercise of power under Section 274 of Officer lacked jurisdiction to act and it was not necessary for the Civil Court to formally set aside his order before passing a decree
What necessitated the plaintiff to come to the civil court was the challenge to his title and the suit must be held to be covered by Article 65 and therefore not barred by shorter period of limitation either Article 100 or Article 113
693E 694B C D Sheo Lal and Ors
vs Sultan  Ors
  and Mohd Murtiza Khan vs State of M P and Ors 1966 MPLJ referred to
State vs Sadh Ram ILR HP 1973 2 235 and Gangu and Ors
vs Mahanraj Chand and Ors AIR 1934 Lahore 384 held inapplicable