1 IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITIONS NO. 357/2000 & 33/2001 WRIT PETITION NO. 357/2000 Martin Lottery Agencies Ltd. Represented herein by Power of Attorney Shri Pius Fernandes, having office at `Daisy Plaza' 355-359, 6th St. Gandhipurum, Coimbatore 641 012. ........... Petitioner. Versus. 1. State of Goa through Secretary (Finance), Government of Goa, 4th Floor, EDC House, Panaji, Goa. 2. The Director of State Lotteries & Ex-Officio, Jt. Secretary, Government of Goa, with Office at Altinho, Panaji, Goa. WRIT PETITION NO. 33/2001 M/s. Anu Agencies, a registered Partnership Firm having office at H-11, Lajput Nagar-II, New Delhi, represented herein by its duly constituted power of Attorney Holder, Shri Edward D'Souza, resident of St. Cruz, Ilhas, Goa. . ........... Petitioner. Versus. 1. State of Goa through its Chief Secretary having office at Secretariat, Panaji, Goa. 2. The Director of State Lotteries & Ex-Officio, Joint Secretary, Government of Goa, 2 Directorate of State Lotteries, Altinho, Panaji, Goa. Mr. M. S. Sonak, Advocate for the petitioners. Mr. S. R. Rivonkar, Government Advocate for the respondents. CORAM : S.A. BOBDE & R.C. CHAVAN, JJ. DATE : 12th June, 2008 ORAL JUDGMENT : (PER R.C. CHAVAN, J.) The petitioners, in these two petitions, take exception to the forfeiture of the Earnest Money Deposit of Rs.25,00,000/- each, furnished by the petitioners while responding to the notice inviting tender for appointment of sole selling agents/distributors for sale of Goa State Lotteries. 2. The Government of Goa had invited tenders vide its Tender Notice dated 13.10.1999. In response to this notice, the petitioners in the two petitions submitted their offers and furnished sum of Rs.25,00,000/- each, as Earnest Money Deposit. It is not in dispute that one M/s. Pavana Enterprises was the highest bidder whose offer was accepted by the State when the tenders were opened. On 18.11.1999, the petitioners in Writ Petition No.33/01 M/s. Anu Agencies had withdrawn their offer. M/s. Pavana 3 Enterprises backed out on 2.12.1999. On the same day, the State Government offered distributorship to M/s. Anu Agencies which was second highest bidder, on condition that the distributorship would be subject to the final decision in Writ Petition No. 320/99. The petitioner M/s. Anu Agencies protested and demanded refund of earnest money deposit. Anu Agencies was informed on 6.12.1999 that the earnest money stood forfeited. 2. The State Government then offered the sole distributorship to the petitioner in Writ Petition No. 357/2000, i.e. M/s. Martin Lottery Agencies on the same condition, namely that it would be subject to the final result in Writ Petition No. 320/1999. The petitioner therein sought further information. Thereafter, the tender was itself cancelled. The petitioner in Writ Petition No.357/2000 also sought refund of Earnest Money Deposit. The State declined. M/s. Martin Lottery Agency filed Writ Petition No. 104/2000 wherein the learned Advocate General stated that the decision on the request of M/s. Martin Lottery Agency relating to the forfeiture or refund of the earnest money deposit would be taken by them within the stipulated period. Thereafter, the petitioners therein were informed that the earnest money deposit was forfeited, leading the petitioners to file these petitions. 3. We have heard Mr. Sonak, the learned Counsel for the petitioners 4 and Mr. Rivonkar, the learned Government Advocate for the respondents. A “deposit” by its very nature is something which has to be refunded, unless some term of contract enables forfeiture. 4. In case of Anu Agencies, since Anu Agencies had withdrawn their offer before it was accepted, there could be question of the respondents being able to contend that the earnest money deposit of Anu Agencies could be forfeited, because they backed out. In para 16 of the reply, filed on behalf of the respondents, it is contended that it was not open to Anu Agencies to withdraw the offer after tenders were opened. However, the learned Government Advocate could not point out any such condition in the tender document, indicating that such withdrawal was impermissible. Since the offer of M/s. Anu Agencies had been withdrawn, it could not have been accepted conditionally subsequently to brand them as defaulters. Their claim for refund of the earnest money deposit was thus justified. 5. In case of M/s. Martin Lottery Agencies Ltd ., though its offer was valid when it was accepted, the acceptance itself was conditional, subject to the final decision in Writ Petition No.320/1999. (Even acceptance of offer of M/s. Anu Agencies was subject to this condition.) The learned Government Advocate submitted that this condition was imposed in 5 pursuance of the order passed in the said writ petition. Whether the Government had justification to impose such a condition or not does not alter the fact that the acceptance was conditional and, therefore, since it was not absolute and unqualified, it does not amount to “acceptance” as required under Section 7 of the Contract Act. Therefore, it could not be said that even M/s. Martin Lottery Agencies Ltd. had defaulted, requiring the earnest money deposit furnished by them to be forfeited. In this view of the matter, there is absolutely no justification for the respondents to withhold the earnest money deposit tendered by the two petitioners. Mere Offer of the two petitioners does not make them “successful tenderers”. They would have become successful bidders only upon acceptance. Since the acceptance was qualified in case of both the petitioners and, in case of Anu Agencies, it came after the offer was withdrawn, the two petitioners were not required to comply with clause 9 of the tender document or sign an agreement with the State. Consequently, their failure cannot lead to forfeiture of earnest money deposit. 6. Ironically, the respondents had asked one of the petitioners to even submit a pre-receipt and asked the other to submit original money receipt to process refund. After this, volte face by the State is not only enigmatic but unfortunate. 6 7. It is not clear as to what prompted the State to forfeit the earnest money deposit of the two petitioners after the entire tender process was cancelled. First, it is not shown that there was any condition in the tender document indicating that the tenderers were required to keep the offer alive for particular period after the tenders were opened. Secondly, had such a condition been there, upon cancellation of the entire process, this condition too could not have been enforced against the two petitioners. 8. In this view of the matter, the petitioners in these two petitions, succeed. Rule is made absolute. The respondents shall refund the earnest money deposit of the petitioners, with interest, at the rate of 15 % per annum (since the transactions are commercial) from the date the tender process was cancelled, till the payment is made, within a period of 8 weeks from this Judgment. S.A. BOBDE, J. R.C. CHAVAN, J. ssm.