THE HON’BLE MR JUSTICE L. NARASIMHA REDDY Writ Petition No.2798 of 2007 ORDER: The Municipal Corporation, Kadapa, the 1st respondent, issued a tender notification, dated 07.09.2006, inviting tenders for laying a pipeline within the Municipal Corporation. The estimated cost of the work was Rs.55,29,341/-. The process comprised of two stages, namely technical bid and financial bid. Such of the tenderers, who are qualified in technical bid would clear financial bid. The petitioner has qualified at the technical bid stage. He has also furnished a bank guarantee for a sum of Rs.55,000/-, towards EMD, as required under the tender notice. However, the financial bid was not considered, nor confirmed for quite some time. According to the tender notification a bid will be valid for a period of three months. The petitioner addressed a letter, dated 22.12.2006, stating that the bid validity prescribed under the tender document had expired and requested for return of the bank guarantee for a sum of Rs.55,000/- furnished towards EMD. Through communication, dated 02.01.2007, the Commissioner of the Municipal Corporation, the 2nd respondent herein, informed the petitioner that the General Body of the Corporation passed resolution, dated 28.12.2006, to cancel the tender and to forfeit the bank guarantee. The petitioner feels aggrieved by the same. Heard learned counsel for the petitioner and learned Standing Counsel for the Corporation. It is a matter of record that the validity of the bid is for a period of 90 days. If for any reason, the Corporation was not able to finalize tenders within 90 days, it was under obligation to seek extension from the tenderers beyond 90 days. No such effort was made. Once the Corporation did not finalize the matter within the period of validity of the bids, nor sought for extension, it has no authority to forfeit the EMD. It is only when a contract is validly awarded to a tenderer and he refused to execute the work that the EMD can be forfeited. Further, no notice was issued to the petitioner before EMD was forfeited. A representation made by the petitioner for refund of the EMD cannot constitute the basis for the respondents to forfeit the same. Hence, the writ petition is allowed and the respondents are directed to return the EMD within a period of two months from today. In case the amount is not refunded within that time, it shall carry interest at 9% per annum from the date on which it became due, till the date of payment. There shall be no order as costs. _____________________ L. NARASIMHA REDDY, J. Dt.03.02.2011. GJ