WP(C) 1710/2011 BEFORE HON’BLE MR. JUSTICE UJJAL BHUYAN J U D G M E N T AND O R D E R A Notice Inviting Bid (NIB) dated 31.01.2008 was floated by the Hindustan Paper Corporation Ltd., Nagaon Paper Mill, Jagiroad (briefly the Corp oration hereafter) for procurement of 20,000 Metric Tonne Green (MTG) of home g rown bamboo by road from and beyond the areas of Baihata Chariali of Lower Assam for the period 2007-08. Pursuant to the said NIB, altogether six parties partic ipated including the petitioner. The techno-commercial bids were opened on 29.02 .2008 and the price bids were thereafter opened on 15.03.2008. The petitioner wa s the lowest bidder for supply of 5000 MTG home grown bamboo at the rate of Rs.1 386/- per MTG, excluding VAT. Though the exact rate of the offer made by the Cor poration is not available, the petitioner accepted the offer on 28-4-2008. There after he deposited the earnest money deposit of Rs. 1,00,000/-, following which the supply order was issued on 13-5-2008 in duplicate for supply of the aforesai d quantity of bamboo by road from and beyond the areas of Baihata Chariali. The petitioner received the supply order on 14-5-2008. As per the said order, the pe riod of contract was for 12 months from 14-5-2008 to 13-5-2009. Clause 5 of the terms and conditions of the tender provided that the bamboo was to be supplied e xclusively from and beyond the areas of Baihata Chariali of Lower Assam through the Baihata-Guwahati-Jagiroad route. Clause 10 of the terms and conditions provi ded for security deposit by the successful bidder at the rate of Rs. 20/- per MT G for the contracted quantity to be retained by the Corporation till completion of the contract. As per the said clause, the earnest money deposit would be auto matically converted into security deposit of the successful bidder on placement of the work order which would be as per the aforesaid rate. Clause 12 of the ter ms and conditions provides for release/forfeiture of security deposit. Clause 16 of the said terms and conditions provided for execution of agreement between th e successful bidder and the Corporation. The petitioner was requested to return the duplicate copy of the supply order within 7(seven) days from the date of rec eipt of the same, duly signed by him indicating acceptance of the terms and cond itions stipulated in the supply order along with all the terms and conditions of the NIB, failing which it was provided that the work may be cancelled and that the petitioner would have no claim of any nature on the supply order including f orfeiture of the earnest money deposit. According to the petitioner, after recei ving the supply order he visited the starting point i.e. Baihata Chariali to sta rt the mobilization process for procurement of bamboo and for transportation of the same to Jagiroad by road. But he was obstructed by some unidentified youths who claimed to belong to that area and threatened the petitioner not to procure and transport bamboo from Baihata Chariali. The petitioner was further threatene d that if he acted in defiance of their diktat, he would have to face serious co nsequences. Faced with such a situation, the petitioner wrote to the Deputy Gene ral Manager (Forest) of the Corporation on 6-6-2008 stating that he was not acce pting the work order as he was not in a position to execute the work for the rea sons indicated above. The Corporation wrote back to the petitioner by its letter dated 23-6-2008. In the said letter, the Corporation stated that as per the ter ms and conditions of the supply order, the petitioner was supposed to return the duplicate copy of the same duly signed by him within 7(seven) days from its re ceipt but in stead the petitioner returned it after 23 days. It was further stat ed that the reasons given for the petitioner’s inability to execute the work di d not fall within the purview of the terms and conditions of the NIB and the wor k order, observing that the petitioner could have taken up the matter with the civil administration of Kamrup district. The petitioner replied back by his lett er dated 15-7-2008 stating that the duplicate copy was returned only after 23 da ys because initially he wanted to execute the work and went to Baihata Chariali to start the work but the local youth association did not allow him to do so, w hich was the reason for the delay. He requested the Corporation authority to shi ft the loading point from Baihata Chariali to Jalukbari referring to a previous instance where such shifting was permitted from Doboka to Kothiatoli Chariali. I t appears that the said request of the petitioner was not accepted and ultimatel y the petitioner wrote to the Corporation by his letter dated 17-1-2011 request ing the authority to refund the earnest money deposit. As there was no response, the petitioner has approached this court by filing the present writ petition se eking a direction to the corporation to refund the earnest money deposit of Rs. 1,00,000/-. 2. The Corporation has filed its counter affidavit. Corporation has stated that the petitioner returned the supply order after a period of 23 days showing his inability to accept the same contending that the difficulties expre ssed by the petitioner was beyond the control of the Corporation and that the pe titioner should have taken up the matter with the civil administration. Accordin g to the Corporation, the petitioner failed to send the duplicate copy of the su pply order within the stipulated period of 7(seven) days and in stead took 23 da ys to return the same, therefore, the claim of the petitioner for refund of the earnest money deposit cannot be accepted and that the petitioner is not entitled to the same. 3. I have heard Mr. M. Rahman, learned counsel appearing for the pe titioner as well as Mr. J. Roy, learned standing counsel appearing for the Corpo ration. 4. Mr. Rahman, learned counsel appearing for the petitioner referri ng to the averments made in the writ petition and the documents annexed thereto submits that because of circumstances beyond the control of the petitioner, he c ould not start the work. He further submits that though there was some delay in informing the Corporation authority, the same was because he tried his best to e xecute the work but when he found that the same was not possible because of grav e threat, he wrote to the Corporation authority on 6-6-2008 clearly stating that he did not accept the supply order as he was not in a position to execute the s ame. He further submits that as the agreement was not executed, it cannot be sai d that the contract had been concluded. Asserting that the problem faced by him was a genuine one which is a common problem faced by the contractors in the Stat e in recent times, he, therefore, submits that the Corporation should release th e earnest money deposit to him. 5. Resisting the said submission made on behalf of the petitioner, Mr. J. Roy, learned standing counsel submits that the offer made by the Corporat ion was accepted by the petitioner and only thereafter the supply order was issu ed. He has asserted that the contract is complete and that the petitioner is not entitled to the refund of the earnest money deposit. Expressing doubt about the genuineness of the grievance expressed by the petitioner, he submits that the p etitioner did not file any complaint either before the police authority or befor e the district authority despite being reminded by the Corporation. Asserting th at such prayer is not maintainable, he submits that if such relief is granted it will lead to chaos. In support of his submissions, Mr. Roy, learned standing co unsel refers to and relies on the following decisions: (1) 1995 Supp (4) SCC 726 (Bhanwar Lal(Dead) Now His LRS. And Others. Vrs. State of Rajasthan and Another.), (2) (2003) 7 SCC 410;(National Highways Authority of India Vrs. Ganga Enterpris es and Another), and (3) 2006 (Supp) GLT 867 (Ranjit Kumar Saha Vrs. State of Tripura and Ors.). 6. Mr. Rahman, learned counsel for the petitioner in his reply refe rred to Clause 12(b) of the terms and conditions of the tender and submits that since agreement was not executed between the petitioner and the Corporation, the earnest money deposit cannot be forfeited. He further submits that the petition er is a businessman and his predicament has to be seen and understood from the p erspective of a businessman. Perhaps considering his long term business prospect s, the petitioner did not deem it appropriate to take up the issue with the conc erned police or civil authority. 7. I have considered the rival submissions made at the bar. For a b etter appreciation of the controversy arising out of the present proceeding, it would be appropriate to consider the relevant provisions of the terms and condi tions which formed part of the work order at the very out set. As per clause 10, the earnest money deposited by the successful bidder would be converted into se curity deposit on placement of the work order. The conversion would be at the ra te of Rs. 20/- per MTG from the earnest money deposit for the contracted quantit y. It would, however, not bear any interest. Clause 12 deals with release/forfei ture of the security deposit. As per Sub-clause (a) of Clause 12, after successf ul completion of the contractual obligations, the full amount of security deposi t would be refunded to the contractor after 60(sixty) days. Sub-clause (b) of Cl ause 12 is very relevant for the purpose of the present case and the same is quo ted hereunder: (b) In the event party accepts our offer and also execute an agreement for the contract and fails to supply any quantity, the total amount of security deposit adjusted from EMD, shall be forfeited. Clause 16 as indicated in the earlier part of this judgment prov ides for execution of an agreement. As per the said clause, an agreement has to be executed by the successful bidder with the Corporation within 15 days from th e date of receipt of the supply order. The agreement has to be executed in the o ffice of the DGM (Forest) NPM, Jagiroad, wherein the contractor has to be presen t himself along with his witness. Thus, from a conjoint reading of the aforesaid provisions, it is clear that three conditions must be satisfied before the earn est money deposit can be forfeited, namely: (1) the successful bidder accepts th e offer, (2) the agreement for the contract is executed and (3) the successful b idder fails to supply any quantity. Clause 16 says that the agreement has to be executed within 15 days from the date of receipt of the supply order. In the ins tant case, though the petitioner had accepted the offer of the Corporation, ther e was no execution of any agreement as contemplated under Clause 12(b) and 16 of the terms and conditions of the supply order. Therefore, it cannot be said that the contract had been concluded. As the agreement was not executed, the Corpora tion could not have refused the prayer of the petitioner for release of the earn est money deposit. The argument advanced by Mr. Roy, learned standing counsel fo r the Corporation that the duplicate copy of the supply order was returned after 23 days of the receipt of the work order and not within 7(seven) days because o f which the petitioner is not entitled to the refund claim does not hold good. A reading of the penultimate paragraph of the supply order clearly shows that the duplicate copy of the supply order has to be returned within 7(seven) days from the date of receipt of the same duly signed by the successful bidder indicating acceptance of the terms and conditions stipulated therein and in the NIB. So th e aforesaid provision envisages a situation where the successful bidder returns the duly signed duplicate copy of the supply order within seven days to indicate acceptance of the same. If the successful bidder fails to return the duplicate copy, the supply/work order may be cancelled, in which case, the bidder will hav e no claim of any nature including forfeiture of the earnest money deposit. In t he instant case, the petitioner did not return the signed duplicate copy either within 7(seven) days or thereafter which indicates that he did not accept the su pply order. This position was made more explicit by the petitioner’s letter to t he Corporation dated 6-6-2008 where he categorically stated that he had not acce pted the work order. There is no averment in the counter affidavit filed by the Corporation that the supply order was cancelled by the Corporation. Therefore, t he Corporation was not justified in refusing to release the earnest money deposi t to the petitioner. 8. Now, coming to the cases relied upon by Mr. Roy, the learned sta nding counsel for the Corporation, I find that those decisions were rendered in altogether different situations and are quite distinguishable from the facts and circumstances of the present case. In the case of Bhanwar Lal(supra), the relev ant clause stipulated that the tenderer would have no right to withdraw his tend er, otherwise the earnest money would be forfeited. It was an absolute condition , which had to be given by way of an undertaking by the tenderer. In the face of such a clear undertaking given, the Apex Court held that the tenderer had no ri ght to claim refund of the earnest money. In the case of National Highways Autho rity of India(supra), the primary question dealt with by the Apex Court was as to whether disputes relating to contracts could be agitated under Article 226 of the Constitution of India. But even on merit, in the context of the tender cond itions which were considered in that case, the Apex Court held in para-9 of the said judgment that a person may have a right to withdraw his offer but if he ha s made his offer on a condition that some earnest money will be forfeited for n ot entering into the contract or if some act is not performed, then even though he may have a right to withdraw his offer, he has no right to claim that the ear nest/security money be returned to him. But the same is not the situation in the present case. Even in the case of Ranjit Kumar Saha(supra), there was a clause, viz, Clause 8 in the NIT, which provided that no tenderer would be allowed to s urrender his rate before finalisation of the tender and that if any tenderer sur rendered the rate offered by him before finalisation of the tender in question, the earnest money deposited by him would be liable to be forfeited. It was in th at context that this court held that since the petitioner had withdrawn his bid before finalisation of the tender in question, he obviously violated the conditi ons of the NIT and, therefore, the authorities were justified in forfeiting his earnest money by invoking Clause 8 of the NIT. 9. As seen above, all the above three cases were decided in differe nt fact situations. It is a settled proposition that each case has to be decided in the facts and circumstances of that case. As pointed earlier, the sine qua n on to forfeit the earnest money deposit in the present case is that the authorit y must be satisfied regarding fulfillment of three conditions, namely, (1) accep tance of offer, (2) execution of agreement and (3) failure to supply any quantit y. If any of the above three conditions are not satisfied, it would not be open for the Corporation to forfeit the earnest money deposit. In the present case, s ince no agreement was executed as is the requirement, the contract could not be said to have been completed. Therefore, there was no breach of contract committe d by the petitioner and since there was no breach of contract, the Corporation c annot retain or forfeit the earnest money deposited by the petitioner. 10. For all the aforesaid reasons, this writ petition is allowed. Th e Corporation is directed to refund the earnest money deposit of Rs. 1,00,000/- to the petitioner within a period of 6(six) weeks from today. No cost.