Regular Second Appeal No.4003 of 2008 (O & M ) IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: February 11, 2011. Regular Second Appeal No.4003 of 2008 (O & M ) Madan Lal ….Appellant Versus Food Corporation of India .. Respondent CORAM: HON’BLE MR. JUSTICE MOHINDER PAL. 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not. 3. Whether the judgment should be reported in the Digest? Present: Mr. R.C. Setia, Senior Advocate,with Mr.Vishan Ranjan, Advocate, for the appellant. Ms. Jaishree Thakur, Advocate, for the respondent. -.- MOHINDER PAL, J. Defendant-appellant Madan Lal is in second appeal aggrieved against the judgments and decrees passed by both the Courts below whereby the suit filed by the plaintiff-respondent i.e Food Regular Second Appeal No.4003 of 2008 (O & M ) Corporation of India (hereinafter referred to as `the plaintiff-Corporation’) for recovery of Rs.891517.98 (Rs.755939.98 as principal amount and Rs.141578/- as interest) from the defendant-appellant Madan Lal was decreed. I have heard Mr. R.C. Setia, Senior Advocate, assisted by Mr.Vishan Ranjan, Advocate, appearing for the defendant-appellant and Ms.Jaishree Thakur, Advocate, appearing for the plaintiff-Corporation and have gone through the records of the case. The facts of the case, in brief, are that the plaintiff- Corporation floated a tender for storage, movement, transport, distribution and sale of food grain. The defendant-appellant submitted the tender. The tender of the defendant-appellant was the lowest. It was accepted by the plaintiff-Corporation. The defendant-appellant also deposited Rs.10,000/-as the earnest money at the time of submission of the tender. The tenders were opened on 28.3.1985. The acceptance of the tender was conveyed by the plaintiff-Corporation to the defendant-appellant by way of a telegram dated 10.5.1985 (Exhibit P.2) and he (defendant-appellant) was required to deposit Rs.50,000/- as security with the plaintiff-Corporation by 16.5.1985 and to take up the work on 26.5.1985. The acceptance of tender was also subject to the defendant-appellant furnishing certain documents i.e Capacity Affidavit, Property Certificate, Income Tax Clearance Certificate and Bank Balance Certificate. The defendant-appellant neither deposited the security amount of Rs.50,000/- nor submitted the documents required by the plaintiff-Corporation, mentioned above. Thus, the pre-requisites of the contract were not complete. Regular Second Appeal No.4003 of 2008 (O & M ) The short question involved in this appeal is whether, in the facts and circumstances of the case mentioned above, it can be said that contract between the appellant-defendant and the plaintiff- Corporation had been completed. Learned counsel for the defendant-appellant has argued that both the Courts below have given a wrong finding to the effect that there was a complete contract between the parties; that this finding of the Courts below is against the record; that there was no clear-cut acceptance by the plaintiff-Corporation of the tender submitted by the defendant-appellant; and that the judgments of both the Courts below are liable to be set aside on this ground alone. It has been further argued by the learned counsel for the defendant- appellant that as per clause 4 of the tender (Exhibit P.1), the defendant-appellant was required to submit earnest money of Rs.10,000/- which amount was deposited by him. Further, as per clause 4 of the tender which prescribes that if a person who has submitted the tender, has resiled therefrom or has modified his offer, in that eventuality the earnest money was to be forfeited. In the facts and circumstances of the case, according to the learned counsel for the defendant-appellant, at best the earnest money of Rs.10,000/-, deposited by the defendant-appellant at the time of submission of tender, could be forfeited. On the other hand, learned counsel for the plaintiff- Corporation argued that the contract had come into existence and completed as per telegram (Exhibit P.2) when the defendant-appellant was informed about the acceptance of his tender. She further submitted that the contract of the defendant-appellant was terminated Regular Second Appeal No.4003 of 2008 (O & M ) by the competent authority on 9.9.1985 vide letter Exhibit P.4 and that it was at the risk and cost of the defendant-appellant. The defendant-appellant was intimated that the work was being got done at his risk and cost. It was thereafter that the work was entrusted to some other contractor. She further argued that both the Courts below have rightly decreed the suit of the plaintiff-Corporation. After giving a careful thought to the rival submissions made by the learned counsel for the parties, I find force in the submissions raised by learned-counsel for the defendant-appellant and have no hesitation in holding that there was not a complete contract between the appellant-defendant and the plaintiff-Corporation. In response to the tender floated by the plaintiff-Corporation for storage, movement, transport, distribution and sale of food grain, the defendant-appellant submitted the tender and deposited Rs.10,000/- as earnest money at the time of submission of the tender. The tender submitted by the defendant-appellant was accepted and an intimation in this regard was conveyed to him by sending him telegram dated 10.5.1985 (Exhibit P.2). The defendant-appellant was required to deposit Rs.50,000/- as security with the plaintiff-Corporation by 16.5.1985 and to take up the work on 26.5.1985. It was also conveyed to the defendant-appellant that the acceptance of tender was also subject to his furnishing Capacity Affidavit, Property Certificate, Income Tax Clearance Certificate and Bank Balance Certificate. However, the defendant-appellant failed to deposit the security amount of Rs.50,000/-. He also did not submit the documents i.e Capacity Affidavit, Property Certificate, Income Tax Clearance Certificate and Bank Balance Certificate, required by the plaintiff- Regular Second Appeal No.4003 of 2008 (O & M ) Corporation. Thus, the pre-requisites of the contract were not complete. In such a situation, as per clause 4 of the tender, (Exhibit P.1), the plaintiff-Corporation was entitled to forfeit the earnest money of Rs.10,000/- deposited by the defendant-appellant at the time of submission of the tender. However, the plaintiff- Corporation, instead of forfeiting the earnest money which had been deposited by the defendant-appellant, had filed the instant suit for recovery of damages etc. Once I have held that the contract between the plaintiff-Corporation and the defendant-appellant had not been completed because the defendant-appellant had neither deposited the security amount of Rs.50,000/- nor the documents called for by the plaintiff-Corporation, it (plaintiff-Corporation) could only forfeit the earnest money of Rs.10,000/- deposited by the defendant-appellant at the time of submission of the tender and nothing more could be recovered from him (defendant-appellant). In this view of the matter, both the Courts below were not legally right in decreeing the suit of the plaintiff- Corporation for recovery of the amount stated above. For the aforesaid reasons, this appeal succeeds. The same is, accordingly, allowed, the impugned judgments and decrees passed by both the Courts below are set aside and the suit filed by the plaintiff- Corporation is dismissed. However, there shall be no order as to costs. Dated: February 11,2011. (MOHINDER PAL) ak JUDGE