State Of Maharashtra & Ors vs A.P. Paper Mills Ltd

The tender was to be submitted in the prescribed form on or before 15.7.1987 and sealed tenders received from the bidders were to be opened on the same day and tenderers were to pay earnest money deposit i.e. 10% of the total royalty to be worked out on the basis of the total estimated yield of that Bamboo Unit. It was mentioned in the Tender Notice that the sealed tender should be accompanied by the treasury challan or demand draft indicating that earnest money has been deposited. It was further stated in the Tender Notice that in case of successful tenderers, the earnest money deposit would automatically stand appropriated towards the security deposit which is required to be furnished. It is the case of the respondent that as per the conditions stipulated in the tender after the submission of the tender, the offer would be considered valid for a period of 45 days from the date of the Tender Sale. Pursuant to the Tender Notices issued by the appellants 2 and 3, the respondent submitted tenders on 15.7.1987 and before submitting the Tender Notice the respondent had deposited the earnest money as required by the Tender Notice. As per the clause 7 of the Tender, the final sale result was to be declared within 30 days for getting approval of the competent authority and since appellants 2 and 3 did not declare the final sale result even after the expiry of 30 days from the date of opening of the Tender i.e. 15.7.1987, the respondent sent a telegram on 15.8.1987 to appellant nos. 2 and 3 in which it was stated that since the final sale had not been declared within 30 days as per Clause 7 of the Tender Notice, the respondent had withdrawn its offer and requested for return of the earnest money deposit. The respondent also addressed letters to the appellants 2 and 3 on the same date, in which reference was made to the message and telegram which had been sent earlier. On 17.8.1987 the respondent addressed another communication reiterating its stand of withdrawing their offer and requesting for refund of the earnest money. But it did not receive any reply to the telegram which was sent on 15.8.1987 or to the letters sent on the same day addressed to the appellant nos. 2 and 3 and also to the communication dated 17.8.1987 which was addressed to appellants 2 and 3. Therefore, on 2.9.1987 a letter was addressed to the appellant no.2 stating therein that even after expiry of 45 days on 29.8.1987 the final results had not been declared and, therefore, earnest money deposited by the respondent should be refunded. Again on 16.9.1987 it addressed letters to appellants 2 and 3 stating therein that final sale result had not been declared even after the expiry of 45 days and the respondent had already withdrawn the offer and, therefore, the respondent was entitled to the refund of the earnest money deposit.

It is an admitted position that the final sale result in respect of the tender opened on 15.7.1987 was declared on 17.9.1987 which was communicated to the respondent on 21.9.1987, in which it was mentioned that the highest offer of the respondent was accepted.

Request of the respondent for refund of the earnest money deposit was rejected by appellant no.3 by letter dated 24.9.1987. The respondent filed a writ petition under Article 226 of the Constitution of India, 1950 (in short the 'Constitution') challenging the decisions of the appellants 2 and 3 dated 23.9.1987 and decision dated 24.9.1987 rejecting the request of the respondent to refund the earnest money.

xxx xxx xxx"

A reading of the clause makes it clear that the provisional sale result has to be declared as early as possible. But the same is not to be declared which is not to be considered as final sale result and the final sale result can be declared within 30 days on getting approval of the competent authority. It had not done in the present case because withdrawal was done while the tender was under consideration. That being so, the interpretation put by the High Court is clearly erroneous and deserves to be set aside. The order of the High Court is accordingly set aside. The appeal is allowed but without any order as to costs.