LexNATIONAL THERMAL POWER CORPORATION LTD. versus M/S. ASHOK KUMAR SINGH & ORS.
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[2015] 2 S.C.R. 388 A NATIONAL THERMAL POWER CORPORATION LTD. B v. M/S. ASHOK KUMAR SINGH & ORS. (Civil Appeal No. 1852 of2015) FEBRUARY 13, 2015 [T.S. THAKUR, R.K. AGRAWAL AND ADARSH KUMAR GOEL, JJ.] C Government contracts: Forfeiture of earnest money on withdrawal of bids- Challenged- Held: In terms of condition no.2 of Special condition of contract, revocation of tender was by itself sufficient to call for forfeiture of earnest money- D Therefore, respondents cannot contend that the right to withdraw the bid in terms of s. 5 of the Contract Act, 1872 would entitle them to withdraw without suffering forfeiture of E the earnest money. Allowing the appeal, the Court HELD: A plain reading of Condition no.2 of Special Conditions of Contract would show that one of the Special Conditions of Contract, subject to which the F intending bidders could submit their bids, was that the earnest money accompanying the bid shall be forfeited in any one of the three contingencies referred to in Condition No.2. One of these contingencies was revocation of the tender, which would in the context in G which the special provision is made imply any withdrawal of the bid/tender by the bidder concerned. The High Court appears to have confused revocation of H 388 NATIONAL THERMAL POWER CORP. LTD. v. ASHOK 389 KUMAR SINGH the tender with revocation of the tender notice. The A expression "revocation of tender" does not obviously refer to revocation by the appellant-corporation, who had issued the tender notice. There is a clear difference between revocation of a 'tender' and revocation of the 'tender notice'. While revocation of the tender notice is B the prerogative of the appellant-corporation, revocation of the 'tender' could be only by the bidder/tenderer concerned. The expression "revocation" may have been loosely used by the corporation, but, in the context in which the same appears in the Special Conditions of C Contract only means withdrawal/cancellation/ recall of the bid or tender submitted by the bidder. The High Court was in manifest error in holding that the forfeiture did not fall within the purview of Condition No. 2. It is no longer possible for the respondents to contend that the D right to withdraw the bid in terms of Section 5 of the Contract Act, 1872 would entitle them to withdraw without suffering forfeiture of the earnest money even in cases where the submission and receipt of bids is itself subject to the condition that in the event of a E withdrawal of the bid the earnest money stand forfeited. [Paras 7, 13) [392-E-H; 393-A-C; 397-F-G] National Highways Authority of India v. Ganga Enterprises and Anr. (2003) 7 SCC 410: 2003 (3) Suppl. F SCR 114; State of Maharashtra and Ors. v. A.P Paper Mills Ltd. (2006) 4 SCC 209: 2006 (3) SCR 719; State ofHaryana and Ors. v. Malik Traders (2011) 13 SCC 200: 2011(10) SCR 372 - relied on. Case Law Reference G 2003 (3) Suppl. SCR 114 relied on. Para 9 2006 (3) SCR 719 relied on. Para 9 H 390 . A SUPREME COURT REPORTS [2015] 2 S.C.R. 2011 (10) SCR 372 relied on. Para 9 CIVILAPPELLATE JURISDICTION: Civil Appeal No(S). 1852 of 2015 B From the Judgment and Order dated 11.10.2013 of the High Court of Judicature at Allahabad Lucknow Bench Lucknow in Misc. Bench No. 9620 of 2013. S. K. Dhingra, Shefali Mitra, for the Appellant. C Alka Agrawal, Ajay K. Agrawal, for the Respondents. The judgment of the Court was delivered by T.S. THAKUR, J. 1. Leave granted. D 2. This appeal arises out of an order dated 11/10/2013 passed by the High Court of Judicature at Allahabad, whereby M.B. No. 9620 of 2013 filed by the respondents has been allowed and order dated 19/09/2013 passed by the appellant- corporation declining refund of the earnest money quashed E with a direction to the corporation to refund to the respondents the amount deposited by them. 3. The appellant-corporation floated two tenders one dated 17/10/2012 and the other dated 19/11/2012 for F construction of a shed and a boundary wall. The respondent- contractor submitted two separate tenders in response to the said tender notices enclosing therewith an amount of Rs.4,41,000/- and Rs.3,34,000/- respectively towards earnest money deposit. The tenders were in two parts, one G technical and the other commercial. While the technical bids were opened and found compliant, the financial bids had yet to be opened when the respondents moved an ap
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