JUDGMENT

SHARMA, J. :— Special Leave is granted.

2. In response to a notice inviting tenders by the Diesel Locomotive Works, Indian Railways, in connection with disposal of one lot of Ferrous Scrap, a number of tenders were submitted by the appellant, the respondent No. 1 and other intending purchasers. The tenders of the respondent No. 1 and some other bidders were rejected as defective and the appellants offer being the highest was accepted, and accordingly the appellant deposited a sum of about Rs. 15 lacs. The respondent No. 1 challenged the decision by a writ petition before the Allahabad High Court contending that there was no defect in its tender and that the tender of the appellant could not have been validly accepted as the necessary condition of payment of Rs. 50,000/- as earnest money with the tender had not been complied with. The application was resisted on the grounds (i) that the respondent No. 1 having not deposited the earnest money at all was not entitled to a consideration of its tender and has no locus standi in the present matter; and (ii) that the appellant had substantially complied with the requirement by sending with its tender a Bankers Cheque marked and certified by the Union Bank of India as good for payment. The High Court accepted the appellants first ground, holding that the tender of the respondent had been rightly rejected for failure to deposit the earnest money, but allowed the writ petition on the finding that the appellant also did not satisfy the condition No.6 of the tender notice as the earnest money was offered by the Bankers Cheque of a bank other than the State Bank of India mentioned in the said clause. The High Court directed the authorities to consider the other valid tenders and further observed that should the other tenders be found to be unacceptable it would be open to the authorities to invite fresh tenders. The present appeal is directed against this judgment.

3. The case of the appellant has been that its tender mentioned the highest amount of one and a half crores rupees for the 2000 M.T. of Ferrous Scrap which was a very fair price, and the authorities were absolutely right in accepting the same. With respect to the alleged deficiency in the matter of deposit of the earnest amount, the stand is that a Bankers Cheque is as good as cash and especially so when a verification. from the bank in question about its authenticity was made and the banks assurance to honour the same was obtained. Admittedly, the Tender Committee had taken the precaution of getting the matter confirmed from the appellants bank before deciding to accept his tender.

4. The relevant clause 6 of the notice required the tender to be accompanied by earnest money calculated at 5% of the offer under the tender subject to a maximum of Rs. 50,000/- and in terms permitted the deposit by cash or by demand draft drawn on the State Bank of India. The defect pointed out by the respondent No.1. and accepted by the High Court is in the appellant sending the cheque of the Union Bank of India drawn on its own branch and not on the State Bank. By the impugned judgment it has been held that in view of this defect the authorities had no power to accept the appellants tender.

5. The learned counsel for the appellant has contended that having regard to the circumstances in the case it must be held that the Tender Committee had the power to accept the appellants tender. Referring to the books "Bills of Exchange" by Byles, and "Cheques in Law and- Practice" by M.S. Parthasarathy, it has been argued that certified cheques are as good as cash and the irregularity relied upon in the appellants submitting his tender could be validly waived by the Diesel Locomotive Works. Reliance was also placed on M/ s. B. D. Yadav and M. R. Meshram v. Administrator of the City of Nagpur, AIR 1984 Born 351, and T.V. Subhadra Amma v. Kerala Board of Revenue, AIR 1982 Ker 81.

6. It is true that in submitting its tender accompanied by a cheque of the Uni