IMPORTANT POINT
Earnest money cannot be forfeited when there is no intentional lapse on part of bidder.

JUDGMENT

R. BANUMATHI, J.

Leave granted. These appeals arise out of common order of the Punjab and Haryana High Court dated 26.7.2012 passed in CWP Nos. 8415/2012 & 8416/2012 whereby the High Court declined to interfere with the action of the Food Corporation of India (FCI) rejecting tender of the appellants-firms.

2. Brief facts leading to the filing of these appeals are as follows:-The appellants are partnership firms having five partners. Respondent No. 2 -FCI invited tenders for Mandi Labour Contract (MLC) for its centres at Uchana, Sonepat, Narwana and Safidon and the appellants applied for the tender. The tender consisted of two parts -technical bid and price bid. As per the procedure, on successfully qualifying the technical bid, the price bid was to be opened. The appellants were eligible in technical bid thereby making themselves qualified for opening of price bid. The said price bid was opened on 2.3.2012. The appellants’ bid was not considered by FCI, in view of the fact that in the earlier tender of Road Transport Contract (RTC) of Hathin– Rajasthan, the appellants had failed to deposit the security deposit and bank guarantee within the stipulated period as required and the Earnest Money Deposit (EMD) of the appellants had been forfeited vide Order dated 5.11.2011 and hence, the appellants’ MLC tender was rejected invoking sub clause (III) of Clause 4 of the Disqualification Conditions. According to the appellants, earlier tender of the appellants was rejected by an Order dated 5.11.2011 invoking Clause 7 of the Model Tender Form (MTF). The appellant-Shree Shyamji Transport Company challenged the said Order dated 5.11.2011 by filing CWP No.21694/2011 which was disposed of by Order dated 6.3.2012 in which the Court observed that FCI had not invoked Clause 7 of the MTF to debar the appellant-Shree Shyamji Transport Company for the contract period and the apprehension of the appellant was ill-founded. In the light of the observations in CWP No.21694/2011, appellants contend that the Order dated 21.3.2012 rejecting the appellants’ tender for MLC invoking Clause 4 (III) is unsustainable.

3. Challenging action of the respondents -FCI in not considering their MLC tender, the appellants filed two writ petitions bearing Nos. CWP 8415/2012 and 8416/2012 to quash the communication dated 21.3.2012 and also prayed for consideration of their price bid with regard to MLC tender dated 14.3.2012. The High Court dismissed the writ petitions by a common Order dated 26.7.2012, interalia, on the grounds:-(i) In the Writ Petition No.21694/2011, forfeiture of Earnest Money Deposit (EMD) of the appellants was not set aside by the Court and forfeiture of earnest money stood sustained justifying the invocation of Clause 4 (III); (ii) appellants had also not challenged the action of the respondents declaring it to be disqualified under Clause 4 (III) of the MTF. Aggrieved appellants are before us.

4. Assailing the impugned order, Mr. Jasbir Singh Malik, learned counsel appearing for the appellants submitted that in the light of the order dated 6.3.2012 passed in CWP No.21694/2011, it was not open to the respondents to forfeit the earnest money in respect of Hathin –Rajasthan RTC tender by invoking Clause 7 of the MTF and the learned High Court did not correctly interpret its earlier order passed in CWP No.21694/2011. Learned counsel further submitted that the High Court has committed an error in observing that the appellant has not challenged the action of the respondents declaring it to be disqualified under Clause 4 (III) of the MTF whereas the appellant-firm had actually challenged the action of the FCI disqualifying the appellant under Clause 4 (III) of the MTF in CWP No. 8415/2012, contending that Clause 4 (III) could not have been invoked against the appellants.

5. Refuting the above contentions, Mr. Ajit Pudussery, learned counsel appearing for the respondents, submitted that admittedly EMD of the appellant-firm in RTC Hathin–Rajastha