IMPORTANT POINT
General provisions of Contract Act will not override special conditions of particular contract.

JUDGMENT

T.S. THAKUR, J.

1. Leave granted.

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 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 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 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 application addressed to the AGM (C&M) of the appellant-corporation at Rai Bareilly withdrawing the bids submitted by it and asking for being excluded from consideration besides praying for refund of the earnest money deposited with the bids. This was followed by a representation on 1/5/2013 whereby the respondent once again asked for the return of the earnest money deposited by them. In response to the said representation, the appellant-corporation issued a letter dated 26/4/2013 stating that although the bids offered by the respondent were not being considered, the prayer for refund of earnest money could not be considered as the same stood forfeited. Aggrieved by the said order, the respondent filed Writ Petition No. 9620 (MB) of 2013 before the High Court challenging the refusal of refund of the earnest money deposit. The said petition was opposed by the appellant herein but was allowed by a Division Bench of the High Court of Judicature at Allahabad, Lucknow Bench, in terms of a brief order holding that since respondent’s case was not covered by condition No. 2 of the Special Conditions of contract of the appellant-corporation, the refusal of refund of the earnest money deposited by the respondent was unjustified. The High Court observed as under:

“Thus, the position being clear that the tender has not been opened and the petitioner is not covered under any of the clauses of condition No. 2, we hereby quash the impugned order dated 19/9/2013 and direct the NTPC to refund the earnest money.

Writ petition, thus, stands disposed of.”

4. The present appeal assails the correctness of the above order as noticed earlier.

5. Appearing on behalf of the appellant-corporation Mr. S.K. Dhingra argued that the High Court was in error in directing refund of the earnest money deposited by the respondent. It was contended that in terms of condition No. 2 of the Special Conditions of Contract revocation of tender was by itself sufficient to call for forfeiture of the earnest money. Inasmuch as the High Court had held that the respondent’s case was not covered under condition No. 2, it committed a palpable error.

6. Condition No. 2 of Special Conditions of Contract may be extracted. It reads:

“2. The earnest money shall be forfeited on the following grounds:

a. On revocation of the tender or,

b. On refusal to enter into a Contract afterward to a Contractor or,

c. If the work is not commenced after the work is awarded to a Contractor.”

7. A plain reading of the above would show that one of the Special Conditions of Contract, subject to which the 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 (supra). One of these contingencies was revocation of the tender, which would in the context in 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 the tender with