The main legal point established in the judgment is that the forfeiture of earnest money deposit must be reasonable and in compliance with the tender conditions, and the court's decision was influenced by the interpretation of these legal principles.

JUDGMENT

V. Gopala Krishna Rao, J. - This Appeal, under Section 96 of the Code of Civil Procedure [for short 'the C.P.C.'], is filed by the Appellants/plaintiffs challenging the Decree and Judgment, dated 13.12.2004, in O.S. No.18 of 2002 passed by the learned III Additional District Judge, Tirupati [for short 'the trial Court']. The Respondent herein is the defendant in the said Suit.

2. The Plaintiffs filed the above said suit against the defendant for recovery of Rs.10,80,000/- with interest and for costs.

3. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court.

4. The brief averments of the plaint, in O.S. No.18 of 2002, are as under:

The plaintiffs 1 and 2 are wife and husband. Plaintiff No.2 is looking after the business activities of the first plaintiff and representing the first plaintiff for all practical purpose. The defendant invited tenders for the grant of licence to run Tirumala Tirupati Devasthanam Canteen at Sapthagiri Guest House, Tirumala vide publication in Eenadu daily dated 26.11.2001, pursuant to the said notification, plaintiffs submitted tender in the name of first plaintiff and the same was opened on 11.12.2001. The said tender was accepted and the same was communicated to the first plaintiff vide letter dated 27.02.2002. As per the tender conditions, the said tender is valid for 3 months from the date of opening of tender.

Contrary to the tender conditions, the defendant has forfeited the Earnest Money Deposit of Rs.10,00,000/- vindictively and arbitrarily on baseless grounds as there is no mention that the said tender was confirmed and accepted by the competent authority.

5. The defendant filed a written statement by denying the averments mentioned in the plaint and further contended as under: -

The tender of the first plaintiff was accepted and the same was communicated to her in the letter Roc.No.Rev1/265/AEO(Rev) Tml/2001, dated 30.12.2001 by registered post with acknowledgment due and the same was accepted by her on 07.01.2002. The first plaintiff deliberately suppressed the said fact. Again the defendant in Roc.No.Rev1/265/AEO(Rev)/Tml/2001, dated 27.02.2002 called upon the first plaintiff to comply with the requirements therein within 7 days from the date of said letter, failing which the Tirumala Tirupati Devasthanam would cancel the tender confirmation by forfeiting the Earnest Money Deposit. The first plaintiff did not comply with the required conditions inspite of letter dated 08.03.2002. The first plaintiff in her representation dated 16.03.2002 offered to accept the above tender. The offer falsifies her earlier contention that there is no confirmation or acceptance of tender by competent authority. The forfeiture of the Earnest Money Deposit by the authorities is perfectly legal and plaintiffs cannot question the same. The plaintiffs are not entitled to any relief much less the relief as prayed for in the plaint and prayed the Court to dismiss the suit.

6. Based on the above pleadings, the trial Court framed the following issues:

(i) Whether the defendant has illegally forfeited the E.M.D. amount of Rs.10,00,000/- (Rupees ten lakhs only) deposited by the plaintiff?

(ii) Whether the plaintiff is entitled to recover E.M.D. amount of Rs.10,00,000/- from defendant with interest and if so at what rate?

(iii) To what relief?

7. During the course of trial in the trial Court, on behalf of the Plaintiffs, PW1 was examined and Ex.A1 to Ex.A12 were marked. None were examined on behalf of the Defendant, however, Ex.B1 to Ex.B4 were marked.

8. After completion of the trial and on hearing the arguments of both sides, the trial Court dismissed the suit with costs vide its judgment, dated 13.12.2004, against which the present appeal is preferred by the appellants/plaintiffs in the Suit questioning the Decree and Judgment passed by the trial Court.

9. Heard Sri V.Eswaraiah Chowdary, learned counsel, representing Sri M.P. Chandramouli, learned counsel for appellants and Smt Y.Dyum