The main legal point established in the judgment is that the requirement of a formal agreement for a concluded contract, as per the tender conditions, is an essential term of the bargain, and negotiations and exchange of drafts do not necessarily result in a concluded contract.

Revati Mohite Dere, J.

1. The present appeal is directed against the Order dated 30th June, 2014 passed by the learned Judge, by which the appellant's Notice of Motion No. 996/2012 for interim reliefs in its suit for specific performance came to be dismissed.

2. The short controversy arising in the present Appeal is whether there is a `concluded contract' between the appellant and the respondent No.1-Cooperative Housing Society.

3. We are entirely in agreement with the learned Judge that there is no concluded contract. We would summarise our findings as follows:

Admittedly, no agreement was executed between the appellant and respondent No.1. The tender conditions expressly provided that a concluded contract would come into existence only upon the execution of a formal agreement. There is nothing in the other terms that suggest otherwise. The other terms establish that the execution of a formal agreement was an essential term of the bargain between the appellant and respondent No.1-Society. For instance, the terms entitled the Society to modify or alter or add any additional terms and conditions even “before signing the agreement”. To uphold the appellant's contention, would deprive respondent No.1 of the right to do so.

Further, all the letters addressed by the appellant and the appellant's conduct clearly establishes that the appellant itself knew and accepted that a contract could come into existence only upon the execution of a written agreement. For instance, the tender required the payment of Rs. 4 Crores as security deposit within fifteen days of the award of the contract. Accordingly, the appellant offered to pay the security deposit of Rs. 4 Crores only upon the execution of the documents stating that the contract would be complete “upon the execution of the “Development Agreement and related development documents”.

The balance of convenience is also in favour of respondent No.1, as an injunction in such a case would deprive its 300 members, the right to enjoy their property upon redevelopment during the pendency of the suit.

4. A few facts which are necessary to decide the said controversy, are as follows:

(A) Respondent No.1 is a Cooperative Society consisting of 284 residential flats admeasuring 350 sq. ft. each; 10 shops admeasuring 225 sq. ft. each; two commercial units admeasuring 320 sq. ft. each and one commercial unit i.e. occupied by a bank admeasuring 1848 sq. ft. Respondent No.1 also owns two adjoining plots together with respondent No. 2.

(B) As the respondent No. 1 decided to redevelop the property bearing CTS No. 444-A at Kandivli (West), Mumbai, tenders came to be invited by the respondent No.1 for the same. The tenders that were invited, apart from certain terms and conditions, stipulated a tender deposit of Rs. 25,00,000/- lakhs drawn in favour of respondent No.1-Society.

(C) On 30th October, 2004, the appellant submitted the tender form along with a tender deposit of Rs. 25,00,000/-. According to the tender document, the term “contract” and the term “tender” were defined to mean as under:

“(B) The “CONTRACT” shall mean the tender and acceptance thereof and formal agreement executed between the Developers and Society together with the documents referred to therein including these conditions and appendices and any special conditions and specification, design, drawings, price schedules, bills of quantities and schedules of rates. All these documents taken together shall be deemed to form one contract and shall be complementary to one another.”

“(I) “TENDER” means an offer.”

Some of the relevant clauses of the tender document which will have a bearing on the decision of the present appeal are set out as under:

“TENDER DEPOSIT”

The Tenderers shall deposit the tender deposit by Pay Order in favour of the Society payable at Mumbai. If during the Tender validity period the Tenderer withdraws his Tender or the successful Tenderer fails to submit security deposit and bank guarantee as specified within 15 days a