The main legal point established in the judgment is the court's finding of collusion between the defendants, breach of contract by defendant No. 1, and the plaintiff's entitlement to claim damages.

( 1 ). The plaintiff in the instant case is State Trading Corporation of India Ltd which is a company registered under the Indian Companies Act 1956. It is having one of its Branch offices in Delhi situated at En Kay House,3-4, Shopping Centre, Dharam Marg, Chanakya pun, New Delhi One of the business activities of the plaintiff is sale of second hand imported cars and other vehicles The plaintiff has alleged in the plaint that the said Delhi Branch issued a Tender Notice No. DLH-44/sept 25/81 dated 11. 9. 1981 for the sale of imported cars and other vehicles mentioned including a Mercedes Benz 300-D Sedan Car mentioned at s. No. 3 in the said Tender Notice In response to the said Tender Notice, besides others, M/s. Madhu Enterprises (P) Ltd , defendant No. 1, M/s L. S. Bagla H. U. F. , defendant No. 2 and shri Shyam Goel, defendant No. 3 also offered their tenders for several cars mentioned in the said Tender Notice and remitted Bank draft/pay-orders of the amount of earnest money for the required category of vehicles All the defendants also filed tender offers for the said mercedes Benz 300-D Sedan Car mentioned at S. No. 3 of the said Tender Notice dated 11. 9. 1981 along with the Demand Draft/pay-orders of the amount of Rs 40,000/- each by way of earnest money. The tenders were opened in the presence of the tenderers who chose to be present including defendants 1 to 3 and following offers for the said Mercedes benz car mentioned at S. No. 3 were found to be the highest in the order mentioned below - 1 Madhu Enterprises (P) Ltd (Defendant No. 1) Rs. 13,57,000. 00 2 L. S. Bagla H. U. F. (Defendant No. 2) Rs. 11,83,979. 00 3 Sh. Shyam Goel (Defendant No. 3) Rs. 11,15,300. 00 4 Sh. Nalin Bhatia Rs. 9,81,501. 00

( 2 ). It is further alleged in the plaint that on coming to know that tender submitted by the defendants 1 to 3 were the highest and that they had given very high bid than the next tenderer Shri Nalin Bhatia, their intention became bad and the defendant No. 3 in collusion with the defendant No. 2 raised an objection in respect of tender submitted by the defendant no. 1 alleging that the said tender was not accompanied by a valid Bank Draft The defendant no. 3 even sent a written representation dated 26. 9. 1981 requesting for rejecting the tender of the defendant No. 1 and demanded that fresh tenders be called for the sale of said car the plaintiff after considering the representation and objection rejected the aforesaid representation of the defendant No. 3 and accepted the highest tender offer of defendant no. 1 requiring the defendant No. 1 to pay the balance of the tender price with octroi duty by 26. 10. 1981 and take delivery of the car Thereafter on 24. 10. 1981 the defendant No. 2 withdrew his earnest money However, the defendant No. 3 in collusion with the defendant no. 1 filed suit for permanent injunction against the plaintiff on 25. 10. 1981 seeking restraint against the plaintiff from selling the car in question to the defendant No. 1 Initially ex-parte injunction was granted on 26. 10. 1981 The Defendant No. 1 on the same day came to the office of the plaintiff and handed over a letter dated 26. 10. 1981 and a Bank Draft in the sun of Rs. 13,14,118. 00 for the delivery of car in question However, the car could not be delivered because of the aforesaid restraint order On receiving this letter, the defendant No. 1 requested the plaintiff to return the Bank Draft Thereafter vide letter dated 23. 4. 1982 the defendant No. 1 sent a legal notice to the plaintiff refusing to purchase the car, terminating the contract and claiming the refund of earnest money.

( 3 ). The suit filed by the defendant No. 3 was ultimately dismissed on 3. 7. 1982 After the dismissal of the suit, the plaintiff sent telegram dated 24. 7. 1982 calling upon the defendant no. 1 to pay the balance price of the said car and take delivery of the car on or before 30. 7. 1982. The defendant No. 1, however, refused to take the car on th