Sudershan Kumar Misra, J.

1. This is the appeal of the defendants, Food Corporation of India and its Senior Regional Manager, impugning the decree granted by the court below to the respondent/plaintiff for a sum of Rs. 5 Lacs along with interest at the rate of 12% per annum from the date of filing of the suit till realization of the decretal amount along with costs. It arises in the following circumstances;

2. The respondent, Shri Prem Chand Jain, sued the appellant for recovery of Rs. 5 Lacs along with interest on the ground that even though he had withdrawn his offer to purchase rice; made by him in terms of a tender floated by the appellant; before the same could be accepted by the appellant; the appellant nevertheless proceeded to accept that offer and demand performance from him in terms thereof; and on his non-performance, the appellant proceeded to illegally forfeit the earnest money of Rs. 5 Lacs furnished by him along with his bid in terms of the said tender.

3. On 6th June, 2000, the appellant floated a tender inviting offers from prospective buyers for the purchase of rice acquired by the Food Corporation of India, “Under Relaxed Specifications”, from farmers pertaining to the crop year 1997-1998. It stated as follows:

“Food Corporation of India” Regional Office Industry House, Ashram Road

Ahmedabad-28009

Tender No.QC/5/(1-B)2000- TENDER SALE, DTD. THE 6.6.2000 Cost Rs.150/- SIGNAURE OF ISSUING AUTHORITY Money Receipt No.005368 12.6.2000 The Tender is issued in duplicate. The copy marked original must be returned intact while submitting quotations. Copy marked duplicate be retrained by the tenderer. Invitation to Tender and instructions to tenderers for disposal of rice (procured under relaxed specification Crop Year 1997-98)

TENDER SCHEDULE:

(A) Date of sale of tender forms On all working days from 10.00 AM to 3:00 P.M. upto 20.6.2000 and upto 1:00 PM on 21.6.2000.

(B) Date of receipt of tender: Up to 1:00 PM on 21.6.2000

(C) Date of opening tenders at 3.00 PM on 21.6.2000

(D) Date for keeping the offer open for acceptance:

Upto 20.7.2000.

Note:

All the tenders shall remain open for acceptance upto 21.7.2000. the Sr. Regional Manager, FCI, Ahmedabad also reserves the right to extend the period of acceptance of tender another fifteen days and such extension shall be binding on the tenderers. At sub-paragraph (D) of the aforesaid, “tender schedule”, against the column, “Date for keeping the offer open for acceptance”; it is stated, “upto 20.07.2000”. But in the note, which is appended just below, it is stated, “all the tenders to remain open for acceptance up to 21st July, 2000”. However, both counsel are agreed at the bar that the tender floated by the appellant remained valid for acceptance till 21.07.2000. That tender, inter alia, empowered the appellant to extend the period of acceptance for another period of 15 days. On 21.07.2000, the appellant exercised its right in terms of the said tender and extended the period prescribed for acceptance of any bid received to 5.8.2000.

4. Admittedly, on 27th July, 2000, the respondent withdrew his offer through a letter, Ex.PW 1/1-2. It states, in effect, that since the respondent’s offer was open for acceptance till 20th July, 2000, and since the appellant has not accepted that offer so far, the respondent is “uninterested in lifting the goods”. Although it appears that, initially, the respondent had decided to rest his decision to withdraw his bid on the ground that there had been no acceptance of the same till 20.07.2000, which was the date initially mentioned in the aforesaid paragraph (D) of the tender document, however, in view of the uncontroverted position that the initial period for which the bid of the respondent remained open for acceptance was, in fact, 21.07.2000, which was then validly extended to 5.8.2000; the respondent has chosen to pursue his claim of having validly withdrawn his offer solely on the ground that, notwithstanding the fact that the period for