Point of Law: Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification to wriggle out of the contractual obligations which the parties had accepted with open eyes.

JUDGMENT :

MURALI PURUSHOTHAMAN, J.

1. The petitioners are contractors supplying pooja and other materials to various temples under the Travancore Devaswom Board (TDB) for the last more than 5 years. The TDB issued Ext.P1 E-Tender notification for auctioning the ‘kuthaka avakasham’ (exclusive right) to sell pooja/other items at different temples under the jurisdiction of Pathanamthitta Deputy Devaswom Commissioner for the financial year 2020-2021. The petitioners participated in the tender and submitted their bids for their respective items along with the required Earnest Money Deposit (EMD). Going by the averments in the writ petition, the respective bids submitted by the petitioners were accepted and the respondents finalized the tender concerned in their favour. As per the tender conditions, each of the petitioners remitted 50% of the respective bid amount. However, they could not supply the materials to the temple as per the tender for the period from 01.04.2020 since temples were closed on directions from Government on the outbreak of Covid-19 pandemic. Therefore, the petitioners submitted representations before the TDB requesting to extend the term of contract for the next financial year or discount the rate of tender or to cancel the tender and return the EMD and the amount deposited by them. However, the TDB issued Ext.P17 notice directing the petitioners to remit the balance 50% of the bid amount. The petitioners submitted further representations before the TDB to cancel the tender and to return the amount already remitted. According to the petitioners, they have not executed any formal agreement with the TDB in terms of Ext.P1 tender and as such, there is no concluded contract and they are entitled to get back the amounts remitted by them including the EMD. They have filed this writ petition for direction to cancel their respective tenders and for return of the amounts remitted by them including the EMD and to declare that the petitioners are not liable to remit any amount to the respondents by applying the principle of ‘Force Majeure’ and that the contract is frustrated on account of Covid-19 pandemic.

2. Heard the learned counsel for the petitioners and the learned standing counsel for the TDB.

3. According to the petitioners, the bids submitted by them were accepted and the tender was finalized in their favour by the TDB and they remitted 50% of the auction amount as per the terms of tender. However, they could not do any business pursuant to the contract on account of closure of temples due to the outbreak of Covid-19 pandemic. It is the case of the petitioners that they have not executed any agreement pursuant to the tender and therefore, there is no concluded contract and they are not liable to pay any amounts at all and further that they are entitled to get back the amount already remitted. The petitioners also have a case that the contract could not be performed due to the outbreak of Covid-19 pandamic and the turn of events thereby and the contract has become frustrated.

4. Admittedly, the petitioners participated in the E-tender, remitted EMD and the bids submitted by the petitioners were accepted and the respondents finalized the tender in favour of the petitioners in respect of their respective items. In terms of Ext.P1 tender notification, the petitioners have also remitted the 1st installment of the auction amount. The balance amount is to be remitted before 31.07.2021 as stipulated by clause 9 of Ext.P1. However, the petitioners contend that, no agreement was executed by them pursuant to the finalization of tender and as such, there is no concluded contract and they are not liable to deposit the bid amount and are entitled to get back the 1st installment of the bid amount already deposited.

5. Clauses 6 and 7 of Ext.P1 tender notification conjointly read that the person who is granted with the kuthaka shall be informed of the grant of kuthaka in his favour and the person who receives the kuthaka shall remit