RAJASTHAN HIGH COURT
Vineet Kothari, J.
Devkinandan Contractor Pvt. Ltd. Sriganganagar - Appellant
Versus
Rajasthan State Agricultural Marketing Board, Jaipur - Respondent
S.B. Civil Second Appeal No. 219 of 1994.
Decided On : 29-10-2015
CONTRACT - OPTION - REVOCATION - OFFER - WITHDRAWAL - EARNEST MONEY - FORFEITURE - STATUTORY CONDITIONS - CONTRACT ACT, 1872, SECTION 5.
Fact of the Case:
The plaintiff, a contractor, submitted a tender for a work to the defendant, a marketing board. The tender was accompanied by an earnest money deposit. The defendant invited all contractors to revise their offers, including the plaintiff. The plaintiff withdrew its original offer and declined to participate in the revised negotiations. The defendant forfeited the plaintiff's earnest money deposit.
Finding of the Court:
The court held that the plaintiff was entitled to withdraw its offer before it was accepted by the defendant. The court found that the defendant's invitation to revise offers constituted a rejection of the plaintiff's original offer. The court also held that the defendant was not entitled to forfeit the plaintiff's earnest money deposit because there was no statutory condition requiring the plaintiff to keep its offer open for a specified period.
Issues: 1. Whether the plaintiff was entitled to withdraw its offer before it was accepted by the defendant. 2. Whether the defendant was entitled to forfeit the plaintiff's earnest money deposit.
Ratio Decidendi: 1. Section 5 of the Contract Act, 1872, permits the withdrawal of an offer before its acceptance. 2. The defendant's invitation to revise offers constituted a rejection of the plaintiff's original offer. 3. There was no statutory condition requiring the plaintiff to keep its offer open for a specified period.
Final Decision: The court dismissed the defendant's appeal and held that the plaintiff was entitled to withdraw its offer and that the defendant was not entitled to forfeit the plaintiff's earnest money deposit.
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