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1977 Supreme(All) 122

Allahbad High Court
HARISWARUP,M.A.ANSARI
U. P. State Electricity Board - Appellant
Versus
Goel Electric Stores, Chandigarh - Respondent
Decided On : 05/12/1977

Advocates:
S.N. Kakkar and K.B. Sinha, for Appellants; H.D. Srivastava and A.K. Sen, for Respondent.

A mere request for clarification or information from the offeree does not destroy the offer or amount to a counter offer.

Headnote:

CONTRACT - TENDER - ACCEPTANCE - IMPLIED ACCEPTANCE - COUNTER OFFER - REVISED OFFERS - INJUNCTION - COSTS.

Fact of the Case:

Plaintiff submitted a tender for the purchase of goods from the defendant, U.P. State Electricity Board. The tender was initially returned as the date for submission had been extended. Plaintiff resubmitted the tender with a correction slip offering a higher price. The tender was opened on the extended date, but no decision was made. Plaintiff received a letter from the defendant requiring clarification on certain aspects of the tender and stating that the earnest money guarantee was insufficient. Plaintiff responded by clarifying the tender and submitting an additional bank guarantee. Subsequently, the defendant invited revised highest offers from those who had already submitted tenders. Plaintiff did not submit a revised offer but filed a suit seeking an injunction to restrain the defendant from considering and accepting the revised offers.

Finding of the Court:

The court held that there was no completed contract between the plaintiff and the defendant. The letter sent by the defendant to the plaintiff seeking clarification and additional earnest money did not constitute an implied acceptance of the tender or a counter offer. The plaintiff's tender had not been accepted prior to the invitation of revised offers, and the defendant had the right to reject all tenders and invite fresh tenders.

Issues: 1. Whether there was a completed contract between the plaintiff and the defendant. 2. Whether the defendant had the right to invite revised offers after the initial tenders had been opened.

Ratio Decidendi: 1. For a proposal to become a promise, the acceptance must be absolute and unqualified. 2. The letter sent by the defendant to the plaintiff seeking clarification and additional earnest money did not constitute an implied acceptance of the tender or a counter offer. 3. The defendant had the right to reject all tenders and invite fresh tenders.

Final Decision: The appeal was allowed, the decree of the court below was set aside, and the plaintiff's suit was dismissed with costs.

Judgement

HARI SWARUP, J. :- This is a defendants appeal arising out of a suit for an injunction to require the defendant U. P. State Electricity Board to sell to the plaintiff the goods for which tenders were invited and the plaintiff had made the tender. Further injunction was sought to restrain the defendants from considering and accepting fresh revised offers in respect of the goods in dispute in the present suit.

2. This case, in brief, was that defendant No. 2, the Superintendent Engineer, Electricity Stores Inspection Circle, on behalf of U. P. State Electricity Board, invited tenders for the sale of goods mentioned in the invitation to purchase the goods. Last date for the submission of the tenders was 13th Sept., 1973. On that date the tender filed by the plaintiff was returned as the date had extended to Oct. 16, 1973. The plaintiff filed the tender again along with a correction slip offering higher price than it quoted earlier. The tenders were opened on 16th Oct., 1973. On that date neither any tender was accepted nor rejected. The plaintiff received a letter from the Superintending Engineer dated Oct. 22, 1973. Through this letter the plaintiff was required to clarify the places for which different rates had been quoted by the plaintiff. It was also stated that condition No. 7 of tender specification as stated by the plaintiff was not acceptable to the Board. It was further stated in the letter that the guarantee for earnest money for Rs. 1,50,000 on non-judicial stamp paper of Rs. 15 was insufficient as the earnest money guarantee should have been for Rs. 2,04,000 and bank guarantee should have been on non-judicial stamp paper of Rs. 22.50. In reply to this letter the plaintiff sent a letter on 1-11-1973. The plaintiff clarified the places for which the quotations had been made. The condition No. 7 in the original tender was withdrawn and an additional bank guarantee for Rs. 54,000 on non-judicial stamp paper of Rs. 22.50 was enclosed. Thereafter the plaintiff received a telegram dated 30-11-1973 inviting revised highest offers for all categories of goods from those persons who had already submitted tenders. The revised offers were to be received by 14 hours on 14-12-1973 and were to be opened at 15 hour the same day. The plaintiff did not submit any revised offer, but on 5-12-1973 made a representation to the Chief Minister requesting that his good offices be utilized and goods be delivered to it after acceptance of the plaintiffs tender. A request was also made on 13-12-1973 by the plaintiff for the postponement of the consideration of the revised tenders. On 14-12-1973, however, the tenders were opened but before any decision could be taken the suit giving rise to the present appeal was filed by the plaintiff and an ad interim injunction was obtained. The interim injunction was ultimately confirmed and the suit was finally decreed. The trial court has directed the defendants to deliver the goods to the plaintiff at the rates quoted by the plaintiff. The defendants were further restrained from considering and accepting the fresh highest revised offers which were opened on 14-12-1973. They were also directed not to receive any payment as price for the goods from any person except the plaintiff.

3. Aggrieved by the decree of the trial court the defendants have filed this appeal. The case of the appellants is that there was no completed contract and the plaintiff had no right to sue for the injunction which the Court had granted. The contention of the learned counsel for the respondent, on the other hand, is that there was a completed contract and the injunction was rightly granted. It was further contended that so long as the offer made by the plaintiff had not been rejected the defendants had no right to invite revised offers from persons who had filed the tenders on the basis of the earlier invitation.

4. The first question that arises is whether there was a completed contract in the case or not. According to the










































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