Validity of the offer and forfeiture of earnest money based on the conditions of the tender.

JUDGMENT

Ajit Singh, J.:-

By this petition, the petitioner has mainly prayed for a direction against the respondents to refund his earnest money of Rs. 8,66,000/- deposited as security in the form of Term Deposit Receipt (TDR) along with interest. On 20-7-2012 respondent Public Works Department of the State of Madhya Pradesh invited tenders from interested persons for the construction of Baxwaha-Nehagir-Dalpatpur Road. Respondent No. 2 is the Engineer-in-Chief whereas respondent No. 3 is the Executive Engineer in the Public Works Department. As required under the terms and conditions of the tender, all the tenderers including the petitioner deposited the earnest money. The petitioner deposited the earnest money of Rs. 8,66,000/- on 9-8-2012 in the form of Term Deposit Receipt in favour of respondent No. 3. Also under the terms and conditions of the tender, the petitioner and other tenderers agreed to keep their offer open up to 120 days from the specified deadline of receipt of tenders. They even agreed that the full value of earnest money would be forfeited in the event of their withdrawing the offer before the expiry of the period of validity of offer. The deadline for receiving the tender was 12-8-2012 and, therefore, the validity period of offer of 120 days was up to 11-12-2012. But respondent No. 3 accepted the petitioner's tender only on 27-12-2012 vide Annexure P4 i.e. after the expiry of the validity period of offer of 120 days. The petitioner in reply to the letter of acceptance informed respondent No. 3 vide Annexure P5 dated 4-1-2013 that he was not interested in the work because his offer lapsed after the expiry of validity period of 120 days and, therefore, his earnest money be refunded. Respondent No. 3 instead, not only forfeited the petitioner's earnest money but also prohibited him to tender for the same work for which fresh Notice Inviting Tender (NIT) was issued. It is in this background the petitioner has filed the present petition.

2. Respondent Nos. 1 to 3 in their return have stated that since the petitioner failed to execute the agreement as per the terms and conditions of the tender, the action taken against him was just and proper. In support of the action taken, they have also relied upon condition Nos. 4.7, 4.7.1 and 8.1.1 of the tender.

3. Conditions Nos. 4.7, 4.7.1 and 8.1.1 of the tender read as under:

4.7 VALIDITY OF OFFER: Tenders shall remain open upto 120 days from the specified deadline of receipt of tenders and in the event of the tenderer withdrawing the offer before the aforesaid dates for any reason whatsoever, earnest money deposited with the tender shall be forfeited.

4.7.1 In the event of tenderer withdrawing his/her offer before the expiry of the period of validity of offer or failing to execute the contract agreement as required by condition No. 8.1.1 of the Notice Inviting Tender (NIT) he/she will not be entitled to tender for this work, in the case of recall of tenders, in addition to forfeiture of his/her earnest money as per provision of condition Nos. 4.7 and 8.1.1 of the NIT as may be applicable for their work. If the tenderer has committed a similar default on the earlier occasion as well his/her registration in the department may be suspended temporarily for period of 6 months from such date as may be ordered by the authority which has registered him/her.

8.1 AGREEMENT:

8.1.1 Execution of agreement: The tenderer whose tender has been accepted (hereinafter referred to as the contractor) shall produce an appropriate solvency certificate, if so required by the Executive Engineer and will execute the agreement in the prescribed form within 10 days from the date of communication of the acceptance of his tender by the department. Failure to do so will result in the earnest money being forfeited to the Govt. of Madhya Pradesh and tender being cancelled.

4. From the combined reading of the above quoted conditions, it is apparent that the validity period of the offer was only up to 120 days f