JUDGMENT
T.N.C. Rangarajan, J.
1. This writ petition seeks return of the Earnest Money Deposit of Rs. 20,000.00 on the ground that the petitioner had withdrawn the tender before it was opened. This Earnest Money Deposit, for short ‘E.M.D.’ was given by the petitioner in response to a Tender Notice dated 8-10-1996 calling for tenders for display of advertisements on the buses owned by the respondent-Corporation. According to the conditions of Tender Notice, each tender form had to be accompanied by a demand draft for Rs. 20 lakhs and tender forms completed in all respects had to be put in the tender box on or before 14 hrs. on 31-10-1996. Clause (10) of the terms provided that the tenders will be opened at 15 hrs. On 31-10-1996 and the tenderer or his authorised representative may be present at the time of opening of tenders. Clause (14) provided that tenderers shall not be permitted to withdrawn their tender after the tenders are opened. Clause (15) provided that if the highest tenderer backs out from taking up the agency, for whatsoever reason, the E.M.D. paid by him will be forfeited. The petitioner gave his duly filled tender along with the demand draft of Rs. 20 lakhs before 15 hrs. on 31-10-1996. But, it appears that some other person had approached the High Court and obtained orders on 4-3-1997 in W.P. No. 21941 of 1996 and accordingly the respondents opened the tender box at 3 p.m. and found six scaled covers but in view of the directions of the High Court the said covers were again placed back in the tender box without opening the seals and to that effect the signatures of the tenderers and their agents were obtained. The tenders themselves were not opened to find out who was the highest bidder. In this situation the petitioner wrote a letter on 11-11-1996 stating that no reasons were given to him for non-opening of the tenders and that he cannot keep the huge amount of Rs. 20 lakhs with uncertainty and, therefore, requested to return the E.M.D. without any delay on the ground that the respondent had not adhered to the terms and conditions of the tender. On 14-11-1996 the respondent replied to the letter of the petitioner stating that the petitioner had signed the note recording the proceedings which took place on 31-10-1996 and, therefore, it was incorrect to state that the respondent had not adhered to the terms and conditions of the tender and that they could not open the seals of the tender covers because of the order of the High Court. It was further stated in that letter that under Clause (6), the E.M.D. does not carry interest even if there is any delay in the refund and under Clause (15) the successful tenderer will forfeit the E.M.D. if he backs out of taking the agency for whatsoever reason and that it was for that reason it was notified that the petitioner may attend the opening of tenders on 16-11-1996 at 11-30 hrs. The petitioner once again wrote a letter on 15-11-1996 that the question of his participation in the opening of tenders on 16-11-1996 cannot arise because he had asked for return of E.M.D. before the opening of the tenders and as the petitioner was not interested in the participation, the sealed cover need not be opened. The respondent, however, proceeded with the opening of the sealed covers and found that the petitioner was the highest bidder and awarded the contract to the petitioner by letter dated 23-11-1996. Subsequently, a telegraphic reminder was given to complete the formalities. The petitioner again demanded refund of E.M.D. in his letter dated 8-12-1996 for which the respondents replied in their letter dated 24-12-1996 informing the petitioner that the E.M.D. stands forfeited.
2. The learned Counsel for the petitioner submitted that the said action of the respondent forfeiting the E.M.D. as illegal and arbitrary. He pointed out that the offer has been withdrawn before the tender has been opened and hence the condition in Clause (14) that the tenderer shall not be permitted to withdraw the tender after the tenders are opened, will not apply to him. He also relied on decisions of Madhya Pradesh High Court in Rajendra Kumar v. State , and Delhi High Court in M/s. Suraj Besan & Rice Mills v. Food Corpn. of India , and contended that the contract comes into force only after intimation of acceptance was given and in the present case intimation was given on 23-11-1996 i.e. after the petitioner withdrew the offer on 15-11-1996. Lastly, he argued that the contract itself has become frustrated because the original terms and conditions are varying for no fault of the petitioner and in such circumstances the E.M.D. has to be refunded. In support of the said contention he relied upon a decision of Allahabad High Court in Shyam Biri Works Pvt. Ltd. v. U.P. Forest Corpn. . He also relied upon a decision of Orissa High Court in Executive Engineer, Sundargarh v. Mohan Prasad Sahu , to submit that the offer can be withdrawn before acceptance.
3. The learned Standing Counsel appearing for the Corporation submitted that the cases relied upon by the petitioner are not applicable to the facts and circumstances of the present case. He argued that the present case has to be tested only on the basis of terms and conditions under which communication of acceptance is not necessary and opening of tender is sufficient. According to him when the tender box was opened on 31-10-1996 the tenders were deemed to have been opened and that they were again kept in the box only in view of the directions of the High Court. It was also submitted that the petitioner had only asked for E.M.D. and did not specifically withdrew the offer, and therefore, when he was again told to participate in the tender, he was found to be successful bidder and hence the prohibition under Clause (14) was attracted. He also argued that the E.M.D. does not carry any interest and the petitioner is not entitled for interest or refund of the E.M.D.
4. The only point in this case is whether the petitioner has withdrawn the tender before it was opened in accordance with the terms and conditions of the tender notice. According to the tender notice, the tenders were to be opened at 3 p.m. on 31-10-1996 by opening the tender box. But mere opening of the box is not sufficient. The tender forms are to be scrutinised as to whether they are valid tenders and find out who is the successful bidder. That process admittedly, was not gone through and even according to the respondent the sealed covers are not opened on the given date and were kept back in the box. The opening of tenders by removing the seals and scrutinising the tender forms was postponed because of the interim orders of this Court. Before the actual process stated, the petitioner had asked for return of the E.M.D. Hence, it is not possible to accede to the contention of the learned Counsel for the respondent. Though the request of the petitioner did not specifically refer to withdrawal of the tender, still no one will ask for return of the E.M.D. unless there is an intention not to participate in the tender. The respondent had also understood this because in the reply dated 14-11-1996 the respondent had clearly stated that the petitioner should participate in the opening of the tenders to which date it was postponed i.e. 16-11-1996 and expressed the inability to return the E.M.D. referring to Clause (12) of the tender notification. But that Clause comes into operation only after the tenders are opened and the highest bidder is declared and such a declaration can come only after scrutinising the tenders. In the present case, that did not take place till 16-11-1996 and the petitioner had asked for return of E.M.D. second time on 15-11-1996 stating that he has no interest in participating in the opening of the tenders. According to the learned Counsel for the respondent, this communication dated 15-11-1996 of the petitioner was received only at 12.10 p.m. on 16-11-1996 after the sealed covers are opened at 11 a.m. This contention appears to be contradicted by the office note on the said letter of the petitioner which indicates that a copy of the letter was given to the Chief Traffic Manager before opening of the tenders for information and necessary action. In any event, the petitioner having withdrawn the offer on 11-11-1996 itself, his tender was not available for scrutinising at the time it was opened at 11 a.m. on 16-11-1996. There cannot be any acceptance of the offer because the offer was not alive. The question of forfeiting the E.M.D. arises only after declaration of the tender as successful. In the present case, petitioner withdrew from the offer prior to the scrutiny and hence he cannot be said to be highest bidder and Clause (14) does not apply and the respondent had no authority to forfeit the E.M.D. It was bound to return the E.M.D. on 11-11-1996 itself. Unfortunately the respondent had not carried out this bounden duty to return the E.M.D. when it knew that the petitioner withdrew the tender before it was opened. This action has to be disapproved. The respondent is, therefore, directed to return Rs. 20 lakhs deposited towards E.M.D. forthwith. The learned Counsel for the respondent submitted that because of the Condition No. 6 the E.M.D. will not carry interest. I am unable to accept this contention because that condition applies to claims of unsuccessful tenderers for refund the E.M.D. In cases where tender is withdrawn before acceptance this clause cannot apply. Retention of money even after tender is withdrawn is unreasonable and the respondent is bound to pay interest on that amount. I, therefore, grant interest at 1% per month in respect of this amount from the date of filing of the writ petition i.e. 31-1-1997 till the date of payment.
5. The writ petition is allowed with costs of Rs. 1,000/-.
6. That Rule Nisi has been made absolute as above.
7. Petition allowed.