Sanjay Kishan Kaul, J.

1. The respondent DDA invited tenders for the work of development of main land at Dwarka Phase II for an estimated cost of project of Rs. 33,23,494/- in October, 1999. The petitioner submitted his tender on 12.11.1999 and submitted an earnest money deposit of Rs. 83,088/-. The date of the opening of the tender was 15.11.1999.

2. The petitioner vide letter dated 16.11.1999 informed the respondents that the rate for item No. 6 should be read as Rs. 68/- instead of Rs. 38/- as the same was stated to be a mistake. This was reiterated on 19.11.1999 stating that the mistake had occurred since the petitioner was under a mis-apprehension that the hand mixing (mini plant) would be allowed to be used whereas in fact the work involved the use of hot mixing plant with power finish. The request of the petitioner was rejected on 29.11.1999 by the respondents. The last date fixed for acceptance of the offer of the petitioner expired on 13.2.2000 since the notice inviting tender was valid upto 90 days from the submission of the tender.

3. On 14/16.2.2000 the letter was sent by the petitioner to the respondents seeking refund of the earnest money since the validity period had expired and he further claimed interest in case of delay in payment. The request of the petitioner was rejected on 19.2.2000 since the tender has been rejected as per the following remarks:

In view of the change in rate the tenders be rejected, earnest money of the lowest contractor be forfeited.

4. The relevant tender condition dealing with the issue of forfeiture is Clause 22 which is as under:

22. The tender for works shall remain open for acceptance for a period of ninety days from the date of opening of tenders. If any tenderer withdraws his tender before the said period or makes any modification in the terms and conditions of the tenders which are not acceptable to the Department then the DDA shall, without prejudice to other rights or remedy be at liberty to forfeit the entire amount of the earnest money absolutely.

5. Since the earnest money of the petitioner was forfeited, the petitioner filed the present writ petition seeking refund of the earnest money deposit of Rs. 83,088/- along with interest @ 18% p.a. with effect from 14.2.2000.

6. Learned Counsel for the petitioner assailed the action of the respondents in forfeiting earnest money and contended that if the modification as sought for by the petitioner was not acceptable, the petitioners tender being the lowest should have been accepted and the work should have been allotted to the petitioner. However, neither the work was allotted to the petitioner nor the earnest money refunded. It was further contended that the period of 90 days from the date of opening of the tender expired on 13.2.2000 and thereafter the petitioner had withdrawn his offer vide letter dated 14/16.2.2000.

7. Learned Counsel for the petitioner thus contended that the option which was available to the respondents in terms of the tender documents were to allot the work to the petitioner being the lowest tender or forfeit the earnest money within 90 days with a notice of rejection of tender if the tenderer was not the lowest bidder and sought modification. Since neither of the two conditions had been adhered to in this case and the petitioner was the lowest tenderer, the contention of the learned Counsel for the petitioner was that the petitioner was entitled to the refund of the earnest money.

8. The petitioner vide subsequent communication dated 24.4.2000 had once again sought the refund of the earnest money forfeited since the refund was sought after the expiry of the validity period but vide letter dated 4.3.2000 the respondents re-affirmed their earlier stand.

9. Learned Counsel for the petitioner has referred to various authorities to support his contention of invalidity of the action of the respondents in forfeiting the earnest money of the petitioner. Learned Counsel for the petitioner referred to the judgment of the Andhra Pradesh High Court in M/s. Krishnaveni Constructions v. The Executive Engineer, Panchayat Raj, Darsi and Others, AIR 1995 Andhra Pradesh 362. In the said case the tender submitted by the petitioner firm therein was opened and was the lowest. However, within a short time thereafter the petitioner firm sought to withdraw the bid submitted by it. The tender condition prescribed the period of three months after the last date of receipt of tender to take a decision on the tenders submitted and provided for forfeiture of the earnest money in the event of the tenderer either modifying or withdrawing his tender within the said period of three months. The submission urged before the Court was that despite the said condition the petitioner firm was entitled to withdraw its offer before it was accepted by the respondents because it was not a concluded contract. The learned Single Judge of the High Court agreed with the contention advanced on behalf of the petitioner seeking withdrawal of the tender as the same was before acceptance by the Government and held that there was thus no concluded contract. It was held that a condition in the tender that the tender cannot be withdrawn before it is accepted would be invalid and would not prevent a tenderer to withdraw his bid before its acceptance and that the clause of forfeiture of earnest money would be unenforceable.

10. Learned Counsel for the petitioner referred to the Division Bench judgment of the Madhya Pradesh High Court in Rajendra Kumar Verma v. State of Madhya Pradesh and Others, AIR 1972 Madhya Pradesh 131, where it was held that the Government by merely providing a clause in the tender notice imposing condition on the exercise of the right to withdraw the offer could not take away the legal right of the petitioner and that a person who makes the offer is entitled to withdraw his offer or tender before its acceptance is intimated to him. Learned Counsel for the petitioner also referred to the judgment of the Division Bench of Allahabad High Court in M/s. Shyam Biri Works Pvt. Ltd. v. U.P. Forest Corporation and Another, AIR 1990 Allahabad 205, to contend that a writ petition is maintainable for refund of the earnest money with interest.

11. Learned Counsel for the petitioner referred to the judgment of the learned Single Judge of this Court in M/s. Suraj Besan and Rice Mills v. Food Corporation of India, AIR 1988 Delhi 224, where it was held that a person can withdraw or modify his offer of tender before the communication of acceptance is complete as against him i.e. before its acceptance is intimated to him and that the Government by merely providing a clause to the contrary in the tender notice could not take away the legal rights of a person. To the same effect is another judgment of this Court in Delhi Development Authority v. M/s. Bhasin Associates, 79 (1999) DLT 363 [LQ/DelHC/1999/387] =1999 (9) AD (Delhi) 237. Both the judgments are based on the statutory provisions under Sections 3, 4, 5 and the Indian Contract Act, 1872.

12. In the counter affidavit filed by the respondents, the respondents has relied upon Clause 22 of the tender quoted aforesaid on the basis of which the forfeiture of earnest money has taken place. It is further stated that the letter dated 14/16.2.2000 was in fact received on 19.2.2000 at 4.00 p.m., but there would be no question of any refund since the petitioner had sought modification of his tender.

13. Learned Counsel for the respondents further contended that the petitioner had never withdrawn the offer within the period of 90 days but had only sought modifications vide letter dated 16.11.1999. The date of opening of the tender was 15.11.1999 and it is only on 16.11.1999 that the petitioner sought to modify the bid. It was thus contended that after the opening of the tender the bid was sought to be modified but not withdrawn. The offer was withdrawn only in terms of the letter dated 14/16.2.2000 received on 19.2.2000 after the expiry of 90 days. The communication was addressed to the petitioner vide letter dated 29.11.1999 stating that once the quoted rates of tenders were opened, there could be no question of petitioners request for modification in the quoted rates.

14. Learned Counsel for the respondents also relied upon the additional clause in the notice inviting tender to the following effect:

AdditionalClause

1.Case of withdrawal of offer If the contractors modifies/withdraws their offer within 90 days of quotingAction to be taken The earnest money deposited by the contractor shall be for feited absolutely.

(i)







the rates.

15. Learned Counsel for the respondents thus contended that the request of the petitioner for modification of the bid was rightly rejected and the petitioner has sought to withdraw the bid only subsequently after the expiry of the period of 90 days. The bid of the petitioner was rightly rejected on 18.2.2000 and only thereafter the letter dated 14/16.2.2000 was received on 19.2.2000 seeking refund of the amount which was responded to vide letter dated 21.2.2000 in view of the fact that the offer of the petitioner had already been rejected prior to the receipt of the said letter.

16. I have considered the submissions advanced by the learned Counsel for the parties.

17. There can be no doubt that the petitioner has sought to modify the terms of the bid by the subsequent letters dated 16.11.1999 and 19.11.1999 after the bid was opened on 15.11.1999. This request for modification was rightly rejected on 29.11.1999 since the modification could not take place after the tenders were opened. The petitioner thereafter kept silent on this issue.

18. A reference to Clause 22 of the invitation of tender as also to additional clause makes it clear that if a tenderer withdraw his tender before the period or makes any modification in the terms and conditions of the tender, the respondent has the right to reject the same and forfeit the earnest money. It is relevant to note that the petitioner did not withdraw the tender thereafter and in fact after the communication dated 18.2.2000 informing the petitioner about the rejection of his bid, sought refund of the earnest money vide letter purportedly dated 14/16.2.2000 though received by the respondents on 19.2.2000 at 4.00 p.m. This is apparent from the letter dated 21.2.2000 stating so as also from the endorsement made on the letter dated 14/16.2.2000. There is no rejoinder filed to the counter affidavit of the respondents denying any of the factual averments made therein. In the letter dated 21.2.2000 it is stated that since the tender of the petitioner was already rejected and the earnest money forfeited, there could be no question of refund of the earnest money at that stage.

19. The judgments cited by learned Counsel for the petitioner enunciated principle of law arising from the provisions of Sections 3, 4 and 5 of the Indian Contract Act, 1872, that a person has a right to withdraw from the tender before the acceptance or rejection of the offer. Though in M/s. Krishnaveni Constructions case (supra), the term of forfeiture was similar, the material difference was that the bid was sought to be withdrawn before its acceptance. It was in these circumstances that it was held that said withdrawal cannot be prohibited contrary to the provisions of Section 5 of the Indian Contract Act, since proposal can be revoked anytime before the communication of its acceptance is complete. The position is the same in Rajendra Kumar Verma case (supra), and M/s. Suraj Besan and Rice Mills case (supra).

20. It is relevant to note that as per his own contention the petitioner in para 10(A) of the writ petition has contended that the respondents had two options either to allot the work to the petitioner being the lowest tenderer or forfeit the earnest money within 90 days with a notice of rejection of tender if the tenderer is the lowest bidder and seeks modification. The petitioner at no stage communicated to the respondents that he was willing to abide by the original terms of the tender and woke up only after the rejection of his tender.

21. Along with the counter affidavit the respondents have also filed the details of the expenditure incurred on the tender process which amounted to Rs. 1,35,266/- including the extra expenditure to be incurred due to rise in cost of index on estimated cost of delay of work.

22. In view of the aforesaid though there is no doubt on the legal proposition sought to be advanced by learned Counsel for the petitioner by relying on the various judgments of different High Courts, the same would not apply to the facts and circumstances of the present case since the bid of the petitioner was already rejected when the petitioner sought refund of the earnest money. In my considered view it is apparent that the petitioner had second thoughts after the bids were opened and thereafter tried to change and manipulate the tender bid by seeking modification. Having failed in that attempt the petitioner kept quiet and on the rejection of the bid of the petitioner, sought to send a letter after the said rejection purporting to be dated prior to the rejection. In such circumstances, in my considered view, the petitioner would not be entitled to the refund of the earnest money.

23. The writ petition is dismissed leaving the parties to bear their own costs.