NATIONAL MILK SUPPLIERS Vs. UNION OF INDIA

JUDGEMENT

(1.) Respondents invited tenders for sale of two units of HTST Pasteurisers-un-chillers on 22.11.1988. Petitioner responded and submitted his tender quoting Rs. 1,82,000.00 against item No. 1 under the column "Rates (net) per unit tendered" and also made a security deposit of Rs. 5000.00. Later vide letter dated 23.2.1989, respondent called petitioner for negotiations. There are two versions to what happened during these negotiations. Petitioner's case is that he had clarified that offer made by him of Rs. 1,82,000.00 was for both units and that he had made a revised offer of Rs. 2,15,000.00 for two units plus Rs. 6,000.00 for 6 pumps. But respondents maintain that they had conducted negotiations only to find out if petitioner could raise the bid and thereafter they had accepted his offer of Rs. 1,82,000.00 per unit and asked him to deposit the remaining security amount.

(2.) It transpires that perhaps on failure of negotiations, respondents addressed letter dated 23.8.1987 to petitioner accepting his offer and asking him to deposit the remaining security amount. Petitioner reacted to this by his letter dated 5.4.1989 referring to his alleged fresh offer of Rs. 2,15,000.00 and odd for two units on 4.3.1989 and cancellation of his previous offer of Rs. 1,82,000.00 dated 23.2.1989. No reference is, however, made to any letter/document which contained any such revised offer, in this letter and respondents thereafter issued show-cause notice to him which he replied on 26.5.89 reiterating his earlier stand and wanting respondents to accept his offer of Rs. 2.15 lacs for two units and for making of proportionate security deposit. Respondents replied this vide communication dated 29.6.1983 and informed him that his security deposit stood forfeited and that he would be liable to make good the loss after re-tendering. He wrote back to seek reconsideration of his case and refund of security amount deposited by him. But respondents eventually informed him by letter dated 5.12.1989 that two units were sold after re-tendering wherein they had incurred a loss of Rs. 1,12,745.00 which was to be paid by him within 15 days. Petitioner disputed the liability again and meanwhile respondents appointed the Arbitrator in terms of Arbitration Agreement who entered the reference. Petitioner is said to have appeared before the Arbitrator and sought stay of proceedings on the plea that there was no valid contract in existence and on his refusal filed Suit No. 711 /96 under Section 33 of Arbitration Act seeking declaration that there was no valid and binding contract between the parties. Trial Court dismissed the suit by judgment dated 12.12.1996 and petitioner has now filed this revision petition to assail it.

(3.) Petitioner's case in nutshell is that once respondents had failed to accept his offer on 6.2.1989 and had taken recourse to negotiations leading to his revised offer of Rs. 2,15,000.00 and odd for two units, his first offer, whether for one or two units stood obliterated and acceptance of that offer by respondents vide their letter dated 23.3.1989 was inconsequential. Learned Counsel for petitioner, Mr. Rajiv Mehra submitted that the contract could be said to be complete in terms of Sections 3 and 5 of the Contract Act only if it was unconditionally accepted by respondents before the revised offer was made by petitioner on 4.3.1989. The first offer was superseded by the revised offer and the question of conveying acceptance to the first offer did not arise. He urged that Trial Court had fallen in error while holding that revised offer was no offer as it was not accepted by respondents. What was material was not whether petitioner's revised offer was accepted but whether it was made and if it was found to be made, it would wipe off the first offer. He asserted that acceptance conveyed to respondents of non-existent offer could not result in a valid and binding contract between the parties.