UNITED OF INDIA Vs. B P ENGINEERING WORKS

JUDGEMENT

(1.) This appeal by the Union of India through the General Manager, Northern Railway, has been preferred against the judgment of Additional District Judge, Delhi, dated October 13, 2005 passed in RCA No. 36 of 2004 The facts are that a summary suit under Order 37 of the Code of Civil Procedure was instituted by the respondent ' M/s B.P.Engineering Works for recovery of a sum of Rs. 50,000/- which it had deposited with the appellant as earnest money in response to an invitation of tender for the work of construction of 'B.G.Washing line No. 6, road along the washing line and on approaches and other miscellaneous works in connection with addition and alteration of coaching yard at Hazrat Nizammuddin station of Delhi Division.' It is not in dispute that the bid submitted by the respondent did not find favour with the appellant. Having failed to secure the contract, the respondent claimed refund of Rs. 50,000/-. The appellant declined to refund the amount. That led to the filing of a suit under Order 37 of the Code of Civil Procedure in the court of a Civil Judge who after trial decreed the suit in favour of the respondent. Feeling aggrieved, the Union of India preferred an appeal before the learned Additional District Judge which was dismissed vide impugned order dated October 13, 2005.

(2.) Learned counsel for the appellant has relied upon clause 52-A of the General Conditions of Contract and on the strength of the same has contended that it empowers the appellant to withhold or retain the amount of Rs. 50,000/- which the respondent had deposited as earnest money to secure the contract for which the bids were invited. The clause in question reads as under:-

(3.) It is an agreed term of the contract that the sum of money so withheld or retained under this clause by the Railway will be kept withheld or retained as such by the railway till the claim arising out of or under any other clause or by the competent court as the case may be and contractor shall have no claim for interest or damages whatsoever on this account or on any other ground in respect of any sum of money withheld or retained under this clause and duly notified as such to the contractor.'