STATE Vs. J C GAMMON LTD

JUDGEMENT

(1.) The defendant State is the appellant. The suit is for return of earnest money deposited by the plaintiff along with a tender given by the plaintiff for the construction of the Kozhencherri bridge. The plaintiff is a construction company in Bombay. The Chief Engineer of the erstwhile Travancore State published a notification in November 1937 inviting tenders for the construction of the Kozhencherri bridge. The relevant terms of the notification were that the tender should reach his office not later than 3 p.m. on 17.1.1938 and that the tender should be accompanied by an earnest money deposit certificate of Rs.3,000 in the form of interest-bearing Travancore Government Securities or Travancore Savings Bank Deposits. The plaintiff company sent a tender from Bombay on 15.1.1938 enclosing therewith a draft from the Bombay branch of the Travancore National and Quilon Bank Ltd., for Rs. 3,000 drawn on its Trivandrum Main Road, branch in favour of the Diwan of Travancore. The plaintiff also sent an express telegram to the Chief Engineer on 15.1.1938 itself informing the latter that a tender has been posted by the plaintiff. It is seen that this tender was received in the Chief Engineers office on 20.1.1938, but it happened to be misplaced and was not brought to the notice of the Chief Engineer. There was only one tender received within the due date and that was of Messrs. Dharm Singh Dutta, Burma. In the meanwhile, there was a new proposal to construct the bridge with treated timber and Government ordered on 8.1.1938 that the sale of tender forms might be stopped. But at the same time they directed that the tender notification need not be cancelled. On 2.2.1938 Government directed the Chief Engineer to inform the tenderers that they would be given the option of either allowing the earnest money to remain with Government as earnest money deposit or withdraw it for being deposited when fresh tenders would be called for or an extension of time would be granted. It is seen that Messrs Dharm Singh Dutta alone were informed of this order of Government. Their earnest money was returned to them as requested by them.

(2.) Subsequently, the representative of the plaintiff company made enquiries relating to their tender, and as a result of the search made in the Chief Engineers Office the cover containing the tender and the draft was recovered from the table of the Head Draftsman on 14.3.1938, and they were kept in the office. As the question of the construction of the bridge was not finally decided no further action was taken in the matter by the Chief Engineer. The Travancore National and Quilon Bank Ltd., suspended payment on 20.6.1938 and was subsequently ordered to be wound up. After that the plaintiff company called for a certificate from the Chief Engineer for the earnest money sent by them in the form of the draft. Such a certificate was sent by the Chief Engineer on 30.8.1938. Ext. E is that certificate. It was to the following effect:-

(3.) The defendant contended that the tender made by the plaintiff was not valid as it was not received in the Chief Engineers Office within the prescribed time and as earnest money was not sent in the manner prescribed in the tender notification. According to the notification only interest bearing Travancore Government Securities or Travancore Savings Bank Deposits could be sent as earnest money deposit. The Chief Engineer had no authority to accept a draft as earnest money deposit. Government was not bound to accept the draft as earnest money, and the Diwan has not accepted it, and therefore there was no obligation on the part of the Diwan to cash the draft. It was also contended that Government was not respondible for any wrongful act or negligence on the part of the Chief Engineer. Government, therefore, disclaimed liability for the plaint claim.