BHOLENATH TRADING CO Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) Rule. Rule made returnable forthwith by consent of mr. R. R. Srivastava, learned counsel for the petitioner and Mr. Anilkumar, learned counsel for the Respondent.

(2.) The counsel for the petitioner states that in the instant case bids were invited by the Respondent-Bank for sale of land with industrial shed, plant and machinery of an oil (Vanaspati) Extraction Plant located in the city of Akola vide tender notice dated 9-10-2004. It is further contended by the learned counsel for the petitioner that the petitioner was one of the bidder and submitted his tender on 29-11-2004. The bids were opened on 12-2-2005 and the petitioner was the highest bidder. It is further contended that the amount of Rs. 25,00,000/- (Twenty five Lacs) was required to be deposited by the tenderer at the time of submitting the tender as per the condition of tender document and therefore, the petitioner has deposited the Demand Draft of Rs. 25,00,000/- along with the tender document which was submitted on 29-11-2004. The counsel for the petitioner further contended that for the first time the offer of the petitioner was accepted by the Respondent vide impugned communication dated 17-8-2005. However, before the offer/bid of the petitioner was finally accepted, the petitioner, because of certain contingencies, did not want to continue with the offer and therefore, issued letter to the Respondent dated 1-8-2005, wherein it is mentioned that the petitioner's offer was frustrated and therefore, the Respondent Bank was called upon to return the security deposit of Rs. 25,00,000/- deposited by the petitioner.

(3.) The counsel for the petitioner further contended that in view of the terms and conditions of the tender documents, specifically condition No. 7, the successful bidder is required to pay 25% of the amount immediately on acceptance of the bid and the remaining amount within 30 days, failing which the bank may at its discretion cancel the bid and forfeit the earnest amount and/or charge interest at the rate of 18% per annum with monthly rests on delayed payments or as the bank considers it appropriate. The counsel for the petitioner, in view of this clause, has contended that the successful bidder will be one whose bid is accepted and it is only on such acceptance 25% amount is required to be paid. The counsel for the petitioner has contended that, in the instant case, since the petitioner before acceptance of his bid by the respondent submitted the application for withdrawal of the offer and refund of the amount deposited along with the tender document, the question of forfeiture of the said amount does not arise, since it is not earnest money and petitioner is entitled for refund of the said amount which is security deposit. It is further contended that the respondent, instead of refunding the amount asked by the petitioner vide letter dated 1-8-2005, issued the impugned communication dated 17-8-2005 and asked the petitioner to deposit sum of Rs. 2,58,42,750/- within seven days and further asked to arrange the balance amount in three weeks. It is also mentioned in the communication dated 17-8-2005 that if the petitioner fail to deposit the balance amount, the deposit of Rs. 25,00,000/- shall stand forfeited. The petitioner being aggrieved by the impugned communication issued by the Bank invoked the extra ordinary jurisdiction of this Court by filing the present writ petition.