MBL INFRASTRUCTURE LIMITED Vs. RITES LIMITED AND OTHERS

JUDGEMENT

(1.) The issue involved is as to the enforceability of a forfeiture clause in a notice inviting tender. There is no doubt that the relevant clause provided for the forfeiture of the earnest deposit if material particulars were found to have not been disclosed by a tenderer. The legal question which has arisen is whether, upon there being a material non-disclosure or a material concealment, the forfeiture clause would become applicable irrespective of the quantum of money sought to be forfeited and without reference to the nature of inconvenience or the extent of damages suffered by the party seeking to forfeit.

(2.) The two matters are similar, though they pertain to different notices inviting tender. The forfeiture clause is the same. The principal parties are identical. The nature of non-disclosure or concealment is also the same. The earnest or security deposit in either case is Rs.50 lakh, which is the amount sought to be forfeited. The subsequent reference in this judgment is to one of the matters. The principles involved are the same in both cases.

(3.) The Damodar Valley Corporation engaged Rites Limited for the purpose of supervising the construction of a railway siding for the Koderma Thermal Power Project in Jharkhand. Clause 9 of the notice inviting tender issued in January, 2009 provided for every tender to be accompanied by an earnest deposit of Rs.50 lakh. Such earnest deposit was to be refunded to tenderers whose technical bid was not found to be acceptable and the refund was to be made as soon as the scrutiny of the technical bid was completed by Rites. In respect of the bids which did not clear the technical stage, the earnest deposits of the unsuccessful tenderers were to be refunded within 28 days of the tender validity period.