Tilak Raj Gogia v. Union of India

1. This Regular Second Appeal is filed under Section 100 of the Code of Civil Procedure, 1908 (CPC) impugning the concurrent judgments of the courts below; of the Trial Court dated 26.10.2015 and the First Appellate Court dated 19.12.2016; by which the courts below have dismissed the suit for recovery of Rs.67,463/- filed by the appellant/plaintiff and which suit was filed seeking recovery of 2017:DHC:2286 forfeited earnest money amount of Rs.19,700/-. An amount of Rs.47,763/- was claimed as loss of profit. Interest was also prayed.

2. The facts of the case are that the appellant/plaintiff was a successful tenderer in the work of Annual Repair and Maintenance of Road under PWD Division M-412 during the year 2013-14 (Painting of Kerb Stone & M.S. Railing on various roads under Sub Division M- 4122). The case of the appellant/plaintiff was that the respondent/defendant refused to accept the performance guarantee amount, required as a pre-condition of the contract, when tendered on 11.6.2013, and therefore, respondent/defendant could not have forfeited the earnest money amount of Rs.19,700/- given under the tender. Appellant/plaintiff also claimed loss of profit and interest and thus totaling to the suit amount of Rs.67,463/-.

3. Respondent/defendant did not appear in the suit and was proceeded ex-parte.

4. Appellant/plaintiff has proved on record the letter dated 30.5.2013 as Ex.PW1/1, and by which the appellant/plaintiff was directed within 7 days of issuance of the letter to give the performance guarantee amount. Appellant/plaintiff also filed his letter dated 11.6.2013 (Ex.PW1/3), showing that the appellant/plaintiff went to deposit the performance guarantee amount on 11.6.2013. Appellant/plaintiff also filed the letter of the respondent/defendant dated 11.6.2013/Ex.PW1/4, forfeiting the earnest money. Letters regarding re-tendering of the work have been proved and exhibited as Ex.PW1/6 and Ex.PW1/7.

5. The admitted facts which appear on record are that when the respondent/defendant awarded the work vide letter dated 30.5.2013 Ex.PW1/1, the appellant/plaintiff was to deposit the performance guarantee amount within 7 days i.e by 7.6.2013 and commence the work on the 10th day. Appellant/plaintiff did not deposit the performance guarantee amount within 7 days and even within further grace period of 3 days and he went to deposit the same only on 11.6.2013. Respondent/defendant therefore has rightly cancelled the tender on account of non-compliance by the appellant/plaintiff of the terms of the tender.

6. That earnest money deposit can be forfeited on account of non-compliance of the terms of the tender is now well established. The judgments of the Supreme Court in this regard are National Thermal Power Corporation Limited vs. Ashok Kumar Singh and Others (2015) 4 SCC 252 and State of Maharashtra and Others vs. A.P. Paper Mills Ltd. (2006) 4 SCC 209.

7. In view of the above facts, no fault can be found with the judgments of the courts below dismissing the suit inasmuch as the respondent/defendant was found entitled to forfeit the earnest money. Once the tender itself was validly cancelled and in fact no contract was rightly entered into on account of non-compliance of pre-condition of submitting the performance guarantee amount by the appellant/plaintiff, therefore, appellant/plaintiff is also not entitled to any loss of profit or interest on the amounts claimed.

8. No substantial question of law arises. Dismissed. MAY 01, 2017/ib VALMIKI J. MEHTA, J