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TMI Blog2008 (10) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,000/-). By communication dated 5-8-2005, the executive engineer (housing) second respondent herein; informed the petitioners that they are the highest bidders for the land offered for sale. Second respondent also informed the petitioners that they have to pay an amount of ₹ 2,96,30,100/- by 8-8-2005 as per the terms and conditions of the bid as otherwise earnest money deposit (EMD) of ₹ 5,00,000/- paid by them will be forfeited. After receiving said communication first petitioner submitted objections, inter alia, stating as the survey plan was not provided and that Bharatiya Vidya Bhavan (BVB) was claiming lease of the land. Yet another communication dated 13-8-2005 through their counsel was also sent with similar objections. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jections after bid is knocked down in favour of highest bidder. 5. Learned counsel for the petitioners made the following submissions. The action of APHB in issuing impugned order forfeiting EMD is illegal and arbitrary. The petitioners have not committed any breach of contract and therefore, any forfeiture would be unsustainable. As per Section 55 of TP Act seller is bound to disclose the material defects in the property and the buyer has a right to decline and accept the delivery of the property with defect and insist upon the rectification of the defects or encumbrances of the property. Learned counsel relied on decisions in Sohan Lal v. Bal Kishan and N. Narasingarayudu v. N. Ankineedu 1961 ALT 421 : 1961 (1) An.w.R. 462 : AIR 1962 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n tenderer and authority inviting tenders is concerned all such relations are governed by TCAN themselves which are in the nature of binding administrative/executive instructions (See Ramana v. I.A. Authority of India: (1979)IILLJ217SC ). Though TCAN are in the nature of administrative instructions, they have to be strictly complied with by both the parties. There is no dispute on this. Therefore, it has to be seen as to what are the terms and conditions relevant for the purpose of this case in the matter of forfeiture of EMD. They are conditions (1), (2), (4) and (11), which read as under: 1. The participants in the sealed Tender should deposit ₹ 5.00 lakhs, as E.M.D. by means of Demand Draft obtained in favour of the Executive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the total amount by 8-8-2005 and balance 75% of the bid amount should be remitted within three months from the date of confirmation of auction by VC. Auction was conducted on 5-8-2005. As per condition (4) of TCAN if highest bidder violates condition (2) thereof regarding deposit of 25% of the bid amount and 1% auction expenses, APHB is entitled to forfeit said amount and re-auction the plot. Therefore, the impugned order does not suffer from any illegality. 11. The submission with regard to the alleged breach of contract of APHB and enforceability of Section 55 of TP Act is wholly misconceived. It cannot be ignored that as per condition (6) of TCAN, highest bidder gets a right only when auction is confirmed by VC. Before such confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order was issued. In a case of doubt about the defective title the petitioners had a right to withdraw from the bid. Even in such a case the right of APHB to forfeit EMD as well as 25% of the bid amount as per condition (2) of TCAN is not taken away. 14. In H.U.D.A. (supra) and DDA (supra) the Supreme Court upheld the right of forfeiture of the public authority when TCAN were not complied with. 15. In National Highways Authority (supra) tenders were called for collection of toll on a portion of Highway in Rajasthan. As per the tender conditions the bid shall remain valid for a period of 120 days. Respondent's tender was accepted, but it withdrew the tender before expiry of 120 days. Nonetheless, NHAI encashed the bank guarantee of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or benefit of hi own wrong by not allowing forfeiture. It must be remembered that, particularly in government contracts, such a term is always included in order to ensure that only a genuine party makes a bid. If such a term was not there even a person who does not have the capacity or a person who has no intention of entering into the contract will make a bid. The whole purpose of such a clause i.e. to see that only genuine bids are received would be lost if forfeiture was not permitted. 16. In view of the binding authority of Supreme Court this Court does not feel it necessary to consider two citations referred to by learned Counsel for the petitioners. This Court, therefore, holds that the impugned orders does not suffer from any in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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