9911796707
TMI Blog2000 (6) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted their tender. As per the tender condition under 12.1.2 under the general head BID BOND the plaintiff is required to furnish a Bank Guarantee apparently as earnest money which is valid initially up to 60 days beyond the required period for the offer. For better appreciation of the facts of the case, it is necessary to extract here that Clause 12.1.2. 12.1.2. The bidders not covered under para 12.1.1 above must enclosed with their offer (in case of two bid system, with technical commercial bid earnest money in the form of Bank Draft in pro forma at Appendix 3 from a Nationalized Bank/Scheduled Indian Bank of a Foreign Bank acceptable to ONGC. The amount of Bid Bond/Earnest Money has been indicated at serial 7 on covering letter of this tender. The Bid Bond should initially be valid up to 60 days beyond required period for the offer. The Indian Bidders are to execute Bid Bond on non-judicial stamp paper of the requisite value. 4. Under the Clause 12.1.4 of the tender condition, the Earnest Money shall be forfeited by the Corporation on the following grounds : (a) If tender is withdrawn during the validity period of any extension thereof. (b) If tender is varied or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the first defendant is claimed to have accepted the offer made by the first defendant. These two letters of the plaintiff and first defendant must have crossed each other. Since the entire case of the parties depend on the interpretation of the letter of the first defendant, I think it is necessary to extract the relevant portion of that letter hereunder. Please refer to the above vide which M/s. Kilburn have confirmed their acceptance to ONGC's award of contract latest by September 1999. Based on your above confirmation and submission of your revised price bid (opened on 9-8-1999) M/s. Kilburn is evaluated lowest tenderer. In view of the above and M/s. Kilburn being lowest tenderer, ONGC has considered your above proposal for award of contract and the Notification of Award is likely to be issued on or before 30-9-1999. 7. According to the counsel for the first defendant, by this letter they have accepted the offer of first defendant and therefore they are bound by the Bank Guarantee issued in pursuance of the tender. On the other hand the contention of the plaintiff is that at any stretch of imagination, this letter cannot be treated as an acceptance of the offer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been extended within the validity period of the offer namely 15-9-1999, the offer was accepted on the last date i.e. 15-9-1999. As I indicated earlier, the whole case of the first defendant depends on the interpretation of the letter dated 15-9-1999 issued by the first defendant. That letter cannot be spelt out in absolute terms as an acceptance of the offer of the plaintiff. What is stated in the letter is that though the offer made by the plaintiff is found to be lower and ONGC has considered the proposal for award of contract, and award is likely to be issued on or before 30-9-1999, I am not able to find any certainty in the words notification is likely to be issued on or before 30-9-1999 . This makes all the difference about certainty which I discussed above. It does not contain any commitment either. I do not find that the first defendant used the word in absolute term that the offer of the first defendant has been accepted. But still stated that award or contract is likely to be issued on or before 30-9-1999. Therefore going by Section 7 of the Contract Act, the acceptance lacks certainty and commitments. Therefore the letter of the first defendant dated 15-9-1999 cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained in the terms of the Notice inviting Tender (NIT) and other terms and conditions contained in the Tender documents supplied by Corporation which amount is liable to be forfeited on the happening of any contingencies mentioned in said documents. 14. Therefore the so called absolute clause contained in Clause (2) of the Bank Guarantee has to be read in conjunction with the preamble clause. It stipulates the period during which the Bank Guarantee should operate. It stipulates the intend and purpose of which the Bank Guarantee has been executed. Therefore the question whether the Bank Guarantee is absolute or not, or whether it could be invoked in the event of happening of any contingency, has to be examined by the Court even (if) it is established that there is no fraud. I am fortified for this proposition by a judgment of the Supreme Court in Hindustan Construction Company Ltd. v. State of Bihar, . The Apex Court has considered in the aforesaid case the invocation of the Bank Guarantee executed in respect of mobilization advanced for the performance of the contract. The Supreme Court has considered that clause which says that the advanced loan has been used only by the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of injunction, granted by the single Judge, by which the defendants were restrained from invoking the bank guarantee. The Supreme Court in the aforesaid paragraph has stated that such Bank guarantee could be operated only in the circumstances referred to in the clause. Therefore I have no hesitation to hold that the present Bank guarantee can operate only during the period and for the purpose for which the Bank guarantee postulates in its preamble. That preamble has to be read along with Clause (2). If the Clause (2) read in conjunction with the preamble it goes without saying that the Bank Guarantee cannot be called as an absolute Bank Guarantee, as contended by the counsel for the defendant No. 1. 15. Another contention of the learned counsel for the first defendant is that the original Bank Guarantee as evidenced by' Exh. B is valid upto 25-5-1999. Therefore the Bank Guarantee sought to be injuncted is that Bank Guarantee which was extended upto 15-9-1999. The learned counsel raised an objection that there is no pleading that the plaintiff is seeking an injunction for restraining the extended Bank Guarantee. It appears to me too technical that it does not merits any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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