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TMI Blog2001 (6) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... tnership firm, Respondent No. 1. The appellant instituted the aforesaid civil suit before the City Civil Court at Ahmedabad alleging that the appellant had issued an open tender No. STG/PUR/G/I/ 57/OT/71-72 which was due on 22nd February, 1972. By issuing the aforesaid tender the appellant (original plaintiff invited offers for the supply of certain types of pipes being E.R.W.M.S. Pipes. In fact, the tender contained requirements of four types of pipes of different sizes and different qualities. We are concerned with item No. 2 viz. E.R.W.M.S. Pipes having size of 15/16 x 14G quantity 4689 meters plus 15% expected Increase which would mean to 7500 meters. We are not concerned with other types of pipes which were covered by the said tender. While issuing the tender, certain conditions were laid down as stated in the tender itself. The rates of the goods were required to remain in force upto 21st June, 1972. The tender consisted of a covering letter, tender schedule, declaration to be signed by the tenderer, information required to be furnished along with the tender by the tenderer and terms and conditions governing the submission of the tender. All these papers were to consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit for the recovery of the said amount from the respondents. 3. Respondent Nos. 1 2 filed written statement at Exh. 21 and the remaining respondents had adopted the said written statement by filing an application to that effect at Exh. 22. The suit was contested by all the respondents on the several contentions. The respondents contended that the suit was filed with a mala fide intention. That the suit was premature. That the Court had no jurisdiction to deal with the suit in question. That the suit was bad for misjoinder of parties and non-joinder of necessary parties. The respondents also contended that there was not concluded contract between the parties. That there was a bona fide error and mistake on the part of the respondents in quoting the rate of Rs. 3.50 per meter which actually meant Rs. 3.50 per foot. That the respondents came to know about the said mistake, therefore, they immediately addressed a letter dated 7-3-1972 clarifying that there was an error on their part as aforesaid. That the appellant had not suffered any loss. Even if the appellant had suffered any loss, according to the case of the respondents, the respondents were not responsible or liable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide and the suit of the appellant be decreed in terms of reliefs as claimed in the plaint. 7. On receiving the aforesaid appeal it was admitted at the relevant point of time, notice was issued to and served upon the respondents. Mr. Udayan P. Vyas appeared for Mr. Shelat on behalf of respondent No. 1. I have heard the learned advocates for the parties and have perused the papers. 8. Now, the initial facts are not in dispute. The appellant had issued a tender and had invited offers from the tenderer for the supply of four different types of pipes. It is also undisputed that the respondents had filled in tender and at item No. 2, the rates were shown at Rs. 3,50 per meter. It is undisputed that the appellant had accepted the tender of the respondents and, therefore, according to the case of the appellant, the respondents were required to supply the said item at the quoted rates. These facts are not in dispute. 9. At the same time the trial Court has already found that the Court had jurisdiction to entertain the suit and the suit was not bad for misjoinder or non-joinder of necessary parties. The trial Court has also found that the appellant had accepted the tender of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to both the parties to the contract, then the contract must be treated to be a concluded contract, even if the agreed terms and conditions are not reduced to writing though the same were required to be reduced into writing. In other words, if the material terms and conditions are agreed upon between the parties then as per the argument, merely because they are not put on papers, it cannot be argued that the contract is not a concluded contract. Let us not dispute, in principle, the last argument of Ms. Desai. 13. It is also required to be kept in mind that a contract may be expressed or it may be implied., A contract may be written or it may be an oral one. It may be partly written and partly an oral contract. There cannot be any definite way of entering into a contract that means that the terms and conditions of the contract must be finalized and both the parties must be aware of those terms and conditions of the contract. Each party must know as to what the party is required to perform and each party is also required to know as to what is being accepted from it. Unless this is done, it would not be possible for that party to perform its part of the contract in question. 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time the appellant or any officer thereof had dispensed with the deposit of earnest money by the respondents. The payment of earnest money was a part and parcel of the contract. In fact the tender contained a condition that each tender must be accompanied by a receipt of Rs. 200/- to be paid with the cashier at the Central Purchase, Ahmedabad as an earnest money deposit. 20. It is a matter of records that the respondents never paid the amount of earnest money. Therefore, it is an admitted position that there was a pre-condition for acceptance of tender that there should be payment of earnest money at Rs. 200/- at the time of submission of tender. There is nothing on record to show that the appellant or any authorised officer, at any point of time, dispensed with the deposit of earnest money as said hereinabove. Therefore, this can be treated to be one of the circumstances for not holding the contract to be concluded contract, in absence of fulfilling a mandatory condition for payment of earnest money of Rs. 200/- at relevant point of time. 21. It would be required to be considered here that the appellant insisted upon the deposit of earnest money and the respondents, desp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quoted letter carefully and reply to it. The respondents also asked the appellant, if the appellant agreed to the terms of the respondents. The respondents further told that so far as the payment is concerned the respondents wanted payment only through bank, 95% against the delivery and rest within 30 days. The respondents also made it clear in the letter that so far as penalty is concerned, the penalty is agreeable to the respondents to the extent of 2% per month. As regards earnest money the respondents made it clear that if the appellant felt that the terms of the respondents are agreeable to the appellant then only it would be useful to send earnest money. 25. The respondent, therefore, required the appellant to clarify as to whether or not the appellant is agreeable to the aforesaid terms and conditions suggested in the aforesaid letter dated 7-3-1992 placed at Exh. 39 before the trial Court. 26. This means that certain conditions were suggested by the respondents which were required to be considered by the appellant and respondents were agreeable to the contract provided those terms and conditions were acceptable to the appellant. Therefore, the contract was again depe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quotation, the respondents have stated that the earnest money follows, but it never followed. In fact, looking to the aforesaid correspondence between the parties, the trial Court has found that the deposit of earnest money was part and parcel and the pre-condition of contract between the parties. Since the amount has not been paid at any point of time it would be one of the considerations for holding that there was no concluded contract between the parties, it is more so when the appellant never exempted the respondents from paying the earnest money nor such an exemption was permissible according to the policy of the appellant. 31. It is required to be considered that though the tender was required to be accompanied by an amount of earnest money and though the tender of the respondents did not deposit the amount of earnest money, then how the appellant issued the said tender of the respondents which was not accompanied by earnest money. Therefore, the trial Court has found that the payment of earnest money is a pre-condition for arriving at the contract. The said condition was not fulfilled at all. The trial Court has observed that the payment of earnest money has not been disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lal Shah, as plaintiff witness No. 1 at Exh. 28. He was Store Purchase Officer at relevant point of time. He has given details as to how the tender of respondents was accepted. 36. The appellant has also examined Chandrakant Manilal Contractor, at Exh. 58 as plaintiff witness No. 2. He has given evidence to the effect that the appellant-Corporation had accepted the tender of the respondents as per his quotation with respect to item No. 2. 37. In para 2 of his evidence, he has deposed that to accept the tender without earnest money is the discretion of the competent authority. Now it is a matter of record that the appellant has stated in its letter that it was the policy of the appellant to insist upon the payment of earnest money. It is also stated in its letter by the appellant that no exemption could be granted with respect to payment of earnest money. Despite the said position, the aforesaid witness has said in para 2 of his evidence that it is a discretionary matter. This oral evidence of this witness does not get corroboration from any other material on record. There is nothing on record to show that a particular authority had discretion to dispense with the payment of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant and, therefore, also it would be difficult to hold that there was a concluded contract between the parties as the appellant was not agreeable with the say of the respondents that the rate was wrongly quoted through error. 43. If we turn to the evidence of Chandrakant Manilal Contractor at Exh. 58 we nowhere find from it that the competent authority had dispensed with the payment of earnest money. There is nothing in his evidence to show that the terms and conditions suggested by the respondents in their correspondence were accepted or that there was some final decision or agreement between the parties with respect to those terms and conditions suggested by the respondents in their correspondence. In absence of such finalization or final decision or final agreement, it could not be said that there was a concluded contract between the parties. 44. No other witness appears to have been examined by the appellant in respect of its case. Therefore, we can safely turn to the evidence of the respondents, Mahendrabhai Babubhai, Exh. 66, has been examined as dependent witness before the trial Court. He has deposed in very unequivocal terms that he has never paid any earnest money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposals and counter proposals made by each party to the opposite party and there is nothing on record to show as to what were the final terms and conditions agreed between the parties. Therefore, when the terms and conditions of contract have not been finalized or when they are not proved to have been finalized then in that event it could not be said to be a concluded contract. 50. Therefore, on the one hand the contract could not be concluded in absence of earnest money on the other hand the contract could not be concluded with the payment of earnest money has not been dispensed with. It Is more so when it could not e dispensed with by the appellant. Then it is a matter of record that there were counter proposals suggesting terms and conditions and there is nothing on record to show that some terms and conditions were finally agreed to between the parties. Even from that angle the contract could not be treated to be concluded. 51. The learned counsel for the respondents has relied upon the decision of Zodiac Electricals Pvt. Ltd. v. Union of India, reported in AIR 1986 SC 1918 wherein the Hon'ble Supreme Court has observed that the original offer made by the appellants c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms and conditions were finally concluded, the contract could not treated to be finally concluded. 53. In the aforesaid view of the matter I am of the opinion that the trial Court was not unjustified in holding that there was no concluded contract between the parties. The learned advocate for the appellant arguing the matter at very great length was not in position to convince this Court that the aforesaid finding was against the weight of evidence and, therefore, it was erroneous. 54. In the facts and circumstances of the case it is found that there was no concluded contract between the parties. The appellant could not insist on performance thereof at the hands of the respondents and consequently in absence of a concluded contract the appellant could not allege breach of contract by the respondents. When there was no concluded contract, the respondents were not required to fulfil or perform some part of the alleged contract and simply because the respondents did not perform that part of the contract, it could not be treated to be a breach of contract committed by the respondents when the respondents are not found to have committed breach of contract. When the respondents we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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