1 2025:CGHC:7639-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WA No. 108 of 2025 1 - Chhattisgarh Housing Board Raipur Through Its Commissioner, Shankar Nagar Raipur (Now Sector -19, Prayawas Bhawan, Atal Nagar, Naya Raipur) Distt- Raipur, Chhattisgarh. 2 - Executive Engineer Chhattisgarh Housing Board, Project Division Durg, Talpuri Twin City Durg, District Durg Chhattisgarh. 3 - Deputy Commissioner Chhattisgarh Housing Board, Office At Head Quarters Of Chhattisgarh Housing Board, Shankar Nagar, Raipur (Now Division- Durg) Distt.- Durg Chhattisgarh. ... Appellants versus Sterling And Wilson Pvt. Ltd. (S.N.W.) Having Registered Office At Universal Majestic, 9th Floor, P.L. Lokhande Marg, Chembur W, Mumbai 400043 Through Its Authorized Signatory Shri Jaydeep Ghosh S/o Late Shyamal Ghosh, Aged About 42 Years, Working As Sr. Manager Accounts, Noida Division Of Sterling And Wildson Pvt. Ltd. R/o Sector-Ii-A/72, Flat No. S-2, Second Floor, Vaishali, Ghaziabad Police Station Indirapuram District Ghaziabad Uttar Pradesh 201010, Maharashtra. ... Respondent For Appellant : Mr. Sanjay Patel, Advocate. For Respondent : Mr. Alok Buxy, Advocate. BABLU RAJENDRA BHANARKAR Digitally signed by BABLU RAJENDRA BHANARKAR Date: 2025.02.13 17:36:32 +0530 2 Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal , Judge Judgment on Board Per Ramesh Sinha, Chief Justice 13.02.2025 1. Heard Mr. Sanjay Patel, learned counsel for the appellants as well as Mr. Alok Buxy, learned counsel appearing for the respondent on I.A. No.01/2025, which is an application for condonation of delay of 08 days in filing the instant appeal. 2. For the reasons mentioned in the application, I.A. No.01/2025 i.e. application for condonation of delay, the same is allowed and delay is condoned. With the consent of learned counsel for the parties, the appeal is heard finally. 3. This writ appeal is presented against an order dated 29.11.2024 (Sterling and Wilson vs. Chhattisgarh Housing Board Raipur and others) passed by learned Single Judge in WPC No. 1301 of 2015, whereby the writ petition filed by the respondent herein was allowed by learned Single Judge with direction that the appellants/Board shall refund the Earnest Money Deposit (EMD) to the petitioner within a period of two months from 29.11.2024. 4. The facts of the case according the appellant is that the appellant C.G. Housing Board (for short 'the Board') issued NIT for execution of (External Electrification Work i/c Under Ground Cable System) for Twin City Taluri, Aamdi Ruabandha, Bhilai, 3 Durg. The E.M.D. to be deposited at the time of submitting the tender form was Rs.10 lacs, whereas the tender amount was Rs.16.64 Crores. Clause 3.1 of the NIT provided that Rs. 5 lacs will be refunded to the unsuccessful tenderer on the rejection of the tender. The respondent submitted its tender form and was declared L-1 after opening of the tender. As per Clause 4.7.1 of the NIT, the validity period of the offer was 120 days only. The said period started from 28/08/2011 which was expired on 27/12/2011. The respondent further contended that they have not communicated till 24/12/2011 about the acceptance of bid, therefore, the respondent sent a letter on 24/12/2011 to the appellants and informed the Commissioner of the Housing Board that no acceptance has been communicated to the respondent. In response to this, after 27/12/2011 (the date on which the validity period of 120 days expired) vide letter dated 04/01/2012 (Annexure P-8), the respondent was requested to give its consent for extension of validity period for 2 months. The respondent quickly responded to the letter dated 04/01/2012 by sending a letter on 09/01/2012 (Annexure P-9). On 09/01/2012, the respondent sent a letter communicating the extension of validity period of offer upto 29/02/2012 with further condition of rebate of 0.5% on item of Transformer and item No.6.1 (laying L.T. cable). Till 29/02/2012, no response received by the appellants and on 22/03/2012, the appellants sent a letter, which was received by the respondent on 02/04/2012. It was 4 communicated to the respondent that offer of the respondent has been accepted and he should come forward for executing the agreement. 5. On 04/04/2012, the respondent replied to this letter that offer of the respondent is no more valid and has expired on 29/02/2012. The respondent again made certain demands due to price escalation for reimbursement of service tax. On 23/04/2012 and on 03/05/2012, letters were sent by the appellants intimating that if the respondent will not execute the agreement, the EMD will be forfeited. On 14/05/2012, the respondent replied to those letters requesting that since the offer had expired on 29/02/2012, EMD cannot be forfeited. Thereafter, several communications were sent by the respondent to the appellant but nothing substantial happened. However, vide impugned communication dated 26/07/2013, the appellant No.3 communicated to the respondent that EMD has been forfeited and the same cannot be refunded back. According to the respondent, the impugned communication by which the EMD has been forfeited is that the appellant/Board has no authority to forfeit the EMD as there is no concluded contract between the parties and no document on record to show that the contract agreement was ever executed between the parties, therefore, the appellant/Board has no authority to forfeit the EMD, hence, the impugned communication issued by the Housing Board is bad in law. Being aggrieved by the same, the 5 writ petitioner / respondent herein filed WPC No.1301 of 2015, which was allowed by learned Single Judge. Hence, this writ appeal. 6. Learned counsel for the appellant submits that learned Single Judge has failed to appreciate the order of forfeiting the EMD was passed on 15.05.2012, the appellants raised a dispute as per the arbitration clause 29 of NIT before the Deputy Housing Commissioner who rejected the dispute vide order dated 26.07.2013. As per section 74 of the Indian Contract Act, the Housing Board has explicit power to forfeit the EMD if the respondent failed to execute the agreement as per clause 4.7.1 read with clause 8.1.1. He further submits that learned Single Judge has failed to see that the writ petitioner himself in the legal notice dated 08.12.2014 has stated that the writ petitioner would file a civil suit but instead filed writ petition which was allowed by learned Single Judge. He also submits that learned Single Judge has failed to see that there is delay of more than 3 years in preferring the writ petition and there is no explanation of delay in para 7 of the writ petition though the objection was specifically raised by the appellants. As such, the writ appeal deserves to be allowed and the impugned order passed by learned Single Judge deserves to be set aside. 7. On the other hand, learned counsel for respondent opposes the submissions made by the learned counsel for the appellants and 6 submits that learned Single Judge after considering all the aspects of the matter has rightly allowed the writ petition filed by the writ petitioner / respondent herein, in which no interference is called for. 8. We have heard learned counsel for the parties, perused the impugned order and other documents appended with writ appeal. 9. From perusal of the impugned order, it transpires that learned Single Judge has held that in the present case, it is undisputed that no concluded contract was there and hence, by fastening of liability upon the writ petitioner, the appellant/Board cannot forfeit the EMD placed by the writ petitioner at the time of submission of bid. Even the Clause 4.7.1 of the NIT also, does not give any right to forfeit the earnest money, because the Clause 4.7.1 is very specific that “In the event of withdrawing the offer by the tenderer, before the expiry of the period of the validity of offer or failing to execute the contract agreement as required by the condition 8.1.1 or the Notice Inviting Tender, he will not be entitled to tender for this work in case of recall in addition to forfeited of his earnest money. If the tenderer has committed, a similar default on an earlier occasion as well as his registration in the Board may be suspended temporarily for a period of six months or above from such date as may be ordered by the Competent Authority who has registered him. Learned Single Judge further held that the contention of appellants/Board that by 7 exercising the power under Clause 4.7.1 read with Clause 8.1.1, they have exercised the power of forfeiture is absolutely illegal because in the present case, there was no communication from the appellants/Board in the initial four months of validity period of the offer as per NIT. After 120 days, the appellants/Board accorded consent of extension of validity period and thereafter, extended the validity period till 29/02/2012 under changed condition and till 29/02/2012, there was no communication of acceptance by the appellant/Board and on that data, the validity period of offer was already expired, hence, after 29/02/2012, since there was no valid offer was in existence, therefore, the forfeiture of EMD in exercise of power under Clauses 4.7.1 or 8.1.1 after 29/02/2012 is bad in law as well as contrary to the condition of the NIT itself. Learned Single Judge also held that as far as the reliance of the appellants upon the judgment of Malik Traders (supra), the fact of this case is also different from the fact of the present case and in this case, the acceptance of the bid of the tenderer was communicated within a period of 90 days, whereas in the present case, there has been no communication of acceptance in the first 120 days and even before 9/02/2012 that was the last extension. 10. Considering the submissions advanced by learned counsel for the parties, perusing the pleadings made in writ appeal and the finding recorded by learned Single Judge while allowing the writ 8 petition filed by the writ petitioner / respondent herein, we are of the considered opinion that learned Single Judge has not committed any illegality, irregularity or jurisdictional error in the impugned order warranting interference by this Court. 11. Accordingly, the writ appeal being devoid of merit is liable to be and is hereby dismissed. No cost(s). Sd/- Sd/- Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice Bablu