High Court of KeralaSingle JudgeWrit petition allowed; refund of EMD ordered; n...

M.M. Varghese v. Kerala Water Authority

Case / Petition Number:WP(C).No. 12421 of 2012 (C)

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • T.R. Ramachandran Nair
Judgment Date
2012-11-02
Court Decision / Holding
Writ petition allowed. The respondents are directed to refund Rs. 12,00,000 (Rs. 3,00,000 for each of the four tenders) within one month from the certified copy of the judgment. No costs.
Final Disposition
Writ petition allowed; refund of EMD ordered; no costs.

Parties to the Case

Appellants / Petitioners

  • M.M. Varghese, aged 64 years, s/o Mathai, Muttuvanchery House, Thamarachalpuram, Kizhakkambalam P.O. – 683 562, Kizhakkambalam Village, Kunnhatunad Taluk

Respondents

  • Kerala Water Authority represented by Managing Director, Jala Bhavan, Thiruvananthapuram
  • Chief Engineer (SR) Kerala Water Authority, Office of the Chief Engineer (Southern Region), Thiruvananthapuram
  • The Superintending Engineer Public Health Circle, Kerala Water Authority, Thiruvananthapuram

Legal Representation & Advocates

Counsels for Petitioners

  • • Sri V. Rajendran (Perumbavoor)
  • • Sri George Varghese, Kizhakkambalam

Counsels for Respondents

  • • Sri George Mathew, SC, Kerala Water Authority

Case Synopsis & Summary

This writ petition challenges the Kerala Water Authority’s refusal to refund the Earnest Money Deposit (EMD) of Rs. 12 lakhs deposited with tenders for three works (Tender Nos. 03/2011-12, 04/2011-12, 05/2011-12) for the Kerala Water Authority’s Public Health Circle project at TVM. The petitioner, a contractor and proprietor of M/s Cochin Steel, submitted three tenders in the name of his firm; after noticing a clerical lapse (non-submission of scanned documents), he submitted two additional tenders in his personal capacity for the same works. The Authority proceeded to forfeit the EMD on grounds that the tender submissions in two capacities violated NIT clauses, notably 7.7.6 (no association with another bidder in the same tender) and 7.13 (firm period of tender; withdrawal before expiry leads to forfeiture). The petitioner argued that the two tenders in personal capacity were fresh, that the two tenders in the proprietorship were defective due to missing documents, and that withdrawal prior to acceptance is permissible under Section 5 of the Indian Contract Act, with statutory rights not overridden by non-statutory NIT clauses; references to case law were cited. The High Court held that the two personal-capacity tenders were fresh and the proprietorship tenders were defective; 7.7.6 did not apply, and 7.13 is non-statutory. On these grounds, the petition was allowed and the EMD for four tenders (Rs. 3 lakhs each) was ordered to be refunded within one month, with no costs.

Provisions of Law Cited

Section 5 of the Indian Contract Act, 1872Clause 7.7.6 of the Notice Inviting Tender (NIT)Clause 7.13 of the NITClause 8.11 of the NITArticle 14 of the Constitution of IndiaArticle 299 of the Constitution of India

Legal Doctrines & Maxims

  • A proposal may be revoked before acceptance under Section 5 of the Indian Contract Act.
  • Administrative instructions (e.g., PWD Manual) are not statutory rules and cannot override statutory rights.
  • Withdrawal of an offer before acceptance is permissible; reliance on non-statutory tender clauses does not extinguish statutory rights.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that clause 7.7.6 is triggered only when a firm/bidder associates with another bidder in the same tender, and hence the two tenders submitted in personal capacity were fresh and not a prohibited association. Since the two tenders in proprietorship were incomplete for lack of scanned documents, they were not evaluable; withdrawal before the firm period was communicated in Ext.P1, and under Section 5 of the Contract Act an offer can be withdrawn before acceptance. Hence the EMD for four tenders should be refunded.

Contentions of Respondents

The respondents submit that withdrawal before the firm period and the resultant forfeiture of EMD is mandated by NIT clauses 7.13 and 7.7.6; tenders submitted in two capacities constitute an association with another bidder in the same tender and thus are liable for EMD forfeiture. They rely on Villayati Ram Mittal (Pvt) Ltd. and other precedents to justify forfeiture and pre-qualification decisions.

Cited Precedents (7)

Case NameCitationTreatmentExplanation
State of Kerala v. Aboobaker Kutty (died) and others1992 (2) KLJ 438PositiveA Division Bench held that withdrawal before acceptance is permissible under Section 5 of the Contract Act, and that statutory-like rules in NITs are not binding when inconsistent with statutory rights.
Suraj Besan and Rice Mills v. Food Corporation of IndiaAIR 1988 Delhi 224PositiveProvided authority that a tenderer may withdraw before acceptance; supports the petitioner’s rights to withdraw.
Abdus Salam Choudhury v. The State of Assam and othersAIR 1991 Gauhati 9PositiveHeld that Section 5 of the Indian Contract Act permits withdrawal prior to acceptance; persuasive authority for the petitioner.
Villayati Ram Mittal (Pvt) Ltd.'s caseJT 2010 (10) SC 394DistinguishedCourt distinguished this case on facts, noting that it involved withdrawal after acceptance and a clause enforcing forfeiture, which differs from present circumstances.
C.J. Fernandez v. State of MysoreAIR 1967 SC 1753PositiveNoted that PWD Manual instructions are administrative and not statutory rules, reinforcing that non-statutory rules do not override statutory rights.
Ramana v. I.A. Authority of IndiaAIR 1979 SC 1628PositiveUsed to characterise actions as administrative and subject to Article 14 when not statutory.
Union of India v. S.S. Syndicate PoonaAIR 1976 SC 879PositiveIllustrates application of general contract principles and public procurement norms in line with statutory rights.

Diagnostic Tool

Beta

Does this judgment govern your specific facts?

Don't risk relying on a distinguishable precedent. Enter your facts or proposition below. We will test it against M.M. Varghese v. Kerala Water Authority and instantly map out authorities that support, challenge, or govern your position.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR** ## **FRIDAY, THE 2ND DAY OF NOVEMBER 2012/11TH KARTHIKA 1934** ## **WP(C).No. 12421 of 2012 (C)** **---------------------------** **PETITIONERS :** - **--------------------** **M.M. VARGHESE, AGED 64 YEARS S/O. MATHAI, MUTTUVANCHERY HOUSE THAMARACHALPURAM, KIZHAKKAMBALAM.P.O - 683 562 KIZHAKKAMBALAM VILLAGE, KUNNATHUNAD TALUK.** **BY ADVS.SRI.V.RAJENDRAN (PERUMBAVOOR) SRI.GEORGE VARGHESE KIZHAKKAMBALAM** **RESPONDENTS :** **----------------------** **1. KERALA WATER AUTHORITY REPRESENTED BY MANAGING DIRECTOR, JALA BHAVAN,THIRUVANANTHAPURAM - 695 033.** **2. CHIEF ENGINEER (SR) KERALA WATER AUTHORITY** **OFFICE OF THE CHIEF ENGINEER, (SOUTHERN REGION) THIRUVANANTHAPURAM - 695 033.** **3. THE SUPERINTENDING ENGINEER PUBLIC HEALTH CIRCLE, KERALA WATER AUTHORITY THIRUVANANTHAPURAM- 695 033.** **R1-R3 BY ADV. SRI.GEORGE MATHEW, SC, KERALA WATER AUTHORITY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06/08/2012 THE COURT ON 02-11-2012, DELIVERED THE FOLLOWING:** **BP** **WP(C).No. 12421 of 2012 (C)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS :** **EXHIBIT-P1-TRUE COPY OF THE LETTER DATED 28/07/2011 ISSUED BY THE PETITIONER TO THE 3RD RESPONDENT.** **EXHIBIT-P2-TRUE COPY OF THE PROCEEDINGS OF THE 3RD RESPONDENT BEARING NO. KWA/PHC/D2/4116 (A)/09 DATED 24/08/2011** **EXHIBIT-P3-TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER TO THE 3RD RESPONDENT.** **EXHIBIT-P4-TRUE COPY OF THE LETTER DATED 25/11/2011 ISSUED BY THE PETITIONER TO THE 3RD RESPONDENT.** **EXHIBIT-P5-TRUE COPY OF THE LETTER DATED 25/11/2011 ISSUED BY THE PETITOINER TO THE 3RD RESPONDENT.** **EXHIBIT-P6-TRUE COPY OF THE LETTER DATED 21/03/2011 BEARING NO. PHC - D2 4116 (C)/2009 ISSUED BY THE 3RD RESPONDENT.** **EXHIBIT-P7-TRUE COPY OF THE REPLY DATED 27/03/2011 ISSUED BY THE PETITIONER TO THE 3RD RESPONDENT.** **EXHIBIT-P8-TRUE COPY OF THE PROCEEDINGS OF THE 2ND RESPONDENT BEARING NO. KWA/CE (SR)/WSNTA/3923/2009 B DATED 09/11/2011 IN RESPECT OF THJE TENDER NO. 04/2011-2012/KWA PHC/TVM** **EXHIBIT-P9-TRUE COPY OF THE PROCEEDINGS OF THE 2ND RESPONDENT BEARING NO. KWA/CE (SR)/WSNTA/3923/2009 A DATED 09/11/2011 IN RESPECT OF THE TENDER NO. 04/2011-2012/KWA PHC/TVM** **EXHIBIT-P10-TRUE COPY OF TGHE LAWYER NOTICE DATED 10/04/2011 ISSUED TO THE RESPONDENT.** **EXHIBIT-P11-TRUE COPY OF THE LETTER NO. PHC/D2-4116/B/09 DATED 10/04/2012 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER** **EXHIBIT-P12-TRUE COPY OF THE LETER NO. PHC/D2-4116/B/09 DATED 10/04/2012 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER.** ## **WP(C).No. 12421 of 2012 (C)** **EXHIBIT-P13-TRUE COPY OF THE LETER NO. PHC/D2-4116/B/09 DATED 12/04/2012 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER.** **EXHIBIT-P14-TRUE COPY OF THE LETER NO. PHC/D2-4116/B/09 DATED 12/04/2012 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER. EXHIBIT-P15-TRUE COPY OF THE REPLY BEARING NO. KWA/CE(SR) WSNTA/3923/2009 DATED 08/05/2012 ISSUED BY 2ND RESPONDENT TO THE PETITIONER** ## **RESPONDENT'S EXHIBITS :** **EXHIBIT -R1(a): COPY OF CLAUSE 7.7.6 OF THE NIT.** **EXHIBIT-R1(a): COPY OF CLAUSE 7/13/OF NIT** **//TRUE COPY//** **P.A. TO JUDGE** **BP** ## **T.R.RAMACHANDRAN NAIR, J.** **- - - - - - - - - - - - - - - - - - - - - - - - - -** ## **W.P.(C).No. 12421 of 2012** **- - - - - - - - - - - - - - - - - - - - - - - - - -** ## **DATED THIS THE 2nd DAY OF NOVEMBER, 2012** ## **JUDGMENT** The petitioner seeks for issuance of a writ of mandamus directing the third respondent to refund the Earnest Money Deposit amounts to the tune of Rs.12 lakhs, furnished by him along with the tenders submitted. 2. The respondents have mainly rejected the request by pointing out that the withdrawal of tenders as well as certain other factors will result in forfeiture of the Earnest Money Deposit. 3. The petitioner is a contractor under the first respondent and is the proprietor of M/s. Cochin Steel Industrial Complex, Kizhakkambalam. He is having 2 A-Class licences, one in his personal name and the other as proprietor of the said Industrial Complex. Electronic tenders were invited by the third respondent by a notification published in leading dailies dated 9.6.2011 and in the website. The tenders were invited in respect of three items, as Tender Nos.03/2011-12/KWA/PHC/TVM, 04/201112/KWA/PHC/TVM and 05/2011-12/KWA/PHC/TVM. As proprietor of M/s. Cochin Steel he submitted three electronic tenders. But later, a mistake was found out after sending the tenders, that the tenders were not W.P.(C).No.12421/2012 -2- accompanied by scanned documents. The petitioner thereafter submitted two more tenders as Tender Nos.04 and 05 in his individual licence accompanied by all the required documents. These were submitted along with Ext.P1 letter wherein a request was made to accept Tender No.03 submitted by M/s. Cochin Steel as well as Tender Nos.04 and 05 submitted in his personal capacity, as Tender Nos.04 and 05 submitted in the name of M/s. Cochin Steel were defective. 4. By the said process, he had remitted Rs.15 lakhs as Earnest Money Deposit for the five tenders. Ext.P2 is produced by the petitioner to show that the third respondent recommended for pre qualification of the tenders submitted by the petitioner in his capacity as proprietor of M/s. Cochin Steel, in respect of Tender No.03/2011-2012 as well as Tender Nos.04 and 05 submitted in his personal capacity. Later, the petitioner submitted Ext.P3 letter requesting to return the Earnest Money Deposit of the two invalid tenders. After coming to know that he was not pre qualified, two letters were submitted as Exts.P4 and P5 to return the Earnest Money Deposit covering all the five tenders. An amount of Rs.3 lakhs was returned as per Ext.P6 in respect of Tender No.03/2011-2012 submitted in the name of Ms. Cochin Steel. Again, the petitioner requested to refund the Earnest W.P.(C).No.12421/2012 -3- Money Deposits in respect of the other four tenders by Ext.P7. Exts.P8 and P9 are copies of the proceedings of the second respondent directing to take steps to forfeit the Earnest Money Deposit. These are followed by Exts.P11 to P14 letters explaining their stand also. 5. The stand taken in Exts.P8 and P9 is that the tenders submitted in the personal capacity of the petitioner are additional tenders and therefore those cannot be accepted. The petitioner points out that the letters Exts.P11 to P14 of the third respondent will show that the two tenders submitted by the petitioner as Proprietor of M/s. Cochin Steel were considered as invalid tenders as they were incomplete thus the two tenders submitted in his personal capacity have been recommended for pre qualification, by the third respondent. 6. The respondents have filed a counter affidavit justifying the action. 7. Heard learned counsel for the petitioner Shri V. Rajendran and learned Standing Counsel for the respondent, Shri George Mathew. 8. Learned counsel for the petitioner submitted that the stand taken by the respondents in the documents produced and in the counter affidavit, that the submission of two tenders in the personal capacity is against the W.P.(C).No.12421/2012 -4- conditions of Notice Inviting Tenders (NIT), especially clause 7.7.6, is not correct. The said clause is attracted only in a case where the tenderer is associated with another tenderer in the particular tender. Herein, out of the three tenders submitted in the name of the proprietorship in respect of tender Nos.04 and 05, the petitioner noticed the mistake later in not producing the scanned documents. Thereafter, in his licence in personal capacity, two tenders were submitted for tender Nos.04 and 05. Therefore, they are only fresh tenders and it is not a case where clause 7.7.6 will apply. It is also submitted that even before acting upon the tender documents, the petitioner submitted a withdrawal as per Ext.P1. In the light of Section 5 of the Contract Act, an offer is entitled to be withdrawn before its acceptance. Therefore, the conditions under the NIT cannot go against the provisions of the Contract Act and reliance is placed on a Division Bench decision of this Court in **State of Kerala v. Aboobaker Kutty (died) and others** (1992 (2) KLJ 438). It is pointed out that the instructions in the NIT have no statutory force. Reliance is also placed on the judgment of the Delhi High Court in **M/s. Suraj Besan and Rice Mills v. Food Corporation of India** (AIR 1988 Delhi 224) and that of the Gauhati High Court in **Abdus Salam Choudhury v. The State of Assam and others** (AIR 1991 Gauhati 9). It is W.P.(C).No.12421/2012 -5- submitted that the petitioner was entitled to withdraw the two incomplete tenders on submission of the fresh tenders in his personal capacity and therefore the Earnest Money Deposits in respect of the four tenders have to be refunded. 9. Shri George Mathew, learned Standing Counsel appearing for the respondents contended, in the light of the averments in the counter affidavit and the relevant clauses of the NIT, that the tenderer cannot withdraw a tender in the light of clause 7.13 before the firm period is over and it is clearly provided in the said clause that any such withdrawal will be at the risk of the tenderer and the Earnest Money Deposit will be forfeited. It is also submitted that clause 7.7.6 of the NIT will show that a tenderer shall not associate with any of the bidder in the particular tender. Herein, two sets of tenders have been submitted, one in his capacity as proprietor and the other as individual. Therefore, the rigors of clause 7.7.6 will squarely apply. Reliance is also placed on the dictum laid down in V **illayati Ram Mittal (Pvt) Ltd. v. Union of India & another** (JT 2010 (10) SC 394). 10. The factual aspects thus require a detailed analysis. The tenders in question are numbered as 03/2011-12, 04/2011-12 and 05/2011-12. Initially, three electronic tenders were submitted in the status of proprietor W.P.(C).No.12421/2012 -6- of M/s. Cochin Steel. In respect of tender Nos.04 and 05, scanned documents were not forwarded. Along with Ext.P1 letter, two more tenders were submitted in his personal capacity. In Ext.P1 it is mentioned that a mistake was found out after submission of the tenders and a further request was made to consider Tender No.03 only in the name of the proprietorship and Tender Nos.04 and 05 in the personal capacity. In Ext.P2 which is the copy of the forwarding letter submitted by the Superintending Engineer to the Chief Engineer, under item Nos.9 and 15 these tenders have been evaluated. Under item No.9, after referring to the request of the petitioner, it is mentioned to the effect that “The firm has uploaded only the formats Q1-Q8 and no other documents have been uploaded by them and the technical committee decided to recommend the request of the petitioner and only his bid may be considered.” The above facts are discussed under item No.15 in the firm name also. In Ext.P8, with regard to the tenders of the petitioner's firm, under item No.14 it is mentioned that the tender once submitted in the name of the proprietorship cannot be withdrawn as per the NIT conditions. Under item 15, the reason stated for rejection of the tenders submitted in the personal capacity of the petitioner, is that the tender has been submitted in two capacities which will entail in disqualification of the W.P.(C).No.12421/2012 -7- two tenders. Therefore, both the tenders submitted in the status of proprietor as well as individual capacity, have not been pre-qualified. The said reasons are repeated in respect of the other tenders also as evidenced by Ext.P9, in respect of tender No.05/2011-12. 11. The relevant clauses in the NIT, as elaborated in the counter affidavit and contained in Exts.R1(a) and R1(b), are the following: “7.7.6 No firms/partner of any firm, consultant including design consultant or individual be, who have submitted the tender for a work shall associate with any other bidder in the particular tender. EMD in such cases shall be forfeited and both the tenders will be treated as rejected. 7.13 FIRM PERIOD OF TENDER Tenders shall be firm for acceptance for a period of 9 months from the last date prescribed for submission of tender. No tender can be withdrawn or altered before the firm period is over. Any tenderer who withdraws or alters the tender before the expiry of the firm period shall do so at the risk of the tenderer and the earnest money will be forfeited to Kerala Water Authority. 8.11 The EMD of unsuccessful tenderer shall be refunded after the tenders are disposed off as per the discretion of the tendering authority.” 12. The first question is whether clause 7.7.6 is attracted for W.P.(C).No.12421/2012 -8- forfeiting the EMD by treating the bidder as disqualified. A reading of clause 7.7.6 will show that it will be attracted if a firm/partner of any firm, etc. who have submitted a tender associates with any other bidder in the “particular tender”. Therefore, such association should be evident from the bid document itself. On a reading of para 2 of the counter affidavit itself, it can be seen that the tenders submitted by the petitioner are treated as in two different capacities, one as proprietor of M/s. Cochin Steel and the other in his personal capacity. It is also stated that “the tenders submitted by the petitioner as proprietor of M/s. Cochin Steel for Tender Nos.4 and 5 were incomplete as well as the documents required for evaluating the tender were not electronically uploaded.” Thus, actually these tenders were submitted in two different capacities and it is not by associating with any other bidder. One set of bid documents were incomplete, even going by the admissions of the second respondent. Therefore, those tenders, viz. Tender Nos.04 and 05 submitted in the proprietorship of M/s. Cochin Steel are clearly defective which cannot obviously be evaluated at all. Thus, the rigor of clause 7.7.6 will not be attracted as the respondents themselves have treated these two sets of bids as submitted in two different capacities. What is prohibited under clause 7.7.6 is association with another bidder in W.P.(C).No.12421/2012 -9- respect of a particular tender. The same is absent as far as the factual situation herein is concerned. What was submitted by the petitioner in the personal capacity are fresh tenders, as the two tenders submitted as proprietor were clearly defective. The fact that a mistake was committed while submitting the two tenders in his personal capacity also, was informed by Ext.P1. In para 3 of the counter affidavit, with regard to Ext.P1 letter, it is stated as follows: “However based on Ext.P1 letter the mistake as reported by the petitioner was favourably considered by the 3[rd] respondent and accordingly for Tender No.3 the tender submitted by the petitioner in his capacity as proprietor of M/s. Cochin Steel was recommended to the 2[nd] respondent for pre qualification vide letter Nos.KWA/PHC/D2/4116(C)/09 dated 24.8.2011.” That the tenders submitted under the proprietorship in respect of Tender Nos.04 and 05 were defective as it was not accompanied by scanned documents and which amounts to a mistake, is therefore clear. 13. The next argument to be considered is whether para 7.13 will apply. The same evidently contains a clause that no tender can be withdrawn or altered before the firm period is over and the EMD will be forfeited if a tenderer withdraws or alters the tender before the expiry of W.P.(C).No.12421/2012 -10- the firm period. 14. Herein, the information regarding the mistake committed by the petitioner was conveyed by him before the last date for submission of the bid documents was over. The information was therefore given by the petitioner well in time. In such cases whether para 7.13 will apply, itself will have to be considered. 15. A Division Bench of this Court in **Aboobaker Kutty's case** (1992 (2) KLJ 438) considered a similar issue. Therein, the last date for submission of tender was 17.11.1987 and the time for opening the tender was 4.30 p.m. A mistake was committed by the tenderer which was found out and he informed about the same as per Ext.P10 letter at 4.05 p.m.. He sought permission to correct the mistake or in the alternative, to withdraw the offer. The security deposit of the petitioner was withheld which was under challenge in the writ petition and the petitioner prayed for return of the earnest money deposit. The respondents relied upon the relevant clause of the P.W.D. Manual which is extracted in para 6 of the judgment, which provided that “a tenderer cannot withdraw his tender or make any modification not acceptable to the Department once the tender has been deposited in the tender box. Any contravention of the above rule will entail W.P.(C).No.12421/2012 -11- forfeiture of the Earnest Money Deposit.” The writ petition was allowed by taking the view that an offer can be withdrawn in the light of Section 5 of the Contract Act, even before the tenders were opened. The Division Bench examined the issued in paragraphs 7, 8 and 9 which are extracted below: “7. Under Section 5 of the Contract Act a proposal could be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. The illustration under the said Section shows that 'A' proposes, by a letter sent by post, to sell his house to 'B'. 'B' accepts the proposal by a letter sent by post. 'A' may revoke his proposal at any time before or at the moment when 'B' posts his letter of acceptance, but not afterwards. It is also settled that the provisions of General Law of Contract are applicable to Government contracts also subject to the provisions of Article 299 of the Constitution of India: vide _Union of India v. S.S.H. Syndicate Poona,_ A.I.R. 1976 SC 879. Therefore when the withdrawal letter was received before 4.30 P.M. which was the time for opening tenders, there was no completed contract between the parties. 8. At a stage when the contract had not come into force, the action of the authorities was purely in the nature of administrative action as stated in _Ramana v. I.A. Authority of India,_ A.I.R. 1979 SC 1628 and in fact the actions are subject to the provisions of Article 14 of the Constitution of India. W.P.(C).No.12421/2012 -12- 9. So far as the clauses in the PWD Manual are concerned, it has been held by the Supreme Court in _C.J. Fernendez v. State of Mysore,_ A.I.R. 1967 SC 1753 that the instructions contained in the P.W.D. Manual are administrative instructions and not statutory rules. The question arose in a writ petition filed by a citizen for enforcement of the Mysore Public Works Department Code. It was held by the Supreme Court that the rules not being statutory they were not enforceable. As the said rules are not enforceable at the instance of the tenderer they would not be enforceable in a court of law at the instance of the Government, particularly when the said rules govern a situation before the contract to be formed. When the action of the Government is purely an administrative action, it is governed by the principles laid down by the Supreme Court in _Ramana's case_ (supra), as stated above. The above paragraphs will show that in the light of Section 5 of the Contract Act, a proposal could be revoked at any time before the communication of its acceptance is complete against the proposer, but not afterwards. At a stage when the contract had not come into force, the action of the authorities was purely in the nature of administrative action which will be subject to the provisions of Article 14 of the Constitution of India and as far as P.W.D. Manual is concerned, they are not statutory in nature. Finally, in para 10 it was held as follows: W.P.(C).No.12421/2012 -13- “10. If that be so, the withdrawal of the offer by the writ petitioner before the time fixed for opening tenders was perfectly in order, and as much as the Government is governed by Section 5 of the Contract Act, it could not rely upon the PWD Manual for the purpose of negativing the statutory right of the petitioner which had accrued to him because of the clear provisions of Section 5 of the Contract Act, and the administrative instructions cannot have the effect of overriding statutory provisions. We, therefore of the view that the learned Single Judge was right in allowing the writ petition.” 16. The position herein is also similar. Even before the outer time fixed for submission of the tender, the petitioner had informed about the mistakes in the two tenders and had requested to consider the tenders submitted in his individual name instead of those submitted in the proprietorship, in respect of Tender Nos.04 and 05. Therefore, he had communicated the withdrawal well in time. It is further to be noticed that the two tenders were defective for want of supportive documents. In fact, under item No.14 in Ext.P8 while considering the tender submitted in the name of the proprietorship, it is clearly mentioned that “since the firm failed to submit complete documents supporting the formats, the firm is not pre-qualified.” The same is the reason given in Ext.P9. Therefore, as far as W.P.(C).No.12421/2012 -14- the question of withdrawal is concerned, it is before any acceptance of the tender. Clause 7.13 which is not statutory in nature, cannot therefore help the respondents, in the light of Section 5 of the Contract Act and the principles stated in **Aboobaker Kutty's case** (supra). 17. In **Suraj Besan and Rice Mills' case** (AIR 1988 Delhi 224) also it was held in paragraphs 9 and 10 that “a person who makes an offer, is entitled to withdraw his offer or tender before its acceptance is intimated to him. The Government by merely providing a clause to the contrary in the tender notice could not take away the legal rights of a person.” 18. In **Abdus Salam Choudhury's case** (AIR 1991 Gauhati 9) also the matter was considered under Section 5 of the Contract Act and it was held in para 10 that “under the provisions of Section 5 of the Indian Contract Act, a proposal may be revoked at any time before communication of its acceptance is complete as against the proposer but not afterwards. Admittedly, the petitioner withdrew his offer made in his tender by the application dated 21.3.1977 well before acceptance thereof. In other words, the petitioner revoked his proposal/offer well before acceptance thereof. Under the provisions of the Indian Contract Act, the petitioner has the statutory right to withdraw/revoke his offer for getting settlement of the W.P.(C).No.12421/2012 -15- Mahal or coupe before acceptance thereof by he settling authorities. It being a statutory right of the petitioner under the provisions of the Indian Contract Act entitling him to withdraw/revoke his offer/proposal made in his tender before acceptance thereof by the authorities and the petitioner having done so in the instant case, the contract of sale of the Mahal in question for the settlement period could not be enforced on the petitioner and he cannot be saddled with the liability to make good the deficiency. 19. Learned Standing Counsel for the respondents, by relying upon the decision of the Apex Court in **Villayati Ram Mittal (Pvt) Ltd.'s case** (JT 2010 (10) SC 394), contended that a clause provided in the NIT is enforcible against a person who revoked his offer. 20. Learned counsel for the petitioner submitted that in the above case the tender was accepted and the revocation was after the communication of acceptance and therefore the said dictum will not apply to the facts of this case. 21. A reading of the judgment in **Villayati Ram Mittal (Pvt) Ltd.'s case** (JT 2010 (10) SC 394), will reveal the following facts: The petitioner submitted its offer along with an earnest money of Rs.40 lakhs. The tenders were opened on 5.5.2004 and the offer of the petitioner was found to W.P.(C).No.12421/2012 -16- be the lowest at Rs.32 crores. The estimated cost of the work was Rs.40 crores. On the next day, i.e. On 6.5.2004 the petitioner sent a letter to the second respondent making correction of a figure in his tender to read as Rs.32,76,000/- instead of Rs.23,76,000/-. This resulted in the offer of the petitioner for the work increased from Rs.32 crores to Rs.41 crores. This was treated by the respondents as a revocation of the offer and the earnest money deposit was forfeited. Clause 6 of the Notice stipulated that “if the firm revokes its offer during the validity period, its earnest money shall be forfeited.” The above facts will show that the subsequent correction was made after the bid was opened and the petitioner was found to be the lowest. In para 10 of the judgment, the Apex Court rejected the contentions in the following words: “10. In facts of the present case, the respondents have stated in their reply to the Writ Petition before the High Court that as a consequence of the failure of the petitioner to stand by its offer dated 05.05.2004 the tender for the work had to be re-invited by the respondent No. 2 on revised costs of the construction and in the circumstances, the respondent No. 2 had to forfeit the earnest money of the petitioner. This was thus a case where on account of failure on the part of the petitioner to stand by its offer, the transaction or the contract did not come through and therefore the W.P.(C).No.12421/2012 -17- respondents were entitled to forfeit the earnest money furnished by the petitioner in terms of Clause 6 of the Notice.” Therefore, it is a case where the offer was accepted and the transaction did not come through later because of the failure of the petitioner to stand by to the offer. Herein, the situation is totally different. This is not a case where any offer is revoked after its acceptance. In the light of the above, the facts of the case are clearly distinguishable. 22. Herein, as far as the four tenders are concerned, two are in the name of the proprietorship which are defective and the two tenders in the individual name of the petitioner are supported by documents. By no stretch of imagination it can be said that the two defective tenders will be acted upon at the stage of pre qualification. Herein, the petitioner had requested as per Ext.P1, to accept only the two tenders submitted by him in his personal capacity which are uploaded with documents. Therefore, there was no iota of chance even for considering the tenders submitted in the name of the proprietorship, as they are defective. Clause 7.7.6 also will not apply to these tenders, as the subsequent tenders submitted in the name of the petitioner were in his personal capacity and they were fresh tenders also. 23. In the light of the above, the writ petition is allowed. There will W.P.(C).No.12421/2012 **==> picture [21 x 9] intentionally omitted <==** be a direction to the respondents to refund to the petitioner the earnest money deposit in respect of the four tenders, viz. Rs.3 lakhs each ( Rs.12 lakhs in total), within a period of one month from the date of production of a certified copy of this judgment. No costs. (T.R. Ramachandran Nair, Judge.) kav/