Haryana State Electricity Board vs Pankaj Kumar Neeraj Kumar

G.C. Garg, J.—M/s. Pankaj Kumar Neeraj Kumar submitted a tender in response to a tender inquiry No. NIT-140 inviting offers for sale of 41 metric tonnes of H.T/L.T. Copper Coils lying at various stores of the Haryana State Electricity Board. Tender of respondent was accepted by telegram dated January 20, 1986. Acceptance of tender submitted by the respondent was further confirmed by telegram dated February 3, 1986 and March 13, 1986. The earnest money required to be deposited along with the tender was adjusted against the amount of the respondent lying in deposit with the Board in respect of contract NIT 132. The respondent was required to deposit Rs. 30,000/- while accepting the tender. After some correspondence, a sum of Rs. 7,000/- was deposited at Panipat on April 29, 1989. According to the respondent, this amount was deposited in terms of oral discussion that took place between the firm and the action committee of the Board. The case of the respondent is that the Board failed to deliver the contracted goods in spite of repeated demands and consequently, it committed breach of contract. The disputes and differences having arisen between the parties, in view of Clause 22 of the agreement, the matter was required to be referred to the arbitrator for decision. The request of the respondent to the Board to appoint arbitrator did not find favour with the authorities. This led the respondent to file a petition for appointment of arbitrator. The claim as made in the petition was contested.

The trial court by order dated June 6, 1992 accepted the petition of the respondent and directed the Board to appoint an arbitrator in terms of Clause 22 of the agreement, Exhibit A.5. A further order was made to the Board for supplying the names of the persons to be appointed as arbitrator. Aggrieved by this order of the trial Court, the Board filed appeal which was dismissed by learned Additional District Judge by order dated October 21, 1992. It is in these circumstances, the Board seeks revision of the orders passed by courts below.

The sole contention of the learned counsel for the petitioners is that no concluded contract came into being between the parties and thus, question of appointing arbitrator did not arise.

The entire controversy in this case is, whether a concluded contract came into being between the parties. Tenders in this case were invited and the respondent submitted tenders in response to the invitation earnest money of Rs. 3000/- was required to be deposited along with the tender. The respondent instead of depositing a sum of Rs. 3000/- as earnest money, made a request to the board by appending a note that this amount of Rs. 3000/- be adjusted against the tender inquiry No. NIT-140. This was so done. If this had not been done, tender of the respondent would have been straightaway rejected. Tender of the respondent was consequently accepted. Exhibit A.5 contains the terms and condition of the tenders. The petitioner-board gave a telegram Exhibit A-7 to the respondent accepting the tender and requiring it to deposit a sum of Rs. 30,000/- by way of security, Exhibit A-8 is endorsement on telegram dated January 20, 1986 confirming the telegram and requiring the respondent to deposit the amount as aforesaid. This amount was, however, not deposited and the respondent sought time for doing the needful. Certain correspondence was exchanged between the parties and ultimately the respondent deposited a sum of Rs. 7,000/- on April 29, 1986 in view of the discussion that took place between the respondent and the members of the auction committee. This so finds mention in the minutes of the meeting of the auction committee dated April 30, 1986. In this meeting, it was noticed that the respondent had deposited a sum of Rs. 7,000/- as required by the auction committee and the respondent was further required to deposit the balance amount by a particular date but this decision of the auction commit tee was never conveyed to the respondent and consequently, he could not deposit the balance amount. The question in these circumstances is whether a concluded contract came into being between the parties or not.

By acceptance of the tender by telegram Exhibit A.7 and confirmation by letter Exhibit A-8, tender of the respondent was accepted. He, however, was required to deposit a sum of Rs. 30,000/- as earnest money. Admittedly, this amount has not been deposited and only a sum of Rs. 7,000/- has been deposited. The respondent was seeking extension for depositing this amount and ultimately in terms of the discussion that took place between the respondent-firm and the members of the auction committee, a sum of Rs. 7,000/- was deposited on April 29, 1986. The decision of the auction commit tee as noticed above, was never conveyed to the respondent and consequently, it could not comply therewith. In the circumstances, it cannot thus be said that the respondent failed to comply with the terms of the telegram Exhibit A-7 and confirmatory letter Exhibit A-8 or any subsequent communication in that behalf. The breach of contract would have taken place if the respondent had failed to comply with the final offer made by the members of the auction committee in Exhibit A-17. As noticed above, this decision of the auction committee was never conveyed to the respondent. Even other wise, depositing of a part of the earnest money or whole of it was a condition subsequent to coming into existence of concluded contract. This deposit was not a condition precedent to the agreement. The wording of telegram Exhibit A-7 and confirmatory letter, Exhibit A-8 clearly goes to show that tender of the respondent had been accepted. The respondent was only required to deposit another sum of Rs. 30,000/- within a particular time for which extension was sought and negotiation continued. This condition of deposit of Rs. 30,000/- after the acceptance of contract is thus nothing but a condition subsequent to the acceptance of the tender. Thus, I have no doubt in my mind that completed contract came into being between the parties, leaving an option for the petitioner-Board to cancel the contract for not complying with the latter condition of acceptance of the tender. This was never done. The decision of the auction committee having not been communicated, and the question of compliance thereof did not arise. In the circumstances, the contention of the learned counsel for the petitioner that concluded contract did not come into being cannot be accepted.

As a result, this revision fails and is dismissed with no order as to costs.