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Tuesday, June 30, 2015

Refund of EMD Rs.50,000/- for rejecting his incomplete Tender who failed to mention monthly rent in application - Respondent forfeited the same - writ - their lordships held that forfeiture of EMD merely on the ground that the tender is incomplete is highly irrational. Such an action causes double disadvantage to the tenderer namely, rejection of the tender as well as the forfeiture of the EMD. - the impugned clause has no nexus to the object sought to be achieved and the same constitutes patent arbitrariness. A Statutory Corporation, such as respondent No.1, cannot resort to unjust enrichment by stipulating such clauses.-respondents are directed to refund the sum of Rs.50,000/- to thepetitioner - 2015 Telangana & A.P. 2015MSKLAWREPORT





  As the
petitioner failed to mention the monthly rent against column No.4 of the
tender form, his tender was not only rejected treating the same as invalid,
but also the sum of Rs.50,000/- paid as EMD was forfeited by respondent
No.2.  Aggrieved by the said forfeiture, the petitioner has filed W.P.

The purpose of an EMD
is to make the tenderer bound by the tender conditions and in the event
of violation of the tender conditions the Corporation will recover the loss,
if any, caused by such tenderer for his violation through forfeiture of EMD.
The inevitable consequence of an incomplete tender is its rejection.  In
my opinion, forfeiture of EMD merely on the ground that the tender is
incomplete is highly irrational.  Such an action causes double
disadvantage to the tenderer namely, rejection of the tender as well as
the forfeiture of the EMD. 
 The respondents have not explained the
rationale behind stipulating condition No.4(d).  It is not the pleaded case
of the respondents that by rejection of the petitioners tender it has
suffered any loss.  
On the contrary, it has awarded contract to another
person by name one Rajendra Prasad who emerged as successful    
tenderer.  Even in the rejection order, except relying upon condition
No.4(d) of the tender conditions, respondent No.2 has not assigned any
reason for forfeiting the petitioners EMD.  
In my considered view, the
impugned clause has no nexus to the object sought to be achieved and 
the same constitutes patent arbitrariness.  A Statutory Corporation, such
as respondent No.1, cannot resort to unjust enrichment by stipulating
such clauses. 
        For the above mentioned reasons, the writ petition is allowed.  The
respondents are directed to refund the sum of Rs.50,000/- to the
petitioner within one month from the date of receipt of a copy of this
order.

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