Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Companies Law Companies Law + SC Companies Law - 2010 (9) TMI SC This

  • Login
  • Cases Cited
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2010 (9) TMI 225 - SC - Companies Law


Issues:
1. Interpretation of tender conditions regarding earnest money forfeiture.
2. Effect of correction in tender offer on revocation of original offer.
3. Applicability of legal principles on earnest money forfeiture in the present case.

Analysis:
1. The case involved a dispute over the forfeiture of earnest money by the respondent after the petitioner corrected a figure in its tender offer. The High Court upheld the forfeiture based on the tender conditions. The Supreme Court analyzed Clause 6 of the Notice, which clearly stated that earnest money would be forfeited if the firm revoked its offer during the validity period. The Court examined whether the correction made by the petitioner constituted revocation of the original offer, ultimately agreeing with the High Court's decision regarding the forfeiture.

2. The petitioner argued that the correction was necessary due to a mistake in the initial tender offer, emphasizing that the entire Notice was later recalled. The respondent contended that the petitioner's failure to stand by the original offer led to the reissuance of the tender at revised costs, justifying the forfeiture of earnest money. The Court noted that the petitioner's correction resulted in an increase in the bid amount, indicating a change in the offer terms and supporting the forfeiture under the tender conditions.

3. The judgment referred to established legal principles on earnest money forfeiture. Citing precedents, the Court highlighted that earnest money is part of the purchase price if the transaction proceeds but is forfeited if the deal falls through due to the fault of the party offering it. Applying these principles to the case, the Court concluded that the respondent was entitled to forfeit the earnest money due to the petitioner's failure to adhere to the original offer terms, leading to the transaction not materializing. Consequently, the Supreme Court dismissed the Special Leave Petition, upholding the High Court's decision on the forfeiture of earnest money.

 

 

 

 

Quick Updates:Latest Updates