TMI Blog2010 (9) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... f failure on the part of the petitioner to stand by its offer, the transaction or the contract did not come through and therefore the respondents were entitled to forfeit the earnest money furnished by the petitioner in terms of Clause 6 of the Notice. Not inclined to interfere with the impugned judgment of the High Court who has taken the view in the impugned judgment that as a consequence of the change in the figures, the offer of the petitioner for the work was enhanced from Rs. 32 crores to Rs. 41 crores and, therefore, the original offer of Rs. 32 crores for the work stood revoked. - SPECIAL LEAVE PETITION (C) NO. 12144 OF 2009 - - - Dated:- 21-9-2010 - ALTAMAS KABIR AND A.K. PATNAIK, JJ. ORDER A.K. Patnaik, J. - Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent No. 2 treated this correction made by the petitioner in its tender as revocation of its offer and forfeited the earnest money of Rs. 40 lakhs furnished by the petitioner. 3. Aggrieved, the petitioner filed Writ Petition (C) No. 14998 of 2004 under Article 226 of the Constitution before the High Court of Delhi, but by the impugned judgment the High Court dismissed the Writ Petition after holding that the correction of the bid made by the petitioner amounted to revocation of its original offer and hence the respondent No. 2 was entitled to forfeit the earnest money furnished by the petitioner in terms of Clause 6 of the Notice. 4. Learned counsel for the petitioner submitted that the High Court failed to appreciate that the tende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court and relied on the counter affidavit filed on behalf of the respondents in the High Court as well as in this Court. 6. We find that Clause 6 of the Notice clearly stipulated that "if any firm revokes its offer during the validity period, its earnest money shall be forfeited". Hence, the question that arose before the High Court for decision was whether the petitioner by revising one of the figures in its tender from Rs. 23,76,000 to Rs. 32,76,000 revoked its offer and the High Court has taken the view in the impugned judgment that as a consequence of the change in the figures, the offer of the petitioner for the work was enhanced from Rs. 32 crores to Rs. 41 crores and, therefore, the original offer of Rs. 32 crores for the work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following observations of Hamilton, J. in Summer Leivesley v. John Brown Co. [1909] 25 TLR 745 with regard to the meaning of earnest : " Earnest ... meant something given for the purpose of binding a contract, something to be used to put pressure on the defaulter if he failed to carry out his part. If the contract went through, the thing given in earnest was returned to the giver, or, if money, was deducted from the price. If the contract went off through the giver s fault the thing given in earnest was forfeited." 9. It is thus clear that when earnest money is furnished by a tenderer it forms part of the price if the offer of the tenderer is accepted or it is refunded to the tenderer if someone else s offer is accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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