R.C. Jain, J.@mdashThese petitions involve similar facts and raise common question of law and, Therefore, it is proposed to dispose them of by means of this common order.
2. The facts in OMP No. 82/94 being that in response to the notice inviting tender by the respondent the petitioner submitted his offer on 26th March, 1992 which was valid for 90 days. The petitioner also deposited a sum of Rs.15,600/- as earnest money and the amount involved in tender was to the tune of Rs.14,30,761.25. Pursuant to an order of the Supreme Court dated 15th May, 1992, all quarries in Delhi were ordered to be closed with a view to control pollution in the city and consequently no stones were to be crushed. On 25th May, 1992, the petitioner sent his revised offer and requested that if revised offer was not acceptable, the earlier offer be deemed to be withdrawn. The respondent however, did not accept the revised rates and ignoring the modified offer issued a letter of intent No. 390 dated 25th May, 1992. According to the petitioner, the said offer was deemed to be withdrawn resulting in non-execution of an enforceable, valid and binding contract. The petitioner again requested the respondent to accept the modified offer vide letter dated 7th July, 1992 and 7th September, 1992. However, the respondent forfeited the earnest money of the respondent on the ground that the tender was validly accepted.
3. In OMP No. 83/94, the petitioner submitted his offer on 24th March, 1992 valid for 90 days and has deposited earnest money to the tune of Rs.7,100/-, the amount involved in the tender being Rs.6,42,662.25. Pursuant to the changed circumstances in view of Supreme Court order, the petitioner vide his letter dated 25th May, 1992 modified his offer revising the rates but the respondent vide its letter of intent No. 391 dated 26th May, 1992 and ignoring the modified offer accepted the initial offer of the petitioner and forfeited the earnest money.
4. In OMP No. 84/94, the petitioner had submitted his offer dated 24th March, 1992, the validity period whereof was again 90 days and has deposited an earnest money of Rs.8,200/- and submitted the revised offer dated 25th May, 1992. The respondent accepted the original offer ignoring the revised offer vide its letter of intent No. 389 dated 29th May, 1992 and forfeiting the earnest money.
5. In OMP No. 85/94, the petitioner had given his offer on 7th April, 1992 which was valid for 90 days and deposited an earnest money of Rs.13,830/- though the value of the tender was Rs.12,50,654.70. However, before the said offer could be accepted and the period of acceptance had expired, the petitioner withdrew the earlier offer and gave a revised offer dated 25th May, 1992. The respondent ignoring the modified offer accepted the original offer of the petitioner vide its letter No. 1799 dated 10th July, 1992, i.e. after the expiry of 90 days validity period and overlooking his withdrawal of the offer and the modified offer.
6. In OMP No. 86/94, the petitioner submitted his offer on 24th March, 1992 in response to the notice inviting tender for the work of foundation in 220 KV Yard sub-station, Delhi Cantt., Naraina and deposited an earnest money of Rs.20,000/-, the value of the contract being Rs.18,13,841.60. The validity of the offer was again for 90 days, i.e. till 23rd June, 1992. However, due to the above referred changed circumstances, on 25th May, 1992, the petitioner sent his revised offer and clarified to the respondent that if the revised offer was not acceptable, his original offer be deemed to be withdrawn. Ignoring the modified offer and request for withdrawal of the original offer, vide intent letter No. 1152 dated 25th June, 1992, the respondent accepted the original offer and that too after the expiry of the validity period of 90 days.
7. According to the petitioner, the acceptance of the original offer by the respondent either by ignoring the modified offer or after the expiry of the validity period of the offer, was illegal and consequently no enforceable, valid and binding contract came into being. It is further alleged that no agreement was executed between the parties and the draft agreement/the intent order contained an arbitration clause. By means of these petitions filed u/s 33 of the Arbitration Act, 1940, the petitioner has sought determination and declaration that no valid and binding agreement/contract had resulted between the parties and the action of the respondent in forfeiting the earnest money was illegal and wrongful. The petitions were, however, got amended subsequently and the petitioner instead of seeking the above declaration sought a declaration that no valid and binding arbitration agreement has resulted between the parties.
8. The petitions are contested on behalf of the respondent MCD/DVB and reply has been filed not disputing the factum of the respondent having issued notices inviting tenders and the petitioner having made his offers but it is stated that the present petitions are not maintainable inasmuch as per clause 10 of the notice inviting tender, successful tenderer whose tender was accepted was required to execute an agreement on a stamp paper of Rs.1.50 within 30 days of the issue of written order to start work and clause 11 provided that in the event of failure of tenderer to sign the contract documents within a period of 30 days of the issue of written order, the entire earnest money deposited by him shall be forfeited; that in terms of the said clauses, the petitioner has failed to sign and execute the contract despite the work orders having been issued after due acceptance of his offers and, Therefore, the respondent was fully justified in forfeiting the earnest money deposited by the petitioner Along with his offer. It is denied that petitioner is entitled to any such declaration as prayed for in the present petitions by invoking the provisions of Section 33 of the Act.
9. Parties have filed their evidence by means of affidavits.
10. I have heard Sh. B.K. Dewan, learned counsel representing the petitioner and Sh. Ajay Jha, Advocate representing the respondent and have given my thoughtful consideration to their respective submissions.
11. The foremost question which arises for consideration is as to whether the petitions u/s 33 of the Indian Arbitration Act, 1940 (for short the `Act''), are maintainable and whether the petitioner is entitled to declaration as sought for by him. It is pertinent to note at the outset that in the present cases the petitioner has failed to sign and execute any contract in terms of clause 10 of the notice inviting to tender within 30 days of the work order issued to him and, Therefore, strictly speaking no formal agreement containing an arbitration clause came into being between the parties. In effect, this is the declaration which the petitioner is seeking in these cases but on a different ground viz., that either the respondent had accepted the offer of the petitioner beyond its validity period of 90 days or had wrongly accepted the original offer even after the petitioner had made a modified offer within the validity of the earlier offer and before the acceptance of earlier offer by the respondent. This clearly means that the petitioner is not seeking the opinion of this Court determination by it about the validity or otherwise or the existence of an arbitration agreement but in essence he is seeking a declaration that no valid and enforceable contract came into being between the parties. Therefore, it is to be seen as to whether the petitioner is entitled to invoke the jurisdiction of this Court u/s 33 of the Act for the said relief. In support of his contention that he is entitled to such a relief, the counsel for the petitioner has strongly relied upon a decision of this Court in the case of Sanjay Paper & Chemical Industries Ltd. vs. Union of India & Anr., 2000 (2) Arb. L.R. 442 wherein on the facts of that case a Single Bench of this Court held that there was no valid and binding arbitration agreement between the parties in respect of the tender offer made by the petitioner in their letter dated 2nd April, 1990 for the supply of 600 MT paper printing coloured in reels/sheets. The other case relied upon is a Gujarat decision in the case of
"A tenderer is entitled to revise his offer before acceptance of the offer put with old rates. When the Contract Act itself allows the offerer to revise by revoking his earlier offer before that offer is accepted by the opposite party, a condition to the contrary in the tender cannot be made operative against the tenderer. In instant case the tenderer had revised his earlier offer before its acceptance by the opposite party. A telex message was thereafter sent by the opposite party informing the tenderer that his offer at old rates is accepted. However, the form of acceptance of tender was not sent to the tenderer. The parties have not entered into a formal agreement in writing. Both the parties rely on exchange of correspondence in between them. The tenderer had already revised his earlier offer and that offer has not been accepted by the opposite party. On the contrary, the opposite party, by his telex message accepted the offer of old rates, and Therefore,, it cannot be said that in this case, the binding contract has been concluded. When there was no concluded contract, there was no question of giving security for earnest money by way of Bank Guarantee by the tenderer and thus the opposite party could not exercise its right to invoke Bank guarantee. The Bank guarantee was not produced before the Court inspire of repeated demands and Therefore adverse inference that it is conditional one could be drawn against the opposite party. The tenderer is entitled to interim injunction restraining the opposite party from encashing the Bank guarantee, since there is no concluded contract between the parties."
12. On the other hand, learned counsel for the respondent/DVB has heavily relied upon a Supreme Court decision in the case of
"S. 32 of the Act does not contemplate the case of a suit challenging the validity of a contract merely because it contains an arbitration clause. If the intention of the legislature were that all documents containing an arbitration clause should come within the purview of Ss.32 and 33, the legislature would have said so in appropriate words. These sections have a very limited application, namely, where the existence or validity of an arbitration agreement and not the contract containing the arbitration agreement is challenged. Every person, it has to be borne in mind, has a right to bring a suit which is of a civil nature and the Court has jurisdiction to try all suits of civil nature under S. 9 of the Civil P.C. That right has not been taken away by S. 32. Such a right can only be taken away by express terms or by necessary implication. S. 32 does not have that effect. Ss. 32 and 33 of the Act on the true construction do not purport to a deal with suits for declaration that there was never any contract or that contract is void.
13. From the aforesaid Supreme Court decision, it is manifest that the petitioner is indirectly seeking a declaration about the existence and validity of an arbitration agreement between the parties though in essence his relief is for a declaration that no valid and binding contract came into being between the parties on account of the respondent either having accepted the offer of the petitioner beyond its validity period or after the original offer was withdrawn or revised by a modified offer. Such a relief can only be sought and granted by a Civil Court in a civil suit and not through a petition u/s 33 of the Act. This Court has, Therefore, no hesitation in holding that the present petitions u/s 33 for the said relief of declaration in regard to the existence or otherwise of a valid arbitration agreement, are wholly misconceived and are not maintainable.
In the result, the petitions are failed and are dismissed, however, leaving the parties to bear their own costs.
