If any document is created by any officer to keep it on record so as to produce it before the Court, it is a serious matter which requires to be inquired into by the concerned authority. =The State has neither created any document nor filed the same before the High Court or this Court. If any document is created by any officer to keep it on record so as to produce it before the Court, it is a serious matter which requires to be inquired into by the concerned authority. In view of the fact that a detailed inquiry is required, we find it more feasible to direct the State Government to inquire into the matter and, if so necessary, file an FIR against the alleged officers who might have created the document containing the name of nine conspicuous places in the so called notification dated 3rd October, 1995, signed by the Chief Officer, Sedam in green ink. The Chief Secretary, State of Karnataka is directed to hold an inquiry with regard to notification No. TMC:SEDAM:95-96 dated 3rd October, 1995 issued from the office TMC, Sedam, signed by Chief Officer, Sedam in green ink wherein nine places have been shown for posting the notifications. If it is found to be a document created subsequently, an FIR to this effect be lodged against the concerned officials for forging documents. Departmental proceedings be also initiated and an appropriate action be taken.

                                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.1918 OF 2015
                    (Arising out of SLP(C) No.30573 2012)


STATE OF KARNATAKA TR.                                   ... APPELLANTS
SEC. HSG. & URB. & ANR.

                                   VERSUS


VASAVADATTA CEMENT & ANOTHER                     ... RESPONDENTS


                               J U D G M E N T


SUDHANSU JYOTI MUKHOPADHAYA,J


      Delay condoned. Leave granted.
2.    This appeal has been preferred by the appellant-  State  of  Karnataka
against the judgment dated 23rd June, 2010  passed  by  the  High  Court  of
Karnataka, Circuit Bench at Gulbarga in Writ Appeal  No.2999  of  2004  (LB-
RES). By the impugned judgment, the Division Bench of the High  Court  while
allowing the writ appeal observed as follows:

      "On a thorough consideration of the provision of  Section  9  and  the
notification produced before court which is extracted  above,  it  discloses
that there is no proper  compliance  of  posting  the  notification  at  the
requisite places as stated in Section 9."


3.    The factual matrix of the case is as follows:

      The Government of Karnataka initially by draft  Notification  No.  HUD
14 TML 84 dated 19th June/22nd July, 1986 proposed  to  alter  the  existing
limits of Town Municipal Council (hereinafter referred to as  the  'Council'
for short) Sedam for inclusion of Survey No. 630-642  within  the  municipal
limits   of   town   municipality   (hereinafter   referred   to   as    the
'municipality'), Sedam inviting objections and suggestions to  the  proposal
from persons likely to be affected therein. It was followed by  Notification
No.HUD 14 TMT 84 dated 15th April/20th May,  1987,  issued  by  Governor  of
Karnataka published in Karnataka Gazette dated  25th  May,  1987  exercising
the  power  conferred  by  sub-Section  (1)  of  Section  4   of   Karnataka
Municipalities Act, 1961 (hereinafter referred to  as  the  'Act')  altering
the existing limits of the Council,  Sedam  as  detailed  therein.   A  writ
petition No. 10187 of 1987 was filed against the aforesaid  notification  by
1st respondent which was permitted to be withdrawn  in  view  of  subsequent
notification issued by State Government on 28th November, 1995.
By the said notification dated 28th November, 1995,  it  was  notified  that
having received no objection to the proposal within  a  said  period  of  30
days from the date of publication  of  notification  dated  26th  September,
1995 inviting objections from persons  likely  to  be  affected  thereby  in
exercise of power conferred by Section 3 read with Section  9  of  the  Act,
the Governor of Karnataka specified  the smaller urban area in  Schedule  'A
 and the limits  of  which  are  specified  in  Schedule  'B'  and   further
specified it to be called 'Town  Municipal  Council  Area  of  Sedam  having
regard to:
1)    the population of the area specified in  Schedule-A   being  not  less
than twenty thousand but less than fifty thousand.

2)    the density of population  in  such  area  being  not  less  than  one
thousand five hundred inhabitants to one     square kilometer of area:

3)  the revenue generated for local administration from such area  from  tax
and non-tax sources in the year of the last preceding census being not  less
than Rs.9,00,000/- per annum;

4)     Apart  from  the  percentage  of   employment   in   non-agricultural
activities is not less than 15% of the total employment.


4.    The first respondent filed another Writ Petition No.  14554/96  before
the High Court of Karnataka, Bangalore  challenging  the  said  notification
and the same was summarily dismissed on 19th  August,  1997  observing  that
the matter is covered by the decision rendered  in  another  case.  A  Civil
Petition No.1233/2000 in WP  No.  14554/1996  was  filed  by  respondent  to
rectify the order passed by the learned Single Judge.  While  reviewing  the
said order, the petition was allowed on 20th  August,  2001  and  the  order
dated 19th August, 1997 passed in the writ petition No. 14554/1996  was  set
aside and the said writ petition was restored. However,  after  hearing  the
parties,  the learned Single Judge on 24th May,  2004  dismissed  the   writ
petition on the ground that the action of  inclusion  of  an  area   to  the
limits of  an existing Town Municipal Limits is  essentially  a  conditional
legislation  and  hence judicial  intervention is not warranted.


5.    Against the said order, the respondent preferred the writ  appeal  No.
2999/2004 which was allowed by  the  Division  Bench  by  impugned  judgment
dated 23rd June, 2010.


6.    Learned counsel appearing on behalf of the appellant  while  assailing
the  impugned  judgment,  submitted  that  the  procedure  prescribed  under
Section 9 of the Act is substantially followed and  complied  with  in  this
case. The third appellant under the directions of the  first  appellant  had
posted the notices announcing the inclusion of the  local  area  within  the
existing municipal  limits  in  all  the  conspicuous  places,  calling  for
objection from the public within 90 days but  no  objections  were  received
within the time stipulated.


7.  According to the learned counsel for the 1st respondent, the notice  has
to be posted in area sought to be added or deleted in smaller  urban  areas.
In the present case the proclamation has been neither posted in the area  of
the 1st respondent factory which is a large area  of  around  1235.03  acres
which has mini townships nor has been posted in any other area sought to  be
included in the existing smaller urban area. The only places  where  it  has
allegedly been posted are four namely;


            (1)  Panchayat Office, Old Bazar, Sedam


            (2)  Railway Statio, Sedam


            (3)  Bus Stand, Sedam and


            (4)  Notice Board of Town Municipal Council, Sedam;


which were existed in one area  and none of them are in area  sought  to  be
included in smaller urban area.


8.    Further, according to the learned counsel for the 1st respondent,  the
second part of Section 9 states that whenever it is proposed to  add  to  or
to exclude from a smaller urban area any inhabited area,  it  shall  be  the
duty of the municipal council also to post a copy of the proclamation  in  a
conspicuous place, meaning thereby  in  the  inhabited  area  sought  to  be
included or excluded from the smaller  urban  area.  The  case  of  the  1st
respondent is that it has  a  township  which  is  an  inhabited  area  with
housing for workmen, management, etc. and thus  it  was  mandatory  for  the
municipal council to post the proclamation  in  conspicuous  places  in  the
said inhabited area which was sought to be included.


9.     Learned  counsel  relied  upon  the  following  judgments   for   the
proposition that the proclamation has to be posted in the affected  area  or
concerned locality and  the  objective  of  the  proclamation  is  that  the
affected persons could come to know about the proposed change and that  such
a posting is mandatory and not merely directory.


(a)   (1985) 3 SCC 1, Collector (District Magistrate)     Allahabad  &  Anr.
vs. Raja Ram Jaiswal.


(b)   (1991)1 SCC 401, Syed Hasan Rasul Numa & Ors. vs.  Union  of  India  &
Ors.


(c)   (2011) 10 SCC 714, J&K Housing Board and Anr.      vs.  Kunwar  Sanjay
Krishan Kaul & Ors.


(d)   (2012) 6 SCC 348, Klsum R.Nadiadwala vs. State of Maharashtra & Ors.


10.   We have heard the rival contentions raised by the parties and perused
the records.


11.   For convenient reference, Section 9 of  Karnataka  Municipalities  Act
is quoted below:


   "9.      Procedure for Constitution, abolition,  etc.  of  smaller  urban
areas:


  Not less than thirty days  before  the  publication  of  any  notification
declaring any local area to be smaller urban area, or  altering  the  limits
of any such smaller urban area or declaring that the local area shall  cease
to be smaller urban area,  the Governor shall cause to be  published in  the
official  gazette  in  English  and  Kannada,   and  to  be   posted  up  in
conspicuous placed in  the  said   local  area  in  Kannada  a  proclamation
announcing that it is proposed to constitute the local area  to  be  smaller
urban area or to alter the limits of the smaller urban  area  in  a  certain
manner or to declare that the local area shall cease to be a  smaller  urban
area,  as the case may be,  and requiring  all  persons  who  entertain  any
objection to the said  proposal  to  submit  the  same,   with  the  reasons
therefore, in writing to the Director  of  Municipal  Administration  within
thirty days from the date of the said  proclamation,   and  whenever  it  is
proposed to add or exclude from a smaller urban  area  any  inhabited  area,
it shall be the  duty of the  municipal council also  to  cause  a  copy  of
such  area.  The  Director  of  Municipal  Administration  shall,  with  all
reasonable dispatch forward every objection so submitted to the Governor.

      No such notification as aforesaid shall  be  issued  by  the  Governor
unless the objection, if any, so submitted are in its  opinion  insufficient
or invalid."

      Section 9 prescribes  a  mandate  which  is  to  be  followed  by  the
Governor before publication of notification declaring any local area  to  be
smaller urban area; or altering the limits of any such small urban area;  or
declaring that the local area shall  cease  to  be  a  smaller  urban  area.
Firstly, a proclamation announcing the object/proposal of such  notification
should be published in the Official Gazette  in  both  English  and  Kannada
language. Secondly,  such  proclamation  should  be  posted  in  conspicuous
places in the said local area  'in  Kannada'.   Thirdly,  such  proclamation
shall require all persons who has any objection  to  the  said  proposal  to
submit the same stating reasons within thirty days from  the  date  of  such
proclamation.

      Section 9 further stipulates that whenever it is proposed  to  add  or
exclude from a smaller urban area any inhabited area, it shall be  the  duty
of the municipal council to cause a copy of such proclamation to  be  posted
up in conspicuous  places in such area. The phrase "such area"  used  herein
means the inhabited area which is proposed to be added or excluded from  the
smaller urban area.

12.   Section 9 of the Act has to be read in the light of  Article  243Q  of
the Constitution of India which is as under:


      "243Q. Constitution of Municipalities:


(1)   There shall be constituted in every State,-


(a)   a Nagar Panchayat (by whatever name called ) for a transitional  area,
 that is to say,  an area in transition from a rural to an urban area;


(b)   a Municipal Council for a smaller urban area; and


(c)   A municipal Corporation for a larger urban  area  in  accordance  with
the provisions of this Part:


      Provided that Municipality under this clause may  not  be  constituted
in such  urban  area or part thereof as the Governor may, having  regard  to
the size of the area and the municipal services being provided  or  proposed
to be provided by an industrial establishment in that area  and  such  other
factors as he may deem fit,  by  public  notification,   specify  to  be  an
industrial township.

(2)   In this article, 'a transitional area', 'a smaller urban area'  or  'a
larger urban area' means such area as the Governor  may,  having  regard  to
the population of the area, the  density  of  the  population  therein,  the
revenue general for local economic importance or such other factors  as  may
be deem fit, specify by public notification or the purposes of this Part."



13.   The Provision of Section 9 is somewhat similar to  Section  4  of  the
Land  Acquisition  Act,  1894  whereunder  the  posting  of  the  notice  in
conspicuous/convenient places is mandatory.

      If the argument advanced by the learned senior counsel for  the  first
respondent is accepted, in that case every affected  person  whose  land  is
sought to be included for the purpose of alteration of  the  limits  of  the
smaller urban area would claim that such notice must be posted in his land.



14.   The Office of the Collector, Panchayat Office,  Office  of  Tehsildar,
Office of  municipality, railway station and bus stand,  etc. of  the  local
area are  public places; which are expected to be visited by general  public
for one or the other reason. Those places  can  be  safely  expected  to  be
conspicuous/convenient places for posting  a  notice  about  declaration  of
local area to be smaller urban area  or  altering  the  limit  of  any  such
smaller urban area as is done in the case of land acquisition.



15.   If the stand of the 1st respondent is accepted that the notice  should
have been posted within the township of  1st  respondent,   then   it  would
frustrate the objective of Section 9 of the Act as  other  affected  persons
whose land would also come under the purview of the said notification  might
not have any access to such notice posted within the boundaries  of the  1st
respondent's factory,  being  not  a  public  place.  In  such  case,  every
individual/affected persons will claim posting of such notice at their  land
which will amount to giving individual notice to all affected persons.

16.   Notification dated 3rd October, 1995 was posted  at  four  conspicuous
places, the English version of which reads as follows:

            "No.TMC;95-96                    Office of the TMC

                                             Sedam, dated 3.10.1995

                                NOTIFICATION

                 Sub.: Publication of Govt. Circular

Ref.:  Govt.   Circular,   bearing   No.:NE:407:MLR:95,   Bangalore,   Dated
26.09.1995

                                  --------

With reference to the above subject,  the public of the Town Municipal  area
are informed that vide Circular stated in the reference, the  boundaries  of
Sedam Town Municipalities is proposed to be altered to extend the  municipal
area. Any person having objections to  the  said  proposal  can  file  their
written objections within 30 days. The public area hereby  informed  of  the
same by this notification.


                                                                       1 Sd.


                                                               Chief Officer


                                                                      SEDAM"


It is directed that the copy of the Notification should  be  posted  at  the
following places:


i)  Panchayat Office, Old Bazar, Sedam


ii) Railway Station,  Sedam


iii)Bus Stand,  Sedam


iv) Notice Board of Town Municipal Council,           Sedam."


2 17. Learned counsel for the 1st respondent accepted   that  the  Panchayat
Office of the 1st respondent   is  at  Old  Bazar,  Sedam,  nearest  railway
station is at Sedam  and  the  bus  stand  for  the  employees  of  the  1st
respondent is at Sedam. This indicates that all the persons,  who  are  said
to be affected by the notification, were informed   sufficiently  by  notice
dated 3rd October, 1995 posted at the above said conspicuous places.

18.   Learned senior counsel for the  1st  respondent  next  contended  that
only the factory and residential area of the 1st  respondent  was  added  by
notification dated  28th  November,  1995  but  such  submission  cannot  be
accepted in view of the fact that apart from the  land  of  1st  respondent,
land belonging to others were also shown  in  the  said  notification  dated
28th November, 1995.

19.    However,  on  perusal  of  the  original   record,    we   find   two
notifications both dated  3rd  October,  1995  having  same  number  are  on
record.  Per se, both notifications dated 3rd October,  1995  are  same  but
there is a substantial difference in the last paragraph which  mentions  the
places where copies of the notification  were  to  be  posted.  In  the  1st
notification dated 3rd October, 1995, which appears to be original,  it  has
been shown that the notice   to  be   posted  at  four  places  namely,  (i)
Panchayat Office, Old Bazar, Sedam; (ii) Railway Station,   Sedam;  (iii)Bus
Stand, Sedam and (iv) Notice Board of Town Municipal Council, Sedam.  It  is
an old paper, laminated to ensure that it should not be damaged and  in  the
back of it apart from thumb impressions, signatures also have been  obtained
from different individuals to show  that  the  notification  was  posted  in
presence of those witnesses.

      The other notification dated 3rd October, 1995  shows  that  direction
has been issued to post the said notification  at  nine  places,  i.e.  five
more places apart from the aforesaid four  places  mentioned  in  the  first
notification. The additional five places include the premises of  the  first
respondent. The second notification is signed in green  ink  by  some  other
officer. Prima facie it appears that the  notification  dated  3rd  October,
1995  containing  nine  conspicuous places wherein it was  to  be  notified,
signed in green ink by some officer has been prepared subsequently.

20.   Learned counsel appearing on behalf of the  1st  respondent  requested
the Court to initiate contempt proceedings against  the  concerned  official
and to dismiss the appeal as the document has been created  to  mislead  the
Court.

21.   The appeal has been preferred by the State of  Karnataka.   The  State
has neither created any document nor filed the same before  the  High  Court
or this Court. If any document is created by  any  officer  to  keep  it  on
record so as to produce it before the Court, it is a  serious  matter  which
requires to be inquired into by the concerned  authority.  In  view  of  the
fact that a detailed inquiry is  required,  we  find  it  more  feasible  to
direct  the  State  Government  to  inquire  into  the  matter  and,  if  so
necessary, file an FIR against the alleged officers who might  have  created
the document containing the name  of  nine  conspicuous  places  in  the  so
called notification dated 3rd October, 1995, signed by  the  Chief  Officer,
Sedam in green ink.

      The Chief Secretary,  State  of  Karnataka  is  directed  to  hold  an
inquiry with regard to notification No. TMC:SEDAM:95-96 dated  3rd  October,
1995 issued from the office TMC, Sedam, signed by Chief  Officer,  Sedam  in
green  ink  wherein  nine  places  have   been   shown   for   posting   the
notifications. If it is found to be a document created subsequently, an  FIR
to this effect  be  lodged  against  the  concerned  officials  for  forging
documents. Departmental proceedings be also  initiated  and  an  appropriate
action be taken.

22.   The appeal is allowed with the aforesaid observations and directions.

..............................................................................
                                                                       ...J.
                                        (SUDHANSU JYOTI MUKHOPADHAYA)



..............................................................................
                                                                       ...J.
                                  (VIKRAMAJIT SEN)
NEW DELHI,
FEBRUARY 16, 2015.

Arbitration & conciliation act - vagueness in the arbitration clause incorporated in the sale contract dated 2nd May, 2011, there cannot be any arbitration and therefore, this petition made under the provision of Section 11(6) of the Arbitration and Conciliation Act, 1996 fails.

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION

                      ARBITRATION PETITION NO.6 OF 2014


M/s. System for International Agencies       ... Petitioner


                 Versus

M/s. Rahul Coach Builders Pvt. Ltd.          ...Respondent


                                      1


                              2 J U D G M E N T


ANIL R. DAVE, J.

1.    Heard the learned counsel.

2.    The arbitration clause incorporated in the  agreement  regarding  sale
contract dated 2nd May, 2011 reads as under:
"Disputes: In case of any dispute arising out of this agreement between  the
parties, the same shall be referred to the arbitration under the by-laws  of
Indian Company's Act 1956 and all amendments of  this  Act  up  to  date  or
shall be settled and decided by arbitration as per International Trade  Laws
and all amendments of this Act up to date."

3.    Upon perusal of the said clause it is very clear that the  parties  to
the agreement had agreed to refer  the  dispute  to  arbitration  under  the
provisions of the 'By-laws of Indian Companies Act, 1956'.


4.    The learned counsel appearing for  the  parties  had  fairly  conceded
that there are  no  by-laws  framed  under  the  provisions  of  the  Indian
Companies Act, 1956.

5.    Though an effort was made to show that in a  reply  to  a  winding  up
petition, one of the parties had agreed to refer the matter  to  arbitration
but there also there was vagueness and even that willingness  to  refer  the
dispute to an arbitrator cannot be said to be an arbitration agreement.

6.    Upon perusal of the aforestated clause, it is clear  that  the  clause
with regard to arbitration is quite  vague  and  as  there  are  no  by-laws
framed under the provisions of the  Companies  Act,  no  arbitrator  can  be
appointed.

7.    On account of  the  aforesaid  vagueness  in  the  arbitration  clause
incorporated in the sale contract dated 2nd May, 2011, there cannot  be  any
arbitration and  therefore,  this  petition  made  under  the  provision  of
Section 11(6) of the Arbitration and Conciliation Act, 1996 fails.

8.    Needless to say  that  it  would  be  open  to  the  parties  to  take
appropriate remedy in accordance with law.

9.    The arbitration petition is disposed of as rejected.


                                              ............................J.
                                                              (ANIL R. DAVE)
New Delhi
February 16, 2015.

Granting of Approval = It is not in dispute that the petitioner society has been imparting education to students through its colleges for the last 15 years. If approval is not granted, the students, who have already been admitted by an interim order of the High Court for the academic year 2014-15, would be put to great inconvenience and difficulties for no fault on their part. In the circumstances, as an exceptional case, without going into the merits of this case, we exercise our power under Article 142 of the Constitution of India and direct respondent no.1 to grant a letter of approval to the concerned colleges managed by the petitioner for the academic year 2014-15. For the subsequent academic year, we are sure that the petitioner shall do the needful to comply with the requirements of the aforestated Regulation and other Regulations.

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                         CIVIL ORIGINAL JURISDICTION

                    WRIT PETITION (CIVIL) NO.1034 OF 2014


Mahatma Education Society's


Pillai's Institute of Information Technology,


Engineering, Media Studies & Research          ...Petitioner


                 Versus

All India Council for Technical Education
& Ors.                                              ...Respondents



                              1 J U D G M E N T



ANIL R. DAVE, J.


      Rule.

2.    Looking at the urgency in the matter, at the request  of  the  learned
counsel appearing for the parties, the petition has been finally heard.

3.    The short question involved in this petition is with regard  to  grant
of approval to educational institutions run by the petitioner society.   The
petitioner is a Trust registered under the provisions of the  Bombay  Public
Trust  Act,  1950  and  is  having  four  educational  institutions,  mainly
imparting studies in the field of engineering to the students.

4.    The issue involved is with regard to approval to the institutions  for
the academic year 2014-15.  At the time of usual inspection,  it  was  found
that the petitioner was not having land as per the  provisions  of  the  All
India Council for Technical Education (Grant of Approvals for the  Technical
Institutions)  Regulations,  2012   (hereinafter   referred   to   as   "the
Regulations").   According  to  Regulation  6  of   the   Regulations,   the
petitioner was supposed to have certain  land  with  lawful  possession  and
clear title in the name of the petitioner society.  The relevant portion  of
the Regulation reads as under:-

"6.   Requirement of land
The promoter society/trust/company  established  under  Section  25  of  the
Companies Act, 1956 of a new Technical Education Institution shall have  the
land as required and prescribed in its lawful possession  with  clear  title
in the name of promoter society/trust/company established under  Section  25
of  the  Company  Act,  1956  on  or  before  the  date  of  submission   of
application.

Provided that it  shall  be  open  for  the  promoter  society/trust/company
established  under  Section  25  of  the  Companies   Act,   1956   proposed
Institution to mortgage the  land  only  after  the  receipt  of  letter  of
approval, only for raising the resources for the purpose of  development  of
the Technical Education Institute situated on that land."



5.    As it was found that the petitioner was not having  land  as  per  the
requirements of the Regulation, the approval  granted  to  the  institutions
managed by the petitioner for the last 15 years  had  been  denied  for  the
academic year 2014-15.

6.    It is not in dispute that approximately 550 students  are  prosecuting
studies in the Engineering College at present and  because  of  non-approval
to the institutions run by the petitioner, academic career of  the  students
would be ruined.

7.    As the approval had not been granted, the petitioner  had  filed  Writ
Petition No.6021 of 2014 in the High Court of Judicature at  Bombay  and  by
an interim order, the High  Court  was  pleased  to  grant  limited  interim
relief, whereby the petitioner was permitted to give admission to students.

8.    Ultimately, by an order  dated  27th  August,  2014,  the  High  Court
disposed of the petition with an observation that it was open to  respondent
no.1 Council to take appropriate action in the matter  of  approval  to  the
institutions  run  by  the  petitioner.   The  Council  had  expressed   its
inability to grant approval to the institutions run by  the  petitioner  for
the academic year 2014-15 as the aforestated  provision  of  the  Regulation
had not been complied with.

9.    We have heard the learned counsel for  the  parties.   It  is  not  in
dispute  that  the  petitioner  society  has  been  imparting  education  to
students through its colleges for the last 15 years.   If  approval  is  not
granted, the students, who have already been admitted by  an  interim  order
of the High Court for the academic year  2014-15,  would  be  put  to  great
inconvenience  and  difficulties  for  no  fault  on  their  part.   In  the
circumstances, as an exceptional case, without  going  into  the  merits  of
this case, we exercise our power under Article 142 of  the  Constitution  of
India and direct respondent no.1 to  grant  a  letter  of  approval  to  the
concerned colleges managed by the petitioner for the academic year  2014-15.
 For the subsequent academic year, we are sure that the petitioner shall  do
the needful to comply with the requirements of  the  aforestated  Regulation
and other Regulations.
10.    As and when an application for approval for academic  year  2015-2016
is sought for by the petitioner, the respondent authorities  shall  consider
the application and shall decide in accordance with law.


11.   For the aforestated reason, as an exceptional case,  the  petition  is
allowed.  The impugned letter dated 29th October, 2014  is  quashed  with  a
liberty to the respondent authorities to take appropriate action in  respect
of academic year  2015-16 in accordance with law.   Rule  is  made  absolute
and a direction is given to respondent no.1 to grant approval in respect  of
Pillai's Institute of Information  Technology,  Engineering,  Media  Studies
and Research, New Panvel,  Navi  Mumbai,  for  the  academic  year  2014-15.
There shall, however, be no order as to costs.

                                           ...............................J.
                                                              (ANIL R. DAVE)



                                           ...............................J.
                                                             (KURIAN JOSEPH)
New Delhi
February 16, 2015.

Section 357A Cr.P.C.= Section 304A and 337 IPC - The respondent accused had drawn electricity wire from the pole upto his field which was not visible in the darkness. Ram Charan got trapped in the wire and became unconscious. The deceased Sushila Bai received electric shock in the process of removing the wire. = This Court held : "14. We are of the view that it is the duty of the Courts, on taking cognizance of a criminal offence, to ascertain whether there is tangible material to show commission of crime, whether the victim is identifiable and whether the victim of crime needs immediate financial relief. On being satisfied on an application or on its own motion, the Court ought to direct grant of interim compensation, subject to final compensation being determined later. Such duty continues at every stage of a criminal case where compensation ought to be given and has not been given, irrespective of the application by the victim. At the stage of final hearing it is obligatory on the part of the Court to advert to the provision and record a finding whether a case for grant of compensation has been made out and, if so, who is entitled to compensation and how much. Award of such compensation can be interim. Gravity of offence and need of victim are some of the guiding factors to be kept in mind, apart from such other factors as may be found relevant in the facts and circumstances of an individual case. We are also of the view that there is need to consider upward revision in the scale for compensation and pending such consideration to adopt the scale notified by the State of Kerala in its scheme, unless the scale awarded by any other State or Union Territory is higher. The States of Andhra Pradesh, Madhya Pradesh, Meghalaya and Telangana are directed to notify their schemes within one month from receipt of a copy of this order. We also direct that a copy of this judgment be forwarded to National Judicial Academy so that all judicial officers in the country can be imparted requisite training to make the provision operative and meaningful." 9. As per information furnished by learned counsel for the State, the accused Mehtaab has three sons and he owns 10-12 bighas of land and his annual income was Rs.35-40,000/-. Similarly his sons were earning Rs.25- 30,000/- per annum. The Court of Session has mentioned the age of the deceased to be thirty years at the time of her death in the year 1997. As per instructions of learned counsel for the State, deceased is survived by her husband Ram Charan, two sons Bundel Singh and Suraj Lal and two daughters Durgesh Bai and Babita Bai. 10. As already observed, the respondent having been found guilty of causing death by his negligence, the High Court was not justified in reducing the sentence of imprisonment to 10 days without awarding any compensation to the heirs of the deceased. We are of the view that in the facts and circumstances of the case, the order of the High Court can be upheld only with the modification that the accused will pay compensation of Rs.2 lakhs to the heirs of the deceased within six months. In default, he will undergo RI for six months. The compensation of Rs.2 lakhs is being fixed having regard to the limited financial resources of the accused but the said compensation may not be adequate for the heirs of the deceased. In such situation, in addition to the compensation to be paid by the accused, the State can be required to pay compensation under Section 357-A. As per judgment of this Court in Suresh (supra), the scheme adopted by the State of Kerala is applicable to all the States and the said scheme provides for compensation upto Rs.5 lakhs in the case of death. In the present case, it will be appropriate, in the interests of justice, to award interim compensation of Rs.3 lakhs under Section 357-A payable out of the funds available/to be made available by the State of Madhya Pradesh with the District Legal Services, Authority, Guna. In case, the accused does not pay the compensation awarded as above, the State of Madhya Pradesh will pay the entire amount of compensation of Rs.5 lakhs within three months after expiry of the time granted to the accused.

                                 REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION


                       CRIMINAL APPEAL NO.290 OF 2015
                 (ARISING OUT OF SLP (CRL.) NO.5609 OF 2013)


STATE OF M.P.                               ...APPELLANT

VERSUS

MEHTAAB                                     ...RESPONDENT


                               J U D G M E N T

ADARSH KUMAR GOEL J.


1.    Leave granted.
2.    This appeal has been preferred by the State of Madhya Pradesh  against
judgment and order dated 6th November, 2012 passed  by  the  High  Court  of
Madhya Pradesh at Gwalior in Criminal Revision No.72 of  2007  reducing  the
sentence awarded to the respondent under Section 304A of  the  Indian  Penal
Code ("IPC") from RI for one year and under Section  337  IPC  from  RI  for
three months to RI for 10 days which was the  period  already  undergone  by
him.
3.    On 22nd November, 1997, the deceased Sushila Bai  wife  of  PW  4  Ram
Charan along with her husband was  returning  from  Village  Ragho  Garh  to
their  home  in  village  Kudhaidher.  The  respondent  accused  had   drawn
electricity wire from the pole upto his field which was not visible  in  the
darkness.  Ram Charan got trapped in the wire and became  unconscious.   The
deceased Sushila Bai received electric shock in the process of removing  the
wire.  On receiving the information PW 5 Mishrilal, brother of  Sushila  Bai
and PW 1 Kallu reached the site of the incident along with  PW  3  Goverdhan
and PW 2 Somlal.  It was found that Sushila Bai had died  while  Ram  Charan
was injured but alive.  He was taken  to  the  hospital.   FIR  was  lodged.
Post mortem
was conducted on the dead  body  and  after  investigation,  the  respondent
accused was sent up for trial under  Section  304-A/337  IPC.   The  accused
denied the allegations and alleged that he was falsely implicated.
4.    The prosecution examined PW 6 Dr. N.K. Sharma to the effect  that  the
deceased and Ram Charan received  injuries  by  electric  current  and  that
Sushila Bai had died due to shock of the current.  PW 1 Kallu as well as  PW
4 Ram Charan clearly deposed that the wire was  laid  by  Mehtaab  from  the
pole to the field which was  lying  naked  and  resulted  in  the  death  of
Sushila Bai.  This action clearly amounted  to  the  offence  alleged.   The
said evidence was corroborated by  the  other  witnesses.  Accordingly,  the
trial Court convicted the respondent-accused under Section 304A and 337  IPC
and sentenced him to undergo RI for one year and pay fine  of  Rs.500/-   in
default to undergo further RI for one  month  under  Section  304-A  and  to
undergo RI for three months under  Section  337  IPC.   The  conviction  and
sentence having  been  upheld  by  the  Court  of  Session,  the  respondent
preferred a revision petition before the High  Court.   The  respondent  did
not challenge his conviction  but  only  sought  reduction  in  sentence  of
imprisonment.  The said prayer was accepted and the sentence was reduced  to
the period already undergone.
5.    Aggrieved by the order of the High Court, the State of Madhya  Pradesh
has preferred this appeal.
6.    We have heard learned counsel for the parties.
7.    Learned counsel for the State submitted that  the  accused  respondent
had installed a transformer in his field and left the electric  wires  naked
which was a negligent act.  The deceased Sushila Bai died on account of  the
said naked wire which had high voltage and was  not  visible  in  the  dark.
The offence having been fully proved by the evidence  on  record,  the  High
Court was not justified in reducing the sentence to 10 days  which  was  not
just and fair.  Even if  liberal view on sentence of imprisonment was to  be
taken,  the High Court ought to have  enhanced  the  sentence  of  fine  and
awarded a reasonable compensation as a condition for reduction of sentence.
8.    We find force in the submission.  It is  the  duty  of  the  Court  to
award just sentence to a convict  against  whom  charge  is  proved.   While
every mitigating or  aggravating  circumstance  may  be  given  due  weight,
mechanical reduction of sentence to the period already undergone  cannot  be
appreciated.  Sentence has to be fair not only to the accused  but  also  to
the victim and the society.  It is also  the  duty  of  the  court  to  duly
consider the aspect  of  rehabilitating  the  victim.  Unfortunately,  these
factors are missing in  the  impugned  order.  No  cogent  reason  has  been
assigned for imposing only 10 days sentence when an innocent life  has  been
lost.  Award of unreasonable compensation  has  also  not  been  considered.
Apart from the sentence and fine/compensation to be  paid  by  the  accused,
the Court has to award compensation by the State  under  Section  357A  when
the accused is not in a position to pay fair compensation as  laid  down  by
this Court in Suresh vs. State of Haryana (Criminal Appeal  No.420  of  2012
decided on 28th November, 2014).  This Court held :
"14.    We are of the view that it is the duty  of  the  Courts,  on  taking
cognizance of a criminal offence, to ascertain  whether  there  is  tangible
material to show commission of crime, whether  the  victim  is  identifiable
and whether the victim of crime needs immediate financial relief.  On  being
satisfied on an application or on its own motion, the Court ought to  direct
grant  of  interim  compensation,  subject  to  final   compensation   being
determined later.  Such duty continues at every stage  of  a  criminal  case
where compensation ought to be given and has not  been  given,  irrespective
of the application by the victim.   At the stage  of  final  hearing  it  is
obligatory on the part of the Court to advert to the provision and record  a
finding whether a case for grant of compensation has been made out  and,  if
so,  who  is  entitled  to  compensation  and  how  much.   Award  of   such
compensation can be interim.  Gravity of offence  and  need  of  victim  are
some of the guiding factors to be  kept  in  mind,  apart  from  such  other
factors as may be found relevant  in  the  facts  and  circumstances  of  an
individual case.  We are also of the view that there  is  need  to  consider
upward  revision  in  the  scale   for   compensation   and   pending   such
consideration to adopt the scale notified by the  State  of  Kerala  in  its
scheme, unless the scale awarded by any other State or  Union  Territory  is
higher.  The  States  of  Andhra  Pradesh,  Madhya  Pradesh,  Meghalaya  and
Telangana are directed  to  notify  their  schemes  within  one  month  from
receipt of a copy of this order.   We  also  direct  that  a  copy  of  this
judgment be forwarded to National Judicial  Academy  so  that  all  judicial
officers in the country can be  imparted  requisite  training  to  make  the
provision operative and meaningful."

9.    As per information furnished by learned counsel  for  the  State,  the
accused Mehtaab has three sons and he owns 10-12  bighas  of  land  and  his
annual income was Rs.35-40,000/-.  Similarly his sons  were  earning  Rs.25-
30,000/- per annum.  The Court of Session  has  mentioned  the  age  of  the
deceased to be thirty years at the time of her death in the year  1997.   As
per instructions of learned counsel for the State, deceased is  survived  by
her husband Ram Charan,  two  sons  Bundel  Singh  and  Suraj  Lal  and  two
daughters Durgesh Bai and Babita Bai.
10.   As already observed,  the  respondent  having  been  found  guilty  of
causing death by his  negligence,  the  High  Court  was  not  justified  in
reducing the sentence of  imprisonment  to  10  days  without  awarding  any
compensation to the heirs of the deceased.  We are of the view that  in  the
facts and circumstances of the case, the order of  the  High  Court  can  be
upheld only with the modification that the accused will pay compensation  of
Rs.2 lakhs to the heirs of the deceased within six months.  In  default,  he
will undergo RI for six months.  The compensation of  Rs.2  lakhs  is  being
fixed having regard to the limited financial resources of  the  accused  but
the said compensation may not be adequate for the  heirs  of  the  deceased.
In such situation, in addition  to  the  compensation  to  be  paid  by  the
accused, the State can be required to pay compensation under Section  357-A.
 As per judgment of this Court in Suresh (supra), the scheme adopted by  the
State of Kerala is  applicable  to  all  the  States  and  the  said  scheme
provides for compensation upto Rs.5 lakhs in the  case  of  death.   In  the
present case, it will be appropriate, in the interests of justice, to  award
interim compensation of Rs.3 lakhs under Section 357-A payable  out  of  the
funds available/to be made available by the State  of  Madhya  Pradesh  with
the District Legal Services, Authority, Guna.  In  case,  the  accused  does
not pay the compensation awarded as above, the State of Madhya Pradesh  will
pay the entire amount of compensation of  Rs.5  lakhs  within  three  months
after expiry of the time granted to the accused.
11.   The appeal is accordingly allowed to the above extent.



                                ..........................................J.
                                 [T.S. THAKUR]


                               ...........................................J.
                                                       [ ADARSH KUMAR GOEL ]
NEW DELHI
FEBRUARY 13, 2015


-----------------------
8

8

withdrawal of a bid before acceptance in the context of Section 5 of the Contract Act, 1872= in Malik Traders (supra). Even in this case this Court was dealing with the effect of withdrawal of a bid before acceptance in the context of Section 5 of the Contract Act, 1872. Rejecting the submission that the bid can be withdrawn without any forfeiture in view of Section 5 of the Contract Act, this Court observed: "... ... ...Thus, even though under Section 5 of the Act a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, the respondent was bound by the agreement contained in its offer/bid to keep the bid open for acceptance up to 90 days after the last date of receipt of bid and if the respondent withdrew its bid before the expiry of the said period of 90 [pic]days the respondent was liable to suffer the consequence (i.e. forfeiture of the full value of bid security) as agreed to by the respondent in Para 10 of the offer/bid. Under the cover of the provisions contained in Section 5 of the Act, the respondent cannot escape from the obligations and liabilities under the agreements contained in its offer/bid. The right to withdraw an offer before its acceptance cannot nullify the agreement to suffer any penalty for the withdrawal of the offer against the terms of agreement. A person may have a right to withdraw his offer, but if he has made his offer on a condition that the bid security amount can be forfeited in case he withdraws the offer during the period of bid validity, he has no right to claim that the bid security should not be forfeited and it should be returned to him. Forfeiture of such bid security amount does not, in any way, affect any statutory right under Section 5 of the Act. The bid security was given by the respondent and taken by the appellants to ensure that the offer is not withdrawn during the bid validity period of 90 days and a contract comes into existence. Such conditions are included to ensure that only genuine parties make the bids. In the absence of such conditions, persons who do not have the capacity or have no intention of entering into the contract will make bids. The very purpose of such a condition in the offer/bid will be defeated, if forfeiture is not permitted when the offer is withdrawn in violation of the agreement." 13. The upshot of the above discussion is that it is no longer possible for the respondents to contend that the right to withdraw the bid in terms of Section 5 of the Contract Act, 1872 would entitle them to withdraw without suffering forfeiture of the earnest money even in cases where the submission and receipt of bids is itself subject to the condition that in the event of a withdrawal of the bid the earnest money stand forfeited. Inasmuch as the High Court remained totally oblivious of the true legal position while directing refund of the earnest money, it committed an error. 14. In the result this appeal succeeds and is, hereby, allowed.

                                 REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL NO. 1852 OF 2015
         (Arising out of Special Leave Petition (C) No.5811 of 2014)


National Thermal Power Corporation Ltd.      ...Appellant

Versus

M/s Ashok Kumar Singh & Ors.            ...Respondents


                               J U D G M E N T

T.S. THAKUR, J.

1.    Leave granted.
2.    This appeal arises out of an order  dated  11/10/2013  passed  by  the
High Court of Judicature at Allahabad, whereby M.B. No. 9620 of  2013  filed
by the respondents has been allowed and order  dated  19/09/2013  passed  by
the appellant-corporation declining refund  of  the  earnest  money  quashed
with a direction to the corporation to refund to the respondents the  amount
deposited by them.
3.    The appellant-corporation floated two  tenders  one  dated  17/10/2012
and the other dated 19/11/2012 for construction of a  shed  and  a  boundary
wall. The respondent-contractor submitted two separate tenders  in  response
to the said tender notices enclosing therewith an  amount  of  Rs.4,41,000/-
and Rs.3,34,000/- respectively towards earnest money deposit.   The  tenders
were in two parts, one  technical  and  the  other  commercial.   While  the
technical bids were opened and found compliant, the financial bids  had  yet
to be opened when the respondents moved an application addressed to the  AGM
(C&M) of the appellant-corporation at  Rai  Bareilly  withdrawing  the  bids
submitted by it and asking for being  excluded  from  consideration  besides
praying for refund of the earnest money deposited with the  bids.  This  was
followed by a representation on 1/5/2013 whereby the respondent  once  again
asked for the return of the earnest money deposited by  them.   In  response
to the said representation, the appellant-corporation issued a letter  dated
26/4/2013 stating that although the bids offered by the respondent were  not
being considered, the prayer for  refund  of  earnest  money  could  not  be
considered as the same stood forfeited. Aggrieved by  the  said  order,  the
respondent filed Writ Petition No. 9620 (MB) of 2013 before the  High  Court
challenging the refusal of refund of the earnest  money  deposit.  The  said
petition was opposed by the appellant herein but was allowed by  a  Division
Bench of the High Court of Judicature at Allahabad, Lucknow Bench, in  terms
of a brief order holding that since respondent's case  was  not  covered  by
condition No. 2 of the Special Conditions  of  contract  of  the  appellant-
corporation, the refusal of refund of the earnest  money  deposited  by  the
respondent was unjustified.  The High Court observed as under:
      "Thus, the position being clear that the tender has  not  been  opened
and the petitioner is not covered under any of the clauses of condition  No.
2, we hereby quash the impugned order dated 19/9/2013 and  direct  the  NTPC
to refund the earnest money.

Writ petition, thus, stands disposed of."

4.    The present appeal assails the  correctness  of  the  above  order  as
noticed earlier.
5.    Appearing on behalf of  the  appellant-corporation  Mr.  S.K.  Dhingra
argued that the High Court was in error in directing refund of  the  earnest
money deposited by the respondent.   It  was  contended  that  in  terms  of
condition No. 2 of the Special Conditions of Contract revocation  of  tender
was by itself sufficient to  call  for  forfeiture  of  the  earnest  money.
Inasmuch as the High Court had held  that  the  respondent's  case  was  not
covered under condition No. 2, it committed a palpable error.
6.    Condition No. 2 of Special Conditions of Contract  may  be  extracted.
It reads:
"2.   The earnest money shall be forfeited on the following grounds:
On revocation of the tender or,
On refusal to enter into a Contract afterward to a Contractor or,
If the work is not commenced after the work is awarded to a Contractor."

7.    A plain reading of the above  would  show  that  one  of  the  Special
Conditions of Contract, subject to which the intending bidders could  submit
their bids, was that  the  earnest  money  accompanying  the  bid  shall  be
forfeited in any one of the three contingencies  referred  to  in  Condition
No. 2 (supra).  One of these contingencies was  revocation  of  the  tender,
which would in the context in which the special provision is made imply  any
withdrawal of the bid/tender  by  the  bidder  concerned.   The  High  Court
appears to have confused revocation of the tender  with  revocation  of  the
tender notice. The expression "revocation  of  tender"  does  not  obviously
refer to revocation by the appellant-corporation, who had issued the  tender
notice.  There is a clear difference between revocation of  a  'tender'  and
revocation of the 'tender notice'.  While revocation of  the  tender  notice
is the prerogative of the appellant-corporation, revocation of the  'tender'
could be only by the bidder/tenderer concerned. The expression  "revocation"
may have been loosely used by the corporation, but, in the context in  which
the  same  appears  in  the  Special  Conditions  of  Contract  only   means
withdrawal/cancellation/ recall of  the  bid  or  tender  submitted  by  the
bidder.  In any such event, the earnest money deposited by the bidder  would
be liable to the forfeited is the  plain  and  the  simple  meaning  of  the
Condition No. 2 extracted above. The High Court was  in  manifest  error  in
holding that the forfeiture did not fall within  the  purview  of  Condition
No. 2.

8.    It was next argued on behalf of  the  respondent  that  the  provision
empowering the appellant to forfeit earnest money upon withdrawal  of  offer
even before such offer was opened/accepted by  the  authority  inviting  the
same will be impermissible in law.  The financial bid in the  instant  case,
it was contended, had not been opened by the appellant-corporation  although
the technical bid was opened and  had  been  found  to  be  compliant.   The
respondent could even so, at  any  time,  before  acceptance  of  the  offer
withdraw his bid.  Inasmuch as respondent had done so, he  was  well  within
his rights to demand refund of earnest money  accompanying  the  bids.   The
forfeiture of the amount  was  illegal  and  the  High  Court  justified  in
holding that the respondent entitled to a refund.

9.    On behalf of the  appellant-corporation  it  was  contended  that  the
submission of the bid itself was subject to the condition that it  shall  be
accompanied by an earnest money deposit which was liable to be forfeited  in
the event of the withdrawal of the bid. Opening of  the  bid  or  acceptance
thereof in terms of Section 5 of the Contract Act, 1872 was, in  that  view,
wholly immaterial and irrelevant to the validity of the  forfeiture  ordered
by the appellant-corporation. Reliance in  support  of  the  submission  was
placed by Mr. Dhingra upon the decisions of this Court in National  Highways
Authority of India v. Ganga Enterprises and another (2003) 7 SCC 410;  State
of Maharashtra and others v. A.P. Paper Mills Ltd.  (2006) 4  SCC  209;  and
State of Haryana and others v. Malik Traders (2011) 13 SCC 200.

10.   In Ganga Enterprises case (supra) this Court was examining  a  similar
question.  The argument in that case, as is the  position  even  before  us,
was that withdrawal of an offer before it was accepted could not  result  in
forfeiture  of  the  earnest  money/security  money  given  by  the  bidder.
Repelling that contention this Court held that while a  person  may  have  a
right to withdraw his offer at any time before the  acceptance  is  conveyed
to him if the offer is itself subject to  the  condition  that  the  earnest
money will be forfeited for not entering into contract or if some other  act
is not performed, then, even though he may have  a  right  to  withdraw  his
offer he will have no right to  claim  the  refund  of  the  earnest  money.
Forfeiture of the earnest money, in any such case, does not,  observed  this
Court, infringe any  statutory  right  under  the  Contract  Act,  1872  for
earnest/security is given and taken in such cases  only  to  ensure  that  a
contract comes into  existence.   What  is  important  is  that  this  Court
recognised that absence of any term stipulating forfeiture  of  the  earnest
money may lead to situations where even those who do not have  the  capacity
or intention of entering into a contract venture into  the  bidding  process
for at times extraneous reasons.  The purpose of  such  a  clause  providing
for forfeiture of the earnest money clearly was to  see  that  only  genuine
bids are received.  This Court observed:

"... ... ...The Indian Contract  Act  merely  provides  that  a  person  can
withdraw his offer before  its  acceptance.  But  withdrawal  of  an  offer,
before it is accepted, is a completely different aspect from  forfeiture  of
earnest/security money which has been given  for  a  particular  purpose.  A
person may have a right to withdraw his offer but if he has made  his  offer
on a condition that some earnest money will be forfeited  for  not  entering
into contract or if some act is not performed, then even though he may  have
a right  to  withdraw  his  offer,  he  has  no  right  to  claim  that  the
earnest/security be returned to him. Forfeiture  of  such  earnest/security,
in no way, affects any statutory right under the Indian Contract  Act.  Such
earnest/security is given and taken to ensure that  a  contract  comes  into
existence. It would be an anomalous situation that a person who, by his  own
conduct, precludes the coming into existence of the contract is  then  given
advantage or benefit of his own wrong by not allowing  forfeiture.  It  must
be remembered that, particularly in government contracts,  such  a  term  is
always included in order to ensure that only a genuine party  makes  a  bid.
If such a term was not there even a person who does not  have  the  capacity
or a person who has no intention of entering into the contract will  make  a
bid. The whole purpose of such a clause i.e. to see that only  genuine  bids
are received would be lost if forfeiture was not permitted."

11.   In A.P. Paper  Mills  (supra)  this  Court  was  dealing  with  almost
similar situation where according to Clause  5  of  the  tender  notice  the
tenderer would withdraw the tender only on the pain  of  forfeiture  of  the
earnest money. While refusing  to  interfere  with  the  forfeiture  of  the
earnest money this Court observed:

"... ... ...But it is a case of withdrawal of tender and the  effect  of  it
is to be considered. Since the tender is valid for a period of 45  days  and
withdrawal is before expiry of  the  period  the  earnest  money  is  to  be
forfeited. The stand of the respondent that because of delay in  declaration
of the final sale results there was no bar on withdrawal of  the  tender  is
clearly untenable. Once the tender is  withdrawn  the  result  is  that  the
tenderer who withdraws the tender cannot  take  the  stand  that  since  the
final sale result has not been declared there is no bar on the withdrawal."


12.   Reference may also be made to  a  decision  of  this  Court  in  Malik
Traders (supra).  Even in this case this Court was dealing with  the  effect
of withdrawal of a bid before acceptance in the context of Section 5 of  the
Contract Act, 1872.  Rejecting the submission that the bid can be  withdrawn
without any forfeiture in view of Section 5 of the Contract Act, this  Court
observed:

"... ... ...Thus, even though under Section 5 of the Act a proposal  may  be
revoked at any time before the communication of its acceptance  is  complete
as  against  the  proposer,  the  respondent  was  bound  by  the  agreement
contained in its offer/bid to keep the bid open  for  acceptance  up  to  90
days after the last date of receipt of bid and if  the  respondent  withdrew
its bid before the expiry of the said period of 90 [pic]days the  respondent
was liable to suffer the consequence (i.e. forfeiture of the full  value  of
bid security) as agreed to by the respondent in Para 10  of  the  offer/bid.
Under the cover of the provisions contained in Section 5  of  the  Act,  the
respondent cannot escape from the  obligations  and  liabilities  under  the
agreements contained in its offer/bid.

The right to withdraw an offer before  its  acceptance  cannot  nullify  the
agreement to suffer any penalty for the withdrawal of the offer against  the
terms of agreement. A person may have a right to withdraw his offer, but  if
he has made his offer on a condition that the bid  security  amount  can  be
forfeited in case he withdraws the offer during the period of bid  validity,
he has no right to claim that the bid security should not be  forfeited  and
it should be returned to him. Forfeiture of such bid  security  amount  does
not, in any way, affect any statutory right under Section 5 of the Act.  The
bid security was given by the respondent and  taken  by  the  appellants  to
ensure that the offer is not withdrawn during the bid validity period of  90
days and a contract comes into existence. Such conditions  are  included  to
ensure that only genuine parties make the  bids.  In  the  absence  of  such
conditions, persons who do not have the capacity or  have  no  intention  of
entering into the contract will make  bids.  The  very  purpose  of  such  a
condition in the offer/bid will be defeated, if forfeiture is not  permitted
when the offer is withdrawn in violation of the agreement."


13.   The upshot of the above discussion is that it is  no  longer  possible
for the respondents to contend that the right to withdraw the bid  in  terms
of Section 5 of the Contract  Act,  1872  would  entitle  them  to  withdraw
without suffering forfeiture of the earnest money even in  cases  where  the
submission and receipt of bids is itself subject to the  condition  that  in
the event of a withdrawal of the bid  the  earnest  money  stand  forfeited.
Inasmuch as the High Court remained totally  oblivious  of  the  true  legal
position while directing refund  of  the  earnest  money,  it  committed  an
error.

14.   In the result this appeal succeeds and is, hereby, allowed. The  order
passed by the High Court is set aside and  Writ  Petition  No.9620  (MB)  of
2013 dismissed but without any order as to costs.



                          ................................................J.
                                                               (T.S. THAKUR)



                          ................................................J.
                                                              (R.K. AGRAWAL)





                          ..................................................
                                                         (ADARSH KUMAR GOEL)
New Delhi;
February 13, 2015