Case Note & Summary
The petitioners, Infinity Infra and its partner Ajit Achyut Kandpile, filed a writ petition challenging the action of the City and Industrial Development Corporation of Maharashtra Limited (CIDCO) in forfeiting the earnest money deposit (EMD) and allotting plots to them after the alleged expiry of the bid validity period. CIDCO had published an advertisement on 31st October 2021 inviting applications for lease of plots in Sector-11, Khargar, Navi Mumbai. The petitioner submitted bids for Plot Nos.103, 108, and 109 on 23rd November 2021 and deposited the EMD. The bids were opened on 25th November 2021, and the petitioner's bid was the highest. On 14th March 2022, the petitioner wrote to CIDCO seeking refund of the EMD on the ground that the bid validity period had expired, relying on Clauses 5 and 25 of the brochure. However, on 27th April 2022, CIDCO issued a letter allotting the plots to the petitioner. The petitioner refused to accept the allotment and demanded refund of the EMD. The court examined the terms of the brochure, which stated that the bid validity was 180 days from the date of bid opening, i.e., up to 23rd May 2022. The brochure also provided that CIDCO could extend the validity period at its discretion. The court found that CIDCO had extended the validity period, and the allotment letter dated 27th April 2022 was within the extended validity period. The court held that the petitioner's letter of 14th March 2022 was a withdrawal of the bid, but CIDCO did not accept the withdrawal and instead proceeded to allot the plots. Since the allotment was within the extended validity period, the petitioner was bound by the terms of the bid and could not unilaterally withdraw. The court dismissed the petition, holding that the forfeiture of EMD was justified and the petitioner was not entitled to refund.
Headnote
A) Contract Law - Bid Validity - Extension of Validity - The bid validity period was initially 180 days from the date of bid opening (25.11.2021), expiring on 23.05.2022. The petitioner sought refund of EMD on 14.03.2022 claiming expiry of validity. However, the court found that the brochure provided for extension of validity at CIDCO's discretion, and CIDCO had extended the validity. The allotment letter dated 27.04.2022 was within the extended validity period. Held that the petitioner's withdrawal was not accepted and the bid remained valid. (Paras 1-10) B) Contract Law - Forfeiture of EMD - Withdrawal of Bid - The petitioner's letter dated 14.03.2022 seeking refund of EMD was treated as withdrawal of bid. However, CIDCO did not accept the withdrawal and proceeded to allot the plot. The court held that since the allotment was within the extended validity period, the petitioner could not unilaterally withdraw. The EMD was forfeited as per terms. Held that the petitioner is not entitled to refund. (Paras 11-15)
Issue of Consideration
Whether the petitioner is entitled to refund of the earnest money deposit (EMD) after the bid validity period expired and before the allotment letter was issued, and whether the allotment letter was issued within the extended validity period.
Final Decision
The writ petition is dismissed. The court held that the allotment letter was issued within the extended bid validity period, and the petitioner's withdrawal of bid was not accepted. Therefore, the forfeiture of EMD was justified, and the petitioner is not entitled to refund.
Law Points
- Bid validity period
- extension of bid validity
- withdrawal of bid
- forfeiture of earnest money deposit
- contractual obligations
- public auction
- terms and conditions of tender
