Reference no: EM13934869
Case StudyAditya Mass Communication Private Limited
Vs
A.P. state Road Transport Corporation
A.P. State Road Transport Corporation, Hyderabad advertised tender notice on calling for tenders for display of advertisements on the buses owned by it. According to the condition of the Tender Notice, each tender form had to be accompanied by a demand draft for Rs 20 lakhs and tender forms completed in all respects had to be put in the tender box. The accompanying sum of money was the Earnest Money Deposit (E.M.D). Clause (10) of the terms provided that the tender will be opened at 3:00 p.m. on October 31, 1996, in presence of the tenderers or their authorized agents. Clause (14) provided that tenderers will not be permitted to withdraw their tender after the tenders were opened .Clause (15) provided that if the highest tenderer backs out from taking up the agency , for whatsoever reason, the E.M.D. paid by him will be forfeited.
Aditya mass Communication Private Limited submitted its duly filled tender along with demand draft of Rs. 20 lakhs. In relation to this tender, another person approached the High Court and got an order restraining the Transport Corporation from proceeding further with the tender. Following the order, the A.P. State Road Transport Corporation opened the tender box at 3 p.m. and found six sealed covers. In view of the directions of the High Court, the covers were again placed back in the tender box without opening the seals. The signature of the tenderers and their agents was taken to this effect .The tenders were not opened to find out the highest bidder. Aditya Mass Communication Private Limited wrote a letter on November 11, 1996 stating that no reasons were given to him for non-opening of the tenders and that he could not keep the huge amount of Rs 20 lakhs locked in with all the uncertainty associated with the tender. It, thus, requested for return of the Earnest Money Deposit. A.P. State Road Transport Corporation replied on November 14, 1996 that the Aditya Mass communication had signed on the note recording the proceedings of opening the tender box and putting back sealed covers. Thus, it could not put up the argument that no reasons for non-opening of the tender was given on it. The letter notified that the tenders would be opened on November 16, 1996 at 11:30 hrs. Aditya Mass Communication once again wrote a letter on November 15, 1996 that the question of their participation in the opening of tenders did not arise as they asked for the return of E.M.D. The A.P. State Road Transport Corporation went ahead with the opening of the tender, found Aditya Mass Communication to be the highest bidder and awarded the tender to it. Aditya Mass Communication was informed of this but it demanded refund of Earnest Money Deposit. The A.P. State Road Transport Corporation following the terms of tender forfeited the earnest money deposit of Aditya Mass Communication.
Question1: Elaborately state the important legal issue/s covered under this case.
Question 2: What are the essential features of a tender?
Question 3: Give your reasons in support of your decision for the issue discussed in this case.