Appeal dismissed against trial court order rejecting claim for EMD refund. Respondent contested liability citing tender conditions where default in payment forfeits EMD. No interference warranted due to genuine dispute.
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THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
COMMERCIAL COURT APPEAL No.1 OF 2021
JUDGMENT:- (Per Hon’ble Sri Justice C.Praveen Kumar)
Heard Sri P.Veera Reddy, learned Senior Counsel appearing on behalf of Sri K.Koteswara Rao, learned counsel for the appellant; Sri C.Prakash Reddy, learned counsel for respondent No.5; Sri T.Balaji, learned counsel appearing for respondent No.7 and Sri N.Harinath, learned Assistant Solicitor General.
The 5th respondent herein insured the stock, which was stored with the 7th respondent, to an extent of Rs.20 Crores. It is said that due to Hud-Hud Cyclone, there was damage to part of the stock stored in godown by the 7th respondent. Pursuant thereto, the 6th respondent-Surveyor was appointed to assess the damage and accordingly, it was assessed at Rs.8 Crores. Be that as it may, respondent Nos.5 and 7 thought of selling the damaged stock and as such called for tenders. Out of four bidders, the present appellant was the highest bidder quoting a sum of Rs.2,31,27,657/- for purchase of salvaged stock. Immediately thereafter, EMD of Rs.21,38,300/- was deposited. It is represented by Sri Veera Reddy, learned Senior Counsel, that subsequently the balance amount was also paid through demand drafts to 7th respondent, who in turn handed over the same to 5th respondent and same was encashed. Though the amount was paid, the damaged stock was not released in favour of the appellant, who was highest bidder. Pursuant thereto, representation came to be
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made for release of the stock. Inaction of respondents lead to filing of C.O.S.No.18 of 2017 before the Court of the Special Judge for trial and disposal of commercial disputes, Visakhapatnam. Pending suit, the appellant herein filed I.A.No.161 of 2019 for release of EMD amount in a summary manner, on the ground that it is an admitted amount. Rejection of the same lead to filing of the present appeal.
“The petition is totally speculative and not maintainable under law and liable to be dismissed in limini.
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It is submitted that as per Condition No.2.5 of Tender Conditions the successful bidder has to deposit the full value of the bid amount by way of demand draft within 7 days of receipt of delivery order. As per Condition No.2.7 in the event of failure to pay the bid amount the bid shall stand cancelled and EMD shall be forfeited and he shall have no claim over the seller or on any goods in any manner. Admittedly the petitioner-plaintiff failed to pay the bid amount by way of demand draft and thus committed default in payment. Consequently the EMD of Rs.21,38,300/automatically stood forfeited. Therefore question of refunding the same more particularly by way of summary judgment does not arise.”
Miscellaneous petitions pending, if any, in this Appeal shall stand closed.
_______________________________ JUSTICE C.PRAVEEN KUMAR
_______________________________ JUSTICE RAVI NATH TILHARI
Date: 11.11.2021 Ivd
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THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE RAVI NATH TILHARI
COMMERCIAL COURT APPEAL No.1 OF 2021
Date: 11.11.2021
Ivd
1 issue framed by the court
Whether the high bidder is entitled to the return of EMD in the absence of admission of liability regarding the deposit default under tender conditions?
Appellant (Highest Bidder)
New India Assurance Company Limited
Respondent No.7 (Stock Storage/Owner)
C. Praveen Kumar
Ravi Nath Tilhari
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
