Writ appeal against dismissal of a challenge to forfeiture of earnest money deposit by BMTC under a letter of intent for operating contract buses. The Division Bench held the appellant breached the letter of intent, entailing forfeiture, and dismissed the appeal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
NC: 2024:KHC:28795-DB WA No. 811 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF JULY, 2024
PRESENT
THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE C M JOSHI WRIT APPEAL NO. 811 OF 2022 (GM-RES)
BETWEEN:
SMT. B V LAKSHMI, W/O L NARASIMHAIAH, AGED ABOUT 71 YEARS, R/O NO.193, 27TH CROSS, 2ND MAIN ROAD, JAYANAGARA 6TH BLOCK, BANGALORE-560 082.
…APPELLANT
(BY SRI GOPALKRISHNA KURANDWAD, ADVOCATE)
AND:
Digitally signed by NANDINI R Location: High Court of Karnataka
…RESPONDENTS
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 26.08.2021 IN WP No-12948/2021 PASSED BY THE LEARNED SINGLE JUDGE OF THIS HONBLE COURT.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: THE HON'BLE MR JUSTICE V KAMESWAR RAO
AND
THE HON'BLE MR JUSTICE C M JOSHI
ORAL JUDGMENT
(PER: THE HON'BLE MR JUSTICE V KAMESWAR RAO)
This appeal has been filed by the appellant challenging the order dated 26.08.2021 passed by the learned Single Judge in WP.No.12948/2021, whereby, the learned Single Judge has dismissed the writ petition by stating in para No.4 of the impugned order as under:
"4. The second respondent has recorded in the impugned order that the petitioner had offered 10 buses. She had deposited earnest money deposit of Rs.1,00,000/-. Letter of intent was issued on 27.01.2006. Petitioner failed to provide any bus. With these facts, he has recorded reasons justifying forfeiture. The payment of earnest money was in the year 2006. Petitioner is seeking to refund of the same, which is based on agreement of parties governed by the Contract Act. In contractual matter, writ petition is not maintainable. Accordingly, the writ petition is dismissed."
was to an order dated 13.09.2019 passed by the Chief Traffic Manager (Commercial), Bengaluru Metropolitan Transport
Corporation holding that forfeiture of earnest money deposit is in accordance with the terms and conditions of the letter of intent. Suffice to state that the appellant was granted a contract by a letter of intent for operating buses on contract basis to supplement in urban and sub-urban routes operated by the BMTC, Bengaluru. The letter of intent issued to the appellant, clause 18 thereof stipulates that the agreement can be terminated with 90 days notice from either parties, upon which, even the security deposit will be refunded. It also stipulates that if the termination is due to the breach of the tenderer, security deposit will not be refunded.
paper book to contend that the respondents in terms of their own notice had proposed the forfeiture of the security deposit of 5 buses and not 10 buses. It is his submission hence the respondents could not have forfeited the complete amount of the earnest money/security deposit. Meaningfully understood the submission is the petitioner/appellant is entitled to the refund of Rs.50,000/-. He also submits that the respondents having transferred the agreement in favour of a third party it could not have denied the refund of the earnest money/security deposit to the appellant.
deposit could not have been forfeited, for the same reason that the appellant has violated the terms and conditions of the letter of intent, which entails forfeiture of the earnest money/security deposit.
Sd/(V KAMESWAR RAO) JUDGE
Sd/(C M JOSHI) JUDGE
NR/-
List No.: 1 Sl No.: 11
2 issues framed by the court
Whether forfeiture of the entire earnest money/security deposit was justified under the terms of the letter of intent despite a notice proposing forfeiture for 5 buses.
Whether transfer of the agreement to a third party entitled the appellant to refund of the earnest money/security deposit.
SMT. B V LAKSHMI
BANGALORE METROPOLITAN TRANSPORT CORPORATION
CHIEF TRAFFIC MANAGER, BANGALORE METROPOLITAN TRANSPORT CORPORATION
V KAMESWAR RAO
C M JOSHI
As recorded by the court registry
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