Introduction 

• This is a landmark judgment where the High Court held that an offer can be withdrawn before it is accepted. 
• The judgment was delivered by Chief Justice Bishambhar Dayal and Justice AP Sen. 

Facts 

• The Respondents advertised for receiving tenders for the sale of Tendu Patta leaves. 
• The petitioner gave a tender in pursuance of the above tender notice. The petitioner also deposited some amount as security. 
• Before the tenders were actually opened the petitioner made an application resiling from his tender and requested that his tender be not opened at all. 
• The tender was however opened as it was the only tender received and it was also sent to the Government for acceptance. 
• The Government accepted the tender and since the petitioner did not execute the purchaser’s agreement, proceedings were initiated for recovery of certain amount on the ground that the Tendu leaves were sold to someone else and the balance was recoverable from the petitioner. 
• The contention of the petitioner was as follows: 
  • As he had withdrawn the tender before it was opened and accepted, there was no tender on behalf of the petitioner. 
  • There can be no recovery of the amount as there was no valid contract executed by the petitioner under Article 299 of the Constitution of India, 1950 (COI). 
• Thus, a writ petition was filed under Article 226 of COI challenging the recovery of the amount. 

Issue Involved 

• Whether the demand made by the Government is liable to be quashed? 

Observations 

• The Court observed that a person making an offer is entitled to withdraw his offer before it’s acceptance is intimated to him. 
• Further, it was observed that it was not denied that the tender was withdrawn, therefore, it is clear that when the tenders were opened there was really no offer by the petitioner and there could be no contract impliedly or explicitly between the parties. 
• The Court further observed that unless a valid contract is executed as envisaged by Article 299 (1) of COI where Government is a party there could be no enforceable contract at all. There can be no implied contract between the Government and another person. 
• Thus, the Court allowed the writ petition and the demand against the petitioner was quashed. 

Conclusion 

• The Court in this case reiterated the important principle of the Indian Contract Act, 1872 (ICA) that a person making an offer is entitled to withdraw it before it’s acceptance.