PRODUCERS' UNION LTD. vs P.VENKATA RAMI REDDY

THE opposite parties in O.P. No. 111/1996 question the order of the Nellore District Forum dated 21.5.1997 allowing that opposite party preferred by the respondent herein as the complainant.

THE admitted facts are that the respondent was one of the tenderers for supply of milk through vehicles to Route No. 1 and Route No. 2 in Nellore, He deposited Rs. 5,000/- for each as earnest money deposit (EMD) i.e., in all Rs. 10,000/-. He submitted his tenders on 13.11.1995. On the same day all the tenders were opened and it was found that the complainant was the second lowest tenderer and that another tenderer by name Sri D.P. Reddy was the lowest tenderer. THE tenders of Shri D.P. Reddy for the two routes were accepted by communication to him dated 21.11.1995. The complainant''s case was that the E.M.D. of the unsuccessful tenderers was to be returned by the appellants immediately after Sri D.P. Reddy''s tender was accepted, and on that basis the complainant contended that he was entitled for return of Rs. 10,000/- deposited by him towards earnest money. According to the complain and the addressed letter dated 2.12.1996 to the second appellant but the E.M.D. was not returned to him and thus appellants "committed deficiency of service" causing mental agony and distress to him. He then approached the District Forum for redress.

The appellants filed their versions and their case was that after Sri D.P. Reddy''s tender was accepted he was not prepared to execute the work (expressed by him by letter dated 30.12.1995) and the complainant being the next lowest tenderer his tenders were accepted within 60 days from the date of opening of the tenders which was also within 60 days from the date of the tenders - he had also participated in the negotiations. Orders accepting his tenders were sent to him by registered post to the address given by him and he was required to produce his vehicle for supply of milk from 6.1.1996. It was also made clear that failure to do so would entail for future of the E.M.D. The registered letter sent to the complainant was returned with the postal endorsement that the addressee was not available. Therefore, alternative arrangements had to be made at higher rates for both the routes.

THE appellants relied upon Conditions 8 to 10 of the Tender Schedule. THE District Forum extracted them in its order. THEy are as follows: "(8) THE offer must be open for acceptance for minimum period of 60 days from the date of opening of the tenders. (9) THE E.M.D. will be liable to be forfeited if the tender after submission of his offer backed out from the offer or modified his offer or makes any qualified acceptance of the terms and conditions. (10) THE Union shall have the right to retain the E.M.D. till the finalisation of the tenders or until the expiry of 60 days from the date of opening of tenders whichever is later."

However, the District Forum held that the tenders of the complainant should not have been accepted behind his back and that such acceptance was invalid and therefore the acceptance of his tenders on 1.1.1996 was bad. On that reasoning, the District Forum allowed the complaint and directed the appellants to refund Rs. 10,000/- to the complainant together with interest @ 18% per annum from 1.1.1996 till the date of payment, and also awarded costs of Rs. 1,000/-. A reading of Condition (8) makes it very clear that the offer of the complainant should be kept open for acceptance for a minimum period of 60 days from the date of opening of the tenders. This ex facie implies that within those 60 days his tender could be accepted by the appellants. The conditions do not provide that after the opening of the tenders and after noting the order in which the tenders were placed it was still necessary to give notice to the complainant before acceptance of the tenders without deviating from the order in which the tenderer were placed.

IN the present case it was not disputed by the complainant that he was the second lowest tenderer. It was also not disputed that the tenders of the lowest tenderer, Sri D.P. Reddy were originally accepted but on finding that he was not prepared to execute the work the tenders of the second lowest tenderer i.e. of the complainant, were accepted well within the 60 days period during which the complainant was required to keep his offer open. It was not the case of the complainant that there was no acceptance of his tenders within 60 days. He feigned ignorance of the condition subject to which tenders were made by him, and claimed that he was entitled to the refund of the EMD immediately after the lowest tender was accepted. Under the circumstances we find that the District Forum was in error in reading into the conditions the further requirement that the tenders of the complainant ought not to have been accepted behind his back. We, therefore, find that the District Forum erred in accepting the claim of the complainant/respondent herein. The appellants contended in their version that the complainant was not a consumer as defined under Section 2(1)(d) of the Consumer Protection Act, 1986 (''the Act'' for short) and that there was no consumer and buyer relationship between the parties and, therefore, the complaint was not maintainable. This aspect was not gone into by the District Forum. It merited consideration. On the facts of the present case we are satisfied that there was no hiring of service for consideration by the complainant and no sale etc. of goods was involved in the transaction. The refund or forfeiture of the EMD, as the case may be, turned on the actual import of the conditions of tender. No service by the appellants was involved. The complainant was not a consumer under Section 2(1)(d) of the Act. Consequently we have to hold that the complaint was not maintainable. In the result, the order of the District Forum in O.P. No. 111/1996 is set aside and the complaint of the respondent is dismissed. The appeal is accordingly allowed. No costs. Appeal allowed.