What is the main rule from this case?

An offer can be withdrawn any time before acceptance is communicated to the offeror.

Does Section 5 of the Indian Contract Act allow revocation?

Yes. Section 5 permits revocation of proposals before acceptance is complete as against the proposer.

Can there be an implied contract with the Government?

No. When Government is a party, Article 299 requires a formal written contract. No implied contract can be enforced.

What happened to the demand raised against the bidder?

The High Court quashed the demand because there was no valid contract after withdrawal of the tender.

Who delivered the judgment?

Chief Justice Bishambhar Dayal and Justice A.P. Sen of the Madhya Pradesh High Court.

Rajendra Kumar Verma v. State of Madhya Pradesh (1972)

Madhya Pradesh High Court Year: 1972 Bench: C.J. Bishambhar Dayal & A.P. Sen, J. Citation: — Areas: Contract & Constitution Reading Time: ~6 min

PRIMARY: Offer withdrawal, Section 5 ICA SECONDARY: Article 299 COI, Government tenders Author: Gulzar Hashmi Location: India Publish: 20-Sep-2024

Quick Summary

This case says something simple but powerful: an offer can be taken back before it is accepted. The bidder withdrew his tender before acceptance. So, there was no contract. Also, when the Government is a party, a valid written contract under Article 299 is necessary. No implied contract can be enforced. The High Court, therefore, quashed the money demand raised against the bidder.

Issues

Should the Government’s demand for money be set aside?
Can the bidder legally withdraw the tender before acceptance is communicated?
Is an implied contract possible with Government without Article 299 formalities?

Rules

Rule	Meaning	Effect Here
Section 5, Indian Contract Act, 1872	Proposal can be revoked any time before acceptance is complete as against the proposer.	Bidder’s withdrawal before acceptance meant no binding offer remained.
Article 299, Constitution of India	Government contracts must follow formal requirements; no implied contracts enforceable.	No Article 299-compliant contract existed; recovery could not stand.
Acceptance must be communicated	Until acceptance is communicated to the offeror, there is no concluded contract.	Here, withdrawal preceded acceptance communication.

Facts (Timeline)

Timeline for the tender and withdrawal in Rajendra Kumar Verma case

Tender Notice: Government invited tenders to sell tendu patta leaves.

Tender & Deposit: Petitioner submitted tender and paid security deposit.

Withdrawal: Before opening of tenders, petitioner applied to withdraw and asked that his tender not be opened.

Opening & Forwarding: Authority opened the only tender and sent it for Government acceptance.

Acceptance & Demand: Government later accepted; petitioner did not execute purchaser’s agreement. Recovery was initiated, saying loss occurred on resale.

Petitioner’s Stand: No offer existed after withdrawal; no valid Article 299 contract; hence no recovery.

Writ Petition: Filed under Article 226 challenging the recovery.

Arguments

Petitioner

Offer was withdrawn before acceptance; nothing was left to accept.
No Article 299-compliant contract; Government cannot claim on implied terms.
Opening the tender after withdrawal did not revive the offer.

State (Respondent)

Tender was opened and sent for acceptance; bidder failed to execute agreement.
Authority claimed loss on resale; demanded recovery from bidder.
Security deposit supported the Government’s position.

Judgment

The High Court allowed the writ and quashed the demand. Since the tender was withdrawn before acceptance was communicated, there was no concluded contract. Also, with Government as a party, no enforceable contract existed without the Article 299 formalities.

Ratio

Offeror has the right to revoke before acceptance is complete against him (S.5 ICA).
Acceptance must be communicated; opening a withdrawn tender does not create acceptance.
No implied contract can bind Government; Article 299 formalities are mandatory.

Why It Matters

The case protects bidders in public tenders and clarifies that the State must follow the Constitution’s contract rules. It sets clean boundaries: revocation timing and formal government contracting.

Key Takeaways

Revocation right: You can withdraw an offer before acceptance hits you.
No shortcut with Government: Article 299 is non-negotiable.
Tender mechanics: Opening a withdrawn tender does not bind the bidder.
Recovery demands: Fail without a valid, concluded contract.

Mnemonic + 3-Step Hook

Mnemonic: “R-A-C” — Revoke before acceptance, Accept must be communicated, Constitution needs Article 299.

Timing: Was withdrawal before acceptance?
Notice: Was acceptance communicated to the offeror?
Form: If Government is a party, do Article 299 steps exist?

IRAC Outline

Issue: Can the State recover money when the bidder withdrew before acceptance and no Article 299 contract exists?

Rule: Section 5 ICA allows revocation before acceptance; Government contracts require Article 299 formalities.

Application: Withdrawal happened before acceptance communication; no Article 299-compliant contract; hence no binding obligation.

Conclusion: Recovery quashed; no enforceable contract arose.

Glossary

Revocation: Taking back your offer before acceptance is complete against you.
Acceptance: Final assent to the offer; must be communicated to bind the offeror.
Article 299: Constitution rule on how Government contracts must be made.
Tendu Patta: Leaves used to make bidis; often sold through Government tenders.

FAQs

Yes. Under Section 5 ICA, you may revoke before acceptance is complete as against you.

Opening it does not create a contract. Acceptance must still be properly communicated and Article 299 formalities must be met.

No. When Government is a party, no implied contract is enforceable; Article 299 requires a formal contract.

It allowed the writ and set aside the recovery because no concluded, valid contract existed.