This is suit for recovery of Rs. 50,000 against the defendants. The brief facts are that Director- General, Supplies, Ministry of Industries, Karachi, called tenders inviting offer for supply of 1,500 Metric Tons of M.S. Sheets of different sizes and gauges. Amongst the offers submitted, the offer of defendant No. 2 was lowest who had also furnished a Bank Guarantee through Muslim Commercial Bank for Rs. 50,000 in terms of the tender. The tender was opened on 30th August, 1978 and was accep--ted on 1st October, 1978. The plaintiff by a telegram dated 1st Octo--ber, 1978 communicated the acceptance of the offer of defendant No. 2 but it was not delivered as their office was closed. This was also sent by a special messenger but could not be delivered as their house was locked. However a copy of the acceptance of tender was also sent by Registered A.D.
On 5th October, 1978. The defendant No. 2 by their letter dated 4th October, 1978 stated that as the offer could not be accepted till 1st October, 1978 there was no concluded contract between the parties. The plaintiffs served a demand notice and lodged claim through telegram dated 14th October, 1978 upon the bank. Thereafter notices were also served on .The defendants but as no money as paid to the plain--tiffs they filed this suit.
2. The defendant, No. 1 have filed written statement and taken the plea that the guarantee was valid up to 15th October, 1978 and its validity was extended up to 15th November, 1978, It has been pleaded that the offer of defendant No. 1 was valid for acceptance within 30 days from the date of opening of tender. It has been denied that the communication signifying acceptance of the offer by the plaintiffs was sent to defendant No. 2 on 1st October, 1978. In fact the alleged acceptance was sent after the expiry of 30 days of the date of the opening of the tender and there--fore there was no concluded contract between the parties. The execution of the bank guarantee is admitted but it is denied that in the facts and circum--stances the defendant No.1 are liable under the guarantee. Defendant No. 2 have filed a separate written statement in which it is pleaded that the telegram intimating about the acceptance of tender was not delivered to the defendants No. 2 on 1st October, 1978 as it was a Sunday and the office had been closed as usual at 4-00 p.m. The telegram was received in the office of defendants No. 2 on 3rd October, 1978 at about 12-30 p. m.
And therefore it is denied that the plaintiffs intimated their acceptance on 1st October, 1978. The registered letter was received on 5th October, 1978. Defendants No. 2 by their letter dated 4th October, 1978 had informed the plaintiffs that they were not under obligation to accept the work as the award of tender communicated by the plaintiffs was not an unconditional acceptance as the terms and conditions had been varied by the plaintiffs. Furnishing of the bank guarantee has been admitted but it has been submitted that defendants No. 2 have not committed breach of any agreement and therefore defendants No. 1 cannot be under any legal obligation to pay to the plaintiffs under the guarantee. Both the defen--dants have prayed for the dismissal of the suit. On these pleadings the following issues were framed
(1) Whether there was concluded contract between the plaintiff and the defendant No. 2 ?
(2) Whether the defendant No. 2 committed the breach of contract ?
(3) Did the defendant No. 1 guarantee the payment to the plaintiff in case of breach of the defendant No. 2 ?
(4) Is the plaintiff entitled to the relief claimed from the defendants ?
(5) Whether the plaintiff made any claim/demand under the guaran--tee before the expiry of the guarantee ?
(6) Whether the defendant No. 1 would be entitled in event of the suit being decreed, to be indemnified by defendant No. 2 ?
3. The parties have not led any evidence and only relied upon the documents filed by them. The plaintiffs have filed documents with the plaint which by consent have been exhibited, likewise all the documents filed by the defendants have been exhibited.
Issue No. I.-The plaintiffs had floated a tender inviting offer in res--pect of supply of goods which provided that the tenderers shall keep their offer firm at least for a period of 30 days from the date of opening of the tender. It also provided that the tenderers shall furnish at the option of the Purchaser a Security Deposit/Bank Guarantee upto of the value of contract which will be returned to the tenderer after the satisfactory completion of the contract. A further condition was that no tender shall be accepted unless it is accompanied by an Earnest Money of Rs. 50,000 in the Form of Pay Order/Bank Guarantee from a Scheduled Bank.
Defendant No. 2 by their letter dated 30th August, 1978 submitted their offer for supply of the goods quoting the description of the goods, size, specification, quantity and price per unit. A schedule of delivery was also given under which 10'% delivery was to be made within 6 to 8 weeks, 20% within 12 to 16 weeks and 70% within 24 to 30 weeks after the confirma--tion of the final order. It is an admitted position that the tender was opened on 30th August, 1978 and the telegram of acceptance of tender was sent on 1st October, 1978 which could not be served on defendant No. 2 till 3rd October, 1978. This telegram is reproduced herein below TELEGRAM EXPRESS STATE Ismail do Company A/5 Tariq Square Alfred Street Garden; West KARACHI.
Engg-11I/80237/I/78 (.) Ref. Your Quotation No. NIL of 30th August, 1978 for M.S. Sheets various sizes total 1,500 M/tons hereby Accepted at Rs. 5,965, Rs. 5,995, Rs. 6,125, Rs. 5,890, Rs. 6,150 and Rs. 6,100.
Per M/Ton for Kotri basis against Items 1, 2, 3, 4 and 6 respectively as per the Specifica--tions provided en per cent delivery is made within October, 1978 balance within 30 weeks as offered (.)
Acceptance is also subject to your furnish--ing 5% performance bond in shape of Bank Guarantee/Pay Order amount--ing to rupees four lacs fifty-eight thousand three hundred only valid for one year within seven days of this telegram failing which A/T will be liable to be cancelled at your risk (.) Formal A/T will be issued on receipt of required performance bond (.) Inspection=to be carried out by CI Karachi in association with Indentor or his respective (.) Acceptance Hereby concluded and is governed by P S-35 as amended to-date Except Clause 21.
Not to be telegraphed. Karachi, the 1st October, 1978.
Sd/-- (MUHAMMAD TARIQ QASHI), Assistant Director (Supplies), for Director-General of Supplies."
As this telegram could not be served on the defendant No. 2 on 1st October. 1978 confirmatory copy was sent by a Special Messenger which too could not be served till 4th October, 1978 and thereafter the registered letter was served. The telegram, however, seems to have been served by 4th October 1978 and defendant No. 2 sent a letter the same day to the plaintiffs in which they stated that they were bound to accept the order at the quoted note up to 1st October, 1978 and thereafter they are not bound to accept the order and as within the period of validity of offer acceptance was not communicated they expressed their inability to supply the goods in terms of their offer. By looking to these documents it is to be considered whether there was a concluded contract between the parties.
4. Mr. Niaz Ahmad khan, the learned counsel for the plaintiffs has contended that as the telegram accepting the offer of the defendant No. 2 was sent on 1st October, 1978 within the period as stated by defendant No. 2 in their letter dated 4th October, 1978, the acceptance was com--plete on the part of the plaintiffs and the defendant No. 2 were bound by the Agreement. Mr. Azhar Ali Siddiqui and Mr. G.H. Malik, the learned advocate for the defendants have taken joint stand firstly, that in terms of tender the acceptance was to be made within a period of 30 days from the date of opening of tender, i.e., 30th August, 1978 and secondly the acceptance communicated through the telegram dated 1st October, 1978 was not an unequivocal and unconditional acceptance and, therefore, no concluded contract has been arrived at between the parties.
5. Section 7 of the Contract Act provides that in order to convert a proposal into a promise, the acceptance must be absolute and unequivocal and should be expressed in some usual or reasonable manner. A contract is a result of a proposal and its unqualified acceptance. If the acceptance contains material variation of the terms of offer the agreement upon which the contract can be founded will be missing. Therefore, the law makes it compulsory that the acceptance of proposal should be absolute and unqualified. It was held in the case of Pakistan Industrial Develop-1 men-t Corporation v. Aziz Kureshi (PLD 1965 Kar. 202) that " It is well-settled that the acceptance must be absolute and uncon--ditional and must correspond to the terms of the offer without leav--ing any terms open to further negotiations. If it contains material variation of the terms of the offer, there is no consensus ad idem on agreement upon which the contract can be founded. It is intro--duced in terms not comprised in the offer no contract is made and the original offer must be deemed to have been refused and a counter-offer made. A qualified acceptance is equivalent to a new offer which may either be accepted or rejected."
6. In order to show that a qualified acceptance which varies the pro--posal amounts to a counter- proposal, it is necessary to establish that the variation is of a substantial nature. Considering the telegram it is obvious that while communicating acceptance it was stated that "rate were accepted provided 10% delivery is made within October, 1978 balance within 30 weeks as offered".
This clearly shows that a variation had been made in the period of delivery of the goods to the plaintiffs. It has to be seen whether it would amount to material variation sufficient to convert it into a counter-proposal. In case of sales of goods price ant delivery are vital and material conditions of the contract. The performance of contract mainly depends upon the delivery of the goods of the seller and such deliveries are regulated by the agreements or the provisions of Sales of Goods Act.
The fact that the defendant No. 2's offer to deliver 10% within 6 to 8 weeks after the confirmation of the final order was sought to be reduced to a period of 4 weeks clearly shows that it is a material alteration, and there is no concluded contract between the parties.
7. Issue No. 2.--As there, was no concluded contract between the parties the question of commission of breach by defendant No. 2 does not arise.
8. Issue No. 3 It is an admitted position that the defendant No. 1 had furnished a guarantee for Rs.
50,000 which provided as follows To make payment of Rs. 50,000 to you on demand in case of with--drawal or modification of quotation or any default or non-execu--tion of the contract or refusal to accept order by the tenderers."
The defendant No. 1 would have been liable to pay under the guarantee on happening of any of the contingencies specified in this clause. As no breach has been committed by defendant No. 2 nor any contin--gency as specified above has arisen, the question of payment by defendant No. 1 does not arise.
9. Issue No. 4. In view of the finding on the above issue the plaintiffs are not entitled to claim relief from the defendants jointly or severally.
10. Issue No. 5. The plaintiffs did send a telegram to defendant No. 1 (Exh. 20/3) whereby they called upon the defendants No. I to extend the validity of guarantee till 15th November, 1978 or they should treat the telegram as a claim lodged under the deed of guarantee. It is an admitted position that the validity of the guarantee was extended up to 15th November, 1978 and thereafter on 31st October, 1978 the Plaintiffs demanded Rs. 50,000 under the bank guarantee. The demand was made before the expiry of the guarantee but as stated above the defendant No. 1 were not liable to pay the same.
11. Issue No. 6.-As no decree has been passed against defendants No. 1 the question of third party decree in the same terms against defen--dant No. 2 does not arise.