CONTENTS - Central Public Works Department

116 SECTION 19
19.5 Refund of earnest money
(1) The earnest money given by all the tenderers except the lowest tenderer should be refunded
immediately after the opening of the tenders, or latest within a week from the date of receipt of
tenders. Entry of Demand Draft/Bankers’s cheque received as earnest money with the tenders
may be kept in the Tender Opening Register, and these need not be deposited in the bank except
for the lowest tenderer. (Modified as per OM/MAN/164)
(2) The Executive Engineer should periodically review the Tender Opening Register with a view to
ensure that the earnest money is refunded in time. If the tenderers do not come forward to get their
challans endorsed for refund, the challans should be sent to them by Registered Post within a
week after expiry of the prescribed period. It will be the responsibility of Divisional Accountant to
ensure that Earnest Money is refunded to unsuccessful tenderers in time specified above.
(3) In case where the earnest money is deposited direct into the Treasury or Bank, and receipted
Challan is submitted along with the tender, the amount shall be refunded in the case of unsuccessful
tenders by making requisite endorsement on the original challan as per Rule 630 of the Central
Treasury Rules.
(4) In the case of the successful tenderer, the transfer of the amount to the credit of the concerned
CPWD Division shall be got effected as per rule 631 of Central Treasury Rules, and the amount
shall then be noted on both sides of the cash book as receipt from the contractor creditable to
CPWD and payment into Treasury. The amount should be included in the amount of the consolidated
Treasury Receipts for the month to be obtained from the Treasury Officer.
(5) The earnest money deposits of Civil Departments may be refunded under the authority of an order
endorsed by the departmental officer (in whose favour the deposit was made) upon the original
deposit receipt. Under no circumstances, part payment be made.
(6) If the departmental officer desires that an item of earnest money deposit, instead of being refunded,
be carried to the credit of the Government in the Consolidated Fund, he must record the fact on the
Deposit Receipt and in his initial records, and request the Accounts Officer to effect necessary
adjustment in Accounts.
19.6 Earnest money is not security deposit
The earnest money, which a tenderer for a contract is called upon to furnish along with his application
for issue of tender for the contract is not a security deposit within the meaning of rule 45 of the Saving
Bank Rules for depositors. No account can, therefore, be opened for the deposit of such earnest money
in the Post Office Saving Bank.
19.7 Earnest money stipulation in work/supply to be awarded after call of quotations
In case where work/supply is to be awarded on the basis of quotations, and a condition for depositing
earnest money is laid down in the Notice Inviting Quotation (NIQ), the following condition shall be stipulated
in the NIQ:
“The quotation for the work/supply shall remain open for a period of ............... days from the date of
opening of quotations. The Government shall, without prejudice to any other right or remedy, be at liberty
to forfeit 50% of the earnest money if any quotationer withdraws his quotation before that date or makes
any modification in the terms and conditions of the quotation which are not acceptable to the department,
and to forfeit the whole of the earnest money if the quotationer, whose quotation is accepted, fails to
commence the work/supply specified in the NIQ (along with changes in scope, if any) in the prescribed
time or abandons the work/supply before its completion.”
19.8 Forfeiture of earnest money
(1) If any tenderer withdraws his tender before the expiry of the validity period, or before the issue of
letter of acceptance, whichever is earlier, or makes any modification in the terms and conditions of
the tender which are not acceptable to the department, then the Government shall, without prejudice