Q. & Ans - Why is earnest money taken ?

 Q. - Why is earnest money taken ?

Ans. - Earnest money – 

The Tenderer / Contracts shall be required to deposit Earnest money with the tender for the due performance with the stipulation to keep the offer open till such date as specified in the tender. Earnest money should be either in cash, deposit receipts, pay orders, demand draft.

In railway contracts, earnest money is taken as a form of security from the bidder or contractor. The earnest money deposit (EMD) is a percentage of the total contract value that is deposited by the bidder with the railway authorities as a demonstration of their serious intent to execute the work as per the terms and conditions of the contract. The earnest money shall be 2% of estimated tender value. The earnest money shall be rounded to the nearest Rs. 10/- . Earnest money shall be applicable for all modes of tendering

The purpose of taking earnest money in railway contracts is to ensure that the bidder or contractor has a financial stake in the project and is committed to completing the work on time and to the required quality standards. By requiring a financial commitment upfront, the railway authorities can ensure that the bidder or contractor has the financial resources and capability to carry out the work.

In case the bidder or contractor fails to execute the work as per the terms and conditions of the contract, the earnest money is forfeited by the railway authorities. This acts as a deterrent against non-performance and helps to safeguard the interests of the railway authorities. If the bidder or contractor completes the work successfully, the earnest money is returned to them.

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Short Notes (25) Question Bank (17) Account & Finance (15) FINANCIAL RULES (13) Question & Answer (7) Functions of Accounts Department (3) STATION BALANCE SHEET (3) H.07 लेखा निरीक्षण (2) INDEX (2) RAILWAY BUDGET (2) 0 FINANCIAL RULES SYLLABUS (1) 1. RAILWAY BUDGET (1) 2. Rules of Allocation (1) 3. INVESTMENT PLANNING AND WORKS BUDGET (1) 5. STATION OUTSTANDING. (1) 6.0 RAILWAY BUDGET (Short Note) (1) 6.1 Cannons/Standards of Financial Propriety (1) 6.10 CONTROL OVER EXPENDITURE (1) 6.2 Consolidated Fund Of India (1) 6.4 RULES OF RE-APPROPRIATION (1) 6.7 AUGUST REVIEW (1) 6.9 APPROPRIATION ACCOUNT (1) 8.1 निविदा (Tender) (1) Account (1) Accounts (1) Audit & Audit Report (1) BOT / BOOT Schemes (1) CONTINGENCY FUND OF INDIA (1) Contract & Its Types (1) Earnest Money (1) FINAL MODIFICATION (1) H 1 रेलवे टेंडर सिस्टम (Railway Tender System) (1) H.01 रेलवे का इतिहास एवं संगठन (1) H.01.1रेलवे की परिभाषा और प्रबंध की संरचना (1) H.02 लेखा एवं वित्त (1) H.03 रेल लेखा की संकल्पना (1) H.04 रेल बजट (1) H.05 वित्त एवं व्यय पर नियंत्रण (1) H.06 सांविधिक लेखा - परीक्षा (1) H.08 सामान्य व्यय (1) H.09 कारखाना लेखा (1) H.10 भंडार लेखा (1) H.11 यातायात लेखा (1) H.12 रेलवे यातायात (1) H2. 19 बजट आदेश (Budget Order) / बजट आबंटन (Budget Allotment) में अन्तर (1) H2.01 Revised Estimate/Details Estimate में अंतर (1) H2.02 Abstract Estimate / Details Estimate में अंतर (1) H2.03 Revised Estimate / Supplementary Estimate में अंतर (1) H2.04 Completion Estimate / Completion Report में अंतर (1) H2.05 Delay Tender / Late Tender में अन्तर (1) H2.06 Single Tender / Single offer में अंतर (1) H2.07 ओपन टेंडर / लिमिटेड टेंडर में अंतर (1) H2.08. Earnest Money Deposit / Security Deposit में अन्तर (1) H2.09 Security Deposit / Performance Guarantee में अन्तर (1) H2.10 Deposit Miscellaneous / Miscellaneous Advance में अंतर (1) H2.11 On Account Bill / Final Bill में अंतर (1) H2.12 Rate Contract / Running Contract में अंतर (1) H2.13 Demand Payable / Demand Recoverable में अन्तर (1) H2.14 General Books / Subsidiary Books में अंतर (1) H2.15 Consolidated Fund समेकित निधि / Contingency Fund आकस्मिक में अंतर (1) H2.16 मूल्यह्रास संचय कोष (Depreciation Reserve Fund) / विकास कोष (Development Fund) में अन्तर (1) H2.17 Draft Para / Audit Para में अन्तर (1) H2.18 Traffic (Gross) Earning / Traffic (Gross) Receipt में अन्तर (1) H2.20 स्वीकृत व्यय (वोटेड Expenditure) / प्रभ्रत व्यय (Charged Expenditure) में अन्तर (1) H2.21 Estimate Committee / Public Committee में अन्तर (1) H2.22 Public Committee / Railway Convention committee में अन्तर (1) H2.23 Remittance Transaction / Transfer Transaction में अन्तर (1) H2.24 Stock Item / Non-Stock Items में अन्तर (1) H2.25 Co6 / Co7 में अंतर (1) H2.26 TC / JV में अन्तर (1) H8.2 परिचालन अनुपात (1) H8.3 वित्तीय औचित्य (1) H8.4 सर्वेक्षण (1) Letter of credit (1) Limited Tender (1) Local Purchase (1) Open Tender (1) REVISED AND DETAIL ESTIMATE में अंतर (1) Security Deposit (1) Single Tender (1) Special Limited Tender (1) Tender Committee (1) Tender Notice & Tender Documents (1) Traffic Earnings (1) Work Contracts (1) Zero Base Budget. (1) यातायात लेखा विभाग के कार्य (1)