Assam HC Quashes Fresh Tender For ₹90-Lakh Road Package, Says Acceptance Letter And Timely Security Formed Contract

The Public Works Roads Department (PWRD) invited tenders for road works under RIDF-XXX of NABARD.

For Package No. 96, the petitioner’s bid of ₹90 lakh was found technically responsive and was the lowest. The Department issued a Letter of Acceptance on 7 March 2025; the petitioner furnished the required performance security within the stipulated period and signed the contract document.

When no work order was issued, the petitioner filed WP(C) No. 2963/2025. The Court directed the Department to formally communicate its decision not to issue the work order, but the Department later issued a fresh NIT for the package.

The petitioner challenged the Department’s communication dated 24 June 2025 and the fresh NIT in the two present petitions. The Department relied on alleged false representations, deficiencies in machinery and manpower, poor past performance, and inadequate experience.

Under clauses 33.2 and 34 of the tender’s Instructions to Bidders (ITB), notification of award constitutes formation of the contract, subject to furnishing performance security; failure to furnish that security permits cancellation of the award under clause 34.3.

Once formed, a contract may be discharged only in accordance with the Indian Contract Act, 1872 or the contract’s terms.

Under Mohinder Singh Gill v. Chief Election Commissioner, (1978) 1 SCC 405, the validity of an order must be assessed by the reasons stated in the order itself and cannot be supplemented by later explanations in an affidavit.

The petitioner received the Letter of Acceptance and furnished the required performance security within the prescribed ten-day period. Applying clauses 33 and 34 of the ITB, the Court held that these steps formed a contract; the Department could not treat the award as cancelled on a basis other than the tender’s stated terms.

The communication dated 24 June 2025 gave no reasons for refusing to issue the work order, and the Department’s later affidavits could not cure that omission under Mohinder Singh Gill.

Because the contract remained subsisting, the Department could not issue a fresh NIT for the same package; any further action had to proceed under the contract or applicable law.

It set aside and quashed the communication dated 24 June 2025 and the NIT dated 1 August 2025 insofar as it concerned Package No. 96.

The NIT ruling was limited to that package, and the judgment did not preclude either party from taking other steps consistent with the contract’s formation. Both writ petitions were disposed of.