Bid security must be released if non-compliance with technical tender conditions is not attributable to the bidder.

The Respondent (NHLML) issued tenders for the development, operation, and maintenance of ropeway projects in Haryana, Jammu and Kashmir, and Uttar Pradesh

The Petitioner emerged as the successful bidder and was issued Letters of Award (LoA) in early 2024

Per the Request for Proposal (RFP), the Petitioner was required to enter into an agreement with an Original Equipment Manufacturer (OEM).

However, the Petitioner failed to comply with this requirement, alleging that European suppliers had formed a cartel, making them unavailable

Consequently, NHLML issued orders cancelling the LoAs and forfeiting the Petitioner's Bid Security for all three projects

The projects were subsequently re-tendered or, in one instance, scrapped

Whether the forfeiture of the Petitioner's Bid Security was justified when the failure to fulfill RFP conditions (securing an OEM) was allegedly due to external market factors beyond the Petitioner's control

The Court applied the principle of administrative fairness and the doctrine of attributability in contractual/tender disputes.

It held that penal consequences, such as the forfeiture of bid security, should not be sustained if the underlying non-compliance is not attributable to the conduct or negligence of the bidder

Upon review of the facts, the Court reached a factual finding that the inability to secure an OEM agreement was "not attributable to the petitioner"

The Court reasoned that since the default arose from external circumstances rather than the Petitioner's own failure, it was equitable to direct the Respondent to reconsider the release of the forfeited amounts

To balance the equities, the Court also took into account the Petitioner's voluntary undertaking to waive any interest on the refunded security amounts

The Court recorded the Petitioner's undertaking to forego interest on these amounts

Notably, the Court explicitly stated that this order is based on the specific facts of this case and shall not serve as a precedent for future litigation