Bid security must be released when failure to fulfill tender conditions is not attributable to the bidder.

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

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

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

However, the Petitioner could not 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

While one project was scrapped, the others were re-tendered and awarded to third parties

The Petitioner challenged the forfeiture of the Bid Security.

1. Whether the forfeiture of the Bid Security was sustainable in law given the Petitioner’s claim of OEM non-availability due to external factors

The court applied the principle of attribution in contractual defaults, focusing on whether a breach of tender conditions is attributable to the conduct of the bidder or to external circumstances beyond their control

It further exercised its discretionary jurisdiction to grant relief based on equity, while noting the Petitioner's waiver of interest

specifying that the decision would not operate as a legal precedent

The court examined the Petitioner's contention that the failure to secure an agreement with an OEM was due to a cartel of European companies rather than any lack of diligence

While the Respondent attempted to justify the forfeiture based on the RFP terms, the court found that the non-availability of the OEM was "not attributable to the petitioner" under the specific facts of this case

Because the Petitioner was not at fault for the non-compliance with the RFP requirement, the court determined that the retention of the Bid Security was not warranted.

To balance the equities, the court took note of the Petitioner's voluntary undertaking to forego any interest on the refunded amounts

It directed the Respondent (NHLML) to consider the release of the Bid Security amounts for the respective projects with due expedition

The court recorded the Petitioner’s undertaking to forego interest on the said amounts

clarified that this order is specific to the facts of this case and shall not serve as a precedent for future litigation