Bid security must be released when non-compliance with tender requirements is not attributable to the bidder.

The Petitioner, Sai Eternal Foundation, was issued Letters of Award (LoA) dated 14.03.2024 and 23.01.2024 for the development and maintenance of three ropeway projects in Haryana, Jammu & Kashmir, and Uttar Pradesh.

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

Due to the alleged cartelization and non-availability of European suppliers, the Petitioner failed to comply with this requirement.

Consequently, the Respondent (NHLML) cancelled the LoAs and forfeited the Petitioner’s Bid Security for each project.

The projects were subsequently put to fresh bids or, in one instance, scrapped.

The Petitioner challenged the forfeiture through these writ petitions.

Whether the forfeiture of Bid Security was legally sustainable when the failure to comply with RFP conditions was due to the non-availability of OEMs, a factor allegedly beyond the Petitioner's control.

The court applied the principles of equity and fairness in administrative action under Article 226 of the Constitution of India.

It focused on the doctrine of "attributability," which posits that a party should not be penalized for the non-performance of a contractual condition if the obstacle is external and not attributable to their own conduct or negligence.

The Court examined whether the Petitioner’s inability to secure an OEM agreement constituted a wilful default.

Upon reviewing the facts, the Court determined that the non-availability of an OEM was "not attributable to the petitioner".

While the Respondent attempted to justify the impugned forfeiture orders based on the strict terms of the RFP, the Court found that the specific circumstances—marked by an external inability to procure the necessary technical partnership—rendered the forfeiture of bid security inappropriate.

The Court balanced the Respondent's right to re-tender the projects with the Petitioner’s right to recover security deposits in a situation of genuine impossibility.

The Court accepted the Petitioner's undertaking to forego any interest on the said amounts.

It was explicitly clarified that this order was passed under the specific facts of the case and would not serve as a precedent for future litigation.