Release of bid security directed where non-fulfillment of tender conditions is not attributable to the bidder.

The Petitioner was issued Letters of Award (LoA) dated 14.03.2024 and 23.01.2024 for the development, operation, and maintenance of three ropeway projects in Haryana, Jammu and 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).

The Petitioner failed to comply with this condition, alleging that European companies had formed a cartel, making suppliers unavailable

Consequently, the Respondent (NHLML) cancelled the LoAs and forfeited the Bid Security amounts for all three projects

The projects were subsequently put for fresh bids or scrapped

The Petitioner challenged the forfeiture through three writ petitions

1. Whether the forfeiture of the Bid Security by the Respondent was justified despite the Petitioner’s claim that the non-compliance was due to external market factors (cartelization)

2. Whether the Petitioner is entitled to the release of the forfeited Bid Security amounts

The Court exercised its discretionary jurisdiction under Article 226 of the Constitution of India, applying the principle of non-attribution of fault.

It focused on whether the breach of contractual/tender conditions was "attributable to the petitioner"

The Court also relied on the principle of voluntary waiver of claims, specifically regarding the Petitioner's undertaking to forego interest on the refunded amounts

The Court evaluated the Respondent’s justification for the Impugned Orders against the Petitioner’s claim of European supplier cartelization

While the Respondent defended the forfeiture based on the RFP terms, the Court found that the non-availability of an OEM was a factor "not attributable to the petitioner"

The Court took notice of the fact that the projects had already moved forward—either being awarded to new bidders or scrapped—meaning the Petitioner could no longer undertake the work

Balancing these equities, the Court determined that the retention of the Bid Security was not warranted under these specific circumstances, provided the Petitioner waived any claim to interest

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

The Court explicitly held that this order was specific to the facts of the case and "shall not serve as a precedent in any future cases"