Case Note & Summary
The dispute arose from a tender process initiated by the State of Haryana for the collection of toll at a bridge over the Yamuna River. The respondent, M/s. Malik Traders, was the second highest bidder after M/s. Gaurav Traders, who failed to fulfill the tender requirements. The respondent had initially submitted a bid and agreed to keep it open for 90 days. After Gaurav Traders' bid was forfeited due to non-compliance, the respondent was issued a letter of acceptance. However, the respondent expressed disinterest before the acceptance was communicated and sought a refund of the Bid Security. The High Court ruled in favor of the respondent, quashing the acceptance and ordering the refund. The Supreme Court, upon appeal, analyzed the contractual obligations under the Indian Contract Act, 1872, particularly Section 5 regarding the revocation of offers. The court concluded that the respondent could not withdraw its bid before the 90-day period expired and was thus liable for the forfeiture of the Bid Security. The Supreme Court set aside the High Court's order, reinstating the forfeiture and dismissing the writ petition. The decision emphasized the importance of adhering to the terms of the bid to ensure genuine participation in the tender process.
Headnote
A) Contract Law - Revocation of Offer - Conditions for Withdrawal - Indian Contract Act, 1872, Section 5 - The respondent's withdrawal of its bid was invalid as it had agreed to keep the bid open for 90 days, and thus the forfeiture of the Bid Security was justified. The court held that the respondent was bound by its agreement despite its attempt to withdraw before the acceptance was communicated (Paras 10-12).
Issue of Consideration
Whether the respondent could withdraw its bid after agreeing to keep it open for 90 days, and the validity of forfeiting the Bid Security.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's order, and dismissed the writ petition, thereby upholding the forfeiture of the Bid Security.
Law Points
- Contractual obligations
- Bid Security
- Tender process
- Revocation of offer
- Indian Contract Act
- 1872
