Case Note & Summary
The petitioner, Proactive In & Out Advertising Pvt. Ltd., challenged the cancellation of a tender award by Pune Mahanagar Parivahan Mahamandal Ltd. (respondent nos. 1 & 2) for managing advertisement spaces on non-AC buses in Pune. The petitioner's offer was accepted on 24/01/2018, and a letter of intent was issued on 31/01/2018. The petitioner accepted the award on 06/02/2018. However, the tender conditions (clause 4.10) required the petitioner to furnish a performance bank guarantee within 15 business days from the date of award. The respondent cancelled the award on 08/02/2018, citing non-receipt of the performance bank guarantee and letter of acceptance, and floated fresh tenders. The petitioner argued that the cancellation was premature and violated principles of natural justice as no notice was given before cancellation. The court examined the tender conditions and found that the petitioner had not submitted the required documents within the stipulated time. The court held that the cancellation was valid as the petitioner failed to comply with the mandatory condition. The court also rejected the natural justice argument, stating that in contractual matters, where the terms are clear, cancellation without notice is permissible. The petition was dismissed, and the respondent was allowed to proceed with the fresh tender process.
Headnote
A) Tender Law - Performance Bank Guarantee - Time Limit - Clause 4.10 of Tender Conditions - The petitioner failed to furnish performance bank guarantee and letter of acceptance within 15 business days from the date of award as required by clause 4.10. The respondent cancelled the award and invited fresh tenders. Held that the cancellation was justified as the petitioner did not comply with the mandatory condition. (Paras 2-4) B) Contract Law - Cancellation of Award - Natural Justice - The petitioner argued that cancellation without notice violated principles of natural justice. Held that in contractual matters, where the terms are clear and the breach is evident, cancellation without prior notice is permissible. (Paras 5-6) C) Tender Law - Fresh Tender - Validity - After cancellation, the respondent floated fresh tenders. The court held that the respondent was entitled to do so as the original award stood cancelled due to non-compliance. (Para 7)
Issue of Consideration
Whether the cancellation of the tender award and the subsequent fresh tender process were valid given the petitioner's failure to submit the performance bank guarantee and letter of acceptance within the stipulated time.
Final Decision
The petition is dismissed. The cancellation of the tender award and the fresh tender process are upheld.
Law Points
- Tender conditions are binding
- strict compliance with time limits
- performance bank guarantee
- letter of acceptance
- cancellation of award
- natural justice not required for contractual cancellation
