Civil Law  - Bid Security amount

Forfeiture of - Tenders invited for appointment as Entrepreneur/Agent for collection of toll - A letter of acceptance issued to the respondent however, the respondent failed to deposit the security amount - Letter of acceptance was cancelled and withdrawn and the Bid Security of 20 lakhs was forfeited Before receipt of the letter of acceptance, the respondent sent a letter informing the Executive Engineer that the respondent was not interested in the work and, therefore, the amount of Bid Security deposited may be refunded - Writ petition filed - High Court - Quashed the letter of acceptance and also directed the Executive Engineer to refund the Bid Security amount of 20 lakhs to the respondent - Appeal - Respondent agreed to keep the bid open for acceptance upto 90 days after the last date of receipt of bid. Hence, the respondent could not have withdrawn the bid before the expiry of the period of 90 days and if the respondent withdrew its bid before the expiry of the said period of 90 days the respondent was liable to suffer the consequence (i.e. forfeiture of the full value of Bid Security) as agreed to by the respondent in the offer/bid - Supreme Court - Very purpose of such a condition in the offer/bid will be defeated, if forfeiture is not permitted when the offer is withdrawn in violation of the agreement - Impugned judgment of the High Court set aside - Writ petition dismissed - Appeal allowed - No costs.

Topic(s)- Forfeiture of bid Security amount

Important Decision(s)-