Explore the nuances of the court’s legal analysis regarding the forfeiture of security deposit in tender processes. Delve into the application of contract law principles and understand the importance of adhering to tender document terms. Stay informed about key considerations in bid modifications and security deposit clauses. #LegalAnalysis #TenderProcess #ContractLaw
Facts
- The petitioner participated in the tender process by offering its bid.
- The petitioner requested to modify the price bid due to a mistake in offering the price.
- The Corporation decided to open the price bids in the absence of the petitioner and subsequently disqualified the petitioner.
- The Corporation decided to forfeit the security interest deposit by invoking bank guarantees.
- The petitioner challenged the decision of the Corporation to forfeit the security interest deposit.
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Arguments
- Shri Bhat, Advocate for the petitioner heavily relied on the case of Kailash Nath Associates Vs. Delhi Development Authority.
- He cited Section 74 of the Indian Contract Act, emphasizing that unless loss is proven, the security deposit cannot be forfeited.
- According to Shri Bhat, the purpose of a security deposit is to ensure payment in case of contract non-performance.
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Analysis
- The action of the Corporation in rejecting the bid is in accordance with Clause 14.5 of the tender document.
- The decision of the Corporation is deemed to be in alignment with the terms and conditions specified in the tender document.
- Security deposit may be forfeited if bidder varies or modifies the bid in an unacceptable manner.
- In this case, the bidder did not modify the bid but only corrected an arithmetical error in calculation.
- The communication from the bidder on 03.12.2019 explains a misunderstanding in price calculations.
- The offer was not varied during the validity period
- The last date of submitting the tender was 17.09.2019
- The opening date was also 17.09.2019
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Decision
- The request for modification/variation of the bid offer was made on 03.12.2019.
- Clause 14.5(b) of the tender document shall be applicable in this case.
- The High Court did not commit any error in dismissing the writ petition.
- Special leave petition is dismissed accordingly.
Case Title: POOJA CERATECH PVT. LTD. Vs. OIL AND NATURAL GAS CORPORATION LTD. (2021 INSC 925)
Case Number: SLP(C) No.-019006 / 2021
