M/S Trading Engineering vs. Union Of INDIA

Held

The Court allowed the writ petition, quashing the impugned letters dated September 5, 2025, and September 19, 2025. The Court found that Clause 18 of the Tender Document clearly stipulated a bid validity of 75 days and did not contain any provision for extending this period. Although the petitioner had extended the bid validity twice at the respondents' request, the Court held that the respondents could not take undue advantage of these bona fide extensions. The petitioner had expressly refused a further extension on September 5, 2025, via email, which was received by the respondents before they accepted the bid on the same day. Therefore, the Court concluded that the acceptance of the bid beyond the initial 75-day period, and after the petitioner's refusal to extend, was dehors the terms and conditions of the NIT. The petitioner was not bound to extend the validity period beyond 75 days and was free to withdraw its bid. Consequently, the EMD amount was to be refunded to the petitioner within 30 days, with interest at 6% per annum if not paid within that period.

Facts

The petitioner, M/s Trading Engineering, filed a writ petition challenging the acceptance of its bid by the respondents (Union of India and others) on September 5, 2025, beyond the stipulated 75-day validity period. The petitioner had submitted a bid for a construction project at IISER, Bhopal. Initially, the bid validity was for 75 days from the technical bid opening. The petitioner extended this validity twice at the respondents' oral request, first by one month and then up to September 5, 2025. On September 2, 2025, the respondents requested a further one-month extension. The petitioner, anticipating GST rate revisions, declined this extension via email on September 5, 2025, at 12:10 PM, which was received by the respondents at 12:13 PM. Despite September 5, 2025, being an official holiday, the respondents accepted the bid at 5:35 PM and demanded a bank guarantee. Subsequently, the respondents threatened to forfeit the petitioner's Earnest Money Deposit (EMD) for declining to execute the bank guarantee. The High Court initially restrained the respondents from encashing the bank guarantee.

Key Issues

1. Whether the acceptance of the petitioner's bid on September 5, 2025, was valid, considering the bid validity period as per Clause 18 of the Tender Document and subsequent extensions. Petitioner's arguments: The petitioner contended that Clause 18 of the Tender Document stipulated a bid validity of 75 days and did not provide for extensions. While the petitioner extended the validity twice at the respondents' request, it expressly refused a third extension on September 5, 2025, before the respondents accepted the bid. The petitioner argued that it was not bound to extend the validity beyond 75 days and was free to withdraw its bid. The acceptance on a holiday, after the petitioner's refusal to extend, was illegal. Respondents' arguments: The respondents argued that the petitioner voluntarily extended the bid validity up to September 5, 2025, and therefore, its attempt to withdraw the offer on that date could not be entertained. They claimed the Letter of Acceptance (LOA) was issued on September 5, 2025, and the offer was valid up to midnight of that day. They also stated that the petitioner failed to submit the performance guarantee as per Clause 18, leading to the forfeiture of EMD.