1. By this petition filed under section 34 of the Arbitration & Conciliation Act, 1996 (for short the said Act), the petitioners seek to impugn the arbitral award dated 26th October, 2012 made by the learned arbitrator allowing the claims made by the respondents. Some of the relevant facts for the purpose of deciding this petition are as under:

2. The petitioners were the original respondents before the learned arbitrator. The respondents herein were the original claimants before the learned arbitrator.

3. Some time in the year 2011, the petitioners floated 16 tenders for the supply, construction and commissioning of the sub-transmission lines, power transformers etc. for different parts of Maharashtra. The last date for submission of e-bids was 21st September, 2011. The respondents submitted the e-bids in respect of the 3 tenders which were in respect of Amravati Zone, Aurangabad – Nanded Zone and Baramati Zone on 21st September, 2011 i.e. within time stipulated for submission of the e-bids. The bids were required to be submitted in two parts : (a) technical bid and (b) price bid.

4. Under clause 19.1 of the bid conditions, a bidder was required to furnish as part of its technical proposal, bids securities for the amount designated in the bid data in each tender. The bid security could be furnished at the option of the bidder either in the form of demand draft or an unconditional bank guarantee. The respondents furnished three bank guarantees of Axis Bank Limited, Secunderabad (A.B.) for a total sum of Rs.4,48,42,000/-. The said three bank guarantees were valid upto 31st January, 2012. Clauses 19.4, 19.5 and 19.6 of the bid conditions with reference to the bank guarantee are extracted as under:-

“19.4 : The bid security of the unsuccessful bidders will be returned as promptly as possible, after award and signing of the contract agreement or expiration of the period of bid validity, whichever is earlier ;

19.5 : The bid security of the successful bidder will be returned when the bidder has signed the contract agreement and furnished the required security deposit.

19.6 : The bid security may be forfeited;

c) If the bidder withdraws its bid, except that written notice of the withdrawal of bid is received by the employer prior to the deadline for submission of bids;”

5. A relevant part of one of such bank guarantee is extracted as under:-

“The Bank binds himself, its successors and assigns by these presents. This guarantee will be payable at our branch office at Axis Bank Limited, Credit Management Centre (CBO), Ground Floor, Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai – 400025, SEALED with the Common Seal of the said Bank this 20th day of September, 2011.

THE CONDITIONS of this obligation are:

(1) if the Bidder withdraws his Bid during the period of Bid validity specified in the Form of Bid; or

(2) if the Bidder refuses to accept the correction of errors in his Bid; or

(3) if the Bidder is determined at any time prior to award of contract to have engaged in corrupt or fraudulent practices in competing for the contract; or

(4) if the Bidder, having been notified of the acceptance of his Bid by the Employer during the period of Bid validity:

(a) fails or refuses to execute the Form of Contract Agreement in accordance with the Instructions to Bidders; if required; or

(b) fails or refuses to furnish the Security deposit, in accordance with the Instructions to Bidders;

We undertake to pay to the Employer up to the above amount upon receipt of its first written demand, without the Employer having to substantiate his demand, provided that in its demand the Employer will note that the amount claimed by him is due to him owing to occurrence of one or all of the above conditions, specifying the occurred condition or conditions. This Guarantee will remain in force up to and including the date 118 days after the deadline