The discretion to grant extensions for Performance Security submission in tender processes lies with the managing authority; delays justify annulment.

JUDGMENT :

TUSHAR RAO GEDELA, J.

1. Present writ petition has been filed under Article 226 of the Constitution of India, 1950 seeking setting aside of annulment notice dated 08.07.2025 issued by the respondent no.1/National Highways and Infrastructure Development Corporation Limited (hereinafter referred to as ‘NHIDCL’) in respect of the tender bearing no. NHIDCL/RO/A&N/Package-IIIB/US/2nd/FY24-25/06 dated 02.04.2025. The petitioner also seeks direction to the respondents to reconsider the petitioner's case that led to the delay in submission of the Performance Security and further direct respondent no. 1/NHIDCL to allow the petitioner to work on the same bid on the actual estimate given by the Electricity Department in place of the wrong estimate attached by the respondent no. 1/NHIDCL.

2. Brief facts as culled out from the petition are as under:

a) The respondent no. 1/NHIDCL had issued the Notice Inviting Tender (NIT) in April, 2025 with regard to works of “Shifting of 33 kV and 11 kV electrical utilities and the construction of power lines along NH-4 from Km155.00 to Km181.00 (from the end of Jarawa to Rangat) in the Baratang and Rangat feeder areas of Middle Andaman, in the Union Territory of Andaman and Nicobar Islands, based on percentage rate basis” bearing Contract Package No. NHIDCL/RO/A&N/Package-IIIB/US/2nd/FY24-25/06 in relation to the works of the Electrical Department of Andaman and Nicobar.

b) The petitioner was declared the successful bidder and was subsequently issued a Letter of Acceptance (LoA) dated 16.05.2025.

c) It is the case of the petitioner that upon visiting the office of the respondent no.1/NHIDCL in Andaman and Nicobar Islands, the petitioner was informed that the Bill of Quantities (BOQ) relied upon by the petitioner was different from the BOQ issued by the Electrical Department of Andaman and Nicobar to the respondent no.1/NHIDCL for issuance of NIT.

d) Thereafter, the petitioner vide letter dated 26.05.2025 addressed the issue of BOQ, BOQ rates and execution cost for the subject project to the respondent no.1/NHIDCL and requested intervention in processing a change of scope (COS). In response, the respondent no.1/NHIDCL vide its reply dated 05.06.2025 clarified that the Electrical department of Andaman and Nicobar Islands is the authorized authority for the preparation of cost estimates and scope delineation and that all cost components and items rates are based on the utility’s standard schedules, norms and practices. Vide the said letter, the petitioner was also requested to furnish Performance Security within 10 (ten) days of receipt of the LoA.

e) Pursuant to the said response, petitioner again sent a letter dated 12.06.2025 to the respondent no.1/NHIDCL seeking extension for depositing the Performance Security. The respondent no.1/NHIDCL vide its reply dated 20.06.2025 granted extension to the petitioner for depositing the Performance Security till 26.06.2025 while explicitly informing the petitioner that the deadline is final, considering the urgency of the project and any further correspondence or request for extension of time on behalf of the petitioner would not be entertained.

f) The petitioner yet again sent a representation dated 24.06.2025 requesting an extension of 60 days for depositing the Performance Security in accordance with Clause No. 2.21 of the RFP.

g) It is the case of the petitioner that however, a debarment notice dated 01.07.2025 was issued without any show cause notice or granting any opportunity of hearing to the petitioner. The same was challenged by the petitioner by filing of a Writ Petition bearing W.P.(C) 9438 of 2025 wherein this Court vide order dated 09.07.2025 quashed the said debarment order with liberty to the respondent no.1/NHIDCL to issue a show cause notice to the petitioner. However, in the meanwhile, the respondent no.1/NHIDCL had already issued an annulment notice dated 08.07.2025 thereby cancelling the said RFP due to non-submission of the Performance Secur