The main legal point established in the judgment is that the contract stood concluded upon acceptance of the bid, and the subsequent signing of documents was only for formal documentation. The court emphasized the importance of inspecting the site conditions before quoting rates and upheld the tendering authority's decision to cancel the bid and forfeit the EMD.

JUDGMENT :

S. Mehta, J.

The instant intra-Court writ appeal takes exception to the judgment and final order dated 25.03.2021 passed by the learned Single Judge whereby the writ petition, being, WP(C) 155/2020 preferred by the respondents herein was accepted and the order dated 02.05.2019 issued by the appellants, cancelling the contract entered into with the respondents (writ petitioners) and forfeiting their Earnest Money Deposit (EMD) to the tune of Rs.51,51,870/-, was interfered with and reversed.

2. The brief facts relevant and essential for disposal of the appeal are noted hereinbelow.

A Tender Notice dated 17.09.2018 was floated by the appellant Northeast Frontier Railway (hereinafter referred to as the Tendering Authority) for carrying out the task of earthwork in forming embankment including Pawakhali station yard, construction of minor bridges including RUB/LHS [Total 44 Nos.], including other miscellaneous ancillary works from Chainage 83.50 Km. to 106.837 Km. between station Pawakhali to Thakurganj in connection with construction of New BG line from Arariya to Galgalia of NF Railway (Construction). The approximate value of work was Rs.1000373270.52 and the earnest money deposit was quantified at Rs.51,51,870/-. The respondents/writ petitioners claim that pursuant to the publication of the tender notice, they formed a joint venture and participated in the tender process by depositing the earnest money as quantified (supra). While the bidders (respondents herein) were waiting for acceptance of their bids and completion of the formalities to conclude the contract in question, to the utter shock and surprise of the joint venture bidders, i.e. the respondents/writ petitioners, a communication dated 02.05.2019 was issued by the tendering authority conveying that not only the contract in question purportedly entered into with the writ petitioners had been cancelled but in addition thereto the EMD had also been forfeited. The said communication/order was challenged by the joint venture bidders/respondents by filing the captioned writ petition, which has been accepted by the learned Single Judge vide order dated 25.03.2021, which is assailed in this writ appeal.

3. We have heard learned counsel appearing for the parties and perused the material available on record.

4. On a perusal of the impugned judgment, it transpires that the reasons which persuaded the learned Single Judge to interfere with the impugned action were that:-

(i) there was no concluded contract inter se between the parties and that there was no reliable material on record to show that the letter of acceptance dated 18.01.2019 was ever delivered to the bidders in writing.

(ii) the endorsement of the postal department that the premises were found closed could not be equated to a refusal which would have a different connotation.

(iii) non-delivery of the communication dated 18.01.2019 on account of the remark of “closed” could not lead to presumption of service and delivery of the letter dated 18.01.2019.

(iv) As per the stipulation in the letter of acceptance dated 18.01.2019, the bidders were required to return the duly signed duplicate copy in all pages so as to constitute a binding contract. Since hardcopy of the letter of acceptance along with the annexures was never served upon the bidders, the parties could not be said to have arrived at a concluded contract. Since there was no contract between the parties, the question of termination could not arise and the EMD could not be forfeited.

5. Having held so, the learned Single Judge proceeded to interfere with and reverse the order dated 02.05.2019 whereby termination of the contract and forfeiture of EMD were directed.

6. Mr. G. Goswami, learned counsel representing the appellants urged that the NIT by itself indicated that the process was being invited as an e-Tender. The joint venture bid of the respondents herein was accepted by the Tendering Authority, i.e. the appellants herein and the letter of acceptance was iss