The petitioner herein is a Public Sector Undertaking. In pursuant to the decision made to construct a compound wall, the petitioner floated a tender inviting bids. The value of the contract was Rs.13,91,98,977/- to be completed within nine months from the date of advice to commence the work.

2. The respondent emerged as the lowest bidder and thus, became successful. A Fax of Acceptance dated 22.11.2010 was issued to the respondent by the petitioner requiring it to mobilize resources. Thereafter a Letter of Acceptance was issued on 01.12.2010. The site was handed over to the respondent on 06.12.2010.

3. The following are the relevant clauses contained in Letter of Acceptance dated 22.11.2010, Special Conditions of Contract and the General conditions of Contract.

“12.0 FIRM PRICE:

Subject to Clause 11.2 above, the Contract Price shall remain FIRM and fixed till the completion of work and no escalation in prices on any account shall be admissible to the CONTRACTOR.”

This clause clearly specifies that the contract shall remain 'firm' till the completion of the work with no room for escalation of price under any contingencies.

“56.0 SPECIAL INSTRUCTIONS AND INFORMATION TO THE BIDDER