The cancellation of a Letter of Acceptance due to an 8-day delay in performance security submission was deemed unreasonable, emphasizing the need for fairness in public contract processes.

JUDGMENT :

Om Prakash Shukla, J.

(1) Heard Shri Chandra Shekhar Sinha, learned Counsel for the petitioner, Shri Abhishek Pathak, learned Counsel for the opposite parties no.1 to 3 and learned Counsel for the Union of India/opposite party no.4.

(2) By means of the present writ petition, the petitioner has invoked the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India, praying inter alia for the following reliefs :-

“(i) Issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 20.12.2024 vide letter No. 23001 / 1 / RP-W-UP / A-K / Pkg-IV / NH-34 / FOB / 25292 passed by the O.P. No.1 through the Regional Officer (O.P. No.2), contained in Annexure No.1 to the writ petition;

(ii) Issue a writ, order or direction in the nature of mandamus commanding the opposite parties to reinstate the tender process of the petitioner firm from the stage it was cancelled and proceed with transparency and fairness;

(iii) Issue writ, order or direction in the nature of mandamus to stay on any further tender process or decision-making related to the project pending final adjudication….”

(3) The factual matrix of the present writ petition would reveal that the National Highways Authority of India (NHAI) had invited bids through e-tendering process for construction of Foot Over Bridge (FOB) on Aligarh Kanpur Section of National Highway- 34 (91) in the State of Uttar Pradesh having its tender ID:2024_NHAI_194363_1, wherein the petitioner firm had participated. The technical bid was opened on 14.6.2024 and although initially vide office order dated 9.7.2024, the petitioner firm was declared “Non-Responsive” and the bid was rejected, however, on an explanation and representation dated 10.07.2024 of the said firm, the competent authority of NHAI i.e. DGM (Tech) RO-UP (West) with the approval of Regional Officer declared the bid of the firm as ‘Responsive’. The financial bid of the petitioner firm was opened by NHAI on 9.8.2024 along with other bidders and NHAI declared the petitioner firm as the lowest bidder i.e ‘L1’. Thus, the Regional Officer UP (West) of NHAI issued letter of Acceptance (LOA) dated 20.8.2024 and notified the petitioner firm that their bid for Construction of Foot Over Bridge (FOB) for the quoted bid price amounting to Rs.5,30,06,222.71 (Rupees Five Crore Thirty Lakh Six Thousand Two Hundred Twenty Two and Seventy One Paisa) has been found to be the lowest evaluated bid.

(4) As per the aforesaid Letter of Acceptance (LOA), the petitioner firm was required to furnish a Bank guarantee of Rs. 53,00,622/- (Fifty Three Lakhs Six Hundred Twenty Two), which was 10% of bid price, towards performance security for a period of three years and as per the terms of Request for Proposal (RFP) since the bid amount was 26.97% below the estimated cost, the petitioner firm was also required to deposit an Additional Performance Security of Rs.36,95,121/- as per Clause 33.1 of RFP valid up to completion of the work, within 10 days of receipt of the Letter of Acceptance. In case of failure, the award was to be deemed to be cancelled and the bid security would be forfeited as per Clause 33.3 of RFP and the petitioner firm would be debarred for a period as specified in Clause 16.7 of RFP. The petitioner firm was also asked to return duplicate of the LOA as an acknowledgment and sign the Contract Agreement within the period prescribed in the bid document.

(5) Accordi