WP(C)/24988/2024 of M/S SHIVAM CONDEV PVT.LTD, BBSR Vs ODISHA CONSTRUCTION CORPORATION LTD. BBSR on 2 July 2026

J U D G M E N T

---------------------------------------------------------------------------------- Date of hearing and Judgment: 02nd July, 2026 ----------------------------------------------------------------------------------

HARISH TANDON, CJ.

1. The action of the Tendering Authority is sought to be challenged in the instant writ petition, primarily on the ground of arbitrariness and violation of principles of natural justice, even in relation to the cancellation of a tender.

2. The genesis of the instant litigation can be traced from the fact that pursuant to a Notice Inviting Tender (NIT) for “improvement of communication facility along left side embankment of river Baitarani from RD 24.50 Km to RD 72.50 Km (from Ballavi ghat to Tintar ghat) including strengthening of vulnerable reaches”, the petitioner offered his bid and was subsequently declared as the lowest bidder along with another intending bidder. Since both the bidders quoted the same price, lottery was conducted and the petitioner was adjudged as a lucky one to have the contract to be executed in his favour.

3. In terms of Clause-8 of the said Notice Inviting Tender, the successful tenderer has to furnish the Additional Performance Security (APS) either in the shape of Demand Draft (DD) in favour of opposite party No.1 or by Term Deposit Receipt (TDR) pledged in its favour or by Bank Guarantee (BG) from any nationalized/ scheduled bank in India with the counter guarantee by its local branch at Bhubaneswar within seven days from the date of issuance of the Letter of Acceptance (LoA) by the said opposite party. So far as the Bank Guarantee is concerned, the said Clause clearly stipulates that it has to be furnished in the prescribed format (Annexure-C), appended to the said NIT.

4. According to the petitioner, the bank refused to give Bank Guarantee in absence of any Letter of Acceptance issued by opposite party No.1 and having communicated so, the approach was immediately made to the company for doing the needful. The petitioner further alleges that despite the communications having made, neither the Letter of Acceptance was issued by the company nor any opportunity was given before the company took a decision and the committee constituted in this regard recommended for cancellation of the said tender.

5. Mr. Gautam Mukherji, learned Senior Counsel appearing for the petitioner vociferously submits before us that the decision to cancel the tender has a large ramification and at times, deprives the person of his valuable right and often put the contractor to peril, even though, significant investments have already been done. To buttress the aforesaid contention, reliance is placed upon a judgment of the apex Court rendered in case of Subodh Kumar Singh Rathour v. The Chief Executive Officer, reported in (2024) 15

SCC 461. Mr. Mukherji arduously submits that there is no fetter on the High Court to exercise its powers conferred under Article 226 of the Constitution of India, even in a contractual matter, as the State is obligated to act fairly, justly and reasonably, which is sine qua non to the mandate given under Article 14 of the Constitution of India and placed reliance upon a judgment of the apex Court rendered in case of ABL International Limited v. Export Credit Guarantee Corporation of India Limited, reported in (2004) 3 SCC 553.

6. Mr. Mukherjee further submits that any decision to cancel the tender without affording an opportunity to the successful bidder or the person who would be vitally affected by such decision has been held to be violative of the principles of natural justice as it is an ardent duty of the authorities to give an opportunity of hearing. Though several judgments have been placed to buttress the aforesaid stand rendered by the apex Court as well as this Court, we do not find any dissent to such exposition of law. There is no iota of doubt in recapitulating the nuances of the law applicable in this regard that no fetter can be put in exercise of the extraordinary powers and/or jurisdiction by the High Court under Article 226 of the Constitution of India, even in relation to the contractual matters.

7. The apex Court in ABL International Limited (supra) has categorically held that the party should not be relegated to a civil suit as the dispute pertains to a commercial transaction or remained on the anvil of a contract entered into the parties, if the action of the authorities coming within the purview of Article 12 of the Constitution of India is unfair and violates the fundamental ethos of the constitutional rights guaranteed to the citizen under the Constitution of India. Even in a contractual matter, the action of the authority is tested on the fundamental principles of the rights guaranteed under the Constitution, as the authorities cannot act as per their will and deprives a person of its valuable right.

8. It would render this judgment voluminous, if we proceed to decide each of the judgments cited before us, as the fundamental principles enunciated in all the judgments cited before us do not echo in one voice that if the action of the authority is either contrary to the terms and conditions embodied in the tender document or there is lack of fairness, transparency and equality amongst the other tenderers or violates any of the fundamental principles impinging upon the rights guaranteed under the Constitution and above all, the adherence of the legal maxim– audi alteram partem.

It also admits no ambiguity in recapitulating the law so laid down that the power exercised by the High Court under Article 226 is not inhibited or any fetter being put in a contractual matter, provided the broad principles as adumbrated herein above is found eminently or evidently present in the said case.

9. Keeping those principles of law in mind, let us proceed whether the facts involved in the instant case come within the ambit of any of such principles warranting an immediate interference into the action of statutory authority.

As narrated hereinabove, the petitioner having adjudged as the successful bidder is obligated to submit the Additional Performance Security under Clause-8 of the said NIT, either in the form of Demand Draft/Term Deposit Receipt to be placed with opposite party No.1/ Bank Guarantee.

10. The importance of using a ‘slash(/)’ between the three conditions is always regarded as disjunctive and if freedom is given to a party to take recourse to any one of them, which would be regarded as sufficient compliance of the conditions so incorporated therein. Once the authorities have provided three choices/options to the successful bidder, it would be incongruous to suggest that the authorities would place restriction to any one of them, discarding the other. The option is left to the successful bidder and, therefore, imposition of any condition by the authority floating the tender to take recourse to only one out of the others would be regarded as an action tainted with arbitrariness and contrary to the conditions imposed in the said NIT.

11. There is no quarrel to the above aspect as the option is to be chosen by the successful bidder and once any one of the modes provided as an option is resorted to, such action cannot be said to be invalid and/or illegal and above all, contrary to the terms and conditions enshrined therein. We do not find any difficulty in taking into account that the petitioner chose to submit the Additional Performance Security by way of Bank Guarantee and approached his banker for issuance thereof.

12. On a meaningful reading of the language used in Clause-8 of the said NIT, we find that such Additional Performance Security is to be submitted within seven days from the date of issuance of the Letter of Acceptance by the opposite party No.1 and it can be reasonably gathered without any hesitation and/or ambiguity that the said period start ticking from the date of the issuance of the Letter of Acceptance. We do not find any format having prescribed in relation to the Letter of Acceptance, though the format is prescribed for furnishing the Bank Guarantee for the Additional Performance Security (Annexure-C to the NIT).

13. The petitioner relied upon the said letter issued to it on 18th September, 2024 by the opposite party No.1, wherein the price so quoted was vividly reflected in the first paragraph and the second paragraph contained clear and unambiguous words that the petitioner was called upon to submit the Additional Performance Security of an amount so mentioned strictly in terms of Clause-8 of the Notice Inviting Tender within the time so stipulated. Even though there is no reference to acceptance of a bid or Letter of Acceptance in the said letter, but the tenet of the said letter conveys an unequivocal message that the petitioner's bid was accepted and the Additional Performance Security is required to be furnished in terms of Clause-8. If the petitioner has perceived the said letter as the Letter of Acceptance, it creates a hindrance into it to resile or to take a rebound therefrom, which would further be corroborated by a

letter dated 24th September, 2024 issued by the petitioner to the authority in the following:

“Ref: SCPL/OCCL/MD/BBSR/2024-25/260 Date: 24.09.2024.

To

The Managing Director,

Odisha Construction Corporation Ltd.,

Gopabandhu Nagar, Unit-VIII,

Bhubaneswar.

Name of work: “Improvement of Communication facility along left side embankment of river Baitarani from RD 24.50 Km to RD 72.50 Km (from Ballavi ghat to Tintar ghat) including strengthening of vulnerable reaches”.

Re- LOA No.8961/OCC/CW-04/24 dated 18.09.2024.

Dear Sir,

We received with thanks your above LOA dated 18.09.2024 wherein your good office has advised us for deposit of Additional Performance Security (APS) for Rs.10,11,88,301.00 in shape of DD/TDR/Bank Guarantee.

In this context, we state that, we have started the procedures to start the work as soon as possible. Currently we are facing some financial problems.

Therefore, we request you to kindly give us one month extra time to submit the Additional Performance Security.

Thanking you,

Yours sincerely,

For Shivam Condev Pvt. Ltd.

(Authorized Signatory)”

14. It would be manifestly clear from the language used in the said letter that the petitioner perceived the said letter dated 18th September, 2024 as the Letter of Acceptance and also showed his commitment to comply with further action to be taken in terms of Clause-8 of the NIT, i.e., furnishing of Additional Performance Security for a sum as indicated in the said letter dated 18th September, 2024.

15. Interestingly, though the case is made out in the instant writ petition that the bank refused to give the Bank Guarantee as the letter dated 18th September, 2024 does not contain any specific expressions or the words ‘Letter of Acceptance’ but in the letter dated 24th September, 2024, no such plea was indicated rather a further time was sought beyond the stipulated time because of the financial problems.

16. It is a cardinal principle that a person, who participated in the tender, does so with the open eyes and knowing each and every term and condition embodied therein and its implication, in the event the situation so warrants. The petitioner was aware of Clause- 8 of the NIT that in the event he is declared successful bidder, he has to furnish the Additional Performance Security within seven days from the date of the Letter of Acceptance. Once the letter is construed as the Letter of Acceptance, the petitioner is estopped from contending that it is not so. The conduct in the transaction and understanding of the letters communicated to it, if construed as the Letter of Acceptance, the petitioner cannot resile from such stand and engineer a different story of refusal by the bank to give the Bank Guarantee as the same cannot be treated as the Letter of Acceptance.

17. Though the law laid down in the above reports does not admit any ambiguity in its applicability, but such applicability depends upon the facts of the case and the ratio has to be culled out from the context in which it is so used. A little difference in the fact or an additional fact may invite a diametrically opposite decision and, therefore, the Court should be cautious in relying on a judgment without reading into the context in which it is so used.

18. The facts emanating from the record as reflected hereinabove lead to an inescapable conclusion that the petitioner has defaulted in compliance of Clause-8 of the said NIT and, therefore, cannot blame the authorities that they have acted arbitrarily, violation of the principles of natural justice or contrary to the terms and conditions embodied in the said NIT.

19. We, thus, do not find any merit in the instant writ petition and the same is hereby dismissed. The Interlocutory Application(s), if there by any, stands disposed of.

(Harish Tandon)

Chief Justice

(M.S. Raman) Judge

S. Behera Digitally Signed Signed by: SUMANTA BEHERA Designation: Senior Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 08-Jul-2026 12:37:51 Signature Not Verified