Tender conditions must be enforced as written; exemption under land reform law did not postpone bank guarantee compliance.

In a tender dispute, the SC held that an exemption notification under the Kerala Land Reforms Act was not a condition precedent to the bidder's obligation to furnish the bank guarantee and complete the tender formalities; the tender had to be enforced as drafted, so the High Court was wrong to read in a postponed compliance requirement. The Court further held that Section 87 did not make the tender contract unenforceable or void, because that provision did not apply at the stage of tender confirmation and guarantee compliance, and no illegality in the tender process attracted Section 23 of the Contract Act. The cancellation of the bidder's confirmation letters was therefore upheld.

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Issues: (i) Whether the notification granting exemption under Section 81(3)(b) of the Kerala Land Reforms Act, 1963 was a condition precedent to the bidders' obligation to furnish bank guarantee and complete the tender requirements; (ii) Whether the High Court was justified in treating Section 87 of the Kerala Land Reforms Act, 1963 and the absence of exemption as rendering the tender contract unenforceable or void.

Issue (i): Whether the notification granting exemption under Section 81(3)(b) of the Kerala Land Reforms Act, 1963 was a condition precedent to the bidders' obligation to furnish bank guarantee and complete the tender requirements.

Analysis: The tender conditions required the successful bidder to furnish bank guarantees within ten days of confirmation, failing which the tender would stand cancelled and the earnest money forfeited. The record showed that the parties knew of the proposed exemption process, but the tender terms did not make prior issuance of the exemption notification a precondition to acceptance of bids or to furnishing of the bank guarantee. The contract had to be read as drafted, and the Court declined to add an implied term postponing compliance until exemption was granted.

Conclusion: The exemption notification was not a condition precedent to compliance with the tender conditions, and the High Court was wrong in treating it as such.

Issue (ii): Whether the High Court was justified in treating Section 87 of the Kerala Land Reforms Act, 1963 and the absence of exemption as rendering the tender contract unenforceable or void.

Analysis: Section 87 concerns surrender of excess land after acquisition and was found inapplicable to the stage of tender, confirmation, and furnishing of bank guarantee. The Court also held that Section 23 of the Indian Contract Act, 1872 did not assist the case because there was no illegality in the tender process itself, and courts cannot rewrite contractual terms by importing administrative fairness into a concluded commercial arrangement. The principles governing tender matters required adherence to the declared conditions, and the unsuccessful furnishing of bank guarantee attracted the contractual consequence stipulated in the tender.

Conclusion: Section 87 did not render the contract unenforceable, and the cancellation of the bidder's confirmation could not be invalidated on that basis.

Final Conclusion: The tender conditions had to be enforced as written, the cancellation of the confirmation letters was valid, and the judgment of the High Court was set aside in favour of the appellant.

Ratio Decidendi: Courts do not imply or postpone essential tender conditions in a commercial bidding process, and statutory provisions must be applied according to their true scope without rewriting the contract.

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