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of <h1>Supreme Court Rules Bank Guarantee Enforceable, Reverses High Court on Bid Security Forfeiture in Contractual Dispute.</h1> <h3>NATIONAL HIGHWAY AUTHORITY OF INDIA Versus GANGA ENTERPRISES & ANR.</h3> NATIONAL HIGHWAY AUTHORITY OF INDIA Versus GANGA ENTERPRISES & ANR. - 2003 AIR 3823, 2003 (3) Suppl. SCR 114, 2003 (7) SCC 410, 2003 (1) Suppl. JT 85, ... Issues Involved:The issues involved in this case are the forfeiture of bid security, withdrawal of bid offer, enforceability of bank guarantee, and the jurisdiction of a Writ Court in contractual disputes.Forfeiture of Bid Security:The appellant issued a tender notice for toll collection, requiring bid security of Rs. 50 lakhs. The respondent withdrew the bid before the expiry of 120 days, leading to the appellant encashing the bank guarantee. The High Court allowed the writ petition for refund, stating that no completed contract existed. However, the Supreme Court held that forfeiture of bid security was valid as it was given to ensure non-withdrawal of the offer within the specified period.Withdrawal of Bid Offer:The respondent withdrew the bid before acceptance, citing incomplete toll plazas by the appellant. The Supreme Court ruled that the bid security was forfeited rightfully as it was meant to prevent withdrawal within the stipulated period. The delay in acceptance did not justify the respondent's withdrawal of the offer.Enforceability of Bank Guarantee:The bank guarantee provided for enforcement if the bid was withdrawn within 120 days, which the appellant rightfully invoked. The Supreme Court emphasized that a bank guarantee is a separate contract, and courts should not interfere unless against the guarantee's terms or in case of fraud. The invocation of the bank guarantee was in accordance with its terms, making the refund ordered by the High Court unjustified.Jurisdiction of Writ Court in Contractual Disputes:The High Court allowed the writ petition, stating that the bank guarantee's invocation was illegal. However, the Supreme Court held that contractual disputes cannot be addressed under Article 226 of the Constitution. The petition should have been dismissed on grounds of maintainability, as disputes regarding contract terms fall outside the Writ Court's jurisdiction.In conclusion, the Supreme Court set aside the High Court's judgment, allowing the appeal and dismissing the writ petition. The forfeiture of bid security was upheld, emphasizing the purpose of bid security and the enforceability of the bank guarantee as per its terms. The jurisdiction of a Writ Court in contractual disputes was clarified, highlighting that such disputes cannot be entertained under Article 226 of the Constitution.
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