SOUTH EASTERN COALFIELDS LTD. & ORS. versus M/S. S. KUMAR’S ASSOCIATES AKM (JV)

SOUTH EASTERN COALFIELDS LTD. & ORS. versus M/S. S. KUMAR’S ASSOCIATES AKM (JV)

Because the respondent did not furnish the required performance security nor sign the Integrity Pact as mandated by the NIT and LoI, and no work order or formal contract was executed, no concluded contract arose between the parties; accordingly appellants could only forfeit the bid security and could not recover the...

Source-derived case information.

Parties
Appellant: South Eastern Coalfields Ltd. & Ors.; Respondent: M/s. S. KUMAR’s ASSOCIATES AKM (JV)
Jurisdiction
India
Judgment Date
23 July 2021
Procedural Posture
Civil Appeal / Judgment on Appeal From High Court
Outcome
Appeal dismissed
Legal Topics
Letter of Intent, Performance Security, Integrity Pact, Condition Precedent Vs Condition Subsequent, Forfeiture of Bid Security, Termination for Non Compliance
Contract Law Tenders Public Procurement Letter of Intent Performance Security Integrity Pact Condition Precedent Vs Condition Subsequent Forfeiture of Bid Security +1 more

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Parties

South Eastern Coalfields Ltd. & Ors.

Appellant

M/s. S. KUMAR’s ASSOCIATES AKM (JV)

Respondent

Procedural Posture

Civil Appeal / Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether a Letter of Intent and mobilisation at site without furnishing performance security and signing Integrity Pact constituted a concluded binding contract between the parties
  2. 2 Whether furnishing performance security and signing Integrity Pact were conditions precedent or conditions subsequent to formation of contract
  3. 3 Whether appellants could recover the differential amount from the respondent after termination

Ratio Decidendi

Because the respondent did not furnish the required performance security nor sign the Integrity Pact as mandated by the NIT and LoI, and no work order or formal contract was executed, no concluded contract arose between the parties; accordingly appellants could only forfeit the bid security and could not recover the differential amount; the appeal was dismissed.

Court Disposition

Appeal dismissed

Orders

  • Forfeiture of the bid security amount upheld
  • Appellants directed to deduct the bid security amount out of the Rs.10,00,000 deposited by the respondent and to refund the balance to the respondent