Authority: High Court at Calcutta (Constitutional Writ Jurisdiction)

Order Date: 05.10.2026

Case Overview

  • Parties: Corroganon India Private Limited (petitioner) vs. State of West Bengal & others, including the Hooghly River Bridge Commissioners (respondents).
  • Nature of Proceeding: Writ petition (W.P.O. 2474 of 2022) challenging a memo dated 02.12.2021 that ordered forfeiture of the petitioner’s Earnest Money Deposit (EMD) of Rs 73,97,650.
  • Background:
  • On 18.08.2016 the respondent No. 2 authority issued a Notice Inviting e‑Tender (NIET) for construction of two right‑turn flyovers on Kona Expressway.
  • The petitioner participated, was declared the successful bidder, and received a Letter of Acceptance‑cum‑Work Order on 18.11.2016 (respondent No. 5 authority).
  • The petitioner wrote on 05.12.2016 requesting to step down from the tender.
  • On 07.12.2016 the respondent issued a termination letter stating the petitioner had neither deposited performance security nor executed the agreement, invoking the Instruction to Bidders and terminating the contract with immediate effect.
  • The petitioner repeatedly sought refund of the EMD from 15.12.2016 to 19.07.2021.
  • On 02.12.2021 the respondents issued a memo forfeiting the EMD, which the petitioner challenged.
  • Legal Arguments:
  • Petitioner (Adv. Jishnu Chowdhury): Asserted that the acceptance letter created a contract governed by Section 74 of the Indian Contract Act; argued that forfeiture required a specific pleading of loss and damages, which was absent; cited Dolphin Suppliers Pvt. Ltd. vs. Union of India (2025) and several Supreme Court decisions (Security Engg., MBL Infrastructure, Shree Coal Enterprises, Kailash Nath Associates) to support the view that without proof of loss, forfeiture is unlawful.
  • Respondent (Adv. Abhratosh Majumdar): Relied on Clauses 15.6, 31, 32, 33, 34 of the Instruction to Bidders, emphasizing that failure to sign the agreement and furnish performance security within seven days automatically triggers forfeiture; cited Supreme Court rulings in National Highways Authority of India vs. Ganga Enterprises (2003), NTPC Ltd. vs. Ashok Kumar Singh (2015), and State of Haryana vs. Malik Traders (2011) affirming the enforceability of such forfeiture clauses.
  • Key Provisions Examined:
  • Clause 15.6: Allows forfeiture of bid security/EMD if the successful bidder withdraws the bid during validity or fails to sign the agreement or furnish performance security within the stipulated time.
  • Clause 31: Defines the documents forming the agreement, including the Letter of Acceptance.
  • Clause 32: Requires furnishing a performance security of 7.5% of the contract price within seven days of award.
  • Clause 33: States that non‑compliance with Clauses 31 or 32 constitutes grounds for annulment of the award and forfeiture of the bid security.
  • Clause 34: Provides that failure to commence work within seven days of the notice to commence also leads to forfeiture.
  • Supreme Court Precedents Cited:
  • National Highways Authority of India (2003) – upheld forfeiture of bid security when the successful bidder fails to furnish performance security or sign the agreement.
  • Malik Traders (2008) – affirmed that a bidder who withdraws after acceptance is liable to forfeit the security despite the right to withdraw an offer under Section 5 of the Contract Act.
  • Subsequent decisions (NTPC Ltd., etc.) reiterated the same principle.
  • The Court distinguished Dolphin Suppliers (2025) and other cited cases as factually different, noting they dealt with e‑auctions or pandemic‑related disruptions, not the present tender scenario.

Final Outcome

  • The Court found no merit in the petition and dismissed it.
  • The interim order (if any) was vacated.
  • All pending interlocutory applications were dismissed.
  • No order as to costs was made.
  • Parties may obtain a certified copy of the judgment upon request.

Topics: Earnest Money Deposit, Tender Forfeiture, Contract Law