Page No.# 1/5 GAHC010140622026 undefined THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WA/244/2026 THE FOOD CORPORATION OF INDIA AND 4 ORS. REPRESENTED BY ITS GENERAL MANAGER, REGIONAL OFFICE, ASSAM REGION, 3RD FLOOR, M.T. TOWER, PALTAN BAZAR, GUWAHATI- 08 2: THE GENERAL MANAGER (REGION) FOOD CORPORATION OF INDIA REGIONAL OFFICE ASSAM REGION 3RD FLOOR M.T. TOWER PALTAN BAZAR GUWAHATI- 08 3: THE MANAGER FOOD CORPORATION OF INDIA FCI DIVISIONAL OFFICE GUWAHATI MITRA BUILDING ASHRAM ROAD ULUBARI GUWAHATI- 07 4: THE ASSISTANT GENERAL MANAGER (CONTRACT) FOOD CORPORATION OF INDIA REGIONAL OFFICE ASSAM REGION 3RD FLOOR M.T. TOWER PALTAN BAZAR GUWAHATI- 08 5: THE DIVISIONAL MANAGER FCI DIVISIONAL OFFICE GUWAHATI Page No.# 2/5 MITRA BUILDING ASHRAM ROAD ULUBARI GUWAHATI- 0 VERSUS G.B. LOGISTICS COMMERCE LIMITED AND 2 ORS. REPRESENTED BY MANOJ RATHI, AGED ABOUT 55 YEARS, S/O LATE SHIV KISHAN RATHI, HAVING REGISTERED OFFICE AT STAND ROAD, 5TH FLOOR, ROOM NO. 508A, KOLKATA- 700001 2:THE UNION OF INDIA REPRESENTED BY THE COMMISSIONER AND SECRETARY TO THE GOVT. OF INDIA MINISTRY OF HOME AFFAIRS FOOD AND PUBLIC CONSUMER AFFAIRS FOOD AND PUBLIC DISTRIBUTION GOVERNMENT OF INDIA KRISHI BHAWAN DR. RAJENDRA PRASAD ROAD NEW DELHI- 110001 3:THE BRANCH MANAGER HDFC BANK LTD BUILDWELL COMPOUND NEAR DARWIN CAMPUS BESIDE NEEPCO BHAWAN ZOO ROAD GUWAHATI- 781005 For the appellants : Mr. B.K. Singh, Advocate For the respondents : Mr. P.K. Goswami, Sr. Advocate Assisted by Mr. B.P. Borah, Advocate for the respondent No.1 Page No.# 3/5 – B E F O R E – HON’BLE THE CHIEF JUSTICE MR. ASHUTOSH KUMAR HON’BLE MR. JUSTICE ARUN DEV CHOUDHURY 22-07-2026 (Ashutosh Kumar, C.J.) We have heard Mr. B.K. Singh, learned Advocate for the appellants/Food Corporation of India and four others and Mr. P.K. Goswami, learned Senior Advocate for the respondent No.1. 2. This case involves a tender for a road transport contract awarded by the appellants to the respondent No.1 for transporting food grains from one depot to other via a weighbridge with a contract value of approximately Rs.4.83 Crores. This contract was for a period of two years. The respondent No.1 was obligated under the contract to submit security deposits, including 15% bank guarantee within a specific time. However, as it appears from the records, because of some technical glitch in the bank, the bank guarantee was issued but only a day later than the last date fixed. The respondent No.1 provided the penalty also for the delayed submission of the bank guarantee. A show-cause notice was issued by the appellant/Food Corporation of India and the contract with the respondent No.1 was terminated on 23.02.2026. Simultaneously, the bank guarantee was forfeited and the respondent No.1 was debarred for two years. The appellant/Food Corporation of India chose to initiate fresh tender at the risk and cost of the respondent No.1. Page No.# 4/5 3. This decision was challenged by the respondent No.1 claiming force majeure/technical glitch; substantial compliance and, on top of it, the acceptance of the bank guarantee by the appellant/Food Corporation of India creating estoppel and later rejecting as also terminating the contract in complete violation of the principles of natural justice. 4. The learned Single Judge vide the impugned judgment quashed the termination of contract; directed for restoration of the contract/Letter of Acceptance and also directed for return of the forfeited amount with interest on the bank guarantee. However, the respondent No.1 was directed to submit a fresh bank guarantee which has already been given by the respondent No.1. 5. The appellant/Food Corporation of India has challenged the afore- noted judgment of the learned Single Judge on the ground that the timeline for submission of bank guarantee is a mandatory condition which could not have been over-looked. 6. An issue was also raised whether a glitch in the banking server would technically qualify as a valid excuse for delay, given the explicit tender disclaimer that the bidder is responsible for timely payment/deposit of FCI. 7. The appellant/Food Corporation of India also has argued that there were adequate grounds in the show-cause notice and the respondent No.1 was given ample opportunities to explain its cause before termination, debarment and forfeiture. 8. After having heard the learned counsel for the parties, we find that the appellant had accepted the bank guarantee on 15.01.2026 without Page No.# 5/5 immediate reservation of rights which amounts to extension of the period of submission of the bank guarantee. 9. In that background, the termination of contract was absolutely arbitrary, unreasonable and irrational. If viewed in that back ground, there was no breach of any obligation thereafter. That apart, we find that in the event of no loss having been caused to the appellant/Food Corporation of India at that stage, such drastic measure was absolutely disproportionate. 10. Precisely for these reasons, the learned Single Judge passed an order quashing the termination, restoring the Letter of Acceptance, setting aside the forfeiture and directed for return of the bank guarantee along with the interest. 11. We find that fresh bank guarantee as directed by the learned Single Judge has already been submitted by the respondent No.1. 12. Finding no merit in this appeal, we dismiss it in limine. JUDGE CHIEF JUSTICE Comparing Assistant