Page No.# 1/38 GAHC010055192026 2026:GAU-AS:8922 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/1619/2026 GB LOGISTICS COMMERCE LIMITED REP. BY MANOJ RATHI , AGED 55 YRS, S/O- LATE SHIV KISHAN RATHI, HAVING REGD OFFICE AT STAND ROAD, 5TH FLOOR, ROOM NO-508A, KOLKATA, PIN-700001 VERSUS THE UNION OF INDIA AND ORS REP. BY THE SECRETARY , MINISTRY OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION , GOVT. OF INDIA, KRISHI BHAWAN, DR. RAJENDRA PEASAD ROAD, NEW DELHI-01 2:THE FOOD CORPORATION OF INDIA REP. BY ITS GM REGIONAL OFFICE ASSAM REGION 3RD FLOOR MT TOWER PALTAN BAZAR GUWAHATI-08 3:THE GENERAL MANAGER (REGION) FCI REGIONAL OFFICE ASSAM REGION 3RD FLOOR MT TOWER PALTAN BAZAR GUWAHATI-08 4:THE MANAGER FCI Page No.# 2/38 DIV. OFFICE GUWAHATI MITRA BUILDING ASHRAM ROAD ULUBARI GUWAHATI-07 5:THE ASTT. GENERAL MANAGER FCI REGIONAL OFFICE ASSAM REGION 3RD FLOOR MT TOWER PALTAN BAZAR GUWAHATI-08 6:THE DIVISIONAL MANAGER FCI DIV. OFFICE GUWAHATI MITRA BUILDING ASHRAM ROAD ULUBARI GUWAHATI-07 7:THE BRANCH MANAGER HDFC BANK LTD. BUILDWELL COMPOUND NEAR DARWIN CAMPUS BESIDE NEEPCO BHAWAN ZOO ROAD GUWAHATI-0 BEFORE HONOURABLE MR. JUSTICE DEVASHIS BARUAH For the Petitioner(s) : Mr. P. K. Goswami, Sr. Advocate Mr. B. P. Borah, Advocate For the Respondent(s) : Mr. K. Gogoi, CGC Mr. B. K. Singh, SC, FCI Mr. M. Smith, Advocate Page No.# 3/38 Date on which judgment is reserved : NA Date of pronouncement of judgment : 18.06.2026 Whether the pronouncement is of the Operative part of the judgment? : Yes Whether the full judgment has been Pronounced? : NA JUDGMENT AND ORDER (ORAL) Heard Mr. P. K. Goswami, the learned Senior Counsel assisted by Mr. B. P. Borah, the learned counsel appearing on behalf of the Petitioner. Mr. K. Gogoi, the learned counsel appears on behalf of the Union of India; Mr. B. K. Singh, the learned counsel appears on behalf of the Respondent Nos.2 to 6 and Mr. M. Smith, the learned counsel appears on behalf of the Respondent No.7. PREFACE 2. The Petitioner herein which is a Company registered under the provisions of the Companies Act, 2013 has assailed the order dated 23.02.2026 issued by the Respondent No.3. The Petitioner has also assailed the consequential actions taken on the basis of the impugned order dated 23.02.2026 whereby the part of the Security Deposit so submitted on 23.12.2025 was forfeited and the remaining part which relates to a Bank Guarantee of Page No.# 4/38 Rs.70,65,000/- was invoked and the amount appropriated by the Respondents. Additionally, the Petitioner had assailed the issuance of the Notice Inviting Tender dated 05.03.2026. BRIEF FACTS OF THE CASE 3. A Notice Inviting E-Tender dated 29.08.2025 was issued by the Respondent No.3 inviting bids from eligible contractors for Road Transport Contract for transportation of goods from Ex-RH Salchapara to FSD Badarpurghat via weighbridge having an estimated value of Rs.4,83,00,000/-. 4. The said Notice Inviting E-Tender is regulated by various terms and conditions. Part-A contains the Technical Bid. This Part-A is hereinafter referred to as ‘the Bid Document’. In the Bid Document, there is a Chapter with the heading “General Information to Tenderers”. This Chapter for the same of convenience is hereinafter referred to as “GITT”. There is an Annexure-I which forms the part of the Bid Document. The heading of the Annexure-I reads as “Terms and Conditions governing contracts for Transportation of Food grains from Depots/Mandis/Railheads etc.” This Document hereinafter referred to as “Annexure-I”. 5. Clause 6 of the GITT is the provision dealing with earnest money and it is stipulated that earnest money would be 2% Page No.# 5/38 value of the contract, i.e. amounting to Rs.26,91,432/-. It is also relevant to take note of that Clause 6(iii) stipulated that the Micro & Small Enterprises would be exempted from payment of the earnest money deposit. 6. Clause 7 of the GITT stipulates the conditions pertaining to Security Deposit. Sub-clauses (i), (ii), (iii), (iv) and (v) of Clause 7 of the GITT being relevant are reproduced herein under:- “7. (i) The successful Tenderer shall furnish, within fifteen working days of acceptance of his tender, a Security Deposit for the due performance of his obligations under the contract. The Security Deposit shall consist of: (a) A sum equivalent to 5% of the value of the Contract submitted electronically through NEFT/RTGS/Other electronic means in favour of the General Manager, Food Corporation of India. The contractor at his option may deposit 50 (fifty) percent of this amount within fifteen working days of acceptance of his tender while the balance 50 (fifty) percent may be paid by the contractor by deductions at the rate of 10 (ten) per cent from the admitted bills. The Security Deposit shall not earn any interest. (b) Another sum equivalent to 10% of the value of contract, in the form of an irrevocable and unconditional Bank Guarantee (including e-Bank Guarantee) issued by 'Scheduled Commercial Bank' notified by RBI (excluding all Urban/Rural/State Co- Operative banks and Gramin Banks) in the format prescribed in Page No.# 6/38 Appendix-IV which shall be enforceable till six months after the expiry of the contract period. (c) If applicable, an additional sum equivalent to 10% of the value of the contract (in addition to a & b above), in terms of an undertaking provided by the tenderer for relaxation of eligibility conditions, in the form of an irrevocable and unconditional Bank Guarantee (including e-Bank Guarantee) issued by 'Scheduled Commercial Bank' notified by RBI (excluding all Urban/Rural/State Co-Operative banks and Gramin Banks) in the format prescribed in Appendix-V which shall be enforceable till six months after the expiry of the contract period. (ii) In case of failure of tenderer to deposit the Bank Guarantee as stipulated in clause 7(i) (b) & (c) within 15 working days of acceptance of his tender, further extension of 15 working days can be given subject to levy of penalty @ 1% of the whole amount of the Security Deposit. (iii) The Security Deposit furnished by the Tenderer will be subject to the terms and conditions given in the Tender and the Corporation will not be liable for payment of any interest on the Security Deposit. (iv) In the event of the Tenderer's failure, after the communication of acceptance of the tender by the Corporation, to furnish the requisite Security Deposit under clause 7(i) a by the due date or requisite Security Deposit in the form of Bank Guarantee under 7(i) b & 7(i)c including extension period (applicable to submission of BG Page No.# 7/38 only), his Contract shall be summarily terminated besides forfeiture of the Earnest Money and the Corporation shall proceed for appointment of another contractor. Any losses or damages arising out of and incurred by the Corporation by such conduct of the contractor will be recovered from the contractor, without prejudice to any other rights and remedies of the Corporation under the Contract and Law. The contractor will also be debarred from participating in any future tenders of the Corporation for a period of two years. After the completion of prescribed period of two years, the party may be allowed to participate in the future tenders of FCI provided all the recoveries/dues have been effected by the Corporation and there is no dispute pending with the contractor/party. (v) If the successful tenderer had previously held any contract and furnished security deposit, the same shall not be adjusted against this tender and a fresh security deposit will be required to be furnished.” 7. Now let this Court take note of Annexure-I. Clause IX of the Annexure-I stipulates about the Security Deposit. It is clearly mentioned in Clause IX(a) of Annexure-I the reason why the Security Deposit is required to be submitted by the Contractor. It is mentioned that Security Deposit is required for the due, proper and complete discharge of all the obligations by the Contractor. What the Security Deposit would comprise of had been mentioned in Sub-clauses (i), (ii) and (iii) of Clause IX(a) of Page No.# 8/38 Annexure-I which is pari materia to Clause 7(i) of the GIIT. Clauses IX(b), IX(c), IX(d), IX(e) and IX(f) of Annexure-I being relevant are reproduced herein under:- “(b) In case of failure of tenderer to deposit the Bank Guarantee as stipulated in clause 7(i) (b) & (c) within 15 working days of acceptance of his tender, further extension of 15 working days can be given subject to levy of penalty @ 1% of the whole amount of the Security Deposit. (c) Upon satisfactory performance of the services and on completion of all the obligations by the contractor under the terms of the contract and on submission of "Compliance Certificate/Confirmation of deposit of EPF by way of affidavit duly executed by the Employer (i.e. Contractor/Bidder)/No Due Certificate" from the concerned authority designated under EPF and MP Act 1952 showing due and correct deposit in respect of the employees employed by or through him for the contract period and on obtaining a "No Demand Certificate" from the assigned authority of Food Corporation of India, the Security Deposit will be refunded to the contractor subject to deductions, if any from the Security as may be necessary for recovering the claims of Food Corporation of India against the contractor. The Food Corporation of India will not be liable for payment of any interest on the Security Deposit. For any EPF violations which may be detected at any later stage, the contractor shall be liable and will be proceeded against as per law. The tenderer should be registered with EPFO as an independent Page No.# 9/38 employer, having separate code number as required for an employer under the provisions of EPF and MP Act 1952 and the EPF Scheme framed thereunder. (d) The General Manager shall have the rights to forfeit the entire or part of the amount of security deposit lodged by the contractors or to appropriate the security deposit or any part, thereof in or towards the satisfaction of any sum due to be claimed for any damages, losses charges, expenses or costs that may be suffered or incurred by the Corporation. The decision of General Manager (Region) in respect of such losses, damages, charges, costs or expenses shall be final and binding on the contractors. (e) Whenever the Security Deposit falls short of the specified amount, the Contractor shall make good the deficit so that the total amount of Security Deposit shall not at any time be less than specified amount. (f) In the event of the Tenderer failure, after the communication of acceptance of the tender by the Corporation, to furnish the requisite Security Deposit under clause 7(i)a by the due date or requisite Security Deposit in the form of Bank Guarantee under 7(i)b & 7(i)c including extension period (applicable to submission of BG only), his Contract shall summarily terminated besides forfeiture of the Earnest Money and the Corporation shall proceed for appointment of another contractor. Any losses or damages arising out of and incurred by the Corporation by such conduct of the contractor will be recovered from the contractor, without prejudice to any other rights and remedies of the Corporation under the Contract and Law. Page No.# 10/38 The contractor will also be debarred from participating in any future tenders of the Corporation for a period of two years. After the completion of the prescribed period of two years, the party may be allowed to participate in the future tenders of FCI provided all the recoveries/dues have been effected by the Corporation and there is no dispute pending with the contractor/party.” 8. This Court further finds it relevant to take note of Clause XI of Annexure-I which relates to the provisions of Summary Termination. Sub-Clauses (b) and (c) of Clause XI of Annexure-I being relevant are reproduced herein under:- (b) The General Manager shall also have without prejudice to other rights and remedies, the right, in the event of breach by the contractor of any of the terms and conditions of the contract to terminate the contract forthwith and to get the work done for the unexpired period of the contract at the risk and cost of the contractor and / or forfeit the security deposit or any part thereof for the sum or sums due for any damages, losses, charges, expenses or costs that may be suffered or incurred by the Corporation due to the contractor's negligence or unwork-man like performance of any of the services under the contract. (c) The contractor shall be responsible to supply adequate and sufficient labour, scales/trucks/carts/any other transport vehicle/container for loading/unloading, transport & carrying out any other services under the contract in accordance with the instructions issued by the General Manager or an officer acting on his behalf. If Page No.# 11/38 the contractor fails to supply the requisite number of labour scales and trucks/carts, the General Manager shall at his entire discretion without terminating the contract be at liberty to engage other labour, scales, trucks/carts, etc. at the risk and cost of the contractor, who shall be liable to make good to the Corporation all additional charges, expenses, cost or losses that the Corporation may incur or suffer thereby. The contractor shall not, however, be entitled to any gain resulting from entrustment of the work to another party. The decision of the General Manager shall be final and binding on the contractor.” 9. For the purpose of the instant dispute, this Court need not traverse upon the other Clauses of the GITT/Annexure-I. 10. The Petitioner herein who was interested, submitted its Bid. On 04.12.2025, the Letter of Acceptance was issued in favour of the Petitioner for Road Transport Contract for transportation of goods from Ex-RH Salchapara to FSD Badarpurghat via weighbridge on regular basis for a period of two years. By the said Letter of Acceptance, the Petitioner was advised to furnish the Security Deposit which comprised of a sum equivalent to 5% of the estimated value of the contract totaling to Rs.23,55,000/- and a sum equivalent to 15% of the estimated value of the contract amounting to Rs.70,65,000/- in the form of irrevocable and unconditional Bank Guarantee. It was further mentioned that the said Security Deposit along with the Bank Guarantee should Page No.# 12/38 be furnished within 15 working days, i.e. on or before 23.12.2025 from the date of issuance of the Letter of Acceptance. In the said Letter of Acceptance, it was also mentioned that the last date for submitting the determined Bank Guarantee without any late fee was 23.12.2025 and the last date for submitting the determined Bank Guarantee with 1% late fee along with applicable GST was on 13.01.2026. Clauses 1, 2 and 6 of the Letter of Acceptance dated 04.12.2025 being relevant, are reproduced herein under:- “1. You are advised to furnish the Security Deposit comprising of: i) A sum equivalent to 5% of the estimated value of contract submitted electronically through NEFT/RTGS/ECS amounting to Rs.23,55,000/- (Rupees Twenty Three Lakh Fifty Five Thousand Only). However, the contractor at his option may deposit 50 (fifty) percent of this amount i.e., 2.5% within fifteen working days of acceptance of his tender as initial Security Deposit at the time of joining of the contract while the balance 50 (fifty) percent may be paid by the contractor by deductions @ 20 (twenty) percent from the admitted bills unto the completion of 5% declared Security Deposit. However, if the actual value of contract increases from the estimated value of the contract, the deduction of 2.5% from admitted bills of contractor shall be continued unto the closure of the contract. If there are less than 5 (five) admitted bills of Page No.# 13/38 the contractor, the recovery of SD shall be up to the admitted bills only. The Security Deposit shall not earn any interest. ii) A sum equivalent to 15% of estimated value of contract amounting to Rs.70,65,000/- (Rupees Seventy Lakh Sixty Five Thousand Only) in the form of an irrevocable and unconditional Bank Guarantee (including e-Bank Guarantee) issued by 'Scheduled Commercial Bank' notified by RBI (excluding all Urban/Rural/State Co-operative banks and Gramin Banks) through SFMS platform to the FCI banker as per MTF clause no.-7 (vi) under General information to tenderers on non-judicial stamp paper of appropriate value purchased in the name of issuing bank in the prescribed format of Appendix-IV of the MTF which shall be enforceable till six months after the expiry of the contract period as per tender terms and conditions of MTF. 2. You are requested to furnish prescribed security deposit along with bank guarantee as stated above within 15(fifteen) working days, i.e., on or before 23.12.2025, from issue of this letter as per MTF. 6. If BGs are submitted after the due date, the late fee will be payable by the contractor as given below: · The last date for submitting the determined Bank Guarantee without any late fee- 23.12.2025. · The last date for submitting the determined Bank Guarantee with 1% Late fee along with applicable GST- 13.01.2026. · Late fee will be calculated on the total security amount Page No.# 14/38 (SD+BG).” 11. The materials on record show that in so far as the compliance sought for at Clause 1 (i) of the Letter of Acceptance dated 04.12.2025, the Petitioner duly complied with the same. However, the Petitioner admittedly did not submit the Security Deposit by way of a Bank Guarantee which was the requirement in terms with Clause 1 (ii) of the Letter of Acceptance on or before 23.12.2025. The records reveal that as the Petitioner did not submit the Bank Guarantee within 23.12.2025 of the amount of Rs.70,65,000/- various emails were issued to the Petitioner on 26.12.2025, 05.01.2026, 07.01.2026, 09.01.2026, 12.01.2026 and last one on 13.01.2026 at 4:33 PM. 12. The materials on record further show that the Petitioner though at the last moment, took steps before the Respondent No.7 for the issuance of the Bank Guarantee on 13.01.2026. This aspect is apparent from Page 142 of the writ petition, i.e. the Bank Statement of the Petitioner which is a part of Annexure-E to the writ petition. The said document shows that the Respondent No.7 deducted an amount of Rs.10,59,750/- from the current account of the Petitioner maintained in the Respondent No.7 Bank for the purpose of issuance of the Bank Guarantee. It is also noticed that on account of certain technical/system related issues at the Respondent 7’s end, the Page No.# 15/38 Bank Guarantee could not be processed and issued on 13.01.2026. However, on 14.01.2026, the Bank Guarantee was issued which was submitted by the Petitioner on 15.01.2026. It is also relevant to observe that the penalty amount of 1% was transferred to the Respondent Corporation on 13.01.2026. The fact that on account of the fault of the Respondent No.7, the Bank Guarantee could not be issued is apparent from the communication dated 03.02.2026 issued by the Respondent No.7 which is at Page 146 (Part of Annexure-E to the writ petition). It may not be out of place to mention that on 14.01.2026 was a holiday in the office of the Respondent No.2 to 6. 13. On 03.02.2026, a Show Cause Notice was issued to the Petitioner to explain the reasons for non-submission of the Bank Guarantee within the stipulated date, i.e. by 13.01.2026 and why action should not be taken against the Petitioner as per Clause 6(i), Clause 7(iv), Clause 13, Clause 14(VI), Clause IX(f), Clause XI(b) and Clause XI(c) and the tender submission undertaking, thereby summarily terminating and debarring the Petitioner from participating in any Tender Enquiry with FCI for a period of two years and get the work done for the unexpired period of the contract at the risk and cost of the Petitioner. 14. The Petitioner thereupon submitted a reply on 05.02.2026 stating inter alia that though the Petitioner took steps for Page No.# 16/38 arranging the Bank Guarantee and submitting the same before the Respondent FCI Authorities on 13.01.2026, but on account of the fault of the Respondent No.7 Bank, the Bank Guarantee could not be processed. It was also mentioned that the Bank Guarantee which was dated 14.01.2026 was duly submitted on 15.01.2026 and it did not result in any financial loss, risk or prejudice to the Corporation. It was further mentioned that there was no willful default or any breach on the part of the Petitioner. The Bank Guarantee which was duly submitted was valid, enforceable and effective from the stipulated date, i.e. 13.01.2026 and further, the proposed actions of forfeiture, debarment, termination, risk and cost execution were disproportionate and unwarranted. 15. The Respondent No.3 thereupon passed the order on 23.02.2026 whereby the contract with the Petitioner was terminated; the Petitioner was debarred from participating in any other Tender Enquiry with the FCI for a period of two years from the date of issuance of the order dated 23.02.2026; forfeiture of the deposited Security Deposit of Rs.11,77,500/- and the Bank Guarantee dated 14.01.2026 amounting to Rs.70,65,000/-. Furthermore, the Respondent Corporation would proceed for appointment of another contractor for the same contract work on a regular basis for a period of two years at the risk and cost of Page No.# 17/38 the Petitioner. 16. The records further reveal that in pursuance to said order dated 23.02.2026, the Bank Guarantee dated 14.01.2026 was invoked by the Respondent No.4 by a communication dated 25.02.2026. On 05.03.2026, a fresh Notice Inviting Tender was issued for the same work. It is under such circumstances, the Petitioner has approached this Court by filing the present writ petition. 17. The record reveals that vide an order dated 18.03.2026, the learned Coordinate Bench of this Court while issuing notice passed interim directions to the effect that the Respondent FCI Authorities may proceed with the tender process initiated by the NIT dated 05.03.2026, but the said tender process shall not be finalized without the leave of the Court. It was also directed that the Respondent FCI Authorities who have received the amount upon invoking the Bank Guarantee shall keep the said amount in an interest bearing instrument until further orders. 18. The records further reveal that the Petitioner had filed an additional affidavit on 18.03.2026 itself wherein the Model Tender Form pertaining to the E-Tender No.RO AS- 22.0011.0(11.0)/21/2025-Cont Division for Road Transport Contract for transportation of goods from Ex-RH Salchapara to Page No.# 18/38 FSD Badarpurghat via weighbridge was brought on record. 19. An affidavit-in-opposition was filed by the Respondent Nos.2 to 6 on 20.04.2026. A perusal of the said affidavit-in- opposition shows that the said Respondents took the plea of alternative and efficacious remedy available to the Petitioner in approaching the Grievance Redressal Committee for redressing its grievances rather than approaching this Court by invoking jurisdiction under Article 226 of the Constitution. On merits, the Respondents have reiterated the factual aspects which have been already dealt herein above. The Respondents have also justified their action and more particularly the order dated 23.02.2026 as well as the invocation of the Bank Guarantee dated 25.02.2026. In addition to that, the Respondents also justified their authority and power in terms with the contract agreement to go for a fresh tender in respect to the same work at the risk and cost of the Petitioner. The Respondents have also enclosed the various reminders which have been issued to the Petitioner as Annexure-2 Series and contended in the affidavit-in- opposition that the Petitioner was granted ample opportunities and reminders and in spite of that, the Petitioner did not submit the Bank Guarantee of the amount of Rs.70,65,000/- within the period stipulated in the contract. 20. This Court also takes note of that an affidavit-in-reply was Page No.# 19/38 filed by the Petitioner on 29.05.2026 wherein the Petitioner, apart from reiterating and reaffirming the statements made in the writ petition, further denied the allegations which have been made in the affidavit-in-opposition. SUBMISSIONS MADE BY THE LEARNED COUNSELS FOR THE PARTIES 21. Mr. P. K. Goswami, the learned Senior Counsel appearing on behalf of the Petitioner submitted that a perusal of the materials on record would clearly show that it was for the circumstances beyond the control of the Petitioner that the Petitioner could not submit the Bank Guarantee on 13.01.2026. Referring to the bank statement, the bank guarantee as well as the communication which had been issued by the Respondent No.7 on 03.02.2026, the learned Senior Counsel submitted that the Respondent No.7 had duly admitted that it was on account of a technical glitch that the Bank Guarantee could not be issued to the Petitioner on 13.01.2026. The learned Senior Counsel further submitted that the representative of the Petitioner waited at the Respondent No.7’s bank till 7:00 PM as would be seen from the reply so submitted to the Show Cause Notice. The non-consideration of the aforesaid aspect by the Respondent Authorities, more particularly the Respondent No.3 makes the action on the part of Page No.# 20/38 the Respondent No.3 unreasonable and irrational. 22. The learned Senior Counsel further referring to the Clauses 6 of the GITT submitted that the said Clause categorically stipulates as regards Earnest Money. Taking into account that the petitioner is an MSME, the Petitioner was exempted from payment of any Earnest Money. The learned Senior Counsel further referring to Clause No.7 of the GITT and Clause IX of the Annexure-I submitted that the Respondent Authorities did not have the authority and jurisdiction to invoke the Bank Guarantee in as much as if there was a failure to submit within the prescribed period, the Respondent Authorities in terms with Clause 7(iv) of the GITT/Clause IX(f) of Annexure-I could have at best terminated the contract and forfeited the Earnest Money. However, in the instant case, the Respondent Authorities have accepted the Security Deposit, and if the Security Deposit was accepted, there is an implied waiver on the part of the Respondent Authorities to Clause 7(iv) of the GITT/Clause IX(f) of the Annexure-I. The learned Senior Counsel further submitted by elaborating on the scope of Clause 7(iv) of the GITT/Clause IX(f) of Annexure-I that the Respondent Authorities could not have issued the Show Cause Notice or taken the consequential actions which is the subject matter impugned in the instant proceedings. Page No.# 21/38 23. Per contra, Mr. Page No.# 21/38 23. Per contra, Mr. B. K. Singh, the learned counsel appearing on behalf of the Respondent Nos.2 to 6 submitted that the tender conditions were clear and specific. In addition to that, the Respondents have also clearly mentioned in the Letter of Acceptance dated 04.12.2025 that the Petitioner was required to submit the Bank Guarantee on or before 23.12.2025, and if it was not submitted, the said Bank Guarantee along with an additional 1% with GST should be submitted on or before 13.01.2026. The learned counsel further submitted that in spite of various reminders which have been issued as would be apparent from the affidavit so filed by the Respondents, the Petitioner having not submitted, the Respondent Authorities were justified in taking actions which have been impugned in the instant proceedings. The learned counsel further submitted that the Petitioner was a habitual defaulter in various contracts and as the Petitioner was not required to deposit any Earnest Money, the Security Deposit was forfeited so that upon risk and cost imposed upon the Petitioner, the amount could be adjusted from the Security Deposit which had been forfeited. ANALYSIS AND DETERMINATION 24. The relevant portion of Clause 7 of the GITT as well as the relevant Sub-clauses of Clause IX of Annexure-I have already been quoted herein above. Page No.# 22/38 25. From a perusal of Clause 7(i) of the GITT/Clause IX(a) of the Annexure-I would show what the Security Deposit would consist of. This aspect would be further apparent from a perusal of Clause 1 of the Letter of Acceptance. The Security Deposit which was required to be submitted in the present case were in two parts. (a) An amount of Rs 23,55,000/- (Rupees Twenty Three lakhs and Fifty Five thousand) only. This amount constituted 5% of the estimated value of the contract and was required to be transferred through NEFT/RTGS/ECS. The contract however had the option of paying the entire 5% of the contract value in the aforesaid manner or pay 2.5%, i.e. Rs.11,77,500/- within 15 working days from the date of acceptance of the contractor's tender (which would be the date of issuance of the Letter of Acceptance). In the instant case, the Letter of Acceptance was issued on 04.12.2025. The remaining 2.5% of the Security Deposit shall be deducted @ 20% from the admitted bills till the completion of the total 5% of the Security Deposit. In terms with the Letter of Acceptance, it was clearly mentioned that Rs.11,77,500/- had to be deposited on or before 23.12.2025. Page No.# 23/38 (b) The second part of the Security Deposit is a sum which is equivalent to 15% of the estimated value of the contract which had been clearly mentioned to be Rs.70,65,000/-. This amount is not required to be deposited through RTGS/NEFT/ECS. This amount of Rs.70,65,000/- was required to be guaranteed on the basis of an irrevocable and unconditional Bank Guarantee (including e-bank guarantee) issued by a Scheduled Commercial Bank notified by the RBI, through SFMS Platform to the FCI Banker. The said irrevocable and unconditional Bank Guarantee has to be in the format prescribed in Appendix IV of the MTF. The said Bank Guarantee was required to be valid for a period of six months after the expiry of the contract period. 26. Clause 7(ii) of the GITT/Clause IX (b) of Annexure-I read with the Clause 2 and Clause 6 of the Letter of Acceptance makes it clear that the Petitioner had to: (a) Pay Rs.11,77,500/- by RTGS/NEFT/ECS to the Respondent FCI on or before 23.12.2025. (b) Submit an irrevocable and unconditional Bank Guarantee of Rs.70,65,000/- on or before 23.12.2025. or Submit the irrevocable and unconditional Bank Page No.# 24/38 Guarantee of Rs.70,65,000/- on or before 13.01.2026 alongwith 1% which is late fee alongwith applicable GST which would be Rs.1,11,156/-. 27. Clause 7(iv) of the GITT/Clause IX(f) of Annexure-I stipulates that in the circumstances the Security Deposit is not furnished in terms with Clause 7(i)(a), 7(i)(b) and 7(i)(c) including the extension period which is only applicable to BG submission only, the Respondent FCI would take the following actions: (a) Summarily terminate the Contract; (b) Forfeit the Earnest Money; (c) Proceed for appointment of another contractor at the risk and cost of the Petitioner; and (d) Debar the contractor for a period of two years from participating in future tenders of the FCI provided all the recoveries/dues have been effected by the FCI and there is no dispute pending with the contractor. 28. At this stage, it is also relevant to take note of Clause XI of Annexure-I as the said Clause deals with Summary Termination. Sub-clauses (a) and (c) of Clause XI are not relevant for the purpose of the present dispute. However, a perusal of Sub-clause (b) of Clause XI of Annexure-I would show that the said Sub- Page No.# 25/38 clause is of general nature whereby power to summary termination of the contract is provided. It is well settled that that when terms of a contract confers a power on account of a specific breach, the power has to be exercised under the said Clause and not taking resort to the general clause for taking action. It is therefore the opinion of this Court that if there is a breach to Clauses 7(i)(a), 7(i)(b) or 7(i)(c) of the GITT, the power could only be exercised in terms with Clause 7(iv) of the GITT/Clause (IX) (f) of the Annexure-I. 29. In the backdrop of the above, let this Court analyze the factual aspect which led to the present dispute. The Petitioner on 23.12.2025 duly transferred the amount of Rs.11,77,500/- through NEFT to the Respondent FCI. This amount was a part of the Security Deposit. The Petitioner did not submit the irrevocable and unconditional Bank Guarantee of Rs.70,65,000/- on or before 23.12.2025. Under such circumstances, the Petitioner was required to submit the prescribed Bank Guarantee on or before 13.01.2026 alongwith a late fee of 1% with applicable GST. The Petitioner transferred the late fee of 1% alongwith GST on 13.01.2026 to the Respondent FCI. However, the Petitioner did not submit the prescribed Bank Guarantee on or before 13.01.2026. Rather, the Petitioner submitted the prescribed Bank Guarantee on 15.01.2026. It may not be out of Page No.# 26/38 place to mention that 14.01.2026 was not a working day in the Respondent FCI, and as such, the submission of the Bank Guarantee by the Petitioner on 15.01.2026 has to be construed as on the next working day after 13.01.2026. 30. The fact that the prescribed Bank Guarantee upon being submitted by the Petitioner on 15.01.2026 was duly accepted by the Respondent FCI is not in doubt in as much as the Respondent FCI has upon receipt of the prescribed Bank Guarantee invoked the said Bank Guarantee and thereupon accepted the proceeds of the prescribed Bank Guarantee. 31. The materials on record further reflect that the Respondent No.7 had deducted a particular amount from the Bank account of the Petitioner on 13.01.2026 for the purpose of issuance of the Bank Guarantee. It was also acknowledged by a communication dated 03.02.2026 issued by the Respondent No.7 that on account of a technical glitch, the Bank Guarantee could not be processed on 13.01.2026 and therefore the Bank Guarantee was issued on 14.01.2026, keeping intact the validity period from 13.01.2026, i.e. the last date for submission of the Bank Guarantee. 32. Now the question arises as to whether the impugned order dated 23.02.2026 passed by the Respondent No.3 can be said to Page No.# 27/38 be fair, reasonable, rational and legal whereby not only the actions permitted under Clause 7(iv) of the GITT/Clause (ix) (f) of Annexure-I were taken, but also the entire Security Deposit was forfeited. 33. This Court finds it relevant at this stage to take note of Section 63 of the Indian Contract Act, 1872 (for short, “the Act of 1872”). The said Section 63 being relevant is quoted herein below:- “63. Promisee may dispense with or remit performance of promise.— Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit. 34. A perusal of the above quoted Section would show that the general principle regarding waiver of contractual obligation is engraved in the said Section. The said Section stipulates that it is open to a promisee to dispense with or remit, wholly or in part, the performance of the promise made to him or he can accept instead of it any satisfaction which the promisee thinks fit. There is no necessity that there should be a consideration or any specific agreement to constitute the waiver. In the case of, Citi Bank N.A vs. Standard Chartered Bank and Others, reported in (2004) 1 SCC 12, the Supreme Court dealt with Section 63 of the Page No.# 28/38 Act of 1872 and observed that the promisee can act unilaterally unlike Section 62 of the Act of 1872. Paragraph No.50 of the said judgment is reproduced herein under:- “50. Under Section 63, unlike Section 62, a promisee can act unilaterally and may (i) dispense with wholly or in part, or (ii) remit wholly or in part, the performance of the promise made to him, or (iii) may extend the time for such performance, or (iv) may accept instead of it any satisfaction which he thinks fit.” 35. In the case of S. Brahmanand and Others vs. K. R. Muthugopal (Dead) and Others, reported in (2005) 12 SCC 764, the Supreme Court observed at paragraph No.34 of the said judgment the scope and ambit of Section 63 of the Act of 1872. Paragraph No.34 of the said judgment being relevant is reproduced herein under:- “34. Thus, this was a situation where the original agreement of 10-3-1989 had a “fixed date” for performance, but by the subsequent letter of 18-6-1992 the defendants made a request for postponing the performance to a future date without fixing any further date for performance. This was accepted by the plaintiffs by their act of forbearance and not insisting on performance forthwith. There is nothing strange in time for Page No.# 29/38 performance being extended, even though originally the agreement had a fixed date. Section 63 of the Contract Act, 1872 provides that every promisee may extend time for the performance of the contract. Such an agreement to extend time need not necessarily be reduced to writing, but may be proved by oral evidence or, in some cases, even by evidence of conduct including forbearance on the part of the other party. Thus, in this case there was a variation in the date of performance by express representation by the defendants, agreed to by the act of forbearance on the part of the plaintiffs. What was originally covered by the first part of Article 54, now fell within the purview of the second part of the article. Pazhaniappa Chettiyar v. South Indian Planting and Industrial Co. Ltd. was a similar instance where the contract when initially made had a date fixed for the performance of the contract but the Court was of the view that “in the events that happened in this case, the agreement in question though started with fixation of a period for the completion of the transaction became one without such period on account of the peculiar facts and circumstances already explained and the contract, therefore, became one in which no time was fixed for its performance” and held that what was originally covered by the first part of Article 113 of the Limitation Act, 1908 would fall under the second part of the said article because of the supervening circumstances of the case.” 36. In the case of, Kailash Nath Associates vs. Delhi Development Authority and Another, reported in (2015) 4 SCC 136, the Supreme Page No.# 30/38 Court further observed that the promisee can certainly unilaterally extend the time for payment under Section 63 of the Act of 1872 if the time for payment was not for the benefit of the promisee but for the benefit of the promisor. Paragraph No.25 of the said judgment being relevant is reproduced herein under:- “25. However, such is not the position here. In the present case, the appellant is the promisor and DDA is the promisee. In such a situation, DDA can certainly unilaterally extend the time for payment under Section 63 of the Contract Act as the time for payment is not for DDA’s own benefit but for the benefit of the appellant…..” 37. In the backdrop of the above principles, it is relevant to take note of that as per the terms of Clause 7(iv) of the GITT/Clause IX(f) of the Annexure-I read with Clauses 2 and 6 of the Letter of Acceptance, the Petitioner was required to submit to the Respondent FCI who is the promisee, the prescribed Bank Guarantee on or before 13.01.2026. The prescribed Bank Guarantee was submitted by the Petitioner who was the promisor on 15.01.2026 which was duly accepted by the Respondent FCI without reserving any rights. It was only on 03.02.2026, the Show Cause Notice was issued. The records further reveal that vide order dated 23.02.2026 which is impugned in the present proceedings, the Respondent No.3 directed forfeiture of the entire Security Deposit of Page No.# 31/38 Rs.11,77,500/- alongwith the amount of Rs.70,65,000/- which was guaranteed by the Bank Guarantee that too when on account of the late submission of the said Bank Guarantee, actions were initiated vide the Show Cause Notice dated 03.02.2026. In the opinion of this Court, the moment the Respondent FCI accepted the prescribed Bank Guarantee on 15.01.2026, and thereupon acted on it by invoking the same and appropriating the proceeds of the Bank Guarantee, the Respondent FCI who was the promisee would be deemed to have extended the period of submission by conduct to 15.01.2026. 38. The question now therefore arises whether after extending the period of submission of the prescribed Bank Guarantee by conduct and acting thereupon, would it be fair, reasonable, rational and legal to pass the impugned order dated 23.02.2026 and the subsequent consequential action of invoking the Bank Guarantee vide the communication dated 25.02.2026 and also initiating a fresh process for initiating fresh Bids. 39. In this respect, this Court finds it relevant to take note of the judgment of the Supreme Court in the case of Kumari Shrilekha Vidyarthi and Others vs. State of U.P. and Others, reported in (1991) 1 SCC 212. In the said judgment, the Supreme Court had observed that once the State is a party to a contract, it has Page No.# 32/38 an obligation in law to act fairly, reasonably and justly which are facets of Article 14 of the Constitution. Paragraph Nos.22, 23 and 24 of the said judgment are reproduced herein under:- “22. There is an obvious difference in the contracts between private parties and contracts to which the State is a party. Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions, acts indubitably, as is expected of it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the Page No.# 33/38 claimant of the guarantee under Article 14 of non-arbitrariness at the hands of the State in any of its actions. 23. Thus, in a case like the present, if it is shown that the impugned State action is arbitrary and, therefore, violative of Article 14 of the Constitution, there can be no impediment in striking down the impugned act irrespective of the question whether an additional right, contractual or statutory, if any, is also available to the aggrieved persons. 24. The State cannot be attributed the split personality of Dr Jekyll and Mr Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfil the obligation of Article 14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the contract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing which militates against the concept of requiring the State always to so act, even in contractual matters. There is a basic difference between the acts of the State which must invariably be in public interest and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not Page No.# 34/38 promote public interest. Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regulating the conduct of the State activity.” 40. Based on the facts of this case, it is the opinion of this Court that the impugned order dated 23.02.2026 is arbitrary, unreasonable and irrational. The reasons being that the Respondent FCI by their conduct had extended the period of submission of the prescribed Bank Guarantee by accepting it. This aspect is proved by the fact that though Clause 7(iv) of the GITT/Clause IX (f) of the Annexure-I did not permit forfeiture of the Security Deposit, but the Respondent No.3 vide the order dated 23.02.2026 forfeited the Security Deposit, the Respondent No.3 on 25.02.2026 invoked the Bank Guarantee and the proceeds of the Security Deposit had been appropriated by the Respondent FCI. Under such circumstances, there was no breach by the Petitioner. Resultantly, the drastic measures taken by the Respondent FCI was totally uncalled for, that too when there was no loss caused to the Respondent FCI. Paragraph No.29 of the judgment in the case of Kailash Nath Associates (supra) being relevant is reproduced herein under:- “29. Based on the facts of this case, it would be arbitrary for DDA to forfeit the earnest money on two fundamental grounds. First, Page No.# 35/38 there is no breach of contract on the part of the appellant as has been held above. And second, DDA not having been put to any loss, even if DDA could insist on a contractual stipulation in its favour, it would be arbitrary to allow DDA as a public authority to appropriate Rs 78,00,000 (Rupees seventy-eight lakhs) without any loss being caused. It is clear, therefore, that Article 14 would apply in the field of contract in this case and the finding of the Division Bench on this aspect is hereby reversed.” 41. In that view of the matter, the instant writ petition stands disposed of with the following observations and directions:- (A) The impugned order dated 23.02.2026 passed by the Respondent No.3 is set aside and quashed. Accordingly, the following observations and directions are passed:- (i) The termination of the contract pertaining to E- Tender No.RO AS-22.0011.0(11.0)/21/2025-Cont Division for Road Transport Contract for transportation of goods from Ex-RH Salchapara to FSD Badarpurghat via weighbridge vide the impugned order dated 23.02.2026 is set aside and quashed. (ii) The Letter of Acceptance dated 04.12.2025 stands restored. (iii) The forfeiture of the amount of Rs.11,77,500/- which is a part of the Security Deposit vide the Page No.# 36/38 impugned order dated 23.02.2026 is interfered with and it shall revert back to the Respondent Nos.2 to 6 and form a part of the Security Deposit so submitted by the Petitioner in pursuance to the Letter of Acceptance dated 04.12.2025. (iv) The action on the part of the Respondent No.4 to invoke the Bank Guarantee vide the communication dated 25.02.2026 cannot be sustained in view of setting aside the impugned order dated 23.02.2026. However, as the communication dated 25.02.2026 has already been acted upon and the amount of Rs.70,65,000/- has already been transferred to the FCI, the FCI would be required to return the amount to the Respondent No.7. (v) The instant judgment was dictated in the open Court and being lengthy, it may take some time to be uploaded. The date and time of uploading of the judgment would be mentioned in the body of the judgment. This Court grants 10 working days time to the Petitioner to submit a fresh Bank Guarantee of Rs.70,65,000/- in the prescribed form and manner to the Respondent No.3 from the date of uploading of the present judgment. Page No.# 37/38 (vi) This Court further observes and directs that upon receipt of the Bank Guarantee from the Petitioner as directed herein above, the Respondent FCI shall remit within 7 working days the amount of Rs.70,65,000/- along with the interest accrued (as there was direction in the order dated 18.03.2026 to keep the proceeds of the Bank Guarantee in an interest bearing instrument) to the Respondent No.7. (vii) This Court further observes and directs that in case the Petitioner fails to submit the Bank Guarantee as directed in Clause (v) herein above, the Respondent FCI would be at liberty to initiate steps in terms with Clause 7 (iv) of GITT/Clause IX(f) of the Annexure-I. (viii) The debarment of the Petitioner vide the impugned order dated 23.02.2026 cannot be sustained for the reasons aforesaid, for which the same is set aside and quashed. (ix) The Letter of Acceptance dated 04.12.2025 having been revived upon setting aside the order dated 23.02.2026, the impugned Notice Inviting Tender dated 05.03.2026 cannot also survive, for which the said Notice Inviting Tender dated 05.03.2026 is set Page No.# 38/38 aside and quashed. (B) There shall be no order as to costs. (C) Interim order stands vacated. (D) The Registry shall provide a copy of the present judgment to Mr. B. K. Singh, the learned Standing Counsel of the FCI for due compliance. JUDGE Comparing Assistant Pradip Kumar Kalita Digitally signed by Pradip Kumar Kalita Date: 2026.06.22 19:57:14 +05'30'