Food Corporation cannot withhold security deposit of earlier contractor on termination of his contract, after fresh e-tender issued and new contractor has deposited security amount

Tenderer seeking direction against Food Corporation to refund the Security Deposit of Rs.75,00,000/- along with interest @ 18% p.a. from the date of termination of the contract till realisation.

If the contractor after starting the contract failed and neglected to comply with the same, then only the principal can forfeit the security deposit.

Food Corporation by their letter dated the terminated contract which was granted in favour of applicant tenderer and thereafter, issued fresh E-tender. In that fresh e-tender respondent tenderer was declared as the successful bidder and the contract was awarded in their favour. Respondent tenderer deposited security deposit with Food Corporation for performing the contract as per its terms and conditions. Therefore, there is no question of allowing the Corporation to withhold the security deposit of applicant earlier tenderers.

Appearing Counsel/s : Mr.Vishwanath Patil, Ms.Kewal B. Ahiya,Mr.S.S.Panchpor,Mr.Parag A. Vyas,Mr.Ashok Verma,Mr.A.A.Ansari,Mr.Hafeezur Rehman

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