National Highway Authority Of India vs Ganga Enterprises And Anr

The Supreme Court held that the bid security of Rs. 50 lakhs, as stipulated in the tender document, serves as an earnest to ensure that the bidder does not withdraw his bid during the bid validity period and that the performance security is furnished upon acceptance. The Court clarified that the bid security is distinct from performance security and emphasized that the forfeiture of bid security is permissible if the bidder withdraws his bid or fails to provide the required performance security after acceptance. The appeal was dismissed, affirming the High Court's decision regarding the enforcement of the bank guarantee.