M/s Om Gurusai Construction Company vs. M/s V.N. Reddy & Ors.
Background
The appellant company won a government irrigation tender as the lowest bidder but was required to submit an "additional performance security" within two working days of the financial bid opening. Those two days fell on a weekend followed by a two-day nationwide bank employees' strike, so the appellant deposited the security on the next available working day. The first respondent, a rival bidder, challenged the resulting work order in the High Court, which struck it down on the ground that the two-day deadline was strict and could never be relaxed "under any circumstances."
Decision Breakdown
The Supreme Court held that the appellant had complied with the tender condition at the earliest possible moment given the undisputed bank strike, invoking the legal maxim "lex non cogit ad impossibilia". The law does not compel a person to do the impossible. It found no dispute that the strike occurred, that the appellant's own bank account (as disclosed in the tender) was affected, and that the tendering authority had reasonably verified and accepted the deposit. The Court also criticised the High Court for going beyond the actual dispute and examining unrelated post-award performance issues without full facts, and reaffirmed that courts should be slow to interfere with a tender-issuing authority's own interpretation of its documents absent mala fide or irrationality. The appeal was allowed and the work order restored.
Lesson Learnt
A contractual deadline, even one stated to allow "no relaxation under any circumstances," must still yield to genuine impossibility of performance (like a bank strike), and courts reviewing government tenders will generally defer to the awarding authority's own reasonable interpretation unless there is bad faith or clear irrationality.