SUPREME COURT REAFFIRMS: LETTER OF INTENT CREATES NO BINDING RIGHTS

The Supreme Court, in State of Himachal Pradesh & Ors vs. Oasys Cybernatics (24 Nov 2025), reaffirmed that a Letter of Intent (“LoI”) is merely a “promise in embryo” and does not create binding rights unless all stipulated preconditions mentioned in the LoI are fulfilled. The Court upheld the State’s cancellation of the LoI due to persistent non-compliance, and set aside the High Court’s direction to proceed on the basis of the LoI. While recognising the State’s administrative discretion, the Court permitted the initiation of a fresh tender process, clarifying that the bidder remains free to participate. It also ordered quantum meruit reimbursement for devices or services actually utilised during pilot phases.

The Petitioners were represented by A.S.A., led by Mr. P. Chidambaram, Senior Advocate, assisted by Mr. Arman Roop Sharma, Mrs. Shimpy Sharma, Mohd. Aman Khan Afghani and Ms. Yeshasvi Srivastava. The team’s comprehensive record-based submissions and structured arguments were instrumental in securing clarity on the legal effect of LoIs, judicial restraint, and equitable restitution in tender processes.