Tender Authority Cannot Impose Conditions Contrary To Notice Inviting Tender : Supreme Court

The Supreme Court on Friday (October 31) set aside the disqualification of a bidder in a tender process, holding that the tendering authority had compelled the bidder to meet a condition not prescribed in the Notice Inviting Tender (“NIT”).

“we are of the opinion that rejection of appellant's technical bid on ground that appellant's certificate was not issued by District Magistrate is dehors the terms of the NIT and is liable to be quashed.”, the court said.

A bench of Justices Surya Kant and Joymalya Bagchi heard the case where a dispute arose in a tender floated by the Mandi Parishad for leasing a banquet hall. The process involved two stages- technical and financial bids. Under Clause 18 of the Notice Inviting Tender (NIT), bidders were required to submit a 'haisiyat praman patra' (certificate of means/resources) demonstrating a minimum worth of ₹10 crores.

The Appellant-bidder submitted a valuation certificate from an architect and valuer empanelled with the Income Tax Department, assessing its share in an immovable property at approximately ₹99 crores. However, the Parishad rejected the bid, holding that the certificate was invalid since it was not issued by a District Magistrate (DM).

Aggrieved by the Allahabad High Court's decision to affirm the Respondent's-Parishad decision, the bidder approached the Supreme Court contending that since the NIT doesn't mention that the bidder has to submit a 'haisiyat praman patra' i.e., solvency certificate to be issued by the District Magistrate, and once he had submitted a certificate validly issued by the architect and valuer, then the Respondent could not have disqualified him citing the requirement to have certificate issued by the DM, as it would be de hors the NIT terms.

Setting aside the High Court's decision, the judgment authored by Justice Bagchi found the Respondent's action, being de hors the terms of the NIT, had overstepped its authority by imposing a qualification requirement not contained in the NIT.

The Court added that although in tender cases a judicial restraint must be exercised in interfering with the commercial wisdom of the NIT authority, “in cases where such decision is dehors the terms of the NIT or is patently arbitrary would the Court exercise powers of judicial review and set aside such a decision.”

The matter was disposed of with the direction to the Respondent for a fresh evaluation of the Appellant's technical bid.

“The matter is remanded to 1st respondent-Mandi Parishad to reconsider the technical bid of the appellant and if it is satisfied that the net worth of the asset (free of encumbrances, if any) disclosed in the valuation certificate submitted by appellant meets the requirement of Clause 18 of the NIT, it shall accept the technical bid and after due negotiations between appellant and the 5th respondent (successful bidder), decide whether remainder of contract be awarded to the appellant or in the event 5th respondent matches the financial bid or enhanced offer of the appellant, permit the 5th respondent to continue the contract for the remaining period.”, the court ordered.

Cause Title: KIMBERLEY CLUB PVT. LTD. VERSUS KRISHI UTPADAN MANDI PARISHAD & ORS.

Citation : 2025 LiveLaw (SC) 1054

Click here to read/download the judgment

Appearance:

For Petitioner(s) : Mr. Shail Kumar Dwivedi, AOR Mr. Siddharth Krishna Dwivedi, Adv.

For Respondent(s) : Mr. E. C. Agrawala, AOR Mr. Sunil Murarka, Adv. Mr. Panka Agarwal, Adv. Ms. Kamakshi Sahgal, Adv. Mr. J.N.S. Tyagi, Adv. Mr. Sukumar Pattajoshi, Sr. Adv. Mr. Durga Dutt, AOR Mr. Rakesh Kumar Singh, Adv. Mr. Somesh Kumar Dubey, Adv. Dr. Gajendra Prasad Singh, Adv. Mr. Sushant Kumar Mallik, Adv. Mr. Pradeep Yadav, Adv. Mr. Himanshu Yadav, Adv.