Bombay High Court
PRAGATI CONSTRUCTION LATUR AND R B KRISHNANI PUNE JOINT VENTURE THR ITS AUTHORISED SIGNATIORY KAPILversusSTATE OF MAHARASHTRA THR ITS PRINCIPAL SECRETARY AND OTHERS
- Disposal
- DISPOSED OFF
Holding
The failure to upload the mandatory bank statement constitutes a breach of an essential condition, justifying the rejection of the technical bid.
Summary
M/s. Pragati Construction, a joint venture, filed a writ petition under Article 226 challenging its disqualification from an e‑tender for a gravity pipeline project because it failed to upload a bank statement, though it had uploaded the EMD receipt. The tender documents and a 2023 Government Resolution expressly required the bank statement as a mandatory condition, stating that non‑upload would render a bid non‑responsive. The petitioner argued that the e‑tender notice overrode this requirement and that natural justice demanded an opportunity to rectify the defect. The Court held that the bank‑statement requirement was an essential condition, not overridden by the notice, and that the tender‑issuing authority’s interpretation was reasonable and not perverse. Consequently, the petition was dismissed, upholding the respondents’ rejection of the technical bid.
Issues considered
- The bank statement requirement is an essential condition of the e‑tender or a directory clause.
- Whether the e‑tender notice overrides the detailed tender document’s requirement to upload a bank statement.
- Whether the petitioner was denied natural justice by not being given a chance to rectify the omission.
Legislation cited
- Constitution of India — s. Article 226
Subjects
- e‑tender
- technical bid disqualification
- bank statement requirement
- essential condition
- natural justice
- public procurement
- judicial restraint
Judgment
2026:BHC-AUG:46456-DB
WP-9698.2026.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
BENCH AT AURANGABAD
WRIT PETITION NO. 9698 OF 2026
M/s. Pragati Construction, Latur
& M/s. R. B. Krishnani, Pune,
Joint Venture (JV) having its
Registered Office at : Kapilanand,
Plot No.23, Central Bank Colony,
Pragati Nagar, Ring Road, Latur – 413 512
Through its Authorised signatory,
Kapil s/o Govindrao Makne,
Age : 35 years, Occu.: Business and
social work, R/o. society chowk,
House No.1394, Tq. Chakur, Dist. Latur ...Petitioner
Versus
1. State of Maharashtra
Through its Principal Secretary,
Water Resource Department,
Mantralaya, Mumbai – 32.
2. TAPI Irrigation Development Corporation,
Jalgaon, Chief Engineer Office, Sinchan
Bhawan, Near Akashwani Chowk, Prabhat
Colony, Jalgaon, Maharashtra – 425 001.
3. Chief Engineer,
TAPI Irrigation Development Corporation,
Jalgaon.
4. Executive Engineer,
Minor Irrigation Division, Jalgaon.
5. Sub-Divisional Engineer,
Minor Irrigation Survey No.1 Division,
Jalgaon.
6. M/s. Phaloudi Construction and
Infrastructure Pvt. Ltd. Indore,
Through its Managing Authority,
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203, Panama Tower, Near Hotel
Crown Palace, Kanchanbaug Indore,
Madhya Pradesh – 452 001
Email ID : [email protected]
7. M/s. Jagdish Gupta, Indore,
Through its Managing Authority,
63, Ushanagar Extension, Sudama Nagar,
Madhya Pradesh – 452 009
[email protected]
[email protected]
[email protected] ...Respondents
_____________________________________________________
Mr. V. D. Salunke h/f. Mr. M. V. Salunke, Advocate for the Petitioner.
Mr. N. S. Tekale, AGP for Respondent No.1-State.
Mr. R. N. Dhorde, Senior Counsel a/w Mr. P. S. Dighe i/by Mr. V. R.
Dhorde, Advocate for Respondent Nos.2 to 5.
Mr. A. I. Deshmukh, Advocate for Respondent Nos.6 & 7.
_____________________________________________________
CORAM : KISHORE C. SANT &
JITENDRA JAIN, JJ.
RESERVED ON : 1st OCTOBER, 2026
PRONOUNCED ON : 5th OCTOBER, 2026
JUDGMENT :- (Per - Jitendra Jain, J.)
1. Rule. Rule made returnable forthwith. By consent, heard finally.
2. This petition is filed by the petitioner under Article 226 of the
Constitution of India challenging its disqualification by the Technical Bid
Evaluation Committee of respondent no.2-TAPI Irrigation. Respondent
nos.2 to 5 are collectively referred to as “the respondents”.
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BRIEF FACTS :-
3. Respondents floated an E-tender for the work of construction of
a gravity closed pipeline distribution system from the Head Regulator of
Padmalaya II Dam for a command area of 1982 Ha more particularly
described in E-Tender Notice No.14 of 2026-27. The estimated cost
mentioned in tender is Rs.65.67 crores. Various parties, including the
petitioner and respondent no.6 and 7, applied in response to the said
tender. The parties applying for the tender were required to make an
online payment of Earnest Money Deposit (EMD). The petitioner made
the payment of EMD and uploaded receipt but the bank statement was
not uploaded.
4. On 4 August 2026, technical bids were opened and respondent
nos.6 and 7 were declared as qualified, whereas the petitioner and other
two bidders were declared as disqualified. The reason for petitioner’s
disqualification, as mentioned in the statement, is its failure to upload
bank statement as mandated by Point no.25 of Volume – I of Detailed
Tender Notice.
5. On 6 August 2026, financial bids of respondent nos.6 and 7
were opened.
6. The petitioner being aggrieved by its disqualification has
instituted the present petition on 7 August 2026. This Court on 7 August
2026 directed respondents not to finalise the tender process without prior
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permission of this Court. Pleadings of the respondents and the petitioner
were filed and the matter is heard today finally.
SUBMISSIONS OF PETITIONER :-
7. Mr. Salunke, learned counsel for the petitioner submitted that
the tender conditions only provided for uploading the receipt of online
payment of tender fee and EMD. There is no requirement of uploading
the bank statement as per E-Tender Notice No.14. He relied upon over
ruling clause at page 62 of the petition on guidelines to contractors
mentioned in E-Tender Notice No.14 which reads as under :-
Guidelines of Contractors Regarding Government of Maharashtra e- tendering system
These conditions will over-rule the conditions stated in the Tender
Documents, wherever relevant and applicable. However, in case of
dispute on any contradictory meaning of two or more clauses, decision of
the Superintending Engineer shall be final and binding on both parts.
8. He submitted that the condition of uploading bank statement is
appearing in tender documents and not in the tender notice and,
therefore, by overriding clause in E-Tender Notice, rejection by the
respondents on the ground that bank statement has not been uploaded is
manifestly arbitrary and unreasonable. He, in alternative, further
submitted that no opportunity of hearing was given by the respondents to
rectify the said defect and, therefore, there has been a violation of
principles of natural justice. He also submitted that petitioner was not
made aware of reason for disqualification. He also submitted that on a
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comparison of the financial bids, the petitioner’s quote is lower than the
quotes of the successful bidders. He submitted that this being a public
project, the Court should interfere and quash the disqualification of the
petitioner. Mr. Salunke further pointed out to the reply of the
respondents, wherein it is stated that the technical evaluation bid has
been uploaded on 3 August 2026 and the bidders were given an
opportunity of two days for raising objections, whereas in effect the
technical bid was uploaded on 4 August 2026. He also attacked the
Technical Evaluation Report filed with reply at page 92 and submitted
that respondents have intentionally not mentioned date of this report. He
relied upon the decision of the Hon’ble Supreme Court in the case of
Poddar Steel Corporation vs. Ganesh Engineering Works 1 and prayed for
permitting the petitioner to file bank statement and rectify the defect.
SUBMISSIONS OF RESPONDENT NOS.2 TO 5 :-
9. Per contra, Mr. Dhorde, learned senior counsel appearing for
respondent nos.2 to 5 vehemently opposed the petition. He referred to
various clauses of tender documents and notices and submitted that time
and again and at more than one place, the bidders were informed that if
the bank statement is not uploaded, then the bids will be considered as
non-responsive. He also further referred to 1983 Government Resolution
(GR), which deals with the online tender conditions in support of this
1 (1991) 3 SCC 273
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submission. Learned senior counsel further submitted that the tender
process is online and it is expressly provided that no physical document
will be accepted. He also gave the rationale for requiring such bank
statement to be uploaded alongwith the tender namely, cartelisation etc.
He further submitted that the petitioner, in the petition itself, has
admitted that they were aware about the reason for disqualification on 4
August 2026. Learned senior counsel relied upon following decisions in
support of his above submissions that Court ought to exercise restraint in
interfering with tender matters and prayed for dismissal of the petition.
(a) Glodyne Technoserve Limited vs. State of Madhya Pradesh & Ors. 2
(b) K. K. Vidyut, Ahmednagar vs. Union of India & Ors.3
(c) N. G. Projects Limited vs. Vinod Kumar Jain & Ors.4
(d) Prasad Sheth vs. State of Goa5
(e) Utkal Suppliers vs. Maa Kanak Durga Enterprises & Ors.6
SUBMISSIONS OF RESPONDENT NOS.6 & 7 :-
10. Mr. Deshmukh, learned counsel for respondent nos.6 and 7-
successful bidders adopts the arguments of learned senior counsel
Mr. Dhorde and further submits that in special instructions to the bidders,
it is specifically stated that the bidder should read the terms and
conditions of the tender and accept the same to proceed further to submit
the bids. He further referred to E-Tender Notice No.14, wherein it is
2 (2011) 5 SCC 103
3 2016 (6) Mh.L.J. 806
4 (2022) 6 SCC 127
5 2022 SCC OnLine Bom 1179
6 (2021) 14 SCC 612
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stated that tender documents should be downloaded from the
Government website, on which detailed instructions and information
regarding E-Tender are made available. He also prayed for dismissal of
the petition.
11. We have heard Mr. Salunke, learned counsel for the petitioner,
Mr. Tekale, learned AGP for respondent no.1-State, Mr. Dhorde, learned
senior counsel for respondent nos.2 to 5 and Mr. Deshmukh, learned
counsel for respondent nos.6 and 7 and with their assistance have also
perused the relevant pages of the documents which were brought to our
notice by all the counsel.
ANALYSIS & CONCLUSIONS :-
12. There is no dispute that the bank statement has not been
uploaded alongwith tender document. The petitioner has, however, now
annexed the relevant bank statement in the rejoinder to the reply of
respondents to show that the EMD money has been paid from its account.
13. The issue which arises for our consideration is whether the
failure to upload the bank statement alongwith tender document would
entitle the respondents to reject the technical bid of the petitioner.
Therefore, it is relevant to quote clauses of the tender notice and tender
documents in this regard, on which the parties have placed heavy
reliance.
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14. Following are the clauses of Notice Inviting Tender annexed at
page 133 which reads as under:-
2) The forms of Tender documents are available on the e Tendering
website of Govt. of Maharashtra https://mahatenders.gov.in. The aspiring
Bidders will have to download Tender form, from the website mentioned
above. The bidder has to fill in formats given in downloaded tender
document and upload to the above said website. Also he has to upload
the scanned copy of duly filled in formats, along with scanned copies of
required documents.
4) Blank tender forms will have to be downloaded by the contractor only
from the website of Govt. of Maharashtra https://mahatenders.gov.in.
While submitting the dully filled in Tender Documents, the Bidder are
required to deposit Tender processing fee of Rs. 5,900/- and E.M.D.
Rs.32,83,850/- through e-payment gateway. The E.M.D. online shall be
submitted in NEFT / RTGS from contractor’s own bank account, tender
fee and EMD transferred from any other account shall not be considered
and in such a case, the tender shall be considered as non-responsive. As
per GR Nivida/0417/(pr.kr.247/17) Mo. pr.-1 Date.18/10/2023 and
Point No. 3.3 and 9.2 (ii), the contractor has to prepare & submit the
required Documents Online on or before as per schedule. Hard copy of
tender documents will not be accepted.
7) Additional details regarding e-tendering are available in the Tender
Document on portal. If any assistance is required regarding e-tendering
(Uploading and Downloading), please contact on NIC’s e-procurement
help line Number 0120-4001002, 4001005, 6277787.
Page No. 142 of Section I of Detailed Tender Notice :-
1.3-A e-Tendering Instruction to Applicants :
…
.…
7. Bidder should arrange for the EMD as specified in the tender and EMD
to be deposited Online/e-payment gate way available on web site
(https://mahatenders.gov.in) within the stipulated date and time from
the account of concerned contractor. The scan copy of receipt of
online/NEFT/RTGS is required to be uploaded along with tender
document.
As per Gov GR (WRD) Nivida 0417/(pra.kra.247/117) Mo.pra.-1 date
18/10/2023 mentioned in para No. 3.3 & 9.2(ii), Online EMD amount
must be invariably deposited / transferred from the contractors own bank
account only. Bank statement showing the transaction shall be submitted
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in the envelope No. 01. Bid submitted without bank statement shall be
considered as nonresponsive. EMD transferred from any other account
shall not be considered & in such a case the tender shall be considered as
non-responsive.
Page No. 149 of Rejoinder :-
7.0 MANNER OF ON-LINE SUBMISSION OF e-TENDER AND ITS
ACCOMPANIMENTS:
Tender is to be submitted on-line on the Government of Maharashtra
website (https://mahatenders.gov.in) in two separate e-covers.
A) Cover No.1:-
Note: - Only Scan Copy of Original Certificate will be considered
The first cover on the portal as clearly marked as Technical Cover No.1
shall contain the following documents duly scanned and uploaded.
I) Detail of online deposit of tender fee & earnest money through
payment gateway by the bidders by modes e-payment gate way available
on web site (https://mahatenders.gov.in) transfer of bank having core
banking facility as stated in 1.3 of Annexure ‘A’. Certificates of exemption
for payment of earnest money shall not be accepted. Actual payment
receipt of EMD deposited online through e-payment Gateway available
on website (https://mahatenders.gov.in) shall be uploaded with tender
documents within stipulated date and time. EMD and SD to be paid from
Bidders account only, Bidder should upload bank statement clearly
showing transaction and bidders details such as Name, Account no., etc.
Page Nos. 158, 164 and 165 of Rejoinder :-
8.1 TECHNICAL Cover No.1
First of all, TECHNICAL Cover No.1 of the tenderer will be on-line
opened to verify its contents as per requirements. For the purpose of this
particular contract, the tenderer shall meet the requirement as stated at
Sr.No.8 in Annex-"A" of this section. If the various documents contained
in this 'covers' do not meet the requirements of the department, a note
will be recorded accordingly by the tender opening (on-line) authority,
and the said tenderers Cover No.2 will not be considered for further
action, and the same will be recorded. The decision of the tender opening
authority shall be final in this regard and binding on the contractors.
19) Tender documents from bidders will not be accepted in physical form
(hard copy) in any circumstances except original Demand Draft, Bank
Guarantee.
22) All Conditions laid down in the Government of Maharashtra
Resolution WRD Department Marathi Gr. No. Nivida 0417/ (Pra.Kra
247/17) Mopra-1 Date.18/10/2023 and guideline issued by Govt. of
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Maharashtra from time to time shall be applicable for uploading /
opening and acceptance of the tender.
24) No Evaluation will be done when no documents are submitted with
the bid and tender will not be qualified for the work.
25) It shall be mandatory to pay EMD Amount through online RTGS/
NEFT from Concerned Deposit Account of the Tenderer. Online EMD
amount must be invariably deposited/transferred from the contractor’s
own bank account only. Bank statement showing the transaction shall be
submitted in envelope No.1 Bid Submitted without bank statement shall
be considered as non-responsive.
15. Certain clauses of Government Resolution dated 18 October
2023 reads as under :-
९.२ लिफाफा क्र.१ :- यामध्ये खालील कागदपत्रांच्या प्रती निविदाकाराने सादर
कराव्यात.
i. … … …
ii. आवश्यक बयाणा रक्कम भरल्याचा पुरावा (Scan copy of bank statement
showing EMD payment made)
९.५ कोणती कागदपत्रे निविदेसोबत सादर न केल्यास मुल्यांकन केले जाणार नाही
(No evaluation will be done) व निविदा अपात्र ठरविण्यात येईल याची स्पष्ट
तरतुद निविदेत करावी.
१७.५ निविदाकाराने सादर केलेल्या कागदपत्रांची तपासणी करताना नवीन
कागदपत्रे मागविण्यात येऊ नयेत. फक्त सादर केलेल्या कागदपत्रांमध्ये स्पष्टता
नसल्यास त्याबाबतचे स्पष्टीकरण (Clarification) मागविण्यात यावे.
11. The bidder reads the terms and conditions and accepts the same to
proceed further to submit the bids.
16. On a perusal of the above clauses which are mentioned in the
detailed tender notice and tender document, it is clear that uploading of
the bank statement alongwith tender document is a mandatory pre-
condition before evaluating the technical bid. There is an express clause
which states that no physical document will be accepted. The authority
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issuing the tender is best placed to decide what conditions should be
mentioned to be complied with while uploading the tender. This Court
cannot sit in appeal over every such condition which the bidders have,
with open eyes, accepted before bidding. The petitioner, at more than one
place, was made aware in these documents that if the bank statement is
not uploaded the bid will be treated as non-responsive.
17. It is also important to note that these are commercial
documents, though relating to a public project, but when a private
commercial person files its bid, and moreso when he has accepted all the
terms and conditions of the tender documents, it cannot be permitted to
argue that such a condition should be dispensed with or an opportunity
should be given for its compliance. The above clauses expressly state that,
in the absence of the bank statement being uploaded, the bid will be
treated as non-responsive. The petitioner, having agreed to these
conditions, cannot now seek its dispensation, and more particularly from
this Court in its extraordinary jurisdiction while dealing with tender
matters where minimum interference is to be exercised by this Court.
18. There could be various reasons for uploading of the bank
statement to be made mandatory, namely, to ascertain whether the
bidders have made multiple bids, whether the bidder has the financial
capacity to make the payment of EMD, whether multiple bidders have
used the same account for depositing EMD, etc. The clause itself indicates
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that it is to verify that EMD has been paid from bidder’s own account that
bank statement is to be uploaded and consequences of its failure to do so
is also provided therein. These are the reasons which the authority
issuing the tender, to safeguard itself, has provided, and therefore, this
Court cannot step into the shoes of the issuing authority.
19. The GR dated 18 October 2023 is also referred to in these
tender conditions and documents, wherein the parties have agreed that
the same would be applicable to the present tender. The various clauses
of this GR reproduced above also indicates that the whole process of
filing the tender will be online, no physical document will be accepted,
and if any deficiency is found on account of non-furnishing of certain
documents alongwith tender, then such bid would not be considered.
There is no challenge to this GR and rightly so because the petitioner
while bidding has agreed to all the terms and conditions of the tender
including the terms and conditions of the GR, which is specifically
incorporated in the present tender.
20. It is not a case of a venial breach, but in respect of every
document to be uploaded as per the requirement of the tender, there is a
reason and object, and therefore, permitting such filling up of gaps after
the technical bid is rejected would derail the process of tender, and such
course of action cannot be permitted in matters relating to a tender of a
public project, moreso in this part of the State which invariably has to
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face the wrath of drought.
21. The petitioner should have taken utmost care in complying
with all the requirements of uploading the documents alongwith the
tender, moreso, when it was expressly made clear, in no uncertain terms
and at more than one place, that if the bank statement is not uploaded,
then such a bid will not be considered.
22. The E-Tender at pages 61-62 of the petition, relied upon by the
petitioner, itself states that the right to accept or reject the tender is
reserved by the Chief Engineer and a conditional tender will not be
accepted. At page 62, it is specifically mentioned that the contractor shall
study the guidelines regarding e-tendering to get clarification on the e-
tendering process. At page 61, it is also mentioned that tender document
should be downloaded from website and detailed instructions are given
on that website. At page 63, terms and conditions are accepted by the
bidder. Therefore, tender documents form part of the tender notice.
23. It is also important to note that the technical bid was opened on
4th August 2026, and the same was uploaded, wherein it was specified
that the bid of the petitioner is rejected on the ground of failure to
upload the bank statement. The petitioner himself, in the petition, in
paragraph Nos. 11 and 9, has admitted this. In our view, therefore, it
cannot be said that the petitioner was not made aware of the reason for
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disqualification. If the petitioner’s submission is accepted, then we fail to
understand how the petitioner has annexed page 68A, which contains
reason for disqualification coupled with their admission. The petitioner
did not raise any objection with respondents but filed present writ
petition on 7 August 2026 by which time financial bids were already
opened as per the schedule. The challenge to date not being mentioned
at page 92 of the petition on Technical Evaluation Report, on these facts,
does not carry the case of the petitioner any further.
24. Learned counsel for the petitioner has not brought to our notice
any clause of the tender condition or tender document which states that
the petitioner should be given an opportunity to rectify the defect of not
uploading the bank statement. In the absence of any clause giving such
an opportunity to rectify the defect as provided in the tender document,
such a requirement cannot be read into the present matter. The present
tender matter stands on a different footing than the other matters where
principles of natural justice are read into by the Courts. On the contrary,
it is expressly mentioned that if bank statement is not uploaded then bids
will be treated as non-responsive. This clearly shows that the chance of
rectification to upload bank statement is given a go-by.
25. The learned counsel for the petitioner submitted, by referring
to the e-tender notice guidelines, that it is specified therein that the
conditions in the e-tender notice will overrule the conditions stated in the
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tender document wherever relevant and applicable, and since uploading
of the bank statement is not specified in the e-tender notice, but only
uploading of the EMD payment receipt is mentioned, which is complied
with, the reason for rejection is unjustifiable. In our view, this submission
cannot be accepted for more than one reason. Firstly, in the e-tender
notice, there is nothing mentioned regarding uploading of the bank
statement, whereas the same is mentioned in the tender document. The
guidelines relating to overruling would apply where there is a conflict
between the conditions mentioned in the e-tender notice and tender
document. In the absence of any contradiction with respect to uploading
of the bank statement between what is specified in the e-tender notice
and tender document, this clause cannot be made applicable. In any case,
the said guidelines further state that, in case of a dispute between two or
more clauses, the decision of the Superintending Engineer will be final
and binding on both the parties. Assuming that there is any contradiction,
the Superintending Engineer, in this case, who has approved the technical
bid and who has evaluated the technical bid, has rejected the bid of the
petitioner on the ground of non-compliance with the requirement of
uploading the bank statements. Therefore, even on this count, the
submission made by the petitioner cannot be accepted. Thirdly, the notice
inviting tender itself provides for rejection of the bid if the bank
statements are not uploaded, and therefore, the submission made that
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such a condition is not there in the e-tender notice also cannot be
accepted. We have also reproduced the relevant clauses of the e-tender
notice and tender documents above. Therefore, this submission of the
petitioner cannot be accepted.
26. The learned counsel for the petitioner has also advanced a
submission with respect to his bid being lower than that of the successful
bidder and, therefore this Court should interfere in the matter. We are
afraid, we cannot accept such a submission. We have already upheld the
rejection of the technical bid of the petitioner and, therefore, price
quoted cannot be considered because financial bid will be considered
only if technical bid is accepted. Even otherwise, the difference between
financial bid of the petitioner and that of the successful bidder is only
+1% -1% which is not a material factor for this Court to shock its
conscience, moreso when the estimated cost as per tender is Rs.65 crores.
Therefore, this submission is also rejected.
27. The decision relied upon by the petitioner in the case of Poddar
Steel Corporation (supra) is distinguishable on facts. In that case, the
tender was accompanied by a banker’s cheque issued by the Union Bank
of India and not the State Bank as required under Clause no.6 of the
tender, but the banker’s cheque was enclosed alongwith the tender
document. It is on this fact that the Hon’ble Supreme Court classified
tender conditions into two categories, namely, essential conditions of
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eligibility and ancillary object to be achieved by the condition and since
the banker’s cheque was filed alongwith tender document, the Hon’ble
Supreme Court observed that the eligibility condition was satisfied,
though the banker’s cheque was issued by the Union Bank of India and
not the State Bank. In the instant case, the tender process is online and
not physical as was the case before the Hon’ble Supreme Court. Secondly,
in the instant case before us, there is an express condition that no
physical document will be accepted and further if the bank statement is
not uploaded, then the bid will not be considered at all. There was no
such clause before the Hon’ble Supreme Court in the case of Poddar Steel
Corporation (supra). In our view, the facts being different in the case of
Poddar Steel Corporation (supra), the said decision cannot be of any
assistance to the petitioner.
28. Learned senior counsel Mr. Dhorde for respondent nos.2 to 5 is
justified in relying upon the decisions which are referred to above which
caution this Court to exercise restraint in interfering with tender matters.
The relevant paragraphs of these decisions are reproduced hereunder.
29. The relevant paragraphs of Glodyne Technoserve Limited vs.
State of Madhya Pradesh & Ors. (supra) read as under :-
13. It was urged by the learned counsel that this is not a case of a
tenderer not having a valid certification as required, but a case of not
filing it with the bid documents despite having the same. Mr Salve urged
that in view of Clause 9 of Section 7.1.1, the appellant's bid documents
had been wrongly rejected at the technical bid stage, without even
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considering the financial bid which had been submitted by it.
46. The above provision obliges a tenderer to produce along with the bid
document a copy of the quality certificate which is valid and active on the
date of submission of the bid and it does not enable a bidder to withhold
the copy of such quality certificate. Where the quality certificate will be
expiring shortly and is due for renewal, the bidder is also obliged to
produce the renewed certificate at the time of signing of the contract. The
appellant claimed to have a valid and active ISO 9001:2000 certificate at
the time of submission of the bid, but did not produce a copy of the said
certificate along with the bid document.
47. The submissions made on behalf of the appellant proceeds on the
basis that it was entitled, almost as a matter of right, not to submit the
documents required to be submitted along with the bid documents on the
supposition that, even if such documents were valid and active, they
could be submitted at the time of signing of the memorandum of
understanding. The appellant had a valid and active ISO 9001:2000
certification which it did not submit along with the bid documents, may
be due to inadvertence, but whether such explanation was to be accepted
or not lay within the discretionary powers of the authority inviting the
bids. The decision taken to reject the technical bid of the appellant cannot
be said to be perverse or arbitrary. We need not refer to the decisions cited
by the learned Attorney General or the appellant in this regard, as the
principles enunciated therein are well established.
30. The relevant paragraphs of K. K. Vidyut, Ahmednagar vs. Union
of India & Ors. (supra) read as under :-
11. Perusal of clause (e) would clearly reveal that if the tenderers fail to
submit the above details along with their offer, their offer will be
summarily rejected. It could, thus, be seen that the said clause makes it
mandatory to submit the documents mentioned therein and provides for
consequences of non-submission of the documents. It could further be
clearly seen that it is essential for the bidder to be qualified in the
financial bid, to submit the documents mentioned in the said clause. It
even provides that in case any fresh contract is awarded to the tenderer
in between the date of submission and prior to finalization of the instant
tender, the tenderer must immediately inform in writing to the tender
inviting authority for the purpose of evaluation of their bidding capacity.
12. It would thus be clearly seen that the aforesaid clauses were
applicable to all the tenderers. We may say that they were not only
applicable but they were very much essential because in the absence of
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those documents, the employer could not have ascertained the technical
and financial viability of the bidder to participate in the process.
Admittedly, the documents as required under subclause (c) and (e) of
Clause 6, have not been submitted by the petitioner.
31. The relevant paragraphs of N. G. Projects Limited vs. Vinod
Kumar Jain & Ors. (supra) read as under :-
11. The learned counsel for the appellant also referred to a judgment
reported as Central Coalfields Ltd. v. SLL-SML (Joint Venture
Consortium) [Central Coalfields Ltd. v. SLL-SML (Joint Venture
Consortium), (2016) 8 SCC 622 : (2016) 4 SCC (Civ) 106] wherein it
was held that it was not for the Court to substitute its opinion in respect
of acceptance of bank guarantee. It was held that when a particular
format for a bank guarantee is prescribed, then the bidder is required to
stick to that particular format alone with the caveat that the State
reserves the right to deviate from the terms of the bid document within
the acceptable parameters. This Court held as under : (SCC pp. 632-33 &
638, paras 32, 37, 47 & 49)
“32. The core issue in these appeals is not of judicial review of the
administrative action of CCL in adhering to the terms of NIT and the
GTC prescribed by it while dealing with bids furnished by participants
in the bidding process. The core issue is whether CCL acted perversely
enough in rejecting the bank guarantee of JVC on the ground that it
was not in the prescribed format, thereby calling for judicial review by
a constitutional court and interfering with CCL's decision.
37. For JVC to say that its bank guarantee was in terms stricter than
the prescribed format is neither here nor there. It is not for the
employer or this Court to scrutinise every bank guarantee to
determine whether it is stricter than the prescribed format or less
rigorous. The fact is that a format was prescribed and there was no
reason not to adhere to it. The goalposts cannot be rear-ranged or
asked to be rearranged during the bidding process to affect the right
of some or deny a privilege to some.
47. The result of this discussion is that the issue of the acceptance or
rejection of a bid or a bidder should be looked at not only from the
point of view of the unsuccessful party but also from the point of view
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of the employer. As held in Ramana Dayaram Shetty [Ramana
Dayaram Shetty v. International Airport Authority of India, (1979) 3
SCC 489] the terms of NIT cannot be ignored as being redundant or
superfluous. They must be given a meaning and the necessary
significance. As pointed out in Tata Cellular [Tata Cellular v. Union of
India, (1994) 6 SCC 651] there must be judicial restraint in interfering
with administrative action. Ordinarily, the soundness of the decision
taken by the employer ought not to be questioned but the decision-
making process can certainly be subject to judicial review. The
soundness of the decision may be questioned if it is irrational or mala
fide or intended to favour someone or a decision ‘that no responsible
authority acting reasonably and in accordance with relevant law could
have reached’ as held in Jagdish Mandal [Jagdish Mandal v. State of
Orissa, (2007) 14 SCC 517] followed in Michigan Rubber [Michigan
Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216].
49. Again, looked at from the point of view of the employer if the
courts take over the decision-making function of the employer and
make a distinction between essential and non-essential terms contrary
to the intention of the employer and thereby rewrite the arrangement,
it could lead to all sorts of problems including the one that we are
grappling with. For example, the GTC that we are concerned with
specifically states in Clause 15.2 that ‘Any bid not accompanied by an
acceptable Bid Security/EMD shall be rejected by the employer as non-
responsive’. Surely, CCL ex facie intended this term to be mandatory,
yet the High Court held [SLL-SML (Joint Venture Consortium) v.
Central Coalfields Ltd., 2015 SCC OnLine Jhar 4819] that the bank
guarantee in a format not prescribed by it ought to be accepted since
that requirement was a non-essential term of the GTC. From the point
of view of CCL, the GTC has been impermissibly rewritten by the High
Court.”
17. Therefore, the position of law with regard to the interpretation of
terms of the contract is that the question as to whether a term of the
contract is essential or not is to be viewed from the perspective of the
employer and by the employer. Applying the aforesaid position of law to
the present case, it has been the contention of Respondent 1 that the
format for bank guarantee was not followed strictly by the State and that
the relaxation given was not uniform, in that Respondent 1 was singled
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out. The said contention has found favour with the courts below.
18. In the present matter, Respondent 1 submitted its first bank
guarantee on 8-7-2019 in relation to the first tender for the same project.
However, this first tender was cancelled through a notice, as
acknowledged by Respondent 1. This being the case, being fully aware of
the fact that the first tender was no more in force and given that there
was specifically a new tender in place, Respondent 1 was required to
submit a bank guarantee in the format specified as per the agreement.
However, Respondent 1 opted to use the same bank guarantee which was
drawn on 8-7-2019, albeit with a letter from the bank indicating that
there is now an amendment with regard to the dates and the contract
therein. It is patently clear that if the format for a bank guarantee is an
essential condition of the contract, the format in which the respondent
has opted to submit it is a substantial variation in the terms of the
contract. If the variation that is done by Respondent 1 is considered to be
an acceptable variation, then it would create an onerous burden on the
tendering authority to ensure that each underlying bank guarantee is
valid and further to consider whether the amendment letter itself was
with the full knowledge and consent of the bank. As it were, on the facts
of the case, the State informed the High Court that it had attempted to
verify the amendment but there was no response from the Bank. This
being the case, it is submitted that the relaxation in the format to bank
guarantee was rightly not provided to the respondent.
32. The relevant paragraphs of Utkal Suppliers (Supra) read as
under :-
14. This Court has repeatedly held that judicial review in these matters is
equivalent to judicial restraint in these matters. What is reviewed is not
the decision itself but the manner in which it was made. The writ court
does not have the expertise to correct such decisions by substituting its
own decision for the decision of the authority. This has clearly been held
in the celebrated case of Tata Cellular v. Union of India [Tata Cellular v.
Union of India, (1994) 6 SCC 651] , para 94 of which states as follows :
(SCC pp. 687-88)
“94. The principles deducible from the above are:
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(1) The modern trend points to judicial restraint in administrative
action.
(2) The court does not sit as a court of appeal but merely reviews
the manner in which the decision was made.
(3) The court does not have the expertise to correct the
administrative decision. If a review of the administrative decision is
permitted it will be substituting its own decision, without the
necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial
scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the
contract is reached by process of negotiations through several tiers.
More often than not, such decisions are made qualitatively by
experts.
(5) The Government must have freedom of contract. In other
words, a fair play in the joints is a necessary concomitant for an
administrative body functioning in an administrative sphere or
quasi-administrative sphere. However, the decision must not only
be tested by the application of Wednesbury principle of
reasonableness (including its other facts pointed out above) but
must be free from arbitrariness not affected by bias or actuated by
mala fides.
(6) Quashing decisions may impose heavy administrative burden
on the administration and lead to increased and unbudgeted
expenditure.”
15. Equally, this Court in Afcons Infrastructure Ltd. v. Nagpur Metro Rail
Corpn. Ltd.[Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd.,
(2016) 16 SCC 818, para 15] (“Afcons”), has laid down : (SCC p. 825,
paras 14-15)
“14. We must reiterate the words of caution that this Court has
stated right from the time when Ramana Dayaram Shetty v.
International Airport Authority of India [Ramana Dayaram Shetty v.
International Airport Authority of India, (1979) 3 SCC 489] was
decided almost 40 years ago, namely, that the words used in the
tender documents cannot be ignored or treated as redundant or
superfluous — they must be given meaning and their necessary
significance. In this context, the use of the word “metro” in Clause
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4.2(a) of Section III of the bid documents and its connotation in
ordinary parlance cannot be overlooked.
15. We may add that the owner or the employer of a project,
having authored the tender documents, is the best person to
understand and appreciate its requirements and interpret its
documents. The constitutional courts must defer to this
understanding and appreciation of the tender documents, unless
there are mala fides or perversity in the understanding or
appreciation or in the application of the terms of the tender
conditions. It is possible that the owner or employer of a project
may give an interpretation to the tender documents that is not
acceptable to the constitutional courts but that by itself is not a
reason for interfering with the interpretation given.”
This view of the law has been subsequently followed repeatedly — see
Montecarlo Ltd. v. NTPC [Montecarlo Ltd .v. NTPC, (2016) 15 SCC
272] [at SCC para 25], Caretel Infotech Ltd. v. Hindustan Petroleum
Corpn. Ltd. [Caretel Infotech Ltd. v. Hindustan Petroleum Corpn. Ltd.,
(2019) 14 SCC 81] [at SCC paras 38 and 39], and State of M.P. v. U.P.
State Bridge Corpn. Ltd. [State of M.P. v. U.P. State Bridge Corpn. Ltd.,
(2022) 16 SCC 633 : 2020 SCC OnLine SC 1001] [at SCC paras 24 to
26].
16. In Galaxy Transport Agencies v. New J.K. Roadways, Fleet Owners &
Transport Contractors [Galaxy Transport Agencies v. New J.K. Roadways,
Fleet Owners & Transport Contractors, (2021) 16 SCC 808 : 2020 SCC
OnLine SC 1035] , after referring to para 15 of Afcons [Afcons
Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., (2016) 16 SCC 818,
para 15] , it was held : (Galaxy Transport Agencies case [Galaxy
Transport Agencies v. New J.K. Roadways, Fleet Owners & Transport
Contractors, (2021) 16 SCC 808 : 2020 SCC OnLine SC 1035] , SCC
paras 15-17)
“15. In the judgment in Bharat Coking Coal Ltd. v. AMR Dev Prabha
[Bharat Coking Coal Ltd. v. AMR Dev Prabha, (2020) 16 SCC 759] ,
under the heading “Deference to authority's interpretation”, this Court
stated : (SCC p. 776, paras 50-52)
‘50. Lastly, we deem it necessary to deal with another fundamental
problem. It is obvious that Respondent 1 seeks to only enforce terms
of the NIT. Inherent in such exercise is interpretation of contractual
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terms. However, it must be noted that judicial interpretation of
contracts in the sphere of commerce stands on a distinct footing than
while interpreting statutes.
51. In the present facts, it is clear that BCCL and India have laid
recourse to clauses of the NIT, whether it be to justify condonation of
delay of Respondent 6 in submitting performance bank guarantees or
their decision to resume auction on grounds of technical failure. BCCL
having authored these documents, is better placed to appreciate their
requirements and interpret them. [Afcons Infrastructure Ltd. v. Nagpur
Metro Rail Corpn. Ltd., (2016) 16 SCC 818, para 15]
52. The High Court [AMR Dev Prabha v. Union of India, 2018 SCC
OnLine Jhar 2708] ought to have deferred to this understanding,
unless it was patently perverse or mala fide. Given how BCCL's
interpretation of these clauses was plausible and not absurd, solely
differences in opinion of contractual interpretation ought not to have
been grounds for the High Court to come to a finding that the
appellant committed illegality.’
16. Further, in the recent judgment in Silppi Constructions Contractors v.
Union of India [Silppi Constructions Contractors v. Union of India,
(2020) 16 SCC 489] , this Court held as follows : (SCC pp. 501-02, para
20)
‘20. The essence of the law laid down in the judgments referred to
above is the exercise of restraint and caution; the need for
overwhelming public interest to justify judicial intervention in matters
of contract involving the State instrumentalities; the courts should
give way to the opinion of the experts unless the decision is totally
arbitrary or unreasonable; the court does not sit like a court of appeal
over the appropriate authority; the court must realise that the
authority floating the tender is the best judge of its requirements and,
therefore, the court's interference should be minimal. The authority
which floats the contract or tender, and has authored the tender
documents is the best judge as to how the documents have to be
interpreted. If two interpretations are possible then the interpretation
of the author must be accepted. The courts will only interfere to
prevent arbitrariness, irrationality, bias, mala fides or perversity. With
this approach in mind we shall deal with the present case.’
17. In accordance with these judgments and noting that the
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interpretation of the tendering authority in this case cannot be said to be
a perverse one, the Division Bench [New JK Roadways v.Union Territory
of J&K, 2020 SCC OnLine J&K 733] ought not to have interfered with it
by giving its own interpretation and not giving proper credence to the
word “both” appearing in Condition No. 31 of the NIT. For this reason,
the Division Bench's conclusion that JK Roadways was wrongly declared
to be ineligible, is set aside.”
33. The decision of Poddar Steel Corporation (Supra) came up for
consideration before the Hon’ble Supreme Court in the case of Central
Coalfields Limited and Another vs. SLL-SML (Joint Venture Consortium)
& Ors.7. The issue before the Hon’ble Supreme Court was whether the
condition of furnishing a bank guarantee in a prescribed form mentioned
in the tender document is an essential condition or not and whether a
bank guarantee filed otherwise than in the prescribed form can be a
ground for rejection of the tender. The decision in the case of Poddar
Steel Corporation (supra) was cited for the proposition that the bank
guarantee format is not an essential condition but an ancillary condition.
The Hon’ble Supreme Court, in paragraph 42, observed that Poddar Steel
Corporation (supra) did not advert to the “privilege of participation”
principle laid down in Ramana Dayaram Shetty vs. The International
Airport Authority of India8. This principle was ignored, as per the Hon’ble
Supreme Court, in the case of Poddar Steel Corporation (supra). In
paragraph 46, the Hon’ble Supreme Court accepts that in Poddar Steel
7 (2016) 8 SCC 622
8 (1997) 3 SCC 489
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Corporation (supra), a distinction has been drawn between essential and
ancillary or subsidiary conditions in the bid documents. The Hon’ble
Supreme Court, in paragraph 47, after considering Poddar Steel
Corporation (supra) and other decisions, especially Ramana Dayaram
Shetty (supra) observes that the issue of acceptance or rejection of a bid
should be looked at not only from the point of view of the unsuccessful
party but also from the point of view of the employer. The Court relies
upon the decision in the case of Ramana Dayaram Shetty (supra) and
observes that the terms of the contract cannot be ignored as being
redundant or superfluous. They must be given a meaning and the
necessary significance. The Court further went on to observe in
paragraph 48 that whether a term of the tender is essential or not is a
decision which should be taken by the employer and which the Court
should respect. The decision of the employer to treat the condition as an
essential condition cannot be questioned by the Court. If the Court starts
questioning the decision of the employer, then the Court would be taking
over the function of the tender-issuing authority, which it cannot do.
34. Applying the ratio of this decision, which has considered the
earlier decision of Poddar Steel Corporation (supra), to the facts before
this Court in the instant case, the respondents have, in the tender
document, clearly spelt out their intention that non-uploading of the
bank statement would result in the bid not being considered. On a
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reading of various clauses of the tender document and e-tender notice,
the respondents have treated non-uploading of the bank statement as an
essential condition. Therefore, this Court cannot treat non-compliance
with such a condition, which has been treated by the respondents as
mandatory, as directory and permit the petitioner to comply with the
same at this stage.
35. The decision in the case of of Poddar Steel Corporation (supra)
once again came up for consideration before the Hon’ble Supreme Court
in the case of Vidarbha Irrigation Development Corporation & Ors. vs.
M/s. Anoj Kumar Agarwala & Ors.9. In this case, the bidder was put to
notice that if any deviation from terms of the tender is found, then the
tender will be treated as non-responsive. The bidder furnished a bank
guarantee for a period lesser than what was required by the tender. The
bid came to be rejected on this ground. The Hon’ble Supreme Court after
considering the decision in the case of Poddar Steel Corporation (supra)
upheld the rejection. The facts of present case before us is similar to that
of Vidarbha Irrigation Development Corporation & Ors. (supra) and,
therefore, we do not see any reason to interfere in the decision of the
respondents in rejecting technical bid of the petitioner.
36. Therefore, in our view, the decision of Poddar Steel Corporation
(supra), in the light of the subsequent development in law by the Hon’ble
9 (2020) 17 SCC 577
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Supreme Court in various decisions referred to hereinabove, cannot come
to the assistance of the petitioner for seeking rectification of an essential
condition so as to treat the petitioner as qualified in the technical bid.
37. The Hon’ble Supreme Court has repeatedly cautioned and
advised the Court to exercise judicial restraint in matters dealing with
tenders since the Constitutional Court does not have the expertise to
correct decisions by substituting its own decision for the decision of the
authority.
38. For all the above reasons, the writ petition is dismissed. Rule is
discharged and interim relief stands vacated.
(JITENDRA JAIN, J.) (KISHORE C. SANT, J.)
Sayyed
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