Holding

The Court held that BCCL’s rejection of the appellant’s technical bid and acceptance of Respondent No. 8’s bid were arbitrary, illegal and violative of Article 14, and therefore set aside the decision.

Summary

Banshidhar Construction Pvt. Ltd. (the appellant) submitted a technical bid for a coal‑mining mega‑project tender floated by Bharat Coking Coal Limited (BCCL). The Technical Bid Committee rejected the appellant’s bid, alleging non‑compliance with Clause 10 of the Notice Inviting Tender (NIT) concerning the Power of Attorney, while accepting the bid of Respondent No. 8 despite its failure to submit mandatory audited balance‑sheet documents. The appellant challenged the decision before the High Court, which upheld the rejection, and then appealed to the Supreme Court. The Supreme Court examined whether the rejection and acceptance were arbitrary, discriminatory, and violative of Article 14, and considered the scope of judicial review in government contracts. It held that the appellant’s Power of Attorney complied with the NIT and that the acceptance of Respondent No. 8’s non‑compliant bid was unlawful. Consequently, the Court set aside BCCL’s decision and ordered a fresh tender process, allowing the appeal.

Issues considered

Whether BCCL was justified in rejecting the appellant’s technical bid on the ground of alleged non‑compliance with Clause 10 of the NIT relating to the Power of Attorney.
Whether the acceptance of Respondent No. 8’s technical bid, despite its failure to submit mandatory audited financial documents, was arbitrary, discriminatory and violative of Article 14.
What is the extent of judicial review over the award of government contracts, especially for mega‑projects.

Legislation cited

Power of Attorney Act, 1882s. 2

Subjects

TenderTechnical bidSuccessful bidderEligibility criteriaGovernment ContractJudicial InterventionTender for mega projectTechnically disqualifiedAudited balance sheetsSubmitting/uploading tender documentsTechnical bid committeeGovernment bodies/instrumentalitiesAward of contracts for Mega projectsFree from arbitrariness, bias or actuated by malafidesGovernment bodiesPublic authoritiesContractual mattersRight to equalityBidding processFinancial capacityAudited Annual ReportsPower of AttorneyOpening of technical bids

Judgment

[2024] 10 S.C.R. 425 : 2024 INSC 757

Banshidhar Construction Pvt. Ltd.
v.
Bharat Coking Coal Limited & Others
(Civil Appeal No. 11005 of 2024)
04 October 2024
[Bela M. Trivedi* and Satish Chandra Sharma, JJ.]

Issue for Consideration

Issue arose whether the respondent was justified in rejecting the
technical bid of the appellant, while accepting the technical bid of
the respondent no. 8-Company, and declaring it to be successful
bidder, though the respondent no. 8 had not complied with the
mandatory requirement of submitting the important documents
relating to the qualification criteria as contained in Clause 10 of
the Notice Inviting Tender-NIT.

Headnotes†

Government Contracts – Judicial Intervention – Scope of –
Tender for mega project – Respondent no. 1-BCCL, a public
sector undertaking floated tender – Appellant participated in
the Tender, however, declared to be technically disqualified on
the ground that it did not comply with the Clause 10 of NIT, as
regards power of attorney for signing of bid – Respondent no.
8 Company declared successful bidder – Aggrieved, appellant
filed the writ petition on the ground that the respondent no.8
had not submitted the scanned copies of the Audited balance
sheets required to be submitted as per Clause 10 NIT in
relation to the financial capacity, while submitting/uploading
the tender documents and it was only when clarification
was sought from the respondent No.8 about the shortfall of
documents, the said Audited balance sheets were submitted
after the technical bids were opened – High Court dismissed
the writ petition, confirming the decision of the technical bid
committee of the respondent rejecting the technical bid of the
appellant, while accepting the technical bid of the respondent
no. 8 – Challenge to:

* Author
426 [2024] 10 S.C.R.

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Held: Government bodies/instrumentalities are expected to act in
absolutely fair, reasonable and transparent manner, particularly
in the award of contracts for Mega projects – Any element of
arbitrariness or discrimination may lead to hampering of the entire
project which would not be in the public interest – Court does not
sit as a Court of Appeal in the matter of award of contracts and
it merely reviews the manner in which the decision was made;
and that the Government and its instrumentalities must have a
freedom of entering into the contracts – However, the decision of
the government/instrumentalities must be free from arbitrariness
and must not be affected by any bias or actuated by malafides –
Right to equality u/Art.14 abhors arbitrariness – Public authorities
have to ensure that no bias, favouritism or arbitrariness are
shown during the bidding process and that the entire bidding
process is carried out in absolutely transparent manner – On
facts, the power of attorney was duly executed in favour of the
donee, the signatory of the documents, and was duly not arised
before its submission along with other important documents
required to be submitted as per the NIT by the appellant, before
the last date of submission fixed by the respondent – Hence,
no legal or justifiable ground to reject the technical bid of the
appellant – Action of the respondent in rejecting the technical
bid of the appellant on absolutely extraneous ground and
accepting the technical bid of the respondent no.8 though
submitted in utter non-compliance of the mandatory requirement
of Clause 10 NIT, and subsequently calling upon the respondent
no.8 to furnish the shortfall of documents after the opening
of technical bids of the bidders, totally arbitrary and illegal –
Furthermore, it cannot be said that the project being
Infrastructure project and also one of the Mega projects, this
Court may not interfere more particularly in view of the fact
that agreement has already been entered into between the
respondent and the Special Purpose Vehicle of respondent no.8 –
Impugned decision of the respondent rejecting the technical bid
of the appellant and further declaring the respondent no.8 as
successful bidder grossly arbitrary, illegal, discriminatory and
violative of Art.14, thus, set aside – Any action/process undertaken
or agreement entered into pursuant to the said decision also set
aside. [Paras 19-21, 29, 30]
[2024] 10 S.C.R. 427

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

Case Law Cited

Sterling Computers Limited v. M/s. M & N Publications Limited
and Others [1993] 1 SCR 81 : (1993) 1 SCC 445; Tata Cellular
v. Union of India [1994] Supp. 2 SCR 122 : (1994) 6 SCC 651;
ABL International Limited and Another v. Export Credit Guarantee
Corporation of India Limited and Others (2004) 3 SCC 553; Jagdish
Mandal v. State of Orissa and Others [2006] Supp. 10 SCR 606 :
(2007) 14 SCC 517; Mihan India Ltd. v. GMR Airports Ltd. and Others
[2022] 19 SCR 523 : (2022) SCC Online SC 574; Central Coalfields
Limited and Another v. SLL-SML (Joint Venture Consortium) and
Others [2016] 4 SCR 890 : (2016) 8 SCC 622 – referred to.

List of Acts

Power of Attorney Act, 1882.

List of Keywords

Tender; Technical bid; Successful bidder; Eligibility criteria;
Government Contract; Judicial Intervention; Tender for mega
project; Technically disqualified; Audited balance sheets;
Submitting/uploading tender documents; Technical bid committee;
Government bodies/instrumentalities; Award of contracts for Mega
projects; Free from arbitrariness, bias or actuated by malafides;
Government bodies; Public authorities; Contractual matters; Right
to equality; Bidding process; Financial capacity; Audited Annual
Reports; Power of Attorney; Opening of technical bids.

Case Arising From

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11005 of 2024

From the Judgment and Order dated 18.07.2024 of the High Court
of Jharkhand at Ranchi in WPC No. 2896 of 2024

Appearances for Parties

Ravi Shankar Prasad, Naviniti Singh, Sr. Advs., Pankaj Bhagat, Advs.
for the Appellants.

Tushar Mehta, Solicitor General, Vikramjit Banerjee, A.S.G., Balbir
Singh, Anupam Lal Das, Sr. Advs., Ankur Kashyap, Amit Sharma, Advs.
for the Respondents.
428 [2024] 10 S.C.R.

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Judgment / Order of the Supreme Court
Judgment
Bela M. Trivedi, J.
1. Leave granted.
2. The short question that falls for consideration before this Court is
whether the Respondent Bharat Coking Coal Limited (BCCL) was
justified in rejecting the Technical bid of the Appellant, while accepting
the Technical bid of the Respondent no. 8-Company, and declaring
it to be successful bidder, though the Respondent no. 8 had not
complied with the mandatory requirement of submitting the important
documents relating to the qualification criteria as contained in Clause
10 of the Notice Inviting Tender (NIT) dated 16.08.2023, and thereby
had failed to qualify the Eligibility criteria laid down therein?
3. The Appellant-Banshidhar Construction Private Limited has assailed
the Judgment and Order dated 18.07.2024 passed by the High
Court of Jharkhand at Ranchi in Writ Petition (Civil) No. 2896 of
2024, whereby the High Court has dismissed the said writ petition,
confirming the impugned decision dated 06.05.2024 of the Technical
Bid Committee of the Respondent-BCCL rejecting the Technical bid
of the Appellant.
4. The Respondent no.1-BCCL is a subsidiary of Coal India Limited
and the Respondent Nos. 2-7 are the authorities/employees of
the BCCL. On 16.08.2023 the Respondent no. 1 floated a Tender
bearing reference No. NIT no. BCCL/CMC/MDO-RS/SIMLABAHAL/
BASTACOLLA Area/2023/318 for the project to “Re-open, salvage,
rehabilitate, develop, construct and operate for excavation I extraction
of coal from Amalgamated East Bhuggatdih Simlabahal Coal Mine
and delivery thereof to the Authority at Bastacolla Area of BCCL”
on revenue sharing basis, for a period of twenty-five years. The
Appellant-company vide Board Resolution dated 07.11.2023 resolved
to authorise its Director Lalti Devi for the purpose of participating
in the said Tender and also executed a Power of Attorney in the
prescribed format in her favour. The said Power of Attorney was
notarized on 14.11.2023. Accordingly, the Appellant participated in
the said Tender by submitting its bid on 29.11.2023.
5. The Technical bids of the said Tender were opened on 04.12.2023
and after the evaluation of the same, the Appellant was declared to
[2024] 10 S.C.R. 429

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

be technically disqualified on 06.05.2024. As per the Tender Summary
Reports dated 07.05.2024, the Technical bid of the Appellant was
stated to have been rejected on the ground that it did not comply
with the Clause 10 of NIT (Part I/Cover I other important documents
(OID) Point No. 02 Appendix II (Power of Attorney for signing of bid.)
6. The Financial bids of the two technically qualified bidders were opened
on 07.05.2024 and the Respondent no. 8-Company was declared to
be the successful bidder. The Appellant being aggrieved by the said
decision of the respondent-BCCL, had filed the Writ Petition before
the High Court, which has been dismissed by the High Court vide
the impugned order.
7. On 23.08.2024 the Court had issued Notices to the Respondents
and the learned counsel appearing for Respondents on caveat, had
orally assured the Court that they shall not proceed further with the
project in question. In order to have clarity on the decision taken by
the Tender Recommendation Committee of the BCCL on 06.05.2024,
we had called for the original file in respect of the entire tender
proceedings from the Respondents nos.1 to 7 vide the order dated
17.09.2024 and the same was produced for our perusal.
SUBMISSION BY THE LEARNED ADVOCATES: -
8. Learned Senior Advocate Mr. Ravi Shankar Prasad appearing for
the Appellant vehemently submitted that the reason for rejecting the
Appellant’s Technical bid was grossly arbitrary and discriminatory
in as much as not only the bid of Respondent No. 8 was accepted
though it was not accompanied by important documents, but it was
allowed to subsequently file the said documents to make up the lack
of eligibility. He further submitted that the Appellant had complied
with all the conditions of the NIT, however The Technical bid of the
Appellant was rejected on the extraneous ground by the Technical
Bid Committee of the Respondent-BCCI that the bid documents
were signed on 13.11.2023, and other documents including Power
of Attorney were notarized on 14.11.2023. According to him the
bid documents were uploaded/filed on 29.11.2023 i.e. within the
stipulated time, which complied with all the mandatory requirements
of Clause 10 of the NIT. Mr. Prasad has relied upon various decisions
of this Court to submit that the decision of the Government and
its instrumentalities must not only be tested by the application of
Wednesbury principle of reasonableness but also must be free
430 [2024] 10 S.C.R.

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from arbitrariness. Invoking the Public Trust Doctrine, Mr. Prasad
lastly submitted that Appellant’s bid was much more competitive
and favourable (Rs. 700 crores approx.) to the Respondent BCCL,
and by allotting the tender to the Respondent no. 8 which even
otherwise was ineligible, a commensurate loss was caused to the
public through the Respondent BCCL.
9. However, the learned Solicitor General Mr. Tushar Mehta, learned
senior counsel Mr. Anupam Lal Das and Mr. Vikramjit Banerjee, ASG
appearing for Respondent no. 1 to 7 justifying the decision of Tender
Evaluation Committee rejecting the Technical Bid of the Appellant,
submitted that the Power of Attorney was dated 07.11.2023, which
was notarized on 14.11.2023, whereas the mandatory bid documents
were executed on 13.11.2023, which was not in consonance with
clause 10 Part I/Cover 1 (OID) of NIT. According to them, the
mandatory bid documents were executed on 13.11.2023, when the
Executant had no authority to execute the said bid documents. A
person submitting the bid was required to have a valid Power of
Attorney in his favour at least on the date on which he was signing
and executing the bid documents, and therefore the Appellant did
not meet with the Eligibility criteria prescribed under the terms of the
NIT. They further submitted that during the course of evaluation the
Respondent BCCL could seek shortfall documents from the Bidders,
but could not permit them to replace the bid documents. So far as
Respondent no.8-Company was concerned, the Tender Committee
had sought clarification on 09.04.2024 regarding the Audited Annual
Reports, which approach and methodology of the Committee was
consistent with the other bidders also who were similarly situated
as the Respondent no. 8. The learned Counsels also submitted
that as per the settled legal position the project being infrastructure
project and of national importance, and the scope of judicial review
in the matter of award of Contracts being very limited, the Court
may not interface with the same, even if the Court finds that there
was total arbitrariness or that the tender was granted in a malafide
manner. The ld. Counsels have relied upon catena of decisions to
buttress their submissions, which shall be dealt with hereinafter as
may be necessary.
10. The learned senior counsel Mr. Balbir Singh appearing for Respondent
no. 8 while adopting the submissions made on behalf of Respondent
nos. 1 to 7 submitted that the Respondent no. 8 was declared as
[2024] 10 S.C.R. 431

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

successful bidder on 10.06.2024 and thereafter the Respondent no.1-
BCCL and M/s. Simlabahal Coal Mines Private Limited (a Special
Purpose Vehicle constituted by the respondent no. 8-company) have
also entered into a Coal Mining Agreement dated 27.06.2024. He
further submitted that there was no pleading of malafide raised in
the Appeal by the Appellant and as per the settled legal position, the
Courts should not use magnifying glass while scanning the decision-
making process of the authorities to make small mistake to appear
like a big blunder.
ANALYSIS: -
11. The undisputed facts as discernible from the pleadings and the
documents on record and from the submissions made by the
learned Counsels for the parties are that the Notice Inviting Tender
for the project in question was issued by the Respondent BCCL on
16.08.2023, in response to which, the Appellant and the Respondent
No.8 had submitted their respective bid documents. The Appellant
Company vide the Board Resolution dated 07.11.2023 had authorised
its Director Lalti Devi for the purpose of participating in the tender
and a Power Of Attorney dated 07.11.2023 was executed in her
favour. The said Power Of Attorney was notarised before the Notary
on 14.11.2023. It is also not disputed that the Appellant submitted/
uploaded the bid documents on 29.11.2023, that is before the last
date of submission, 01.12.2023. It is also not disputed that the
Technical bids were opened on 04.12.2023 and the Appellant was
declared technically disqualified on 06.05.2024. The extract of Tender
Summary Report dated 07.05.2024 stated in the Column ‘Remarks’
that the Appellant ‘Did not comply with Clause No. 10 of NIT (Part
I/ Cover I Other Important Documents (OID) Point No. 02 Appendix
II (Power of attorney for signing of bid).”
12. It is also not disputed that the Respondent No.8 had not submitted
the scanned copies of the Audited balance sheets required to be
submitted as per Clause 10 of the NIT in relation to the financial
capacity, while submitting/ uploading the tender documents and that
it was only when a clarification was sought from the Respondent
No.8 about the shortfall of documents, the said Audited balance
sheets were submitted on 17.04.2024, after the Technical bids were
opened on 04.12.2023. It is further not disputed that the Financial
bids of the eligible two technically qualified bidders were opened on
432 [2024] 10 S.C.R.

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07.05.2024 and the Respondent No.8 Company was found to be
the successful bidder.
13. In the instant case the entire controversy centres around the
interpretation of the Clause 10 of the NIT dated 16.08.2023, hence
the same is reproduced for the sake of convenience.
“10. For substantiating the Financial Capacity, the Bidders
are required to furnish the following information online:
(a) Value of Net Worth (to be submitted in Indian Rupees
and in the format provided at Annex III of Appendix I of
RFB);
(b) Value of Total Income in the last 3 (three) financial
years as chosen by the Bidder (to be submitted in Indian
Rupees and in the format provided at Annex III of Appendix
I of RFB);
(c) Membership number of the chartered accountant,£
where applicable; and
(d) Scanned copies of the documents as specified
in Paragraph 10 of the NIT, in relation to the Financial
Capacity.
Note: In case the Bidder is a Consortium, the aforesaid
certificates and information shall be submitted in respect
of all the Members and the Financial Capacity of the
Consortium will be assessed by adding the information
so furnished.
Bidders shall submit the information in an objective manner
confirmed by the uploaded documents. The documents
related to the information furnished online, based on which
the auto evaluation takes place, will only be considered. If
a Bidder uploads any other document, it will not be given
any cognizance.
A scanned copy of the following documents shall
be submitted online by the Bidders in support of the

£ Any approximate equivalent of a chartered accountant may provide the relevant certificates required
under this RFB. Jurisdictions which do not have a license/ certification/ membership requirement for
accountants to describe themselves or to practice as chartered accountants (or any approximate
equivalent), any qualified accountant may provide the certificates required under this RFB.
[2024] 10 S.C.R. 433

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

information/declaration furnished by the Bidder at the time
of submission of their Bids:

Sl. Submission Scanned copy of documents (self-certified
No. of and notarized/certified ® ) to be uploaded
documents by Bidders in support of information/
related to declaration furnished online by the
qualification Bidder against each qualification criteria
criteria (CONFIRMATORY DOCUMENT)
1. Bidder’s Copy of the Bidder’s Covering Letter,
Covering acceptance of the Bid conditions and making
Letter and commitments on the Bidder’s letter head as
acceptance per proforma (provided at Appendix I of RFB)
of bid
Note: In case the Bidder is a Consortium,
conditions
the above documents are to be signed by
all the Members.
2. Financial i) Certificate having UDIN number specifying
Capacity the Net Worth of the Bidder as at the close
of the latest financial year among the 3
(three) financial years as chosen by the
Bidder, from a chartered accountant based
on the financial statements audited by
statutory auditor ∞ exhibiting the information
submitted by the Bidder and confirming that
the methodology adopted for calculating the
Net Worth conforms to the provisions of the
Bidding Documents;
ii) Certificate having UDIN number specifying
the average Total Income of the Bidder during
the last 3 (three) financial years, as chosen
by the Bidder, from a chartered accountant
based on the financial statements audited by
statutory auditor∞ exhibiting the information
submitted by the Bidder online and also
specifying the methodology adopted for
calculating the average Total Income;

® For a power of attorney executed and issued overseas, the document will also have to be legalised
by the Indian Embassy and notarised in the jurisdiction where the power of attorney is being issued.
However, the power of attorney provided by Bidders/ Members from countries that have signed the
Hague Convention, 1961 are not required to be legalised by the Indian Embassy if it carries a conforming
Apostille certificate.
∞ In jurisdictions that do not have statutory auditors, the firm of auditors which audits the annual accounts
of the Bidder may provide the certificates required under this RFB.
434 [2024] 10 S.C.R.

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iii) Audited annual reports of the Bidder for
the last 3 (three) financial years, as chosen
by the Bidder, comprising of the audited
balance sheets and profit and loss accounts
of the Bidder.
iv) A duly filled in Annex III (provided at
Appendix I of RFB).
Notes:
i. For the purpose of Financial Capacity,
the Bidder can choose any 3 (three)
financial years from the 4 (four)
immediately completed consecutive
financial years as on the date of invitation
of Bids. However, the 3 (three) financial
years chosen by the Bidder shall be
the same for each Member (in case of
Consortium) and the Associate(s), whose
Financial Capacity is furnished and relied
upon by the Bidder.
ii. In case the Bidder is a Consortium, the
above documents are to be submitted in
respect of all the Members.
iii. The Bidder shall submit the documents
reflecting the Net Worth of the Associate(s)
whose Technical Capacity and/or Financial
Capacity is furnished and relied upon.
3. Integrity pact Duly signed and witnessed integrity pact
as per proforma provided at Appendix VIII
of RFB.
Note: In case the Bidder is a Consortium,
the integrity pact is to be signed by all
the Members.
4. Authorization a) If the Bidder itself is the DSC holder
for Digital bidding online, then self-declaration of the
Signature Bidder to this effect; or
Certificate
b) If the DSC holder is bidding online on
(“DSC”)
behalf of the bidder then the power of
attorneyβ granted by the Bidder, evidencing
authorization granted to the DSC holder to
submit the Bid on behalf of the Bidder.
[2024] 10 S.C.R. 435

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

5. Undertaking An undertaking is to be given by the Bidder
in Support as per the format given at Enclosure I of
of the this NIT, confirming the genuineness of the
authenticity information furnished online, authenticity of
of submitted scanned copy of documents uploaded and
information such other declarations.
and Note: In case the Bidder is a Consortium,
documents the undertaking is to be signed by all the
and other Members. (Original undertaking shall be
commitments submitted as per the provisions of NIT)
6. Any other document to support the qualification information
as submitted by the Bidder online.
Note: Only one file in .pdf format can be uploaded
against each qualification criteria. Any additional/ other
relevant documents to support the information/declaration
furnished by Bidder online against qualification criteria
may also be added by the Bidder in the same file (in .pdf
format) to be uploaded against respective qualification
criteria.

Part-1/Cover-1-Other Important Documents (“OID”)

Sl. Criteria Scanned copy of documents (self-certified
No. and notarized/ certified® ) to be uploaded by
Bidder in support of information/ declaration
furnished online by the Bidder against each
criteria (CONFIRMATORY DOCUMENT)
1. Legal status Documents to be submitted as applicable:
of the 1. Affidavit or any other document to prove
Bidder the proprietorship/ individual status of the
Bidder (applicable only where the Bidder is
an individual or sole proprietor);
2. Partnership deed/ agreement containing
name of partners and Certificate of Incorporation
(applicable only where the Bidder is a
partnership firm or a limited liability partnership);
3. Memorandum and Articles of Association
with certificate of incorporation containing
name of Bidder or any similar charter/
constitutional documents (applicable where
the Bidder is a company);
4. Appropriate documents as applicable for
any other Bidder not mentioned above.
5. Annex I (Appendix I of RFB) duly filled in
and uploaded
436 [2024] 10 S.C.R.

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6.In case of Consortium:
(i) Details of all Member(s) as at 1/2/3 (as
applicable) above,
(ii) Joint Bidding Agreement as per format
provided at Appendix IV of RFB:
(iii) Annex I (Appendix I of RFB) duly filled in
and uploaded;
(iv) Annex IV (Appendix I of RFB) duly filled
in and uploaded
7.An undertaking in the format given in
Enclosure-III with respect to the ultimate
beneficial ownership of the Bidder/Members,
in light of the General Financial Rules, 2017
read with the OM No. F. No. 6/18/2019- PPD
dated 23rd July 2020 the Consolidated FDI
Policy (effective from 15th October 2020) and
the Press Note No. 3 (2020 Series) dated
17th April 2020 issued by the Department
for Promotion of Industry and Internal Trade
(FDI Policy Section), Ministry of Commerce
and Industry, Government of India, each as
amended or supplemented from time to time.
8. GST registration certificate.
2. Power of As per the format annexed as Appendix II
attorneyβ (as applicable) and Appendix III (in case the
Bidder is a Consortium)
3. Mandate Copy of mandate form duly filled in as per
Form for proforma provided at Enclosure II of this NIT
Electronic
Fund
Transfer
4. Any other document to support the qualification
information as submitted by the Bidder online.

14. It is pertinent to note that the Request For Bid (RFB) annexed to
the NIT, contained “Instructions to Bidders” in Section II thereof. The
Clause 2.1.6 of the said Instructions stated that non-compliance
with any of the bidding instructions may lead to rejection of the
Bid. Further, Clause 2.2.5 thereof specifically stated that the Bidder
shall furnish the requisite documents listed in Paragraphs 9 and
Paragraphs 10 of NIT.
[2024] 10 S.C.R. 437

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

15. From the bare perusal of the afore stated Clause 10, it clearly
transpires that the Bidders were required to furnish the information
and the scanned copies of the documents relating to qualification
criteria particularly to substantiate their Financial capacity. For the
purpose of substantiating Financial Capacity, the Bidders were
obliged to submit the scanned copies (self-certified and notarised/
certified) of the Audited Annual Reports for the last three financial
years as chosen by the Bidder, comprising of the audited balance
sheets and profit and loss accounts of the Bidder, along with other
documents as stated therein. This was the mandatory requirement
of the NIT, the same being related to the qualification criteria as also
transpiring from Clause 2.2.5 of the RFB.
16. Admittedly, the Respondent No.8 had not submitted the scanned
copies of its audited Annual Reports for the last three financial years,
at the time of submitting/uploading the bid documents, before the last
date fixed i.e 01.12.2023 and the same were submitted on 17.04.2024
only when the clarification was sought from the Respondent No.8,
after the Technical bids were opened on 04.12.2023.
17. When the Technical bid of the Appellant was rejected by the
Respondents on 06.05.2024 on the ground that it did not comply
with the Clause 10 of the NIT namely Part I/ Cover I Other Important
Documents (OID) Point No. 02 Appendix II (Power of attorney for
signing of bid), there was no justification on the part of the Respondent
authorities for accepting the Technical bid of the Respondent No.8,
which clearly was not in compliance with the same mandatory Clause
10 of NIT. The Respondent BCCL has miserably failed to justify as to
how the Technical bid of the Respondent no.8 was accepted when it
had not submitted the requisite important documents related to the
qualification criteria as mentioned in Clause 10 of the NIT.
18. A lame submission was made on behalf of the Respondent BCCL
that the Tender Evaluation Committee could call for the shortfall of
documents and could not allow replacement of the documents, and
that the Respondent no.8 was asked to submit the shortfall documents
only. We are neither impressed nor can accept the said submissions.
Further, apart from the fact that the Technical bid of the Respondent
no.8 deserved to be rejected at the threshold for non-compliance
of Clause 10 of NIT, there was also no legal and justifiable reason
for rejecting the Technical bid of the Appellant. Admittedly when the
438 [2024] 10 S.C.R.

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tender documents were submitted by the Appellant, the Power Of
Attorney authorising the concerned signatory to act on behalf of the
Appellant was duly notarised. Merely because the bid documents
were signed on 13.11.2023 by the authorized signatory Ms. Lalti
Devi on the basis of the Power of Attorney executed in her favour
on 07.11.2023, and the said Power Of Attorney was notarised on
14.11.2023, it could not be said that the said representative of
the Appellant Company did not possess the requisite authority to
submit the documents on the day when the bid documents were
submitted, nor could it be said that there was any non-compliance
of the mandatory requirement of the Clause 10 of the NIT as sought
to be projected by the Respondent BCCL. It was nowhere stated
in the NIT that the Power Of Attorney had to be notarised before
signing the bid documents. As per Part-1/Cover I of Clause 10 of NIT,
pertaining to the other important documents, the only requirement
was to furnish the scanned copies of documents (self certified and
notarised/certified) to be uploaded by the bidder in support of the
information/declaration furnished online by the Bidder against each
criteria, and against the criteria for Power Of Attorney, it was stated
that it should be as per the format annexed. The Power Of Attorney
submitted by the Appellant was as per the format and duly notarised
on 14.11.2023, and all the requisite documents along with notarised
POA were submitted before the last date fixed for submission.
19. It would be apposite to note that as per Section 2 of the Power Of
Attorney Act, 1882, the donee of a power-of-attorney may, if he thinks
fit, execute or do any instrument or thing in and with his own name
and signature, and his own seal, where sealing is required, by the
authority of the donor of the power; and every instrument and thing
so executed and done, shall be as effectual in law as if it had been
executed or done by the donee of the power in the name, and with
the signature and seal, of the donor thereof. In the instant case,
the POA was duly executed in favour of the donee, the signatory of
the documents, and was duly notarised before its submission along
with other important documents required to be submitted as per the
NIT by the Appellant, before the last date of submission fixed by the
Respondent BCCL. Hence, there was no legal or justifiable ground
to reject the Technical bid of the Appellant.
20. Thus, the said action of the Respondent BCCL in rejecting the
Technical bid of the Appellant on absolutely extraneous ground and
[2024] 10 S.C.R. 439

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

accepting the Technical bid of the Respondent no.8 though submitted
in utter non-compliance of the mandatory requirement of Clause 10
of the NIT, and subsequently calling upon the Respondent no.8 to
furnish the shortfall of documents after the opening of technical bids
of the Bidders, was totally arbitrary and illegal.
21. There cannot be any disagreement to the legal proposition
propounded in catena of decisions of this Court relied upon by the
learned counsels for the Respondents to the effect that the Court
does not sit as a Court of Appeal in the matter of award of contracts
and it merely reviews the manner in which the decision was made;
and that the Government and its instrumentalities must have a
freedom of entering into the contracts. However, it is equally well
settled that the decision of the government/ its instrumentalities must
be free from arbitrariness and must not be affected by any bias or
actuated by malafides. Government bodies being public authorities are
expected to uphold fairness, equality and public interest even while
dealing with contractual matters. Right to equality under Article 14
abhors arbitrariness. Public authorities have to ensure that no bias,
favouritism or arbitrariness are shown during the bidding process
and that the entire bidding process is carried out in absolutely
transparent manner.
22. At this juncture, we may reiterate the well-established tenets of
law pertaining to the scope of judicial intervention in Government
contracts.
23. In Sterling Computers Limited vs. M/s. M & N Publications
Limited and Others,1 this Court while dealing with the scope of
judicial review of award of contracts held: -
“18. While exercising the power of judicial review, in
respect of contracts entered into on behalf of the State,
the Court is concerned primarily as to whether there has
been any infirmity in the “decision making process”. In this
connection reference may be made to the case of Chief
Constable of the North Wales Police v. Evans [(1982) 3
All ER 141] where it was said that: (p. 144a)

1 [1993] 1 SCR 81 : (1993) 1 SCC 445
440 [2024] 10 S.C.R.

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“The purpose of judicial review is to ensure
that the individual receives fair treatment, and
not to ensure that the authority, after according
fair treatment, reaches on a matter which it is
authorised or enjoined by law to decide for
itself a conclusion which is correct in the eyes
of the court.”
By way of judicial review the court cannot examine the
details of the terms of the contract which have been
entered into by the public bodies or the State. Courts have
inherent limitations on the scope of any such enquiry. But
at the same time as was said by the House of Lords in
the aforesaid case, Chief Constable of the North Wales
Police v. Evans [(1982) 3 All ER 141] the courts can
certainly examine whether “decision-making process” was
reasonable, rational, not arbitrary and violative of Article
14 of the Constitution.”
24. In Tata Cellular vs. Union of India,2 this Court had laid down certain
priniciples for the judicial review of administrative action.
“94. The principles deducible from the above are:
(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.

2 [1994] Supp. 2 SCR 122 : (1994) 6 SCC 651
[2024] 10 S.C.R. 441

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

(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.
Based on these principles we will examine the facts
of this case since they commend to us as the correct
principles.”
25. It has also been held in ABL International Limited and Another
vs. Export Credit Guarantee Corporation of India Limited and
Others,3 as under: -
“53. From the above, it is clear that when an instrumentality
of the State acts contrary to public good and public interest,
unfairly, unjustly and unreasonably, in its contractual,
constitutional or statutory obligations, it really acts contrary
to the constitutional guarantee found in Article 14 of the
Constitution.”
26. In Jagdish Mandal vs. State of Orissa and Others,4 this Court after
discussing number of judgments laid down two tests to determine
the extent of judicial interference in tender matters. They are: -
“22. (i) Whether the process adopted or decision made by
the authority is mala fide or intended to favour someone;
or
Whether the process adopted or decision made is so
arbitrary and irrational that the court can say: “the decision

3 (2004) 3 SCC 553
4 [2006] Supp. 10 SCR 606 : (2007) 14 SCC 517
442 [2024] 10 S.C.R.

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is such that no responsible authority acting reasonably
and in accordance with relevant law could have reached;”
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no
interference under Article 226. Cases involving blacklisting
or imposition of penal consequences on a tenderer/
contractor or distribution of State largesse (allotment of
sites/shops, grant of licences, dealerships and franchises)
stand on a different footing as they may require a higher
degree of fairness in action.”
27. In Mihan India Ltd. vs. GMR Airports Ltd. and Others,5 while
observing that the government contracts granted by the government
bodies must uphold fairness, equality and rule of law while dealing
with the contractual matters, it was observed in Para 50 as under:-
“50. In view of the above, it is apparent that in government
contracts, if granted by the government bodies, it is
expected to uphold fairness, equality and rule of law while
dealing with contractual matters. Right to equality under
Article 14 of the Constitution of India abhors arbitrariness.
The transparent bidding process is favoured by the Court
to ensure that constitutional requirements are satisfied.
It is said that the constitutional guarantee as provided
under Article 14 of the Constitution of India demands
the State to act in a fair and reasonable manner unless
public interest demands otherwise. It is expedient that the
degree of compromise of any private legitimate interest
must correspond proportionately to the public interest.”
28. It was sought to be submitted by the learned Counsels for the
Respondents relying upon the observations made in Central
Coalfields Limited and Another vs. SLL-SML (Joint Venture
Consortium) and Others,6 that whether a term of NIT is essential or
not is a decision taken by the employer which should be respected.
However, in the said judgment also it is observed that if the employer

5 [2022] 19 SCR 523 : (2022) SCC Online SC 574
6 [2016] 4 SCR 890 : (2016) 8 SCC 622
[2024] 10 S.C.R. 443

Banshidhar Construction Pvt. Ltd. v.
Bharat Coking Coal Limited & Others

has exercised the inherent authority to deviate from the essential
term, such deviation has to be made applicable to all the bidders
and potential bidders. It was observed in Para 47 and 48 as under:-
“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 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].
48. Therefore, whether a term of NIT is essential or not
is a decision taken by the employer which should be
respected. Even if the term is essential, the employer
has the inherent authority to deviate from it provided the
deviation is made applicable to all bidders and potential
bidders as held in Ramana Dayaram Shetty [Ramana
Dayaram Shetty v. International Airport Authority of India,
(1979) 3 SCC 489] . However, if the term is held by the
employer to be ancillary or subsidiary, even that decision
should be respected. The lawfulness of that decision can
be questioned on very limited grounds, as mentioned in
the various decisions discussed above, but the soundness
of the decision cannot be questioned, otherwise this Court
444 [2024] 10 S.C.R.

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would be taking over the function of the tender issuing
authority, which it cannot.”
29. The submissions made by the learned Counsels for the Respondents
that the project in question being Infrastructure project and also one
of the Mega projects, this Court may not interfere more particularly
in view of the fact that agreement has already been entered into
between the Respondent BCCL and the Special Purpose Vehicle of
the Respondent no.8, cannot be accepted, when we have found that
the impugned decision of the Respondent BCCL was grossly arbitrary,
illegal, discriminatory and violative of Article 14 of the Constitution
of India. As held earlier, the Government bodies/ instrumentalities
are expected to act in absolutely fair, reasonable and transparent
manner, particularly in the award of contracts for Mega projects. Any
element of arbitrariness or discrimination may lead to hampering of
the entire project which would not be in the public interest.
30. In that view of the matter, the impugned decision of the Respondent –
BCCL dated 06.05.2024 rejecting the Technical bid of the Appellant
and further declaring the Respondent no.8 as successful bidder is
set aside. Any action/ process undertaken or agreement entered into
pursuant to the said decision also stand set aside. It shall be open
for the Respondent – BCCL to initiate fresh tender process for the
Project and to process the same in question in accordance with law.
31. The Appeal is allowed accordingly.

Result of the Case: Appeal allowed.

†
Headnotes prepared by: Nidhi Jain