Holding

An essential tender condition must be strictly complied with; a material deviation such as an insufficient bank guarantee period renders the bid non‑responsive and cannot be condoned.

Summary

The Vidarbha Irrigation Development Corporation issued a tender for canal earthwork requiring a bank guarantee valid for 40 months. Respondent No.2 submitted the lowest bid but furnished a bank guarantee for only six months, later extending it by 34 months. The corporation accepted the bid despite the deviation. The Supreme Court held that the bank guarantee period was an essential tender condition; a material deviation makes a bid non‑responsive and cannot be cured by post‑tender correction. Consequently, the bid of Respondent No.2 should have been rejected and the work awarded to Respondent No.1 at the same price. The Court set aside the High Court’s order and dismissed the appeals.

Issues considered

Whether a deviation in the period of the bank guarantee, an essential tender condition, can be condoned after bid submission.
Whether the lowest bid can be accepted despite a material deviation rendering it non‑responsive.
Whether the authority has power to relax an essential tender condition.

Subjects

tenderessential conditionmaterial deviationbank guaranteenon‑responsive bidstrict compliancepre‑tender clarificationpublic procurement

Judgment

[2019] 2 S.C.R. 493 493

VIDARBHA IRRIGATION DEVELOPMENT CORPORATION A
v.
M/S ANOJ KUMAR AGARWALA & ORS.
(Civil Appeal No.1049 of 2019)
JANUARY 23, 2019 B
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Tenders – Essential tender condition – Non-compliance of –
Tender called by the appellant on 06.01.2018 for balance earthwork
to be done in a canal – Tender was ultimately replied to by three
C
persons – Clause 2.22 of the tender conditions inter alia stated that
bank guarantee that was to be furnished had to be valid up to one
month after the defect liability period, which was for a period of 40
months – Bank guarantee furnished by Respondent No.2 was initially
furnished only for a period of six months – Bids were opened on
06.04.2018 – One day later, Respondent No. 2 sought to make up D
this deficiency by adding a period of 34 months to the bank
guarantee – Bid of Respondent No. 2 being the lowest bid was
accepted – Appellant condoned the initial bank guarantee given
by Respondent No. 2 for an admittedly incorrect period of 6 months
– Propriety of – Held: Clause 2.35 made it clear that a substantially
E
responsive bid was one which conforms to all terms, conditions and
specifications without any material deviation – Inter alia, a material
deviation is one which limits, in any substantial way, or is
inconsistent with the bidding documents or the employer’s rights or
bidder’s obligations under the Contract – A bank guarantee, for a
period of six months and not for a period of 40 months, would not F
only be directly inconsistent with the bidding documents but would
also be contrary to the employers’ right to a bank guarantee for a
longer period – Since a material deviation from the terms and
conditions of the tender document was made by Respondent No. 2,
such bid would have to be considered as not substantially responsive
G
and ought to have been rejected by the employer – When an essential
tender condition which had to be strictly complied with was not so
complied with, the appellant would have no power to condone lack
of such strict compliance – Any such condonation, as has been
done, would amount to perversity in the understanding or
H
493
494 SUPREME COURT REPORTS [2019] 2 S.C.R.

A appreciation of the terms of the tender conditions, which must be
interfered with by constitutional court – Judgment of the High Court,
insofar as para 8 is concerned, set aside – Work now be performed
by the Respondent No. 1 (one of the bidder) at the bid of Rs. 39.15
Crores that was the bid of Respondent No.2.
B Disposing of the appeals, the Court
HELD: 1.1 Clause 2.15 of the tender conditions made it
clear that it is only at a pre-tender stage that a clarification may
be obtained regarding tender conditions. Sub-clause 4 of Clause
2.15 is important because all tenderers were cautioned by this
C Clause that tenders containing any deviation from the contractual
terms and conditions, specifications or other requirements, will
be rejected as non-responsive. [Para 6] [501-B-C]
1.2 In the pre-tender meetings that took place between
the Chief Engineer and prospective parties on 30.01.2018
D questions were raised as to the period of bank guarantee, and
the Department specifically relied upon a GR dated 12.02.2016,
together with the corrigenda thereto, and stated that as a policy
decision, modification in this Clause cannot be made. It is clear,
therefore, that a modification to this very tender condition was
suggested at the pre-tender stage, and was rejected to the
E knowledge of all prospective tenderers. Sub-clause 4 of Clause
2.15, therefore, becomes important in this context as the
Respondent No. 2 was put on notice from the beginning itself
that if there is any deviation in terms of the period of bank
guarantee, its bid would be treated as non-responsive. Clause
F 2.22, also makes reference to the self-same PWD Circular dated
12.02.2016 with the corrigenda. A reading of this Clause would
also show that a bank guarantee that is to be furnished has to be
valid up to one month after the defect liability period which,
admittedly, is for a period of 40 months. [Paras 7, 8] [501-C-D,
F-H; 502-A-B]
G
1.3 Clause 2.35 makes it clear that a substantially
responsive bid is one which conforms to all terms, conditions
and specifications without any material deviation. Inter alia, a
material deviation is one which limits, in any substantial way, or

H
VIDARBHA IRRIGATION DEVELOPMENT CORPORATION v. 495
M/S ANOJ KUMAR AGARWALA & ORS.

is inconsistent with the bidding documents or the employer’s A
rights or bidder’s obligations under the Contract. A bank
guarantee, which is for a period of six months and not for a period
of 40 months, would not only be directly inconsistent with the
bidding documents but would also be contrary to the employers’
right to a bank guarantee for a longer period. This being the
B
case, since a material deviation from the terms and conditions of
the tender document was made by Respondent No. 2, when it
furnished a bank guarantee for only six months initially, it would
be clear that such bid would have to be considered as not
substantially responsive and ought to have been rejected by the
employer. Clause 2.35.2 also makes it clear that such a bid would C
have to be rejected outrightly and may not be subsequently made
responsive by correction. [Para 10] [502-D-F]
1.4 The words used in the tender document cannot be
ignored or treated as redundant or superfluous – they must be
given meaning and their necessary significance. Given the fact D
that in the present case, an essential tender condition which had
to be strictly complied with was not so complied with, the appellant
would have no power to condone lack of such strict compliance.
Any such condonation, as has been done in the present case,
would amount to perversity in the understanding or appreciation
of the terms of the tender conditions, which must be interfered E
with by a constitutional court. The judgment of the High Court,
insofar as para 8 is concerned, is set aside. Mr. Basant, learned
senior counsel appearing on behlaf of Respondent no.1 very fairly
submitted that he will match the amount of Rs. 39.15 crores that
was the bid of Respondent No. 2. The work now be performed by F
the Respondent No. 1 at this bid amount. [Paras 15 and 18]
[505-E-F; 506-C]
Bakshi Security and Personnel Services Pvt. Ltd. v.
Devkishan Computed Pvt. Ltd. and Ors. (2016) 8 SCC
446 : [2016] 3 SCR 310 – relied on. G
Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn.
Ltd. (2016) 16 SCC 818 : [2016] 3 SCR 551
– referred to.

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496 SUPREME COURT REPORTS [2019] 2 S.C.R.

A Case Law Reference
[2016] 3 SCR 310 relied on Para 13
[2016] 3 SCR 551 referred to Para 14
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1049
B of 2019.
From the Judgment and Order dated 11.09.2018 of the High Court
of Judicature at Bombay, Bench at Nagpur, Nagpur in Writ Petition
No. 2932 of 2018
WITH
C
Civil Appeal No.1050 of 2019.
Shekhar Naphade, R. Basant, Raju Ramachandran , Sr. Advs.,
Gagan Sanghi, J.B. Kasat, Rameshwar Prasad Goyal, K.Parameshwar,
Hrishikesh Chitaley, Anup Gilda, J.T. Gilda, Vijay Kari Singh, Rajat
Joseph, M.V. Mukunda, Nishant Ramakantrao Katneshwarkar,
D
Ms. Deepa M. Kulkarni, Anoop Kandari, Advs. for the appearing parties.
The Judgment of the Court was delivered by
ROHINTON F. NARIMAN, J. 1. Leave granted.
2. A Tender was called by the appellant before us on 06.01.2018
E for balance earthwork to be done in a canal. The Tender was ultimately
replied to by three persons whose bids, respectively, were - Rs.39.53
crores by Respondent No.1, Rs.39.15 crores by Respondent No.2, and
Rs.46.81 crores by Respondent No.3. There is no dispute that the bid of
Respondent No. 2 was the lowest bid. At this stage, it is a little important
F to advert to some of the tender conditions:-
“Contract” is defined by the e-tender in question as follows:-
“1.3.9 CONTRACT :-
It shall mean and include following documents.
G Tender Documents.
Specifications.
Drawings.
Tender document & information/data submitted by contractor
H Common set of conditions/Minutes of pre-Tender conference.”
VIDARBHA IRRIGATION DEVELOPMENT CORPORATION v. 497
M/S ANOJ KUMAR AGARWALA & ORS. [R. F. NARIMAN, J.]

Clause 2.15 speaks of “Pre-tender Conference” as follows:- A
“1) Pre-tenders conference open to all prospective tenderer will
be held in the office as stated in this Section, wherein the
prospective tenderer will have an opportunity to obtain clarifications
regarding the work and the tender conditions.
2) The prospective tenderers are free to ask for any additional B
clarification either in writing or orally and the reply to the same
will be given by the Chief Engineer/Superintending Engineer in
writing and these clarifications referred to as common set of
conditions, shall form part of tender documents and which will
also be common and applicable to all tenderer. C
3) The e-tender submitted by the tenderer shall be based on the
clarification, additional facility issued (if any) by the Corporation
and this tender shall be unconditional. Conditional tenders will
summarily be rejected as non-responsive.
4) All tenderers are cautioned that the tenders containing any D
deviation from the contractual terms and conditions, specifications
or other requirements and conditional Tenders will be rejected as
non-responsive.”

E
Clause 2.22 speaks of “Performance Security” as follows:-
“PERFORMANCE SECURITY in case of offer below the cost
put to tender as per PWD Circular BDG-2016/BLD-2/Dt.:12/02/
2016) & corrigendum on date 17/03/2016/ WRD Corrigendum
No. Tender 0316/(189/16) Major Projects-1 dated 14.7.16
F
Condition Regarding payment of performance security (in place
of condition for payment of additional security deposit) if offer
quoted by the tenderer is below the cost put to tender.
i) If the tenderer quote upto 1% below the cost put to tender,
no additional performance security is required. However, if G
the tenderer quote his offer more than 1% below the c o s t
put to tender to 10% below the cost put to tender, tenderer
shall submit the demand draft or FDR or BG of the amount
equal to 1% of cost put to tender towards performance security
in Envelope No.2 of tender.
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498 SUPREME COURT REPORTS [2019] 2 S.C.R.

A ii) If the tenderer quote his offer more than 10% below (offer
below than 10%) the cost put to tender, tenderer shall submit
the demand draft or FDR or BG of the cumulative amount
which is equal to the amount by which offer is more than 10 %
below plus the amount as per (i) above in the Envelop No.2 of
tender. (For example, for 14% below rate, 1% + (14%-10%)
B
i.e. 4%, then total 5% of the cost put to tender.
iii) The amount of performance security shall be calculated on
rounding of contractors offer upto two decimal places. The
offer in envelop No.2 without demand draft or FDR or BG of
appropriate amount of performance security shall be treated
C as invalid offer.
iv) Demand draft/BG/FDR shall be drawn in the name of
Executive Engineer, Ghodazari Canal Division Nagbhid.
v) Demand draft/BG/FDR/shall be drawn from Nationalised
D or scheduled banks.
vi) The BG/FDR shall be valid upto one month after defect
liability period. Validity of demand draft shall be minimum 3
months from the date of submission of tender.
vii) Scanned copy of BG/FDR/demand draft shall be uploaded
E by the contractor at the time of e-tendering.
viii) Contractor shall submit the demand draft/FDR/BG in sealed
envelope in the office of the Executive Engineer, Ghodazari
Canal Division Nagbhid within 5 working days from the date
of submission of tender. Name of work and e-tender number
F shall be written on the envelope.
ix) On opening the tender, if papers in Envelop No.1 don’t
fulfill the essential qualification/ documents requirements, the
Executive Engineer shall return the envelope of Demand Draft/
BG/FDR to concerned Contractor within 7 days from the date
G of opening of tender.
x) The Executive Engineer shall refund the amount of
performance security after completion of work successfully.
xi) Demand draft BG/FDR of the second lowest tender shall
be returned within 3 days after issuing works order to the lowest
H tender.
VIDARBHA IRRIGATION DEVELOPMENT CORPORATION v. 499
M/S ANOJ KUMAR AGARWALA & ORS. [R. F. NARIMAN, J.]

xii) EMD of the contractors submitting false documents/demand A
draft/BG/FDR in above process shall be forfeited and the
contractor shall be Black listed.
xiii) Executive Engineer shall issue the work order only after
encashing the demand draft of the lowest tenderer.”
“Important Note” B

“If any of the documents required as per Technical-Envelope-1 is
not submitted on-line or/and Financial Bid: in Envelope-II
(Commercial) is not properly uploaded, or/and information given
in various Undertakings, Proform’s, Forms, Formats, Appendices
etc, in various Sections-II, III, IV, VI is missing, incomplete/ C
misleading/false tender of the bidder shall be liable for out-right
rejection and shall not be considered for further process.”
Clause 2.35 speaks of “Acceptance of Tender” as follows:-
“2.35 x x x D
2.35.1 A substantially responsive Bid is one which conforms to all
the terms, conditions, and specifications of the Bidding documents,
without material deviation or reservation. A material deviation or
reservation is one (a) which affects in any substantial way the
scope, quality, or performance of the Works, (b) which limits in
E
any substantial way, inconsistent with the Bidding documents, the
employer’s rights or the Bidder’s obligations under the Contract;
or (c) whose rectification would affect unfairly the competitive
position of other Bidders presenting substantially responsive Bids.
2.35.2 If a Bid is not substantially responsive, it will be rejected by
F
the Employer, and may not subsequently be made responsive by
correction or withdrawal of the non-conforming deviation or
reservation.”
3. On the facts in this case, it is undisputed that the bank guarantee
that was furnished for Rs. 42.14 lakhs by Respondent No. 2 before us
was initially furnished only for a period of six months on 12.03.2018, in G
response to the tender. It is common ground between the parties that
the period ought to have been 40 (forty) months. The bids were opened
on 06.04.2018, and on 07.04.2018, one day later, Respondent No. 2,
sought to make up this deficiency by adding a period of 34 months to the
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500 SUPREME COURT REPORTS [2019] 2 S.C.R.

A bank guarantee which was valid for 6 months only. The aforesaid bid
made by Respondent No. 2 was accepted initially on 03.05.2018. A
Tender Evaluation Committee then evaluated all the bids on 07.07.2018,
and finally, the bid of the Respondent No. 2 was accepted as it was the
lowest bidder among the three bids that had been received. The bone of
contention between the parties is whether it is possible for the appellant
B
before us to condone the initial bank guarantee being given for an
admittedly incorrect period of 6 months.
4. Mr. Shekhar Naphade, learned senior counsel appearing on
behalf of the appellant, has taken us through the Government Resolution
(GR) dated 12.4.2017 in order to contend that the term of bank guarantee,
C if originally wrongly given, and which makes a tenderer ineligible, does
not disqualify him as a clarification can be sought from the bidder after
which the term may be extended in conformity with the tender conditions.
Apart from the above, he argued that, ultimately, the moment the
deficiency was pointed out, this deficiency was made good by
D Respondent No. 2 and it is only thereafter that the bid of the Respondent
No. 2 was accepted, being the lowest bid. He also added that the
difference between the bid of Respondent No. 1 and Respondent No. 2
would amount to roughly Rs. 37 lakhs which again would be a saving to
the public exchequer. He went on to add that given the parameters of
judicial review and that a bona fide decision has been taken by the
E authority, this could not have been interfered with and was wrongly
interfered with by the judgment under appeal. Mr. Raju Ramachandran,
learned senior counsel appearing on behalf of Respondent No. 2, broadly
adopted these submissions.
5. Mr. R. Basant, learned senior counsel appearing on behalf of
F Respondent No. 1 has taken us through the tender conditions and has
argued that a period of six months for a bank guarantee, which admittedly
should have been 40 months, is a material deviation which cannot be
condoned later. He further pointed out that in point of fact, objections
were taken at a pre-tender stage by certain would be tenderers, and
G after considering those objections, the authority made it clear that the
PWD Circular dated 12.02.2016, together with corrigenda issued
thereafter, would make it clear that this is a material condition which
cannot be changed. He, therefore, argued that it was known to the
Respondent No. 2, right from the beginning, that this particular condition
was both material and has to be satisfied, and, admittedly, on the facts, it
H
VIDARBHA IRRIGATION DEVELOPMENT CORPORATION v. 501
M/S ANOJ KUMAR AGARWALA & ORS. [R. F. NARIMAN, J.]

was not satisfied. He very fairly stated that the impugned judgment A
could not stand on its own legs but could be supported with the arguments
that had been made by him.
6. At this stage, it is important to analyse the tender conditions. As
was correctly pointed out by Mr. Basant, Clause 2.15, as set out
hereinabove, makes it clear that it is only at a pre-tender stage that a B
clarification may be obtained regarding tender conditions. Sub-clause 4
of Clause 2.15 is important because all tenderers are cautioned by this
Clause that tenders containing any deviation from the contractual terms
and conditions, specifications or other requirements, will be rejected as
non-responsive.
C
7. At this stage, it is important to advert to the pre-tender meetings
that took place between the Chief Engineer and prospective parties on
30.01.2018. Entry 46 of the document that is produced by the appellant
reads as follows:-
S.No Provisions of Tender Modification/clarification Modification/ Clarification D
. s sought by contractor sought by the Department
46 2.22 Performance 2.22 Performance The clause of performance
Security: Security: security is included based on
vi) The B.G./F.D.R. The B.G./F.D.R’s validity G.R. dt. 12.02.2016
shall be valid upto is upto 3 months at the &Corrigendum on date
one month after time of tender submission 17.03.2016 and 14.07.2016.
defect liability &if work is awarded this As policy decision, E
period. B.G./F.D.R’s validity modification in this Clause
extended according to the cannot be made.
tender condition. It
should be taken after the
award of work as general
procedure in other
departments. F
What is important to note is that questions were raised as to the
period of bank guarantee, and the Department specifically relied upon a
GR dated 12.02.2016, together with the corrigenda thereto, and stated
that as a policy decision, modification in this Clause cannot be made. It
is clear, therefore, that a modification to this very tender condition was G
suggested at the pre-tender stage, and was rejected to the knowledge of
all prospective tenderers. Sub-clause 4 of Clause 2.15, therefore,
becomes important in this context as the Respondent No. 2 was put on
notice from the beginning itself that if there is any deviation in terms of
the period of bank guarantee, its bid would be treated as non-responsive.
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502 SUPREME COURT REPORTS [2019] 2 S.C.R.

A 8. Clause 2.22, extracted herein above, also makes reference to
the self-same PWD Circular dated 12.02.2016 with the corrigenda. A
reading of this Clause would also show that a bank guarantee that is to
be furnished has to be valid up to one month after the defect liability
period which, admittedly, is for a period of 40 months.
B 9. Mr. Naphade’s argument that had a demand draft been drawn
instead of a bank guarantee, its validity would only be a minimum of
three months from the date of submission of tender, which would show
that a deviation from the 40 months period would certainly be permissible,
(had a demand draft given instead of a bank guarantee), cannot be
countenanced. On the facts of this case, no demand draft was given.
C Only a bank guarantee was given, and clearly for a much lesser period
then that mandated by this Clause.
10. We may now come to Clause 2.35 which makes it clear that
a substantially responsive bid is one which conforms to all terms,
conditions and specifications without any material deviation. Inter alia,
D a material deviation is one which limits, in any substantial way, or is
inconsistent with the bidding documents or the employer’s rights or
bidder’s obligations under the Contract. It cannot be gainsaid that a bank
guarantee, which is for a period of six months and not for a period of 40
months, would not only be directly inconsistent with the bidding
E documents but would also be contrary to the employers’ right to a bank
guarantee for a longer period. This being the case, since a material
deviation from the terms and conditions of the tender document was
made by Respondent No. 2, when it furnished a bank guarantee for only
six months initially, it would be clear that such bid would have to be
considered as not substantially responsive and ought to have been rejected
F by the employer. Clause 2.35.2 also makes it clear that such a bid would
have to be rejected outrightly and may not be subsequently made
responsive by correction.
11. It is important to note that the Government Resolution dated
12.04.2017, which applies to the PWD Department, has superseded the
G PWD Circular dated 12.02.2016 and corrigenda dated 17.03.2016 and
14.07.2016. However, so far as the tender conditions of the tender in
question are concerned, Clause 2.18 is material and is set
out hereunder:-

H
VIDARBHA IRRIGATION DEVELOPMENT CORPORATION v. 503
M/S ANOJ KUMAR AGARWALA & ORS. [R. F. NARIMAN, J.]

“Earnest Money: A
All tenderers shall pay entire E.M.D. & the mode of payment is
indicated as specified at Sr. No. 4, 6, 4 of Section IV.
As per GR PWD 12.04.2017 – E.M.D. shall be paid online through
bank account of own by contracts, contractor shall submit the
undertaking that the EMD has been paid through his bank account B
and he will be responsible for any legal action under IPC if it is
found false.”
As against this, when it comes to performance security, the PWD
Circular of 12.02.2016 and its corrigeneda have alone to be followed in
the case of performance security. This being the case, it is not possible C
to advert to the GR dated 12.04.2017 for the purpose of performance
security as it applies only in respect of earnest money, as is clear from
Clause 2.18 of the Tender.
12. The fact that a superseded Government Resolution continues
to be utilised for the purpose of performance security may raise eyebrows. D
However, insofar as the tendering public is concerned, they have been
put on notice that the performance security that is to be furnished, will
only be as per the GR dated 12.2.2016 and corrigenda and not as per the
GR dated 12.04.2017.
13. The law on the subject is well settled. In Bakshi Security E
and Personnel Services Pvt. Ltd. v. Devkishan Computed Pvt. Ltd.
and Ors., (2016) 8 SCC 446, this Court held:
“14. The law is settled that an essential condition of a tender has
to be strictly complied with. In Poddar Steel Corpn. v. Ganesh
Engg. Works [Poddar Steel Corpn. v. Ganesh Engg. Works, (1991) F
3 SCC 273] this Court held as under: (SCC p. 276, para 6)
“6. … The requirements in a tender notice can be classified
into two categories—those which lay down the essential
conditions of eligibility and the others which are merely ancillary
or subsidiary with the main object to be achieved by the G
condition. In the first case the authority issuing the tender may
be required to enforce them rigidly. In the other cases it must
be open to the authority to deviate from and not to insist upon
the strict literal compliance of the condition in appropriate
cases.”
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504 SUPREME COURT REPORTS [2019] 2 S.C.R.

A 15. Similarly in B.S.N. Joshi & Sons Ltd. v. Nair Coal
Services Ltd. [B.S.N. Joshi & Sons Ltd. v. Nair Coal Services
Ltd., (2006) 11 SCC 548] this Court held as under: (SCC
pp. 571-72, para 66)
“(i) if there are essential conditions, the same must be adhered
B to;
(ii) if there is no power of general relaxation, ordinarily the
same shall not be exercised and the principle of strict
compliance would be applied where it is possible for all the
parties to comply with all such conditions fully;
C (iii) if, however, a deviation is made in relation to all the parties
in regard to any of such conditions, ordinarily again a power of
relaxation may be held to be existing;
(iv) the parties who have taken the benefit of such relaxation
should not ordinarily be allowed to take a different stand in
D relation to compliance with another part of tender contract,
particularly when he was also not in a position to comply with
all the conditions of tender fully, unless the court otherwise
finds relaxation of a condition which being essential in nature
could not be relaxed and thus the same was wholly illegal and
E without jurisdiction;
(v) when a decision is taken by the appropriate authority upon
due consideration of the tender document submitted by all the
tenderers on their own merits and if it is ultimately found that
successful bidders had in fact substantially complied with the
F purport and object for which essential conditions were laid down,
the same may not ordinarily be interfered with;…”
16. We also agree with the contention of Shri Raval that the writ
jurisdiction cannot be utilised to make a fresh bargain between
parties.”
G 14. However, learned counsel appearing on behalf of the appellant
strongly relied upon Afcons Infrastructure Ltd. v. Nagpur Metro Rail
Corpn. Ltd., (2016) 16 SCC 818, and paragraphs 14 and 15 in particular,
which state:
“14. We must reiterate the words of caution that this Court has
H stated right from the time when Ramana Dayaram Shetty v.
VIDARBHA IRRIGATION DEVELOPMENT CORPORATION v. 505
M/S ANOJ KUMAR AGARWALA & ORS. [R. F. NARIMAN, J.]

International Airport Authority of India [Ramana Dayaram A
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”
B
in Clause 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 C
understanding and appreciation of the tender documents, unless
there is mala fide 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 D
the constitutional courts but that by itself is not a reason for
interfering with the interpretation given.”
15. It is clear even on a reading of this judgment that the words
used in the tender document cannot be ignored or treated as redundant
or superfluous – they must be given meaning and their necessary E
significance. Given the fact that in the present case, an essential tender
condition which had to be strictly complied with was not so complied
with, the appellant would have no power to condone lack of such strict
compliance. Any such condonation, as has been done in the present
case, would amount to perversity in the understanding or appreciation of
the terms of the tender conditions, which must be interfered with by a F
constitutional court.
16. A subsidiary contention has been raised that even the bank
guarantee subsequently furnished was for a period of 39 months and not
for 40 months. This need not be gone into in view of our finding on the
first point. G
17. We may hasten to add that the judgment under appeal leaves
a great deal to be desired. It did not advert to the main point in question,
but instead focused on supposed contradictions made in an affidavit filed
by the appellant in the High Court. Having gone through the affidavit,
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506 SUPREME COURT REPORTS [2019] 2 S.C.R.

A we find no such contradiction. It is also necessary to advert to the final
relief given by the High Court. If, for the reason given by the High
Court, the bid of the Respondent No. 2 had to be rejected, it cannot be
understood as to how Respondent No. 2 can be brought back in the
event that Respondent No. 1 does not agree to carry out the work for
the lower bid amount of Respondent No. 2. For all these reasons, even
B
though the reasoning of the Division Bench in the impugned judgment
does not commend itself to us, yet, for the reasons contained in this
judgment, the appeal will have to be dismissed.
18. We may record that Mr. Basant very fairly submitted before
us that he will match the amount of Rs. 39.15 crores that was the bid of
C Respondent No. 2 before us. We record this statement and order,
therefore, that the work now be performed by the Respondent No. 1 at
this bid amount. The judgment of the High Court, insofar as para 8 is
concerned, is set aside.
19. With these observations, the civil appeals are disposed of.
D

Divya Pandey Appeals disposed of.

E

F

G

H