Failure To Record Reasons For Technical Bid Rejection In Public Procurement Violates Transparency Norms & Article 14: Delhi High Court

"Absence of reasons constitutes the most fundamental infirmity affecting the impugned evaluation. Mere communication of parameter-wise marks, without indicating the reasons or factual basis for deductions or comparative assessment, neither demonstrates application of mind nor enables the Petitioners to understand why their otherwise compliant proposals were found deficient." Delhi High Court, in a significant ruling, has held that the failure of a procuring entity to record and communicate specific reasons for the disqualification of a bidder at the technical stage vitiates the entire tender process.

A bench of Justice Anil Kshetarpal and Justice Shail Jain observed that such an omission violates the General Financial Rules (GFR), 2017, and the constitutional guarantee of a level playing field under Article 14, rendering the decision-making process opaque and arbitrary.

The dispute arose from several Requests for Proposal (RFPs) issued by the Ministry of External Affairs for outsourcing Consular, Passport, and Visa (CPV) services at Indian Missions in Kuwait, Abu Dhabi, Singapore, and Canberra. The petitioners, E Trav Tech Limited and Verasys Limited, were disqualified at the technical-bid stage for failing to secure the minimum qualifying score of 70%. While the Respondents eventually disclosed the parameter-wise breakup of marks following a Supreme Court direction, they failed to provide any qualitative reasons or benchmarks for the deductions made.

The primary question before the court was whether the failure of the Respondents to record and communicate reasons for technical disqualification, despite providing a numerical breakup of marks, vitiates the evaluation process. The court also examined whether the decision-making process was arbitrary, inconsistent, and violative of the requirement of transparency in public procurement under the GFR 2017 and the Manual of Procurement of Non-Consultancy Services 2025.

Res Judicata And Fresh Cause Of Action

At the outset, the court rejected the Respondents' preliminary objection that the petitions were barred by the principles of res judicata due to earlier rounds of litigation. The bench noted that the previous challenge was premature as the financial bids had not been opened and the detailed mark breakup had not been disclosed at that stage.

Disclosure Of Marks Without Reasons Does Not Constitute Transparency

The court held that the subsequent disclosure of marks in May 2026 constituted a fresh cause of action, allowing the petitioners to challenge the legality of the evaluation for the first time. The bench emphasized that the doctrine of res judicata cannot be invoked to shield an administrative action that was based on material unavailable to the petitioners when the earlier proceedings were instituted.

Court Critiques Inconsistent Marking For Identical Proposals

While examining the merits, the court noticed glaring inconsistencies in how the Technical Evaluation Committees awarded marks across different missions. For instance, E Trav Tech Limited submitted materially identical proposals and supporting documents for all four missions but received widely varying scores for the same parameters, such as receiving 4 out of 7 marks in Abu Dhabi but 0 out of 7 in Kuwait for its corporate reputation.

Inconsistency Reinforces Allegations Of Arbitrariness

The court observed that in the absence of recorded reasons for such varying assessments, the distinct allocation of marks appeared unsupported by any objective basis. The bench held that consistency in evaluating substantially identical material is an essential facet of a fair tender process, and any departure must be supported by cogent reasons borne out by the record to prevent subjective discretion from turning into arbitrariness.

Oral Presentations Cannot Substitute Recorded Reasons

The court vehemently rejected the Respondents' argument that any deficiencies in the bids were explained through oral presentations made before the Evaluation Committees. The bench ruled that oral explanations cannot substitute recorded reasons or justify undisclosed standards in a public procurement process, as their absence renders the evaluation opaque and incapable of meaningful judicial scrutiny.

Evaluation Must Reflected Contemporaneous Records

Shortcomings noticed during presentations must be reflected in the contemporaneous evaluation records to satisfy the requirements of fairness and transparency. The court noted that the failure to do so strikes at the heart of equality in public procurement, especially when the evaluation relies on "undisclosed comparative standards" and "unexplained deductions" under objective criteria.

Mandatory Obligation Under GFR 2017 To Record Reasons

The court placed heavy reliance on Rule 173(iv) and Rule 189 of the GFR 2017, which mandate transparency and require the Evaluation Committee to record reasons while rejecting technical proposals. The bench observed that recording reasons is an indispensable component of fair administrative action as it ensures the application of mind and facilitates judicial review.

Non-Compliance With Procurement Manuals Vitiates Process

Furthermore, the court highlighted the failure of the Ministry to comply with the Manual of Procurement of Non-Consultancy Services 2025, which requires procuring entities to debrief unsuccessful bidders by explaining the evaluation of their proposals. The absence of a meaningful debriefing or a comparative summary of the technical evaluation was found to have undermined the integrity of the selection process.

Public Interest At Stake When Lower Bidders Are Arbitrarily Excluded

The bench also noted the larger public interest involved, observing that E Trav Tech Limited had quoted substantially lower financial bids than the successful bidders in all concerned missions. The court held that the exclusion of a lower bidder on the basis of an arbitrary technical evaluation directly impacts the public exchequer and raises serious constitutional concerns.

Arbitrary Technical Evaluation Affects Public Exchequer

The court emphasized that the integrity of technical evaluation assumes added significance when it leads to the selection of higher-priced bids. Any lack of transparency at this stage results in a loss to the state and violates the doctrine of a level playing field, ensuring that the most efficient service provider is selected through a fair and predetermined methodology.

Fresh Tender Process Directed For All Four Missions

In its concluding remarks, the court set aside the impugned technical evaluation processes and nullified the award of tenders in favour of the private respondents. The Ministry of External Affairs was directed to issue fresh RFPs for the procurement of CPV services at the Missions in Kuwait, Abu Dhabi, Singapore, and Canberra within a period of one month.

Interim Arrangements To Ensure Service Continuity

To prevent any disruption in public services, the court permitted the existing incumbents to continue providing CPV services until the fresh tender process is concluded and new successful (L-1) bidders are selected in accordance with the law. The bench urged the Respondents to make sincere efforts to conclude the new process at the earliest.

Date of Decision: July 15, 2026