Tender Conditions Cannot Be Waived Or Relaxed If They Constitute Essential Eligibility Criteria: Supreme Court

"The reading given by an authority to its own tender is ordinarily final, provided that reading is one which the words it has chosen can bear and is not unfair, perverse or arbitrary." Supreme Court, in a judgment dated September 21, 2026, held that while the scope of judicial review in tender matters is narrow, constitutional courts must intervene if an authority’s interpretation of its own tender conditions is patently arbitrary, dehors the terms of the NIT, or ignores essential eligibility requirements.

A bench comprising Justice K.V. Viswanathan and Justice Alok Aradhe observed that the principle of deference to a tendering authority is not an absolute shield against judicial scrutiny when the authority ignores the plain language of its own prescribed standards.

The dispute arose from a tender floated by the Market Committee, Ludhiana, for the collection of user charges at a local Mandi. Micky Traders, the H1 bidder, was declared successful despite an objection from the H2 bidder that it failed to meet the mandatory two-year experience requirement stipulated in Clause 9(c)(a) of the enlistment instructions. The Punjab and Haryana High Court quashed the contract, finding that the H1 bidder's experience in cattle fairs did not constitute the specialized collection of user charges as required, prompting the current appeal.

The primary question before the Court was whether the High Court exceeded its jurisdiction under Article 226 in reviewing the technical evaluation of the tender. The Court further examined whether the experience certificate produced by the H1 bidder satisfied the mandatory eligibility criteria prescribed in the Detailed Notice Inviting Tender (DNIT) and the accompanying enlistment instructions.

Limited Scope of Judicial Review in Tenders

The Court reiterated the well-settled principle that judicial review in tender matters is concerned with the decision-making process rather than the correctness of the decision itself. The Court emphasized that it does not sit as an appellate body to evaluate technical or commercial wisdom, provided the authority's action is free from illegality, irrationality, or procedural impropriety.

Deference is Not Unqualified The Court clarified that the deference afforded to the author of a tender document is not unconditional. Where an interpretation is not in consonance with the language of the tender document or fails to subserve the tender's purpose, the court is duty-bound to interfere.

"The rule which emerges is a short one. The reading given by an authority to its own tender is ordinarily final, provided that reading is one which the words it has chosen can bear and is not unfair, perverse or arbitrary."

Essential vs. Ancillary Conditions

The Bench distinguished between essential eligibility conditions and ancillary requirements. Essential conditions must be enforced rigidly to maintain the integrity of the procurement process, and any deviation cannot be condoned if it results in the selection of an ineligible bidder.

Mandatory Nature of Experience Criteria

Regarding the experience clause, the Court held that the collection of user charges at a Mandi is a specialized, continuous, revenue-facing operation. Comparing this to the organizing of cattle fairs, where the contractor acts as a lessee rather than an agent of the authority, the Court found the H1 bidder's experience fundamentally different.

"To hold that any such incidental collection satisfies a clause that, in terms, requires proven experience of collecting 'User Charges/Parking Fees work' for Government, Semi-Government or PSU organisations, is to empty the clause of the very specialisation it was designed to test."

Absence of Legal Nexus

The Court noted a fatal infirmity in the documentation provided by the H1 bidder. The certificates submitted were in the names of third-party firms, and the bidder failed to provide any partnership deed or registration evidence to prove a legal nexus. An eligibility criterion cannot be satisfied by an unverified assertion of identity between a bidder and an unrelated entity.

Consistency in Conduct

The Court further observed that the H1 bidder had previously participated in similar tenders at Patiala and Rajpura where, under identical clauses, it was declared technically non-responsive. Having acquiesced to that interpretation on two prior occasions, the bidder could not now claim an opposite, favorable construction. A party cannot approbate and reprobate on the meaning of contractual language simply to suit its current convenience.

Revenue Considerations Cannot Cure Ineligibility

Addressing the appellant's argument that rejection would lead to a loss of public revenue, the Court held that financial considerations cannot override eligibility. Bids can only be compared among those who satisfy the requisite criteria; otherwise, tender conditions would become entirely illusory. The High Court was, therefore, correct in its assessment, and the appeal was dismissed.

Date of Decision: 21 September 2026