Tender Rejection Due To Non-Submission Of Physical Original Document When Digital Proof Exists Is Perverse: Supreme Court

"Rigid adherence to the letter of a document cannot be countenanced, especially when there is a clear impossibility in compliance of the same." Supreme Court, in a significant ruling dated 12 October 2026, held that the rejection of a tender bid solely for the non-production of an original physical document, despite the successful completion of an e-payment and submission of a digital receipt, is a perverse exercise of administrative discretion.

A bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran observed that when the tender conditions provide for e-payment, the physical production of an "original" receipt is a redundant requirement that does not serve the purpose of securing the bid.

Tender Rejection Based On Technicality

The appellant, Hardev Construction Private Limited, participated in an EPC project tender for the Bikramshila-Katareah New Line Rail Link Project. The bid was rejected at the technical evaluation stage due to the non-submission of the original Bid Security, even though the appellant had remitted the security amount via the e-payment gateway and uploaded a scanned copy of the digital receipt. The Patna High Court affirmed this rejection, leading the appellant to approach the Supreme Court.

The Question Of Procedural Compliance

The central legal issue before the court was whether the requirement for physical submission of a bid security document, as stipulated in the Request for Proposal (RFP), overrides the validity of a successfully processed e-payment. The court also examined whether an automated, digital transaction process necessitates additional, redundant physical documentation to satisfy the criteria for a responsive technical bid.

Court Rejects Literal Interpretation Of Tender Terms

The bench found that the respondents' insistence on physical submission of a document for an electronic transaction was an instance of "perverse" interpretation of tender conditions. The court noted that once the money is transferred via an e-payment gateway, the respondent authority exercises full control over the funds, thereby negating the need for further physical verification of the instrument.

Perversity In Tender Evaluation

The judges emphasized that while Constitutional Courts should generally defer to the authority’s interpretation of tender documents, this deference does not extend to interpretations that are mala fide or perverse. The court held that the requirement to produce an original for an electronic payment was an "impossibility" and therefore, rigid adherence to such a clause could not be sustained in law.

"The money has already been transferred to the account of the respondents, and they have full control over it."

The court further distinguished the present case from the precedent in Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises and Others, clarifying that while tender documents cannot be treated as redundant, the application of those terms must remain reasonable. The court observed that the appellant had complied with the substance of the requirement, rendering the technical rejection based on a lack of physical paper evidence legally untenable.

Final Directions For Tender Processing

Finding the rejection unjustified, the Supreme Court set aside the impugned order of the High Court and directed the respondents to allow the appellant to participate in the tender process. Since the original deposit had been refunded post-rejection, the court ordered the respondents to facilitate a fresh e-payment within two weeks. Upon successful deposit, the appellant's financial bid is to be opened and evaluated alongside other qualified bidders.

Date of Decision: 12 October 2026