Adherence to Tender Conditions Is Paramount; Bidder's Disqualification For Not Using Correct Form Upheld: Bombay High Court - 2025-06-27

Bombay HC Upholds Disqualification of Highest Bidder for Non-Compliance with Tender Format

Mumbai: The Bombay High Court, in a significant ruling on tender law, has dismissed a petition by Anik Industries Ltd., upholding its disqualification from a high-value land lease tender despite being the highest bidder. The division bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne affirmed that strict adherence to mandatory tender conditions, including the submission of information in a prescribed format, is paramount and cannot be waived, even if it results in a potential financial loss for the tendering authority.

The Court held that a bidder cannot selectively benefit from a tender corrigendum, such as an extended deadline, while ignoring its other mandatory requirements.

Background of the Dispute

The case revolves around a tender floated by the Maharashtra Airport Development Company Ltd. (MADC) in October 2024 for the lease of a prime 11.69-acre plot in the MIHAN Special Economic Zone (SEZ), Nagpur.

Anik Industries Ltd. (the Petitioner) participated in the tender process. However, its technical bid was rejected by MADC's Tender Committee on two primary grounds:

1. Failure to meet the experience criteria of constructing 6 lakh sq. ft. of residential/commercial projects. MADC refused to accept Anik's project in Kolkata, deeming it an "Assembly building" and not purely "residential/commercial."

2. Failure to submit a summary of experience in the mandatory 'Exhibit-IV' format introduced via a corrigendum to the tender. Anik had inadvertently used the old format from the original tender document.

The contract was subsequently awarded to M/s. Kukreja Infrastructures (Respondent No. 3), who quoted Rs. 8,407 per sq. meter. Aggrieved, Anik Industries, which claimed to have quoted a much higher rate of Rs. 12,889 per sq. meter, approached the High Court.

Arguments in Court

Anik Industries Ltd. , represented by Senior Advocate Nitin Thakker , argued that its disqualification was "arbitrary, irrational, and perverse." - They contended that the failure to use the new Exhibit-IV format was a mere "hyper-technical" and inadvertent error, as all the required information was available in other documents submitted with the bid. - On the experience criteria, they submitted that the term "Assembly" in West Bengal's regulations included commercial use. - They also challenged the eligibility of the successful bidder, M/s. Kukreja , alleging it had submitted a false architect's certificate regarding project completion. - Finally, they highlighted that accepting Kukreja 's bid would cause a loss of approximately Rs. 22 crores to MADC.

MADC and M/s. Kukreja Infrastructures , represented by counsels Shardul Singh and Senior Advocates Dr. Milind Sathe and Nikhil Sakhardande respectively, countered these claims. - They argued that the corrigendum, which Anik used to submit its bid on the extended deadline, explicitly made the new Exhibit-IV format a mandatory requirement. - They pointed out that another bidder was disqualified for the exact same reason, proving the process was fair and unbiased. - They asserted that the tendering authority's interpretation of its own rules is final and that courts have limited scope for judicial review in such matters.

Court's Rationale and Judgment

The High Court meticulously examined the rival contentions and upheld the decision of the tendering authority. Justice Sandeep V. Marne , writing for the bench, delivered a decisive judgment based on established legal principles.

On Procedural Compliance: The Court found that the requirement to submit information in the new Exhibit-IV format, as mandated by the corrigendum, was not merely ancillary but essential for the technical evaluation. The judgment emphasized a key legal principle from Nazir Ahmad v. King Emperor , stating, “Where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all.”

The bench observed:

"The Evaluation Committee was not supposed to go through the details of each and every document relied upon by the bidders and then scout for the relevant information... Petitioner’s contention that Exhibit-IV is not a mandatory document or is an ancillary document cannot be accepted..."

The Court also took a dim view of Anik's belated claim in its rejoinder that the corrigendum was not accessible, calling the plea "fallacious" since Anik had availed the benefit of the extended submission date mentioned in the very same document.

On Experience Criteria and Financial Bids: The bench found no perversity in MADC's refusal to accept Anik's "Residential-cum-Assembly" project as meeting the tender's specific "residential and/or commercial" experience criteria. Citing the Supreme Court in Tata Cellular v. Union of India , it reiterated that the interpretation of tender conditions by the tendering authority is final.

Regarding the petitioner's higher financial bid, the court dismissed the argument as irrelevant once the bidder is found technically non-responsive. Quoting the Supreme Court in W.B. State Electricity Board v. Patel Engineering Co. Ltd , the bench noted:

"The principle of awarding contract to the lowest tenderer applies when all things are equal. It is equally in public interest to adhere to the rules and conditions subject to which bids are invited. Merely because a bid is the lowest the requirements of compliance with the rules and conditions cannot be ignored."

Final Decision

Finding no "arbitrariness, irrationality or perversity" in MADC's actions, the High Court dismissed the petition. The ruling serves as a strong reminder to all bidders that scrupulous compliance with every instruction in a tender document is non-negotiable and that procedural lapses can lead to disqualification, irrespective of the financial implications.