1. Tender participation — Rejection of technical bid due to bank guarantee validity shortfall. (Para 1 , 2 , 11 , 12 )
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2026 Supreme(AP) 1246
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
K. SREENIVASA REDDY, J.
Progressive Engineering Enterprises - Petitioner
Versus
Union Of India and Others – Respondents
Writ Petition No. 36493 of 2025
Decided On : 03-03-2026
Advocates Appeared:
For the Petitioner: Butta Vijaya Bhasker
For the Respondents: Y. V. Anil Kumar (Central Government Counsel).
For the Petitioner: Butta Vijaya Bhasker
For the Respondents: Y. V. Anil Kumar (Central Government Counsel).
Non-compliance with mandatory tender conditions, specifically bid security validity, renders a bid non-responsive. Post-bid corrections are impermissible modifications. Courts exercise restraint in commercial matters unless arbitrariness, mala fides, or irrationality is established.
Headnote:(A) Constitution of India - Article 226 - Judicial review in contractual matters - Tender process - Bid security - Validity period of Bank Guarantee - Non-compliance with essential tender conditions renders the bid non-responsive (Paras 12, 14).
(B) Post-bid modification - Acceptance of extended bid security after opening of technical bids amounts to post-bid modification and results in unequal treatment of bidders; not permissible under settled principles of public procurement (Paras 14, 18).
(C) Scope of Judicial Review - In commercial or contractual matters, courts should exercise restraint and not interfere unless there is clear evidence of arbitrariness, irrationality, mala fides, or bias (Paras 17, 18).
Facts of the case:
A bidder participated in a tender process and submitted a technical bid along with bid security in the form of a Bank Guarantee. The tender conditions mandated that the bid security remain valid for 90 days beyond the tender validity period. However, the bidder submitted a Bank Guarantee that fell short of the required validity period by 10 days. Consequently, the technical bid was rejected. The bidder subsequently sought to rectify the error by submitting an extended Bank Guarantee, which was also rejected by the authority on the ground that it constituted a post-bid modification.
Findings of Court:
The court found that the bid security was a mandatory eligibility condition. The failure to comply with the precise validity period made the bid inherently defective and non-responsive. Allowing a bidder to cure such a defect after the technical bids were opened and the financial bid process had commenced would violate the principle of equal treatment of all bidders and the integrity of the tendering procedure.
Issues: Whether the rejection of a technical bid on the ground of a shortfall in the validity period of the Bank Guarantee was arbitrary, irrational, or illegal, warranting interference under Article 226 of the Constitution.
Ratio Decidendi: Bidders must scrupulously comply with tender conditions without deviation as they form an integral part of the process. Non-compliance with an essential requirement, such as the mandatory validity period of bid security, renders a bid non-responsive. Allowing a bidder to cure such a defect post-bid constitutes an impermissible modification and undermines the fairness of the procurement process. Courts must exercise restraint in reviewing commercial contracts unless manifest arbitrariness or mala fides is proven.
Result: Writ Petition dismissed.
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Table of Contents
2. Petitioner argued human error in bank guarantee; respondents contended non-compliance of mandatory tender condition. (Para 8 , 9 , 13 )
3. Bank guarantee validity shortfall rendered bid non-responsive; post-bid modification not permissible; court restraint in tender matters. (Para 14 , 15 , 17 , 18 )
4. Non-compliance of an essential tender condition cannot be cured post-bid; courts exercise restraint in contractual matters. (Para 14 , 18 )
5. Writ petition dismissed. (Para 19 )
6. Can a post-bid modification cure a defect in a bank guarantee submitted with a tender?
No. Post-bid modification is expressly prohibited under settled principles of public procurement and tender conditions. (Para 14 , 18 )
7. Does a shortfall in the validity period of a bid security render a bid non-responsive?
Yes. Non-compliance with an essential eligibility condition like bid security validity ipso facto renders the bid non-responsive. (Para 12 , 14 )
8. What is the scope of judicial review in contractual and tender matters?
Courts exercise restraint and only interfere where there is arbitrariness, mala fides, bias, or irrationality. (Para 17 , 18 )
9. Can Central Vigilance Commission guidelines override express conditions of a tender?
No. Such guidelines ensure transparency but do not authorize relaxation of essential eligibility conditions of a specific tender. (Para 7 , 14 )
ORDER :
K. SREENIVASA REDDY, J.
The present Writ Petition was filed, originally, seeking a direction to the respondents to consider petitioner's technical bid submitted pursuant to Tender No.STCKRPU- V-G_D-GOT116, dated 7.11.2025 issued by 3rd respondent, without reference to the petitioner's bank guarantee for a period of 180 days validity from 20.11.2025 to 19.5.2026, instead of 01.12.2025 to 31.05.2026.
2. Case of the writ petitioner is as follows:
(a) Respondent No.3 issued the subject Tender dated 07.11.2025 for the work viz. Supply, Installation, Design & Commissioning of New Electronic Interlocking (Hot- standby) with Distributed Architecture at Gate Junction (GJC) station, Duvvada (DVD) and Gopalapatnam (GPT) station, and Supply, Installation, Design and Commissioning of Alteration in existing Electronic Interlocking (Distributed) of M/s.Kyosan at Vadlapudi (VDPD) station in connection with 3rd and 4th line between VDPD-GJC and DVD-GPT sections, and provision of automatic block working between VDPD-GJC & DVD-GPT section including Utility shifting of infringing LC Gate, Cables, Location boxes, other Signalling & Tele- communication gears, in Waltair Division of East Coast Railway.
(b) The participants in the tender process are required to submit a technical bid along with a financial bid. Technical bids would be opened first, and the participants, who qualify in the technical bid, will be shortlisted for the financial bid stage. Thereafter, financial bids of the shortlisted participants are opened and the bidders are sorted in ascending order, with the lowest bidders being L1, the second lowest bidder being declared as L2, and so on.
(c) Pursuant to the aforesaid Tender Notification, the petitioner submitted its technical bid on 01.12.2025 through online. The petitioner submitted bid security of Rs.33,17,000/- with Kotak Mahindra Bank Limited, Jayanagar, Bangalore vide B.G.No.0421IGP251118430, dated 20.11.2025. As per the terms of the Tender, the Bank Guarantee (B.G.) bond shall be valid for a period of 90 days beyond the bid valid period. But, instead of mentioning the effective date in the B.G. submitted by the petitioner as 'from 01.12.2025', it is mentioned as 20.11.2025, and the mistake is human error and not intentional. In view of the said mistake, the validity of B.G. would fall short of 10 days i.e. instead of 01.12.2025 to 31.5.2026, it was mentioned as 20.11.2025 to 19.5.2026. The said mistake does not substantially affect the conditions of tender document nor does it cause any hardship or prejudice to the respondents.
(d) It is stated that there is no deficiency in the amount mentioned in the B.G. and the petitioner fulfilled all other conditions required for submission of the technical bid, and the short fall of 10 days in validity period of 180 days from 01.12.2025 would not affect or cause any prejudice to the terms of the Tender. The petitioner apprehends that the respondents are likely to reject the petitioner's technical bid on the said ground, in which event, it would result in great hardship to the petitioner. It is stated that the Central Vigilance Commission Guidelines make it clear that unless a bidder is blacklisted or prematurely terminated because of poor performance, his bids cannot be rejected on any other grounds. Hence, the Writ Petition.
3. On 30.12.2025, when the Writ Petition came up for admission, it was posted to 02.01.2026 for getting instructions. On 02.01.2026, the learned counsel for respondents brought to the notice of the Court that the technical bid was finalized on 31.12.2025 and financial bid was opened on that day i.e. 02.01.2026. Pursuant thereto, the petitioner filed I.A.No.1 of 2026, seeking amendment of prayer and filed additional affidavit. In the said prayer, the petitioner sought to declare the action of respondents in rejecting the petitioner's technical bid on 01.01.2026 pursuant to the subject Tender issued by the respondent No.3 as illegal and arbitrary, and consequently d
