Tender Conditions Must Be Unambiguous; Bidders Cannot Be Disqualified for Non-Submission of Documents Not Expressly Required by NIT: Supreme Court - 2025-09-10

Supreme Court Sets Aside Bidder's Disqualification, Rules Tender Conditions Must Be Explicit and Unambiguous

New Delhi: In a significant ruling on tender law, the Supreme Court has set aside the disqualification of a bidder, holding that a tendering authority cannot reject a bid for non-submission of a document that was not explicitly mandated by the Notice Inviting Tender (NIT). A bench of Justices Surya Kant and Joymalya Bagchi emphasized that if an authority requires a specific document, such as a Joint Venture (JV) agreement, it must be clearly spelled out in the tender conditions.

The Court also observed that a High Court cannot travel beyond the reasons cited by a tender evaluation committee to find new grounds for disqualifying a bidder.

Background of the Case

The case arose from a tender floated by Madhya Pradesh Power Generating Co. Ltd. (MPPGCL) for coal beneficiation and logistics. Maha Mineral Mining & Benefication Pvt. Ltd. (the appellant) submitted its bid, relying on the past experience of a previous consortium it was part of, M/s Hind-Maha-Mineral LLP.

To prove its experience, Maha Mineral submitted a work execution certificate from the Maharashtra State Mining Corporation (MSMC). This certificate confirmed that Maha Mineral held a 45% share in the JV and had successfully executed similar work, meeting the tender's experience criteria. However, the Tender Evaluation Committee rejected Maha Mineral's technical bid, stating it failed to submit the JV agreement itself to substantiate its proportionate share, as required under Clause 5(D) of the NIT.

Maha Mineral challenged this decision in the Madhya Pradesh High Court, which upheld the disqualification. The High Court further found a new reason for disqualification, suggesting that even if the JV agreement had been submitted, the appellant would be ineligible as its washeries were exclusively committed to another entity. This led to the present appeal before the Supreme Court.

Key Arguments Presented

• Appellant (Maha Mineral Mining): Argued that Clause 5(D) of the NIT never expressly required the submission of the JV agreement. The work execution certificate from a public sector undertaking (MSMC) was sufficient proof of its experience and proportionate share. They contended that the disqualification was arbitrary, and the tendering authority could have sought clarification if it had any doubts, as permitted by other clauses in the NIT.

• Respondents (MPPGCL & Rukhmai Infrastructure): Contended that the requirement to submit the JV agreement was "implicit" in the NIT to verify the bidder's share. They cited Clause 8.1, which prohibited the submission of documents after the bid deadline, arguing that Maha Mineral's bid was incomplete and rightly rejected. They also accused the appellant of intentionally suppressing the JV agreement to hide inconvenient clauses.

Supreme Court's Analysis and Ruling

The Supreme Court sided with the appellant on the primary ground for disqualification, providing a clear interpretation of tender requirements.

On Non-Submission of the JV Agreement

The bench meticulously analyzed Clause 5(D) of the NIT and found no explicit mandate for submitting the JV agreement. The judgment highlighted:

"Conditions in a NIT must be clear and unambiguous. In the event the tendering authority insisted on furnishing of the JV agreement alone and no other document as proof of the proportionate share... it should have been spelt out clearly in the NIT."

The Court noted that the appellant had submitted the required work execution certificate, which unequivocally established its 45% share and relevant experience. The rejection was deemed unfair, as the tendering authority never doubted the certificate's authenticity but disqualified the bid on a procedural interpretation not supported by the NIT's plain text. The Court concluded that non-submission of the JV agreement could not be a ground for disqualification for submitting "incomplete documents."

On the High Court's New Grounds for Disqualification

The Supreme Court strongly disapproved of the High Court's decision to introduce a new reason for disqualification based on the appellant's washery capacity (under Clause 5(B)). This issue was never considered by the Tender Evaluation Committee. The apex court stated:

"High Court also lost sight of the fact that the Committee had not adverted to this issue and it was impermissible for it to travel beyond the reasons given by the Committee and disqualify the appellant."

The bench found this issue to be a contentious factual matter that the appellant was not given a proper opportunity to contest at the High Court level.

Final Decision and Its Implications

The Supreme Court set aside the High Court's judgment and the Tender Committee's decision to disqualify Maha Mineral based on Clause 5(D). However, instead of granting the tender to the appellant, the Court remanded the matter back to the High Court for a fresh and expedited consideration of the second issue—whether the appellant has the requisite spare washing capacity as per Clause 5(B) of the NIT.

This judgment serves as a crucial reminder for tendering authorities to draft NIT conditions with clarity and precision. It reinforces the principle that bidders cannot be penalized for unstated or implicit requirements and protects them from arbitrary disqualification. It also circumscribes the scope of judicial review, limiting courts to examining the stated reasons for an administrative decision rather than substituting them with new ones.