Judicial Interpretation in Tender Dispute

Dive into the intricate world of tender disputes and judicial review with our latest case summary. This analysis sheds light on the court’s careful examination of tender documents and decision-making processes. Discover how legal principles shape the outcome of disputes in the realm of tender contracts, ensuring fair play and upholding the public interest.


  • The appeals are related to a notice inviting tender (N.I.T.) issued by the State of Madhya Pradesh, Public Works Department (PWD) for the construction of an Elevated Corridor in Indore district.
  • The construction project involves building a 7.473-kilometer elevated corridor from LIG Square to Navlakha Square.
  • Bidders are required to demonstrate their experience in the construction of major bridges, ROBs, flyovers, or tunnels in the last five financial years prior to the bid due date.
  • Specific experience requirements include completing at least one similar major bridge, ROB, flyover with a span equal to or greater than 50% of the proposed project’s longest span.
  • For tunnel projects, bidders must have completed at least one tunnel with specific criteria related to cross-sectional area and length.
  • Clause outlines the categories and factors used to evaluate technical capacity of bidders.
  • There was a difference of Rs. 9 crores between the financial bids of UPSBC and Rajkamal.
  • UPSBC bid Rs. 306.27 crores while Rajkamal bid Rs. 315.80 crores.
  • The State of Madhya Pradesh was directed to issue a letter of intent to UPSBC for Rs. 306.27 crores within 30 days.
  • Rachana Construction Co. challenged the rejection of its technical bid, which was upheld based on specific clause requirements.
  • UPSBC’s bid was not disqualified despite an FIR against them, as there was no pending investigation as per clause 7(b) of Annex I.
  • Rachana Construction Co.’s bid for Rs. 293.25 crores was not under consideration due to disqualification.

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  • The petitioner argued that they had the necessary experience for the project based on previous similar works completed.
  • The petitioner’s financial bid was Rs. 9 crores less than the competitor, Rajkamal.
  • The authorities were criticized for splitting the project awarded under one tender into two.
  • Arguments were made regarding the interpretation of ‘investigation pending’ and ‘fraudulent practice’ clauses.
  • Legal precedents were cited to support the petitioner’s position, emphasizing compliance with tender formats and rules of interpretation.
  • The Evaluation Committee declared the petitioner as non-responsive due to cost considerations.
  • The petitioner’s non-responsiveness led to the financial bid and quoted rates being deemed immaterial.
  • Allegations were made against Rachana Construction Co. for not intervening or filing a writ petition in a timely manner.
  • Concerns were raised about the grounds on which UPSBC’s bid was rejected, limiting the issues that could be raised in the case.
  • Shri Puneet Jain, representing Rajkamal, criticized the judgment in UPSBC’s case and supported Rachana Construction Co.’s case.
  • He pointed out that Appendix IA was not properly interpreted, specifically mentioning paragraphs 11 and 13 should be read together.
  • Paragraph 11 highlighted that UPSBC’s involvement in a criminal case could lead to rejection of its bid.
  • For Rachana Construction Co., he emphasized on clause which required additional experience in similar bridge projects.
  • Rachana Construction Co. fell short of the required experience, having constructed two road over bridges totaling 2380 meters, far below the minimum of 3.736 kilometers needed.

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  • The Authority reserves the right to reject any non-responsive Technical BID.
  • Bidders and their representatives must maintain the highest standards of ethics during the Bidding Process and Agreement.
  • The Appendix-IA letter format must be followed for the Technical BID submission.
  • Certification is required regarding the absence of convictions or adverse orders that may cast doubt on the ability to undertake the Project.
  • Experience across different categories is computed based on specified factors.
  • Authority can reject a bid if a material misrepresentation is made at any time.
  • Evaluation of Technical BIDs includes tests of responsiveness as outlined in clauses and
  • Corrupt practices during the Bidding Process can lead to rejection of the bid and forfeiture of the security.
  • Fraudulent practice is defined as misrepresentation or suppression of facts to influence the Bidding Process.
  • Detailed instructions and formats are provided for bidding in the N.I.T.
  • The judgment discusses the issue of non-disclosure of the show-cause notice, which led to the disqualification of the appellant in a tender process.
  • The importance of disclosing if a bidder has been banned by government or quasi-government agencies is emphasized.
  • The appellant’s bid was rejected based on the suppression of material facts related to an FIR against them.
  • The judgment highlights the need for strict compliance with the tender format and the consequences of non-disclosure.
  • The concept of ‘fraudulent practice’ includes omitting relevant facts to influence the bidding process.
  • The courts must respect the understanding of tender documents unless there are mala fide intentions or misinterpretations.
  • The issue of the effect of blacklisting or holiday listing on a bidder’s eligibility is addressed.
  • The necessity of proper format in disclosing information related to blacklisting or similar actions is discussed.
  • The case involves the rejection of a bid due to lack of valid ISO certification for security and business continuity.
  • The controversy surrounding the business continuity clause and the submission of ISO certificates is explained.
  • A specific instance is mentioned where a bid was considered non-responsive due to failure in fulfilling criteria outlined in the tender document.
  • The modern trend points to judicial restraint in administrative action.
  • The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
  • The court does not have the expertise to correct the administrative decision.
  • The decision must not only be tested by the application of Wednesbury principle of reasonableness but must be free from arbitrariness not affected by bias or actuated by mala fides.
  • Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
  • The soundness of the decision made by the employer should generally not be questioned, but the decision-making process can be subject to judicial review if it is irrational, mala fide, or intended to favor someone.
  • Terms of the invitation to tender cannot be open to judicial scrutiny as it falls within the realm of contract.
  • Judicial review should not be invoked to protect private interest over public interest or to decide contractual disputes.
  • Special considerations should be taken into account when invoking judicial review in matters relating to tenders or contract awards.
  • The employer’s interpretation of the tender documents should be respected, as they are best positioned to understand and interpret the requirements.
  • Interference in tender or contractual matters through judicial review should be based on specific criteria like mala fides, arbitrariness, irrationality, and impact on public interest.
  • The employer has the authority to deviate from essential terms, as long as the deviation is applied uniformly to all bidders.
  • Judicial restraint should be exercised in interfering with administrative actions related to tenders.
  • A fair play in the joints is necessary for administrative bodies functioning in administrative or quasi-administrative spheres.
  • The expression ‘at least one similar work’ could possibly mean the construction of only one such bridge and not two under the same tender document.
  • The construction of the clause by the tendering authority cannot be considered impossible or perverse.
  • Shri Puneet Jain’s argument, though raised for the first time, supports the State of Madhya Pradesh as the two road over bridges constructed under the agreement have a combined span of 2380 meters, which is less than 50% of 7.473 kilometers.

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  • Rachana Construction Co.’s SLP is dismissed and the judgment dated 02.07.2020 and the review judgment dated 04.08.2020 are upheld.
  • The State of Madhya Pradesh is directed to issue a LOI to Rajkamal at the same financial bid as UPSBC for the present tender.
  • All appeals are disposed of accordingly.


Case Number: C.A. No.-004002-004002 / 2020

Click here to read/download original judgement

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