Judicial Scrutiny in Tender Evaluation: When Administrative Rigor Oversteps the Tender Terms.


31 October 2025 Civil Appeals >> Civil & Consumer Law  

The Supreme Court recently revisited the delicate interface between administrative discretion and contractual fairness in public procurement, reaffirming that tender conditions have to be applied strictly as written and not expanded by implication.

The matter arose from a tender floated by the Krishi Utpadan Mandi Parishad, Uttar Pradesh, for leasing a banquet hall and terrace lawn for ten years. The tender required the bidders to submit a “haisiyat praman patra” (solvency certificate) of not less than ten crore rupees along with their technical bids. The appellant’s bid was rejected on the ground that the certificate it furnished, which was a valuation report issued by a professional architect and government-approved valuer, had not been issued by the District Magistrate.

 

 

Aggrieved by the disqualification, the appellant approached the Allahabad High Court, which upheld the Parishad’s decision. On further appeal, the Supreme Court observed that neither Clause 18 of the notice inviting tender (NIT) nor any other provision mandated that the solvency certificate must be issued by a District Magistrate. The Court underscored that tender conditions form the backbone of fair competition and must be interpreted strictly in the terms they are set out.

Reliance was placed on the doctrine enunciated in Tata Cellular v. Union of India and other judgments that followed it to reiterate that judicial review of tender decisions is limited—though courts may intervene when a decision is arbitrary or outside the terms of the NIT. In the instant case, the Parishad acted dehors the tender conditions by introducing an unwritten requirement flowing from a state government notification which did not expressly apply to its statutory functioning.

The Court also rejected the attempt by the Parishad to justify its action by introducing new reasons in its counter affidavit, relying on the settled principle enunciated in Mohinder Singh Gill v. Chief Election Commissioner that an administrative order must stand or fall on the reasons recorded in its original form.

The Court held that as the appellant’s valuation certificate showed asset value far in excess of the financial capacity required, the rejection of its technical bid was not justified. The matter was remitted to the Parishad for reevaluation of the appellant’s technical bid in accordance with Clause 18 and such further action as may be deemed appropriate, including price negotiation between the appellant and the existing successful bidder. This finding confirms the lasting principle of public law: tendering authorities must confine themselves strictly to the terms they prescribe. Where conditions are silent as to procedural or documentary formality, a bidder's substantial compliance cannot be defeated by introducing fresh administrative requirements post facto.