Government Tender and Contract Law Interpretation of Tender Conditions and Judicial Review (CaseLaws)

Maha Mineral Mining & Beneficiation Pvt. Ltd. Vs. Madhya Pradesh Power Generating Co. Ltd. & Anr. (2025 INSC 1085)

Summary of the CaseLaw
The Supreme Court of India addressed a dispute concerning the disqualification of a bidder in a tender process floated by a state power generation company.

The key legal issues involved were:
Interpretation of Tender Conditions – Whether the tender condition (Clause 5(D)) mandatorily required the submission of the Joint Venture (JV) Agreement itself as proof of a bidder's proportionate share in a previous consortium to claim past experience, or whether a Work Execution Certificate from the client explicitly stating the share was sufficient.

Scope of Judicial Review in Tender Matters – Whether the High Court was justified in upholding the bidder's disqualification based on a new ground (Clause 5(B) - spare washing capacity) that was neither the basis of the Tender Evaluation Committee's decision nor properly argued before it, thereby denying the bidder a chance to rebut the allegation.

Procedural Fairness and Discretion of Tendering Authority – Whether the tendering authority acted fairly and in accordance with the tender document by not seeking clarification on the submitted certificate, especially when a separate clause (Clause 8.8) empowered it to seek additional information.

The Court held that:
The Tender Evaluation Committee and the High Court erred in disqualifying the appellant. The Supreme Court set aside the impugned judgment. It ruled that Clause 5(D) of the NIT did not explicitly mandate the submission of the JV Agreement, and the Work Execution Certificate provided was sufficient to establish the appellant's share and experience. The High Court's additional finding on spare washing capacity was set aside as it was based on a new, contentious issue raised for the first time in written arguments without giving the appellant an opportunity to respond. The matter was remanded to the High Court for a fresh decision limited to the issue of spare washing capacity under Clause 5(B).

Key Legal Principles Established:
Strict Interpretation of Tender Conditions – Eligibility conditions in a tender must be clear and unambiguous. If a specific document is mandatory to establish eligibility, it must be explicitly stated in the tender document. The tendering authority cannot add unstated requirements or interpret conditions in a manner that introduces new obligations for the bidder.

Judicial Restraint in Teder Evaluation – The judicial review of a tender decision is limited to examining whether the decision-making process was fair, rational, and in conformity with the stated terms of the NIT. A court cannot disqualify a bidder on a new ground which was not the basis of the tendering authority's original decision, as it violates principles of natural justice.

Duty of Tendering Authority to be Fair – While a tendering authority has discretion, it must be exercised fairly and reasonably. If a clause in the NIT empowers the authority to seek clarifications or additional information to verify a bidder's credentials, it should do so to ensure a fair and competitive process, rather than adopting a hyper-technical approach to reject a bid.

Relevance:
This judgment reinforces the settled principles of government tender law, emphasizing the necessity for clarity in tender documents and the limited scope of judicial intervention. It cautions tendering authorities against adopting an overly rigid and technical interpretation of conditions to the detriment of competition. Furthermore, it underscores the duty of constitutional courts to ensure a fair hearing and prevent disqualification of bidders on grounds not originally invoked, thereby upholding the principles of natural justice in administrative and contractual matters.