NIT Conditions Must Be Clear; Non-Submission Of Document Not Required As Per Tender Can’t Be Ground To Disqualify Bidder: Supreme Court

The Apex Court also held that the conditions in a Notice Inviting Tender must be clear and unambiguous.

The Division Bench of Justice Surya Kant and Justice Joymalya Bagchi held, “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 of the bidder to avail previous JV experience as prior qualification, it should have been spelt out clearly in the NIT. Having not done so, the 1st respondent cannot thrust the responsibility on the appellant to seek clarification and submit such document.”

“As Clause 5(D) does not require submission of JV agreement itself to establish proportionate share in the JV whose past-experience the bidder is seeking to use, nonsubmission of such JV cannot be a ground to disqualify the bidder for submission of incomplete documents in terms of Clause 8.1 of NIT”, it added.

Senior Advocate Narender Hooda represneted the Appellant while Advocate Kartik Seth represented the Respondent.

Factual Background

In response to Notice Inviting Tender issued by the Madhya Pradesh Power Generating Co. Ltd. for run-of-mine (ROM) coal beneficiation and managing logistics from Western Coalfields Ltd. (Nagpur area) sources for Shree Singaji Thermal Power Project, Khandwa (Madhya Pradesh), the appellant and two others submitted their bid. As NN Global Mercantile Pvt. Ltd. could not furnish an earnest money deposit, only the appellant and the second respondent remained in the fray. The appellant challenged the decision of the Committee to reject its bid before the Madhya Pradesh High Court.

During the pendency of the writ petition, the second respondent was declared the successful bidder and was impleaded in the proceedings. The appellant, aggrieved by the dismissal of its petition, approached the Apex Court.

Reasoning

The Bench found that the High Court had not only upheld the disqualification of the appellant by the Tender Evaluation Committee for non-compliance with Clause 5(D) of the NIT but also held that even if the JV agreement had been submitted, the appellant would have stood disqualified since its washeries had been exclusively committed to Maharashtra State Mining Corporation (MSMC). The Bench referred to Clause 5(D), which merely stated that the appellant would be entitled to use the past experience of a previous consortium/JV in the event its proportionate share is defined in the JV agreement, failing which the past-experience shall be attributed to the lead partner. The clause did not mandate the submission of the JV agreement itself to satisfy such criteria, it noted.

The Bench was not in agreement with the argument that the appellant had intentionally suppressed the JV agreement or had approached the Court with unclean hands. The Bench was of the view that the first respondent acted contrary to the terms of the NIT and unfairly rejected the appellant’s bid for non-production of JV agreement although Clause 5(D) did not prescribe production of such agreement as mandatory to rely on past-experience of such consortium in which the bidder had a defined proportionate share.

The Bench also noted that the High Court went a step further, traversing beyond the reasons given by the Committee and held the Appellant would otherwise be disqualified under Clause 5(B) of the NIT. The Bench affirmed the contention of the appellant that the issue was raised for the first time in the written submissions and the appellant did not get the opportunity to controvert the same.

“We are of the considered view the aforesaid issue is a contentious one and ought not to have been decided by the High Court without giving opportunity to the appellant to controvert the same. 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 held.

Thus, partly allowing the appeal and setting aside the impugned order, the Bench remanded the matter to the High Court for a fresh consideration whether appellant had requisite spare washing capacity as per Clause 5(B) of the NIT and the validity of the work order in favour of the second respondent in light of such decision.

Cause Title: Maha Mineral Mining & Benefication Pvt. Ltd. v. Madhya Pradesh Power Generating Co. Ltd. (Neutral Citation: 2025 INSC 1085)

Appearance

Appellant: Senior Advocates Narender Hooda, Devendra V. Chauhan, Advocates Gagan Sanghi, Chaitanya Dhruv, Nischay Jadhav, Santosh Ghate, Farah Hashmi, AOR Rameshwar Prasad Goyal

Respondent: Advocate Kartik Seth, AOR Ranjeeta Rohatgi, Advocates Nikhil Nasre, Raghav Sharma, Aditi Mishra, K.M Abish, Manan, Shrika Gautam, AOR Himanshu Satija

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