Rigid Adherence To Letter Of Tender Document Can't Be Countenanced When There Is Impossibility In Compliance: Supreme Court

The Apex Court was considering an appeal filed against an order of the Division Bench of the Patna High Court that affirmed the rejection of the appellant’s bid for a project.

The Division Bench of Justice J. B. Pardiwala and Justice K. Vinod Chandran held, “We are convinced that here, there is a clear perversity; insofar as an e-payment was made, as required by the tender document, the digital receipt of which was scanned and uploaded, rejected only since the original was not produced; which is an impossibility. Rigid adherence to the letter of a document cannot be countenanced, especially when there is a clear impossibility in compliance of the same.

Advocate A.K. De represented the Appellant while Advocate Nina R. Nariman represented the Respondent.

Factual Background

The appellant’s bid for the project ‘Engineering Procurement and Construction (EPC) of Construction of guide bunds, Launching Aprons and Associated River Protection Works etc. in connection with Bikramshila-Katareah New Line Rail Link Project on EPC Mode"-Bid/ Package No. ECR-CAO-CS-EPC-05-25-26 dated January 6, 2026 was rejected for the reason of non-submission of the original Bid Security furnished, as stipulated vide Clause 2.20.6 (ii) of the Request for Proposal (RFP), as indicated in the e-portal. The High Court affirmed the rejection, which came to be impugned in the appeal before the Apex Court.

Reasoning

The Bench took note of Clause 2.20.6 of the RFP, which speaks of submission of Bid Security in the form of Bank Guarantee/ Account Payee Demand Draft/Fixed Deposit Receipt/ Banker's Cheque/ e-payment Gateway of Authority.

The Bench concurred with the contention of the appellant, in light of the various forms in which the Bid Security could be furnished. The Bench noted that a Bank Guarantee/ Account Payee Demand Draft/Fixed Deposit Receipt/ Banker's Cheque, unless physically furnished to the respondent, there could be no lien exercised on the Bid Security. The Bench held that the money was deposited into the account of the respondents and there was nothing further required to be produced insofar as the e-payment made, especially when the digital payment receipt had been uploaded along with the bid document. It was further noticed that it was stipulated in Clause 1 that a scanned copy of the same should be uploaded on the e-Procurement Portal while applying for the tender.

“As we noticed, Bid Security, when furnished in all other forms, cannot be enforced, unless the original comes into the hands of the respondents. However, insofar as the e-payment is concerned, the money has already been transferred to the account of the respondents, and they have full control over it”, it stated.

Thus, setting aside the impugned order, the Bench directed the contract to be awarded to the appellant. Allowing the appeal and considering that after rejection, the amounts deposited in the e-portal were refunded to the appellant, the Bench ordered, “In that circumstance, the respondent Nos.1 and 2 would facilitate either a measure of e-payment within a period of two weeks from today, and if there is any technical difficulty, then the appellant shall be required to submit the amounts in any other form within a further period of two weeks.”

Cause Title: Hardev Construction Private Limited v. Union of India & Ors. (Neutral Citation: 2026 INSC 1110)

Appearance

Appellant: Advocates A.K.De, Ananya De, S. Prakash, Chandrakanta Sahoo, AOR Pramit Saxena

Respondent: Advocates Nina R. Nariman, AOR Mukesh Kumar, Advocates Padmja Mishra, Jayam Singh Chauhan, Shambhavi Singh, Kanchan Kumari Gupta, Vedarth Shivhare, Kavita Chaturwedi, Rajesh Kumar, Madhup Kumar Tiwari

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