On September 9, 2025, the Supreme Court of India reaffirmed a crucial principle of tender law: a bid submitted in response to a Notice Inviting Tender (NIT) cannot be rejected for failure to produce a document that is not expressly required in the tender notice. The ruling ensures that tendering authorities cannot introduce additional conditions beyond the scope of the NIT and unfairly disqualify bidders.
The judgment, delivered by a bench of Justices Surya Kant and Joymalya Bagchi, set aside the Madhya Pradesh High Court’s ruling that upheld the disqualification of Maha Mineral Mining & Benefication Pvt. Ltd. for not producing a Joint Venture (JV) Agreement.
Background of the Case
The dispute arose when Madhya Pradesh Power Generating Co. Ltd. (Respondent) issued a tender for coal beneficiation and logistics services. Maha Mineral Mining & Benefication Pvt. Ltd. (Appellant) submitted its bid relying on its prior experience as a 45% partner in Hind Maha Mineral LLP, a joint venture involved in mining operations.
To establish its eligibility, Maha Mineral submitted a Work Execution Certificate issued by the Maharashtra State Mining Corporation (MSMC). The certificate explicitly confirmed the appellant’s 45% participation share in the consortium and referenced the JV Agreement.
However, the Tender Committee disqualified the technical bid, reasoning that submission of the JV Agreement itself was necessary under Clause 5(D) of the NIT. Although the NIT did not mandate such production, the Committee treated the JV Agreement as indispensable.
The Madhya Pradesh High Court upheld this disqualification, leading Maha Mineral to approach the Supreme Court.
Key Legal Issue
The primary legal question before the Supreme Court was:
👉 Can a bidder’s disqualification be justified on the ground of not producing a document that the NIT did not mandate for submission?
The Court was also tasked with considering whether the High Court erred in upholding disqualification on grounds that were not even part of the Tender Committee’s reasoning.
Supreme Court’s Observations
The Supreme Court strongly disapproved of the rejection of the bid, noting that tendering authorities cannot impose conditions that are not expressly mentioned in the NIT.
The bench observed:
“We are inclined to hold that the first respondent acted contrary to the terms of the NIT and unfairly rejected the appellant’s bid for non-production of the JV Agreement, although Clause 5(D) did not prescribe production of such agreement as mandatory to rely on past experience of such consortium.”
The Court clarified that once the Work Execution Certificate sufficiently demonstrated Maha Mineral’s share and experience in the consortium, insistence on producing the JV Agreement was unwarranted and contrary to principles of fairness.
Natural Justice and Fair Tendering Process
The Court also underscored the importance of fair play in public procurement. It highlighted that bidders must be evaluated only on conditions specified in the NIT, and additional requirements cannot be retrospectively introduced.
Furthermore, the Court noted that the rejection of the appellant’s bid also suffered from violation of natural justice principles. Allegations concerning the appellant’s washery capacity under Clause 5(B)—namely that its washeries were tied up with MSMC—were raised for the first time in written submissions. Since the appellant had no opportunity to rebut these allegations, the Court considered this approach unfair.
Decision of the Court
- Disqualification Set Aside – The Court held that the Tender Committee and the High Court erred in disqualifying Maha Mineral for non-production of the JV Agreement.
- Remand to High Court – While partly allowing the appeal, the Court remanded the matter back to the Madhya Pradesh High Court. The High Court was directed to decide within two months the limited issue of washery capacity under Clause 5(B), since that question required factual examination.
Significance of the Ruling
This judgment reinforces several important principles governing tender processes:
- No Hidden Conditions: Authorities cannot reject bids based on requirements not mentioned in the NIT.
- Fairness and Transparency: Tendering must remain transparent, giving all bidders equal opportunity.
- Natural Justice: Bidders must be allowed to rebut allegations raised against them, particularly if such allegations surface late in proceedings.
- Certainty in Public Procurement: Contractors and corporations can rely on NIT terms without fear of arbitrary disqualification.
This ruling aligns with the Supreme Court’s consistent jurisprudence that public authorities must act fairly, reasonably, and within the four corners of tender documents.
Broader Impact on Tender Law in India
Tendering and public procurement are vital aspects of government contracts, involving significant financial implications. The ruling will likely impact:
- Government Tenders – Ensures departments cannot arbitrarily impose new documentation requirements.
- Corporate Bidding Strategies – Bidders can now rely on their certificates and other supporting documents if expressly permitted by the NIT.
- Judicial Oversight – High Courts and Tender Committees must confine themselves strictly to tender terms.
By emphasizing that NIT conditions are sacrosanct, the Court has safeguarded both administrative fairness and business confidence in public procurement processes.
Advocates Who Appeared
- For Petitioner (Maha Mineral): Mr. Narender Hooda, Sr. Adv.; Mr. Gagan Sanghi, Adv.; Mrs. Farah Hashmi, Adv.; Mr. Santosh Ghate, Adv.; Mr. Rameshwar Prasad Goyal, AOR.
- For Respondents (MPPGCL & Ors.): Mr. Shyam Divan, Sr. Adv.; Mr. Balbir Singh, Sr. Adv.; Mr. Kartik Seth, Adv.; Ms. Ranjeeta Rohatgi, AOR; Mr. Nikhil Nasre, Adv.; Mr. Raghav Sharma, Adv.; Ms. Aditi Mishra, Adv.; Mr. K.M. Abish, Adv.; Mr. Manan, Adv.; Ms. Shrika Gautam, Adv.; Mr. Bijender Chahar, A.S.G.; Mr. Arpan Pawar, Sr. Adv.; Mr. Himanshu Satija, AOR; Mr. Harsh Saxena, Adv.; Mr. Chiranjeev Sharma, Adv.; Mr. Pulkit Pawar, Adv.; Mrs. Neha Mehta Satija, Adv.
Conclusion
The Supreme Court’s ruling in Maha Mineral Mining & Benefication Pvt. Ltd. is a landmark decision safeguarding transparency and fairness in the tendering process. By holding that a bid cannot be rejected for failure to produce a document not prescribed in the NIT, the Court has set a clear precedent for future procurement disputes.
This judgment strengthens the principles of fair competition, equality of opportunity, and judicial protection against arbitrary administrative decisions. For businesses engaged in government contracts, this ruling provides much-needed reassurance that tender terms will be applied strictly as written, and not expanded by unwritten requirements.
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