Kiran Raj

The Supreme Court Division Bench of Justice Surya Kant and Justice Joymalya Bagchi set aside the disqualification of a bidder in a tender process conducted by the Krishi Utpadan Mandi Parishad, holding that the authority had imposed a requirement not mentioned in the Notice Inviting Tender. The case concerned a contract to lease a banquet hall and lawn, where the bidder’s technical offer was rejected because its solvency certificate was issued by a private valuer instead of a District Magistrate. The Court held that the tender conditions did not prescribe such a restriction and directed the Mandi Parishad to re-evaluate the bidder’s technical submission, verify its financial capacity, and decide, after negotiation, whether to grant the remaining contract to the bidder or retain the current contractor.

The tender followed a two-stage process—technical and financial bidding. One of the requirements under Clause 18 of the Notice Inviting Tender (NIT) mandated that the bidder submit a ‘haisiyat praman patra’ demonstrating a minimum worth of ₹10 crores along with the technical bid.

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The appellant, a private company, and another bidder participated in the process. The appellant’s technical bid was rejected on the ground that the submitted ‘haisiyat praman patra’ was issued by a private architect rather than by the District Magistrate. The Krishi Utpadan Mandi Parishad considered such certificate invalid and consequently disqualified the appellant from the bidding process.

The appellant challenged this rejection before the High Court, asserting that the NIT did not specify that the certificate must be issued by a District Magistrate. The High Court dismissed the challenge, holding that a ‘haisiyat praman patra’ was equivalent to a solvency certificate issued only by the District Magistrate.

The appellant then approached the Supreme Court, contending that the Parishad’s rejection was contrary to the express terms of the NIT. It argued that its valuation certificate, prepared by a professional valuer registered with the Income Tax Department, assessed the property’s worth at ₹99 crores, of which it held a 76.09% share—well above the ₹10 crores threshold. The respondent authority maintained that the government notification dated October 29, 2018, required ‘haisiyat praman patra’ to be issued only by a District Magistrate and that all other bidders had complied with this requirement.

The Court observed that “in tender matters, the court exercising judicial review does not sit in appeal over the decision of a tendering authority regarding disqualification of bid. Only in cases where such decision is dehors the terms of the NIT or is patently arbitrary would the Court exercise powers of judicial review.”

It examined the tender documents and stated, “neither Clause 18 nor any other condition specifies that the ‘haisiyat praman patra’ submitted by a prospective bidder must be issued only by a District Magistrate in terms of the government notification.”

The Bench recorded that the terms of a tender must be unambiguous, observing that “if the first respondent intended that ‘haisiyat praman patra’ must be issued by District Magistrate alone, it ought to have specified so in the NIT conditions.”

The Court also observed that the Krishi Utpadan Mandi Parishad was not a government department directly bound by the state notification, noting that “nothing is placed on record to show that the government notification was applicable to all tenders floated by the first respondent-Mandi Parishad.”

It stated that the authority could not reject the bid on a requirement absent from the tender terms: “Having failed to do so, the first respondent could not have rejected the certificate submitted by appellant on the ground that it was not issued by a District Magistrate.”

Addressing a new ground raised by the respondent in its counter affidavit—that the valuation certificate failed to disclose encumbrances—the Court recorded that “this objection has been taken for the first time in the judicial proceeding and was not a ground for rejection of the technical bid.” It quoted from the record, “The Petitioner’s tender had been rejected on the ground that they had not submitted required certificate issued by a District Magistrate.”

The Bench clarified the meaning of ‘haisiyat’ by referring to the Oxford Hindi–English Dictionary, noting it denotes “capacity, ability, means or resources.” It then held that while the term relates to net worth, the Parishad’s rejection was based solely on the issuer, not the valuation content. The Court concluded that introducing new justifications after rejection was impermissible, stating, “an order of rejection must be sustained on grounds stated therein and additional grounds cannot be subsequently pressed into service to justify such rejection.”

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“For the aforementioned reasons, we are of the opinion that rejection of appellant’s technical bid on ground that appellant’s certificate was not issued by District Magistrate is dehors the terms of the NIT and is liable to be quashed.”

“Impugned order of the High Court is set aside. The matter is remanded to 1st respondent-Mandi Parishad to reconsider the technical bid of the appellant and if it is satisfied that the net worth of the asset (free of encumbrances, if any) disclosed in the valuation certificate submitted by appellant meets the requirement of Clause 18 of the NIT, it shall accept the technical bid and after due negotiations between appellant and the 5th respondent (successful bidder), decide whether remainder of contract be awarded to the appellant or in the event 5th respondent matches the financial bid or enhanced offer of the appellant, permit the 5th respondent to continue the contract for the remaining period. With these directions, the appeal is disposed of.”

Advocates Representing the Parties

For Petitioner(s): Mr. Shail Kumar Dwivedi, AOR Mr. Siddharth Krishna Dwivedi, Adv.

For Respondent(s): Mr. E. C. Agrawala, AOR Mr. Sunil Murarka, Adv. Mr. Panka Agarwal, Adv. Ms. Kamakshi Sahgal, Adv. Mr. J.N.S. Tyagi, Adv. Mr. Sukumar Pattajoshi, Sr. Adv. Mr. Durga Dutt, AOR Mr. Rakesh Kumar Singh, Adv. Mr. Somesh Kumar Dubey, Adv. Dr. Gajendra Prasad Singh, Adv. Mr. Sushant Kumar Mallik, Adv. Mr. Pradeep Yadav, Adv. Mr. Himanshu Yadav, Adv.

Case Title: Kimberley Club Pvt. Ltd. v. Krishi Utpadan Mandi Parishad & Ors.
Neutral Citation: 2025 INSC 1276
Case Number: Civil Appeal No. ____ of 2025 (@ SLP (C) No. 20557/2021)
Bench: Justice Surya Kant and Justice Joymalya Bagchi