The Supreme Court of India, comprising a Bench of Justice J. B. Pardiwala and Justice K. Vinod Chandran, has held that rejecting a tender bid for failing to submit a physical “original” receipt when the bid security was remitted online through an e-payment gateway constitutes clear perversity and demands compliance with an impossibility. Setting aside an order of the Division Bench of the Patna High Court which had affirmed the rejection, the top court ruled in favour of the bidder and directed that its financial bid be evaluated alongside other bids.
Background of the Case
The matter arose from a tender floated by the Ministry of Railways 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-C-S-EPC-05-25-26 dated 06.01.2026).
Hardev Construction Private Limited submitted its bid for the contract. However, the authority rejected the bid at the technical stage citing non-submission of the physical original of the Bid Security under Clause 2.20.6(ii) of the Request For Proposal (RFP).
The appellant had deposited the requisite Bid Security directly into the authority’s account via its e-payment gateway and had scanned and uploaded the digital payment receipt on the e-procurement portal. When the Division Bench of the Patna High Court dismissed its challenge and affirmed the rejection, the appellant approached the Supreme Court.
Arguments of the Parties
Appearing for the appellant, learned Counsel Sri A. K. De submitted that the sole ground for rejection was the non-submission of the original receipt of the Bid Security. He pointed out that the appellant had remitted the Bid Security directly to the respondent’s account via the authority’s e-payment gateway, and the resulting digital receipt had been scanned and uploaded with the bid. Learned Counsel also submitted that the appellant’s financial bid was far lower than that of the third respondent, thereby avoiding a loss to the public exchequer.
Opposing the appeal, learned Additional Solicitor General Sri Kanakamedala Ravindra Kumar, appearing for the respondent-Ministry of Railways, argued that Clause 2.20.6(ii) explicitly mandated physical delivery of the original form of Bid Security, making the rejection proper. The ASG also noted that because the appellant failed at the technical stage for non-production of the original receipt, its financial bid was never opened, leaving no scope for financial comparison.
Learned Counsel for the successful tenderer (Respondent No. 3), Ms. Nina R. Nariman, cited the Supreme Court’s ruling in Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises and Others (2026) 4 SCC 310, contending that the awarding authority is best equipped to interpret bid conditions and understand its requirements. She submitted that Constitutional Courts must defer to the employer’s interpretation and argued that the tender document left no “elbow room” regarding the mandatory submission of original documents.
The Court’s Analysis and Interpretation of Tender Terms
The Bench examined Clause 2.20.6 of the RFP, which permits submission of Bid Security in various forms, namely:
- Bank Guarantee
- Account Payee Demand Draft
- Fixed Deposit Receipt
- Banker’s Cheque
- e-payment Gateway of Authority
The clause requires an applicant to upload a scanned copy on the e-Procurement Portal, while sub-clause (ii) directs that the form in which the Bid Security is furnished must be physically delivered in person to the nominated official.
Analyzing these stipulations, the Supreme Court observed that the requirement of physical submission applies meaningfully only to instruments like Bank Guarantees, Demand Drafts, Fixed Deposit Receipts, or Banker’s Cheques, where the respondent cannot exercise a lien or enforce the security without possessing the physical instrument. In contrast, with an e-payment, the funds are credited directly to the authority’s account.
The Court noted:
“Insofar as the appellant is concerned, the money was deposited to the account of the respondents and there is 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.”
Addressing the precedent in Prakash Asphaltings and Toll Highways (India) Ltd., the Bench clarified that the cited ruling dealt with a situation where a bidder mistakenly quoted a single-day rate of Rs. 9,72,999/- instead of the total contract value of Rs. 100.65 crores for 1,095 days, seeking to treat tender terms as redundant. The Bench emphasized that while that decision cautioned Constitutional Courts to defer to the authority’s appreciation of tender terms, it expressly carved out an exception for mala fide and perverse interpretations.
Applying that exception to the present controversy, the Court 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.”
The Bench added:
“Rigid adherence to the letter of a document cannot be countenanced, especially when there is a clear impossibility in compliance of the same. 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.”
The Decision and Directions
The Supreme Court set aside the impugned Patna High Court order.
Noting that the amounts deposited on the e-portal had been refunded to the appellant following the bid rejection, the Court issued specific directions to restore the tender process:
- Respondent Nos. 1 and 2 must facilitate a measure of e-payment within two weeks from the date of the judgment.
- In the event of any technical difficulty, the appellant shall be required to submit the bid security amount in any other permissible form within a further period of two weeks.
- Upon submission of the Bid Security, the appellant’s financial bid shall be opened and considered along with the other bids, and the tender finalized in accordance with the stipulated tender conditions.
The appeal was accordingly allowed.
Case Details
Case Title: Hardev Construction Private Limited v. Union of India & Ors.
Case No.: SLP (C) No. 25855 of 2026
Bench: Justice J. B. Pardiwala and Justice K. Vinod Chandran
Date: October 12, 2026
