SC – Competition begins Tender but Compliance decides Eligibility
Judgment dated 21.9.2026 of the Supreme Court in SLP (Civil) No.22161 of 2026 of Micky Traes Vs. L.R.Y. Labour Contractor and others with connected matters.
A tender begins with competition, but it proceeds upon rules.
On evaluation, the technical bid of H1 Bidder was found responsive and its financial bid being the highest was accepted.
The H2 Bidder addressed an e-mail to the Secretary, Tender Opening Committee, Market Committee, Ludhiana, stating that the H1 Bidder did not possess the requisite experience of collection of parking fees or user charges and that the Board had erred in issuing an Enlistment Certificate dated 24.02.2026 in its favour. The objection notwithstanding, a LoA was issued to the H1 Bidder on 20.03.2026.
This was challenged on the ground that the certificate of H1 Bidder did not show two years experience of collection of user charges or parking fees immediately preceding 31.12.2025 as required by the tender instructions.
The High Court held that the technical bid of H1 Bidder did not meet the eligibility criteria and quashed LoA.
It is well-settled in law that requirements in a tender notice can be classified into the following two categories: (i) those which lay down the essential condition of eligibility; (ii) the other which are merely ancillary or subsidiary to the main object sought to be achieved by the condition. In the first case, the authorities issuing the tender may be required to enforce the condition rigidly whereas in other cases, it may be open to the authority to deviate from it and not to insist upon strict 14 literal compliance of the condition12. It is an equally established legal proposition that any non-conformity with or relaxation in the prescribed standard allowed in case of any tenderer, if not resulting in substantial prejudice or injustice to any of the parties or to public interest in general would not be bad. It is equally well-settled in law that where upon due consideration of the tender document submitted by all the tenderers on their own merits, if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which the essential conditions were laid down, the same may not ordinarily be interfered with.
The object of Clause 9(c)(a) is to ensure that the entity to which the collection of a substantial public revenue is to be entrusted has previously discharged that very kind of duty, collection on behalf of, and accountable to, a public body, and not merely some activity that happens, in passing, to involve the handling of money.
The submission that the H1 Bidder’s bid, being higher by about Rs.1.5 crore, ought to be preferred in the interest of the public exchequer, does not assist the H1 Bidder. Revenue considerations cannot cure ineligibility. Bids can be compared only among bidders who are eligible to be compared in the first place; to hold otherwise would be to allow every eligibility condition to yield to the highest figure quoted, and would render the tender document, and the enlistment instructions framed to secure competence and accountability in the collection of public revenue, wholly illusory. The public interest that the H1 Bidder invokes is served, not disserved, by holding the Committee to the conditions it has itself prescribed.
