The Supreme Court has held that a bidder who does not satisfy an essential experience condition prescribed in a tender cannot claim eligibility merely because it has quoted a higher amount.
The Bench of Justice K.V. Viswanathan and Justice Alok Aradhe has observed that revenue considerations cannot cure ineligibility, and that tendering authorities must adhere to the eligibility conditions they themselves have prescribed.
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The dispute arose from a Detailed Notice Inviting Tender (DNIT) issued on February 13, 2026, by the Market Committee, Ludhiana for recovery and realization of user charges for the use of Mandi infrastructure by retail and other vehicles carrying fruits, vegetables and other eatables.
The contract was for a period of twelve months, from April 1, 2026 to March 31, 2027. The reserve price was fixed at ₹12.21 crore per annum.
Five bidders participated in the tender. Micky Traders emerged as the H1 bidder after its technical bid was found responsive and its financial bid of ₹16.51 crore was accepted. The H2 bidder had quoted approximately ₹15.03 crore.
However, the H2 bidder objected to Micky Traders’ eligibility, contending that it did not possess the experience required under the applicable enlistment instructions.
Despite the objection, a Letter of Acceptance was issued in favour of Micky Traders on March 20, 2026. The H2 bidder subsequently approached the Punjab and Haryana High Court challenging the acceptance of the bid.
The controversy centred on Clause 9(c)(a) of the Punjab State Agricultural Marketing Board’s Instructions regarding Enlistment of Contractor Firms.
The clause required bidders to submit completion certificates demonstrating successful execution of annual collection of user charges or parking fees in Government, Semi-Government or PSU organisations during the preceding two years up to December 31, 2025.
The Supreme Court identified five conditions that a bidder was required to satisfy:
- The bidder had to be an enlisted firm with the Board’s Marketing Wing.
- It had to submit an experience certificate relating to work done for specified government or public bodies.
- The experience had to relate specifically to successful collection of user charges or parking fees.
- The work had to have been performed for a Government, Semi-Government or PSU organisation.
- The work had to fall within the prescribed two-year period ending December 31, 2025.
The Supreme Court first reiterated that courts ordinarily exercise limited judicial review over tender decisions.
Referring to its earlier decisions, the Court noted that judicial review is primarily concerned with the manner in which a decision is taken, rather than substituting the court’s own view for the decision of the tendering authority.
Interference may be justified where the decision suffers from illegality, irrationality, procedural impropriety, arbitrariness, bias, mala fides or perversity. The authority that drafted the tender document is ordinarily considered the best person to understand and interpret its requirements.
At the same time, the Court stressed that this deference is not unlimited.
Where the interpretation adopted by the tendering authority cannot reasonably be traced to the language of the tender document, or where the interpretation is unfair, perverse or arbitrary, courts can intervene.
The Supreme Court found a fundamental distinction between the experience relied upon by Micky Traders and the experience actually required under the tender.
The tender involved the collection of user charges from a high volume of vehicles entering Mandi premises on a daily basis. According to the Court, such work required demonstrated competence in areas such as gate management, ticketing or token systems, cash handling, daily reconciliation, accounting to the public authority and supervision of collection staff.
The Court described this as a specialised, continuous and revenue-facing operation, where collection of user charges is itself the principal contractual responsibility of the contractor.
By contrast, the experience relied upon by Micky Traders related to organising cattle fairs.
The Court explained that under the Punjab Cattle Fairs (Regulation) Rules, 1968, the successful bidder for a cattle fair essentially operates as a lessee who pays the authority for use of the fairground. Any charges collected by the organiser from persons using the fairground are collected for the organiser’s own account and arise from the separate commercial arrangement.
Such activity, the Court held, could not be equated with collecting statutory user charges on behalf of a public authority.
The Court further observed that treating incidental collection of money in any commercial activity as equivalent to the specialised experience required under the tender would defeat the purpose of the eligibility condition.
The judgment noted that fairs, festivals, exhibitions and even wedding venues may involve some form of collection from customers. But that does not establish experience in collecting substantial public revenue on behalf of and accountable to a Government or public body.
The purpose of the clause was to ensure that the contractor entrusted with collection of substantial public revenue had previously performed the same type of specialised responsibility.
The Court therefore concluded that the experience of organising cattle fairs was not interchangeable with experience in collecting user charges or parking fees for a Government, Semi-Government or PSU organisation.
It held that the Market Committee had failed to properly apply its own eligibility clause when it treated the two types of experience as equivalent.
The Supreme Court identified another independent problem with the documents relied upon by Micky Traders.
The experience certificate did not record work executed by Micky Traders itself. Instead, it referred to participation during different periods by three separate entities.
Micky Traders sought to explain this by stating that its sole proprietor, Ravinder Singh, had been a partner in those entities and that their experience should consequently be attributed to Micky Traders.
The Supreme Court rejected this explanation in the absence of supporting material.
The Court noted that there was no partnership deed, registration certificate or other material establishing the nature, extent or duration of Ravinder Singh’s association with those entities.
It held that an eligibility condition cannot be satisfied merely through an unverified assertion that the bidder and unrelated third parties should be treated as having the same experience.
The Court also relied upon the bidder’s own previous conduct.
Micky Traders had participated in tenders floated by the Market Committees at Patiala and Rajpura involving an identical experience requirement. On those occasions, its bids had been treated as technically non-responsive because of lack of the required experience.
The bidder had not challenged those decisions.
The Supreme Court held that although different statutory authorities are not automatically bound by each other’s decisions, the bidder’s own conduct was relevant.
Having accepted the interpretation of an identically worded experience condition when it operated against it, the bidder could not adopt the opposite interpretation when the same interpretation became beneficial to it.
The Court described this as a case where the bidder was attempting to approbate and reprobate on the meaning of the same contractual language.
After examining the various grounds, the Supreme Court concluded that the Market Committee’s interpretation did not satisfy the standard required for judicial deference.
The Committee had treated incidental collection of money during an unrelated commercial activity as equivalent to specialised collection of user charges. It had also attributed the experience of other firms to Micky Traders without sufficient proof of the claimed connection.
The Court held that the Committee’s interpretation was patently arbitrary and dehors the terms of the DNIT. Consequently, the High Court was justified in exercising judicial review and refusing to defer to the Committee’s interpretation.
One of the significant arguments raised on behalf of Micky Traders was that its bid was approximately ₹1.5 crore higher than the competing bid and that rejecting it would result in loss of public revenue.
The Supreme Court rejected this argument.
The Court categorically held that revenue considerations cannot cure ineligibility. Financial bids can be compared only after determining that the bidders are eligible to participate.
Accepting an ineligible bidder merely because it has quoted a higher amount would effectively allow every eligibility requirement to be overridden by the highest financial offer, rendering the tender conditions meaningless.
The Court also rejected the argument that the enlistment instructions were merely directory.
It noted that the Committee itself had treated the experience requirement as mandatory because it rejected bids where the required certificate was not furnished.
The problem was not that the Committee had relaxed the requirement generally, but that it incorrectly assessed whether the certificate submitted by Micky Traders actually satisfied the mandatory condition.
The Supreme Court observed that a condition cannot be mandatory in the abstract and directory only in its application to a favoured bidder.
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