Kerala High Court Allows K-Rail's JV To Participate In Redevelopment Tender, Criticises Southern Railway For Rejecting Bid Saving ₹25 Crore Public Money

The Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. dismissed two writ appeals and upheld the decision of a Single Bench that permitted MIPL to participate in the tender process.

It observed:

“We cannot find any satisfactory reply from Southern Railway for not accepting the documents filed by the JV or for not seeking clarification if there were any doubts, as the disclosure of the documents in the proceedings has clearly substantiated that the rejection of the technical bid was improper. The authority ought not to have rejected the technical bid by a cryptic communication without seeking clarification and without considering that K-Rail is a partner of the JV and that K-Rail is a JV of the Ministry of Railways and the Government of Kerala…The credibility of the K-Rail stands on a much better footing and where the Government itself is involved in the formation of “the Joint Venture”, the decision of the Southern Railway to reject the technical bid on a technical ground raises issues more than it answered.”

The Court also criticised the Southern Railways for rejecting the bid that could have saved the Exchequer around 25 crore rupees:

“when “the Joint Venture” meaning thereby “MARYMATHA-KRDCL (JV)”, is able to demonstrate that the acceptance of technical bid of “the Joint Venture” would save the Government exchequer by ₹25 Crores, we find no justification for the Southern Railway to reject the technical bid as “the Joint Venture” was otherwise found to be eligible. We could not find any rational explanation for Southern Railway to prefer an appeal against the order of the learned Single Judge, as larger participation in a public tender brings transparency.”

Facts

Southern Railway notified a tender for a project to re-develop Chengannur railway station in August 2025. To participate in the process, in September 2025, MIPL formed joint venture with K-Rail/KRDCL (Kerala Rail Development Corporation Limited). K-Rail/KRDCL, in turn, was a JV created in 2016 by Government of Kerala and Railways Ministry.

In January 2024, K-Rail Board of Directors had authorised V. Ajith Kumar to participate in the tenders alone or through JV. He was also issued a general power of attorney for the purposes of documentation in tenders and for appointing attorneys to participate in tenders on the company's behalf either alone or through JV. In September 2025, Ajith Kumar authorised Ezhilan M. as the attorney for K-Rail to participate in the present tender process in accordance with the tender notification.

MIPL's technical bid was rejected by Southern Railway as 'not valid'. The tender was finalised in favour of M/s. SVCPL-JVEA, one of the appellants, which was the only bidder qualified in the technical evaluation. SVCPL-JVEA had submitted a bit that was higher than MIPL's bid by Rs. 25 crores.

Aggrieved, MIPL came before the Single Bench by preferring a writ petition. The same was allowed, directing Southern Railway to let MIPL participate in the tender process and to evaluate its technical bid. It was observed that if MIPL was otherwise qualified, its bid shall be opened and proceedings to be finalised without delay.

Assailing the decision, the Southern Railway and SVCPL-JVEA filed two separate writ appeals.

Southern Railways' arguments

Southern Railway argued that MIPL failed to submit requisite documents, including the resolution of its Board of Directors in relation to K-Rail as its JV partner. It contended that the document produced by MIPL – the meeting minutes of its Board of Directors permitting one of the directors to act as attorney of the joint venture partner to participate in tender, either individually or with a joint venture partner – was not sufficient.

Southern Railway submitted that since there was no resolution passed by K-Rail accepting and authorising JV company with MIPL, the existence of the same was doubtful and, that this was the reason to reject the technical bid. It was also pointed out that one of the stipulations in the agreement forming K-Rail - that a special “Super Majority” resolution must be passed for entering into a JV – was not satisfied in this case.

Contentions raised by MIPL

MIPL pointed out that Southern Railway had accepted the same power of attorney and K-Rail Board resolution in other projects – redevelopment of Varkala Sivagiri and Thiruvananthapuram stations – awarded to K-Rail's other JVs. It was contended that in neither case, there was an express tender clause to provide Board resolution, and therefore, the rejection of the bid was unjustified.

K-Rail's submissions

At the appellate stage, K-Rail was arrayed as an additional respondent. K-Rail stated that it has participated in the tender process by forming a JV with MIPL. It referred to the meeting minutes of January 2024, which included representatives of Indian Railways and Kerala government. With respect to the Super Majority requirement, it was told that the decision to authorise Ajith Kumar was unanimous.

K-Rail further pointed out that it had authorised MIPL to file the writ petition. Moreover, the Tender Committee exceeded its jurisdiction by acting as an auditor of the K-Rail's internal voting mechanism and attempting to invalid its Board decision. It also produced documents evidencing that all legal requirements were complied with while entering into JV with MIPL.

Findings

After hearing the parties, the Court was of the view that the Tendering authority took a hyper technical approach in rejecting the bid submitted by the Joint Venture company, especially when such an issue was not raised in similar projects by other JVs of K-Rail. It further noted that all proper documentation was present to create the JV and to participate in the tender process.

The Court added that the Tender Committee should evaluate the technical skill of JV in executing the work instead of rejecting the bid for the absence of a Super Majority Resolution, which was found to be present.

Rejecting the contention that courts should not substitute the decision of the tendering authority, the Court remarked:

“In the event it appears to the Constitutional Courts that the Tender Committee has taken a stand which is irrational, arbitrary, and defies logic, the Constitutional Courts cannot remain idle and is duty bound to strike down such actions. The impugned decision of the authority is manifestly arbitrary and irrational. Moreover, a bidder has no vested right to the awarding of the contract merely because it has participated in the tender.”

It thus dismissed the appeals and upheld the decision of the Single Judge.

Case Nos: W.A.Nos.792 and 799 of 2026

Case Titles: Southern Railway and Anr. v. Marymatha Infrastructure Pvt. Ltd. and Ors. & M/s. SVCPL-JVEA v. Marymatha Infrastructure Pvt. Ltd. and Ors.

Citation: 2026 LiveLaw (Ker) 480

Counsel for the appellants: P. Sreekumar – ASGI, O.M. Shalina – DSGI, Jomy George, R. Padmaraj, Sajeevan V.T., M.J. Benny, R. Ajith Kumar [V.K.Edom], Chitra N. Das, Jistin Jose, Sreedevi V.S., Arjun S. Prakash, Ananthakrishnan D. M.

Counsel for the respondents: Santhosh Mathew (Sr.), Shinto Mathew Abraham

Click to Read/Download Judgment

Click to Read/Download Judgment of Single Bench