“Non-Compliance With Mandatory Bank Guarantee Validity Justifies Rejection Of Tender Bid": Chhattisgarh High Court

The Chhattisgarh High Court has dismissed a writ petition challenging the disqualification of a contractor from a government tender process related to the construction of an Eklavya Model Residential School (EMRS).M/s Ramsaran Singh Projects LLP (Petitioner 1)— engaged in civil construction work, challenged the validity of an e-mail issued by WAPCOS Limited, a Government of India Undertaking (respondent 1), whereby the bid submitted by Petitioner 1 in response to a Notice Inviting Tender (NIT) for construction of EMRS at Kanker, having an estimated cost of Rs. 31,52,70,889/- excluding GST, was declared technically disqualified in the bid evaluation process. The rejection was handed down because the bank guarantee furnished by petitioner 1 towards bid security was valid upto 18.10.2025, the NIT prescribed that the bid security was to remain valid for 45 days beyond the final bid validity period i.e. upto 04.01.2026.Reiterating that the Court cannot sit as an appellate authority over decisions of the tendering authority, unless they are patently arbitrary or irrational, a Division Bench comprising Chief Justice Ramesh Sinha and Justice Ravindra Kumar Agrawal upheld the rejection and observed,“… it becomes evident that the decision taken by the respondent authorities to disqualify the petitioners was based upon objective evaluation of the documents submitted by the bidders and in accordance with the tender conditions. The petitioners admittedly failed to furnish a bank guarantee that remained valid for the period required under the NIT. Such a condition relating to bid security is an essential requirement of the tender process, and non-compliance with the same necessarily results in disqualification of the bid.”Noting that the decision of the respondent authorities was apparently taken in strict accordance with the tender conditions and in the larger interest of maintaining fairness and uniformity in the tender process, the Bench held,“... this Court is of the considered opinion that the petitioners have failed to establish any arbitrariness, mala fides or illegality in the decision-making process adopted by the respondent authorities while evaluating the bids submitted in response to the Notice Inviting Tender dated 04.08.2025. The petitioners admittedly did not comply with the mandatory requirement relating to the validity of the bid security and, therefore, the respondent authorities were justified in declaring the technical bid of the petitioners as disqualified.”BackgroundThe petitioners contended that the said rejection was arbitrary and discriminatory inasmuch as the bid submitted by Balaji Constructions (Engineers and Contractors) (respondent 4) was declared technically qualified, even though the bank guarantee furnished by respondent 4 was also not valid till the required date and was valid till 02.01.2026. It was contended that petitioner 1 and respondent 4 were placed on the same footing with regard to compliance of the tender condition relating to validity of the bank guarantee, yet the respondent authorities adopted a differential and discriminatory approach by disqualifying petitioner 1, while permitting respondent 4 to proceed further in the tender process, which was submitted to violate petitioner 1's equality and fairness mandates under Article 14 and 19(1)(g). They also submitted that by excluding petitioners from the tender process while permitting similarly-placed bidders to participate, the respondents had also caused serious prejudice to the public exchequer.However, Senior Advocate Santosh Tripathi, appearing for the tendering authorities, submitted that tendering authority had acted in strict consonance with the terms and conditions of the NIT and accordingly Petitioner 1 was declared disqualified. It was further submitted that the bank guarantee submitted by Respondent 4 though was valid up till 02.01.2026, however, the claim expiry period of the said bank guarantee was extending up till 13.08.2026 thereby the stipulation the NIT for the bid security to remain valid 45 days beyond the final bid validity period stood complied.Upholding the impugned rejection, the Court reiterated that the tender evaluation process involves technical and commercial considerations which fall within the expertise of the tendering authority, and that the Court's should refrain from interfering in such cases unless patent arbitrariness is established“In the present case, no such circumstance has been demonstrated by the petitioners”, the Court held.With respect to the argument that petitioner 1 was discriminated against, the Court observed,“The contention of the petitioners that the respondents have adopted inconsistent positions with regard to the calculation of the validity period also does not advance their case in any meaningful manner, for the simple reason that even on the interpretation suggested by the petitioners themselves, the bank guarantee submitted by them did not satisfy the mandatory...

“Non-Compliance With Mandatory Bank Guarantee Validity Justifies Rejection Of Tender Bid": Chhattisgarh High Court

Saahas Arora

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