Tender Law I

While authorities are given latitude in formulating tender conditions, Court has been consistent in requiring adherence to conditions once framed, and has entered into fairly detailed scrutiny of administrative decisions.

The law is settled that an essential condition of a tender has to be strictly complied with. In Poddar Steel Corporation, (1991) 3 SCC 273, this Court held as under:-

“… The requirements in a tender notice can be classified into two categories — those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition. In the first case the authority issuing the tender may be required to enforce them rigidly. In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases….” [Para 6]

Similarly in B.S.N. Joshi & Sons Ltd., (2006) 11 SCC 548, this Court held as under:-

“…(i) if there are essential conditions, the same must be adhered to;

(ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;

(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;

(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when the was also not in a position to comply with all the conditions of tender fully, unless Court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;

(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;…” [Para 66].”

Hon’ble Justice R.F. Nariman, Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan [Civil Appeal No. 6978 of 2016].