Railways threw out a bid for not producing the original of a payment made online, and the Court called it an impossibility
Justices J.B. Pardiwala and K. Vinod Chandran set aside the rejection as perverse and directed that the railway contract be awarded to the bidder who was shut out.
The tender document said the original of the bid security had to be submitted. The bidder had paid its bid security through the authority's own electronic payment gateway, scanned the digital receipt and uploaded it with the bid. Its bid was rejected for not producing an original, and the Patna High Court affirmed the rejection. On 12 October 2026 the Supreme Court set that aside, holding there was clear perversity in demanding something that could not exist, and directed that the contract be awarded to the appellant.
The bid and the clause
The appellant had bid for a railway project involving construction of guide bunds, launching aprons and associated river protection works in connection with a new line rail link project on an engineering, procurement and construction basis. Its bid was rejected for non-submission of the original of the bid security furnished, a requirement stipulated by a clause of the Request for Proposal as indicated on the respondent's e-portal.
The appellant's answer was simple. Its bid security had been remitted to the respondent's account through the authority's own e-payment gateway. The receipt generated in digital form was scanned and uploaded along with the bid. There was no paper original to produce because the payment had never taken paper form.
Deference, and where it stops
For the Ministry of Railways it was urged that the clause specifically required the original to be submitted, and that the rejection was therefore proper. The successful tenderer relied on Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises for the proposition that the awarder of a contract is best equipped to understand and appreciate its own requirements and to interpret its bid documents, and that constitutional courts should defer to that understanding.
The Court accepted the rule and pointed to the exception built into it. That line of authority carves out an exception for a mala fide or perverse understanding or appreciation of the documents, particularly in the application of the terms of a tender document. Deference is owed to a reading that is possible, not to one that cannot be satisfied.
Why the demand was perverse
The Court's reasoning rests on what the bid security is for. Where the security is furnished in other forms, it cannot be enforced by the authority unless the original instrument comes into its hands; the original matters because it is what makes the security realisable. Where the payment has been made through the e-payment route, the money has already been transferred to the authority's account and the authority has full control over it. The purpose the clause serves is already achieved.
In those circumstances, rejecting a bid solely because the original was not produced, when an e-payment was made as the tender document itself required and its digital receipt was scanned and uploaded, was a clear perversity. Rigid adherence to the letter of a document cannot be countenanced, the Court said, especially where compliance with it is a clear impossibility.
Order
The impugned order was set aside and the Court directed that the contract be awarded to the appellant. Because the amounts deposited on the e-portal had been refunded to the appellant after the rejection, the Court directed the respondents to facilitate a fresh e-payment within two weeks, and provided that if there is any technical difficulty the appellant may submit the amount in any other form within a further two weeks. On submission of the bid security, the appellant's financial bid is to be opened and considered along with the other bids, and the tender finalised in accordance with the remaining tender conditions. The appeal was allowed on those terms.