Madras Security Printers Private Limited vs National Institute For Smart Government
- Court
- Delhi High Court
- Case type
- Writ Petition Civil
- Decided on
- 10-03-2026
$
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on : 28.01.2026
Judgment delivered on : 10.03.2026
Judgment uploaded on : As per Digital Signature~
+ W.P.(C) 18934/2025 & CM APPL. 78836/2025 CM APPL.
1350/2026
MADRAS SECURITY PRINTERS PRIVATE LIMITED
.....Petitioner
Versus
NATIONAL INSTITUTE FOR SMART GOVERNMENT.
.....Respondents
Advocates who appeared in this case
For the Petitioner : Mr. Amit Sibal, Sr. Adv, Mr. Daksh Pandit,
Mr. Darpan Sachdeva & Mr. Rajat Bector,
Advs.
For the Respondent : Mr. Sandeep Prabhakar, Senior Adv., Mr.
Vikas Mehta, Ms. Mansi Jain, Mr. Parth
Tanwar, Advs. for R-1
Ms Arunima Dwivedi, CGSC; Mr Akash
Gupta, GP; Mr Rajat Sharma, Ms Himanshi
Singh, Ms Monalisha Pradhan, Ms Priya
Khurana Advs. for R-2
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
JUDGMENT
MANMEET PRITAM SINGH ARORA, J.
1. The present writ petition has been filed under Article 226 read with
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Article 227 of the Constitution of India, seeking appropriate directions to the
Respondent No. 1 to consider the Petitioner’s bid, submitted pursuant to IFB
No. NISG/SLUDI-2025, which has not been accepted by the Respondent
No. 1, without furnishing any reasons.
1.1. The Petitioner has been excluded from the bidding process at the pre-
qualification stage and, therefore, its bid has not proceeded even for
technical evaluation.
1.2. It is the Petitioner’s contention that its bid is complete in all respects
and complies with the eligibility criteria set out in the Tender document.
2. The relevant facts for the disposal of the present writ petition are as
follows:
2.1. Respondent no. 1, the National Institute for Smart Government
(NISG), a not-for-profit company which is headed by Secretary, Ministry of
Electronics and Information Technology (MeitY) as its Chairman has been
appointed by the Ministry of External Affairs (MEA), Government of India
as the Project Management Consultant (‘PMC’) for the project titled ‘Sri
Lanka Unique Digital Identity (SL-UDI) (‘the Project’). The end procurer
for the Project is the Government of Sri Lanka.
2.2. It is stated that the Project has its genesis in bilateral Governmental
engagements between the Government(s) of India and Sri Lanka.
2.3. Respondent No. 1/NISG on behalf of the Government of Sri Lanka
has invited bids vide tender bearing IFB No. NISG/SLUDI-2025 (‘the
Tender’) for the appointment of a Master System Integrator (MSI) for the
development, implementation, and maintenance of the Project.
2.4. In response to the aforesaid Tender, the Petitioner herein along with
five (5) other bidders participated in the bid process. Thus, total six (6)
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bidders have participated in the bid process.
2.5. The bidders were required to furnish information and documents
enlisted in Clause 3.2 of Section III (Evaluation and Qualification criteria)
and Clause 4.1 of Section IV (Bid Submission Forms- Pre-Qualification and
Technical Bids) of the Tender, first for pre-qualification, and if qualified,
then for technical evaluation.
2.6. It is a matter of record that out of the six (6) bidders, except the
Petitioner remaining five (5) bidders have proceeded to the stage of
technical evaluation. It is the exclusion of the Petitioner at the pre-
qualification stage which is the subject matter of challenge in these
proceedings.
2.7. The relevant Tender clauses for adjudicating the present controversy
are as follows:
2.7.1. Clause 13.2, read with Clause 24.2 of Section I-Instructions to
Bidders (‘ITB’) of the Tender, envisage a two-stage method for selection of
the final/eligible bidder. The said clauses read as follows:
“13.2 The bidding process followed is the Two stage method .
The First Stage comprises only the pre-qualification. The
documents comprising the pre-qualification bid have been enlisted
in Section 4.1. Table 4.1.1. The Second Stage of the Bid shall
comprise two envelopes submitted simultaneously, one called the
Technical Bid containing the documents listed in Section 4.1.
Table 4.1.2 [Bidder’s Response Format – Technical Bid] and the
other the Price Bid containing the documents listed in Table 4.12
(Bid Submission Form-Price Bid of Section IV (Bidding Forms)],
both envelopes enclosed together in an outer single envelope.”
“24.2 The bidding process followed is the Two stage method .
The First Stage comprises only the pre-qualification. Firstly, the
pre-qualification bid shall be submitted in a sealed envelope on or
before the date and time mentioned in BDS marking it as “Pre-
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Qualification Bid”. A soft copy (on a pen drive, etc.) of the pre-
qualification documents in a single PDF document (which should
be searchable) should be submitted. Once the pre-qualification
evaluation is completed, the qualified bidders at this stage will be
notified and may be invited for a field visit to the project site at Sri
Lanka. The qualified bidders shall be required to sign a non-
disclosure agreement (4.3.11 Non-Disclosure Agreement) and
an Integrity Pact (4.3.12 Integrity Pact) with the GoSL during
the field visit.”
(Emphasis supplied)
2.7.2. Clause 33.1 of the ITB/Section I of the Tender provides that
Respondent No. 1 shall determine the responsiveness of a bid strictly on the
basis of the contents of the bid as submitted, as defined in Clause 13 of ITB;
which clause as noted above again relies and refers to Clause 4.1, Table
4.1.1 of Section IV of the Tender for evaluating the pre-qualification.
2.7.3. Clause 33.4 of the ITB/Section I of the Tender stipulates that bids
which are found to be not substantially responsive shall be rejected. The said
Clause 33 of the ITB/Section I reads as under:
“33. Responsiveness to Bid
33.1 NISG determination of a Bid’s responsiveness is
to be based on the contents of the Bid itself, as
defined in ITB 13.
33.2. A substantially responsive Bid meets the
requirements of the Bidding Document without
material deviation, reservation or omission. A
material deviation, reservation or omission is one
that-
33.2.1 if accepted, would:
a. Affect, in any substantial way the scope,
quality or performance of the IT products and
Services specified in the Contract, or
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b. limit in any substantial way inconsistent
with the Bidding Document, the Employer’s
rights or the Bidder’s obligations under the
proposed Contract; or, if rectified, would
unfairly affect the competitive position of other
Bidders presenting substantially responsive
Bids.
… …
33.4. If a Bid is not substantially responsive to the
requirements of the Bidding Document, it shall be
rejected. It may not subsequently be made responsive
by correcting the material deviation, reservation or
omission.”
(Emphasis supplied)
2.7.4. In the facts of this case, it is not disputed that the Petitioner’s bid was
responsive.
2.7.5. Clause 37 of ITB/Section I of the Tender envisages the evaluation of
the eligibility and qualification of the bidder. The said clause reads as
follows:
“ 37. Eligibility and Qualification of the Bidder
37.1 NISG shall determine its satisfaction during the evaluation
of the Bids whether a Bidder meets the eligibility and qualifying
criteria specified in Section III (Evaluation and Qualification
Criteria) .
37.2 The determination shall be based upon examining the
documentary evidence of the Bidder’s qualifications submitted
by the Bidder.
37.3 An affirmative determination shall be a prerequisite for the
opening and evaluating of a Bidder’s Price Bid. An adverse
determination shall result in the disqualification of the Bid, in
which event the NISG shall return the unopened Price Bid to the
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Bidder.
37.4 The capabilities of the manufacturers and subcontractors
proposed in the bid to be used by the bidder will also be evaluated
for acceptability by Section III (Evaluation and Qualification
Criteria). The parties should confirm their participation with a
letter of intent as needed.”
(Emphasis supplied)
2.7.6. Section III of the Tender sets out the employer’s criteria for
evaluating the eligibility of the bidders for their qualification and pre-
qualification. It stipulates that the bidders shall provide all information
requested in the Forms included in Section IV for this purpose. Clause 3.1.1
and Clause 3.1.2 of Section III expressly states that the evaluation of bids
shall be based on the documents that the bidder submits.
Clause 3.1.1 and Clause 3.1.2 of Section III reads as follows:
“
SECTION III- EVALUATION AND QUALIFICATION
CRITERIA
This section contains the Employer’s criteria for evaluating and
qualifying bidders. The bidder shall provide all the information
requested in the forms included in Section IV-Bidding Forms.
3.1 Evaluation
3.1.1 Evaluation Method
The evaluation of bids shall be based on the documents that the
bidder will submit with its Bid. Therefore, the Bidder is requested
to submit all the necessary information and documentation.
Failure to provide the required information may result in rejecting
the Bid.
The NISG will open and review all Bids submitted to determine
whether the Bidder is eligible and qualified (as per the Bidder’s
Pre-Qualification Criteria specified in Section III) and whether
each Bid is responsive using the following criteria under ITB
Clause 33.
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(a) The Bidder meets the Pre-Qualification Requirements outlined
in Bidder’s Qualification Criteria specified in this Section III –
clause 3.2: Pre-Qualifications of the Bidder.
(b) The Bid is substantially complete in that it provides the
information outlined in the Bidder Response Format Section
IV – Bidding Forms (Employer assessment)
(c) All Bids that satisfy the above criteria in items (a) and (b) will
be considered for the detailed technical evaluation.
(d) The evaluation of the bid will be based on the “Quality Cum
Cost - Based Selection” (QCBS) methodology. In this method,
70% of the weightage would be for the Technical Bid and 30%
of the weightage would be given to the Price bid.
(e) Bid evaluation shall be undertaken in three phases . The first
phase will be the Evaluation of Pre-Qualification of the
Bidders. The qualifying bidders in this stage will be allowed a
site visit to Sri Lanka for validation and assessment of the
existing system at their expense. The second phase will be the
evaluation of technical bids, which will be done by applying
the technical evaluation criteria, sub-criteria and scoring
system specified below. The maximum technical score is 1000
points and the passing score for the bidder qualification is 700.
Bids less than 700 shall be summarily rejected.
(f) The price bids of only the bidders who qualified the technical
evaluation shall be opened in the presence of the qualified
bidders/representatives.
(g) The third phase will evaluate the price bids. The final ranking
will be determined by combining the Technical and Price
scores.
3.1.2 Technical Evaluation
The Employer will evaluate the Technical Bids under ITB Clause
37 using the following criteria:
(a) To evaluate the quality aspects of the Technical Bid, the
Bidder must state comprehensively and with sufficient details how
their Bid meets the Technical Requirements specified in Volume 2
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Section VI (Schedule of Requirements). Acceptable documentary
evidence shall be provided where applicable.
(b) Bidder must use the Technical Responsive Checklist in
Volume 2 Section VI (Schedule of Requirements) of the Bidding
document to state how the proposed system responds to each
technical requirement.
(c) Bidder’s Technical bid must meet all the requirements
stipulated in Chapter 9, Volume 2/Section VI (Schedule of
Requirements) of this Bidding Document. All the requirements
specified in the Technical Responsive Checklist are mandatory.”
(Emphasis supplied)
2.7.7. Clause 3.2 of Section III of the Tender states that the bidder shall
demonstrate that they are qualified to bid by completing the formalities set
out in the table(s) provided in Section IV. The relevant portion of Clause 3.2
reads as follows:
“ 3.2 Pre-Qualification of the Bidder
Bidders shall demonstrate that they are qualified to Bid as part of
the Bidding process and complete the forms set out under the Bid
Submission Form and Qualification of the Bidder. The detailed
forms are found in Section IV , Bidding Forms. Bidders must
provide additional information/documents to substantiate the
eligibility criteria wherever required.
… …”
(Emphasis supplied)
2.7.8. There are twelve (12) criteria listed in Clause 3.2 above; however,
since the criteria of ‘Non-Performance’, ‘General Experience’ and ‘Relevant
Experience’ have emerged as the relevant issues in the pleadings and
arguments, only the said criteria stipulated under Clause 3.2 of Section III
are reproduced herein:
Criteria SE JV/Consortium Subcontracting Document(s)
NP/LP APC EP LB S
Non-Performance – - Must meet Form 4.3.2 with
✓ ✓ ✓ ✓
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Non performance of
a Contract did not
occur within the last
Five (5) years before
the deadline for Bid
submission. Non-
performance must be
based on fully settled
disputes or litigation.
The Dispute
Resolution
Mechanism
has resolved a fully
settled dispute or
litigation under the
respective Contract
and where all appeal
instances available to
the Bidder have been
exhausted.
requirements by
attachments if
itself or as a
partner to past or
required
existing JVCA
- • Form 4.3.7 plus
✓ ✓ - ✓ -
• Work Order/
Contract plus
• Certificate of
Completion
from Client/ Self-
General Experience
– The bidder should
have experience in
IT projects in the last
ten (10) financial
years, including:
• System integration
and
• c Software
application
development,
customization and
maintenance
The project(s) should
meet the following
requirements:
At least one (1) such
project of INR 110
crore or more.
OR
At least two (2) such
projects, each of INR
70 Crore or more
value.
certificate of
completion
issued by the
Company
Secretary or
Statutory
Auditor/ Phase
completion
certificate from
the Client for
ongoing project
✓ ✓ - - ✓ - • Form 4.3.8 plus
• Work Order/
Contract plus
• Certificate of
Completion
from Client/ Self-
certificate of
completion
issued by the
Company
Secretary or
Relevant
Experience –
During the last ten
(10) years, the
bidder must have
completed at least
one (01) system
integration project
with a value of 50
crores in the field of
identity including
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domains like
passport, driving
license, CRVS,
election card etc.
and supporting
application
software of similar
scope.
Statutory
Auditor/ Phase
completion
certificate from
the Client for
ongoing project
2.7.9. Clause 4.1, Table 4.1.1 of Section IV of the Tender prescribes the
Bidder’s Response Form (“BRF”), which is required to be submitted by the
bidder for the purposes of evaluation of pre-qualification in first phase and
technical evaluation in the second phase.
2.8. It is a matter of record that in pursuance to the Tender notice, the
Petitioner duly submitted its bid on 22.08.2025, which was complete and
responsive as stipulated in Clause 33 of the ITB Section I. The Petitioner’s
bid enclosed all requisite information and documents as prescribed under
Sections III and IV of the Tender document. The Respondent No. 1 issued
an e-mail on 27.08.2025 seeking clarifications from the Petitioner, with
regard to the manpower and the contact details of the authorised signatory,
which were duly provided by the Petitioner on 29.08.2025.
2.9. It is stated that however, Respondent No. 1 issued a notice dated
31.10.2025 (“impugned notice”) publishing the list of five (5) bidders who
were declared pre-qualified for consideration in the second stage of the
1
bidding process , namely the Techno-Commercial Bidding stage. The said
list of pre-qualified bidders included: (i) M/s Infosys Ltd., (ii) M/s Tata
Consultancy Services Ltd., (iii) M/s Protean e-Gov Technologies Ltd., (iv)
M/s RailTel Corporation of India Ltd., and (v) M/s Bharat Electronics Ltd.
However, the name of the Petitioner was conspicuously absent from the said
1
(re: Clauses 13.2 and 24.2 of ITB/Section I and Clause 3.1.1 of Section III)
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list and it was the only bidder, who was excluded.
2.10. No separate communication or intimation was ever issued to the
Petitioner informing it the reasons of his alleged exclusion/non-qualification.
2.11. Petitioner vide letter dated 06.11.2025 followed up to inquire the
reasons for opining that its bid fails to meet the pre-qualification criteria;
however, the Respondent No. 1 failed to reply to the said email. The
Petitioner issued another letter dated 10.11.2025 seeking grounds for non-
consideration of the petitioner’s bid, to which the Respondent No. 1 replied
vide email dated 10.11.2025 and informed the Petitioner that it has
forwarded the Petitioner’s letter to the [Evaluation] Committee that has
taken the decision, and the same will be updated to the Petitioner.
However, no communication, order or notice, was issued to the
Petitioner for informing the reasons or grounds for non-consideration of its
bid. The Petitioner addressed subsequent emails dated 11.11.2025, and
19.11.2025, seeking disclosure of reasons and the minutes of the decision-
making process; however, no such reasons or records were furnished.
3. Aggrieved by the non-consideration of its bid for the Second Stage
i.e., technical evaluation without disclosure of reasons, the Petitioner has
approached this Court by way of the present writ petition on the plea the
decision-making process adopted by the Respondent No. 1 is vitiated by
procedural impropriety, lack of transparency and arbitrariness.
4. When the matter was first listed before the Court on 15.12.2025, in
the aforesaid facts, the Petitioner contended that it had meticulously
prepared its bid in compliance with the terms and conditions of the Tender
document and submitted all the necessary documents/clarifications to the
Respondent No. 1 for the bid evaluation. The Petitioner believed that the
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disqualification of the Petitioner at the pre-qualification stage was arbitrary
and whimsical, as no formal reasons were provided to the Petitioner for its
ouster.
5. The Respondent No. 1 has filed its counter-affidavit and submitted
that, in view of the sensitive and sovereign nature of the Project, verification
was requested by Respondent No. 1 from the clients whose references were
provided by all the bidders (including Petitioner) under the ‘General
2
Experience’ and ‘Relevant Experience’ criteria under Clause 3.2 of Section
III.
5.1. It is stated that one of the responses received from the Petitioner’s
client contained adverse inputs in respect of the Petitioner, which is relevant
to institutional risk and suitability. It is stated that on the basis of the adverse
input received during the due diligence, the Petitioner was not found suitable
by the Evaluation Committee.
5.2. It was stated that an Evaluation Committee has been duly constituted,
comprising the Senior Officials from the NISG. All due diligence inputs,
background verification material and references pertaining to all the bidders
including the Petitioner were placed before the said Committee for its
consideration. It is stated that in strict conformity with the Tender
conditions, the MeitY Guidelines and applicable Governmental Procurement
Framework, the Committee arrived at its recommendation.
5.3. The Respondent No. 1 in its counter-affidavit has relied upon Clause
29.1 of the ITB/Section I of the Tender to contend that the information
pertaining to the evaluation of the bids and decision-making of the
Evaluation Committee is confidential. The relevant Clause 29.1 reads as
2
The criteria of General Experience and Relevant Experience as provided under clause 3.2 of Section III
have been reproduced hereinabove.
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under:
“ 29. Confidentiality
29.1 Information relating to the evaluation of Bids and
recommendation of the Contract award shall not be disclosed to
Bidders or any other persons not officially concerned with such
process until the publication of the Contract award. ”
5.4. Respondent no. 1 has justified the pre-qualification verification from
the clients of the bidders (including the Petitioner) by relying upon a clause
of the Model RFP of MeitY. The relevant clause of the Model RFP relied
upon by Respondent No. 1 reads as follows:
“ Step 4: Pre-qualification/Eligibility evaluation
Based on the pre-qualification criterion mentioned in the RFP
document, the documents/proofs submitted by the bidder should
be verified to establish the eligibility of the Bidder. The
subsequent process for evaluation of the bids would be carried out
only of the bidder qualifies through the pre-qualification
requirement.”
(Emphasis supplied)
5.5. The Respondent No. 1 contends that the rejection of the Petitioner’s
bid at the pre-qualification stage, based on an adverse input received from
one of the Petitioner’s clients during the course of due diligence, neither
amounts to arbitrariness nor does it violate Article 14 of the Constitution of
India.
6. The Respondent No. 1 produced the adverse input of the client
received by it against the Petitioner, in a sealed cover before this Court,
which forms the basis of the opinion of the Evaluation Committee. The
sealed cover also included the decisions of the Evaluation Committee for
each bidder at the pre-qualification stage.
7. In rejoinder, the Petitioner has assailed the procedure adopted by the
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Respondent No. 1 for evaluating the pre-qualification of the bidders
contending that the same does not satisfy the requirement of transparency,
fairness and is also not in accordance with the procedure prescribed under
the Tender document.
7.1. It is contended that none of the clients, whose references were
furnished along with the bid documents under Sections III and IV, have ever
issued any notice or communication expressing dissatisfaction with the
services rendered by the Petitioner and/or its performance.
The client certificates provided by the Petitioner along with the bid
documents under the criteria ‘General experience’ and ‘Relevant
Experience’ are as under:
7.2. The Petitioner has also placed on record along with an additional
affidavit dated 23.01.2026, the documents evidencing its continuing
engagement with certain clients to rebut the stand of adverse input taken by
the Respondent No. 1.
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7.3. It is contended that, in light of its ongoing contractual relationships
and certificate of satisfactory performances issued by the clients, the alleged
adverse input has come as a complete surprise to the Petitioner.
7.4. The Petitioner contends that not only is the procedure followed by the
Respondent No. 1 non-transparent but it is also violative of the principle of
natural justice.
7.5. The Petitioner has vehemently opposed the sealed cover practice
adopted by the Respondent No. 1 in the Court process to justify the rejection
of the Petitioner’s bid by contending that the same is impermissible in law
and is antithetical to judicial review.
COURT’S ANALYSIS and FINDINGS
8. In the aforesaid facts, the questions that arise for consideration before
this Court are:
I. Whether the procedure adopted by the Respondent No. 1 for carrying
out evaluation of the pre-qualification of the bidder(s) is in
accordance with the criteria set out in the subject Tender document?
II. Whether the procedure adopted by Respondent No. 1 for evaluating
pre-qualification of the bidder(s) is fair, transparent and free from
arbitrariness?
III. Whether the exclusion of the Petitioner at the pre-qualification stage
without issuance of any formal communication and disclosure of
reasons is violative of principle of transparency?
IV. Whether Clause 29 of ITB/Section I the Tender document can justify
non-communication of the decision of disqualification and non-
disclosure of reasons of disqualification to the bidder by the Tender
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issuing authority or whether such a clause overrides the constitutional
mandate of fairness and non-arbitrariness in public procurement?
Question no. I
9. Clause 33.1 of the ITB/Section I of the Tender states that the
Respondent no. 1/ NISG will determine the responsiveness of the bids based
on the contents of the bid itself.
10. Clause 37.1 and Clause 37.2 of the ITB/Section I of the Tender
similarly stipulates that the evaluation of the bids to determine whether the
bidder meets the eligibility and qualification criteria specified in Section III
of the Tender document will be determined by Respondent No. 1 based upon
the documentary evidence of the bidder's qualification submitted by the
bidder itself .
11. Clause 3.1.1 in Section III of the Tender document reiterates that the
evaluation of the bids shall be based on the documents that the bidder will
submit with the bid.
12. Similarly, Clause 3.1.2 of Section III of the Tender document states
that Respondent No. 1 will evaluate the technical bids on the criteria enlisted
therein. Clause 3.1.2 (a) stipulates that to facilitate evaluation of the quality
aspects of the technical bids, acceptable documentary evidence should be
provided by the bidder.
13. Clause 3.2 of Section III of the Tender document categorically deals
with the pre-qualification process of the bidder. The said clause also
reiterates that it is the bidder, who shall demonstrate that they are qualified
to bid as a part of the bidding process and for the said purpose bidders are
required to submit all necessary documents enlisted therein and in Section
IV of the Tender documents.
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14. Also, clause 3.2 of Section III of the Tender document sets out a
Table which stipulates the 12 criteria of evaluation and mandates that the
Petitioner must provide all documents/information as per the prescribed
Forms stipulated therein to establish its pre-qualification.
3
15. These are the relevant clauses of the Tender document to which our
attention was drawn during arguments.
16. Upon perusal of the said clauses of the Tender document in Section I
and III, it is indisputable that Respondent No. 1/NISG has unequivocally and
repeatedly represented to the bidders that it shall evaluate the pre-
qualification of the bid (solely) on the basis of the documents filed with the
bid.
The bidders as per Clause 3.2 of Section III for the criteria of General
Experience and Relevant Experience respectively were permitted to place on
record the certificates of performance issued by the clients.
The Tender document does not disclose or indicate or stipulate that
Respondent No. 1 will undertake verification of the said experience
certificates of the clients filed by the bidders at the pre-qualification stage.
4
17. The Respondent No. 1, in its counter affidavit at paragraph 5.11 , has
relied upon Step 4- Pre-qualification/Eligibility Evaluation provided in
MeitY Model RFP to justify the exercise undertaken by it for verifying the
experience certificates submitted by the bidders from the respective client.
However, the said clause of the Model RFP, which stipulates verification of
the documents submitted by the bidder at the pre-qualification criteria, is
concededly not present in the current Tender document.
3
Clause 33.1, 37.1 and 37.2 of ITB/Section I. Clause 3.1.1, 3.1.2 and 3.2 of Section III. Forms prescribed
in Section IV
4
At internal page 14
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To the contrary, verification of the information, client certificates
submitted by the bidder as per Clause 3.2 of Section III is expressly
stipulated at a post-qualification stage in the Tender document. Clause 3.1.6
of Section III of the Tender document, which contemplates verification of
the client certificates at post-qualification stage, reads as follows:
“ 3.1.6 Post Qualification (Due Diligence)
Under ITB 37, the Employer may, at its own expense and to the
satisfaction of the Employer, require the Bidder with the Best
Evaluated Bid to provide further information on the request to
substantiate claims and information included in its Bid. This
information may be subject to audit and review by the Employer.
It may involve site visits/inspections, interviews with the bidder’s
clients referenced in the bid and any other measures to verify
whether the bidder can perform the contract.”
( Emphasis supplied)
18. In view of the aforenoted clauses, we are, therefore, of the considered
opinion that the procedure adopted by the Respondent No. 1/NISG’s
Evaluation Committee for seeking verification from the clients of the
bidder(s) at the pre-qualification stage is neither contemplated nor intended
under the Tender document. The present Tender document contemplates that
pre-evaluation of the bid will be carried out solely on the basis of documents
filed by the bidder in terms of Section III and IV of the Tender. The inputs
sought from the clients of the bidders at this pre-qualification stage is
therefore contrary to the terms of the bid as this verification is specifically
contemplated at post qualification stage.
5
19. The Transparency Principle which governs public procurement
5
As documented in the Manual for Procurement of Goods, Second Edition 2024, which reads as under: -
‘1.8. Fundamental Principles of Public Procurement
General Financial Rules, 2017 (Rule 144) lay down the Fundamental Principles of Public
Procurement. These principles and other additional obligations of procuring authorities in
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mandates that the process adopted by the Tender issuing authority for
awarding the Tender should be in conformity with the process pre-declared
in the Tender documents and not adopt a process contrary thereto.
20. Therefore, the procedure adopted by the Respondent No. 1 for
carrying out evaluation of the pre-qualification of the bidder by seeking
inputs from the clients, who have issued experience certificate is not a
procedure contemplated under the Tender document.
21. Also, the adverse input of the client on which the Respondent No.
1/Evaluation Committee has placed reliance fails to meet the test/threshold
of Non-Performance stipulated in the Tender document at Clause 3.2 of
Section. As per the Tender document, the findings Of Non-Performance
(reproduced hereinabove at paragraph no. 2.7.8) of the earlier contract of the
bidder must be settled through a final finding in the litigation process.
Admittedly in the case in hand, the client continues to avail the services of
the Petitioner and there is no litigation between the parties. In these facts,
reliance placed on the adverse input of the client with respect to alleged
public Procurement can be organised into five fundamental principles of public Procurement,
which all procuring authorities must abide by and be accountable for:
1.8.1 Transparency Principle:
All procuring authorities are responsible and accountable for ensuring transparency, fairness,
equality, competition, and appeal rights. This involves simultaneous, symmetric, and
unrestricted dissemination of information to all likely bidders, sufficient for them to know
and understand the availability of bidding opportunities and actual means, processes and
time-limits prescribed for completion of registration of bidders, bidding, evaluation,
grievance redressal, award, and management of contracts. It implies that such officers must
ensure that there is consistency (absence of subjectivity), predictability (absence of
arbitrariness), clarity, openness (absence of secretiveness), and equal opportunities (absence
of discrimination) in processes. In essence, the Transparency Principle also enjoins upon the
Procuring Authorities to do only that which they professed to do as pre-declared in the
relevant published documents and not to do anything that had not been so declared.’ As part
of this principle, all procuring entities should ensure that offers are invited following a fair
and transparent procedure and ensure publication of all relevant information on the
Government e-Marketplace (GeM) and GeM-Central Public Procurement Portal (CPPP)’
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dissatisfactory performance is also contrary to the express conditions of
Clause 3.2 of Section III of the Tender.
22. The Question No. I is decided in favour of Petitioner.
Question No. II
23. In the facts of this case, the adoption of this process of verification of
the experience certificates issued by the client at pre-qualification stage has
not only led to violation of the Transparency Principle, referred above, but
also resulted in the adopted procedure becoming unfair qua the
bidder/Petitioner herein.
24. The Respondent No.1 has contended that it has followed this
procedure of verification of experience certificates issued by the client for
each of the bidder(s) and, therefore, there has been no violation of Article 14
of the Constitution of India. The Respondent No. 1 has also, in the sealed
cover , placed before us the minutes of the meeting of the Evaluation
Committee, evidencing that this process was indeed valid for each of the
bidders.
25. The minutes of the Evaluation Committee placed before us by
Respondent No. 1 in a sealed cover indeed show that verification of the
client certificates was carried out for all six (6) bidding entities. Though, as a
matter of fact, the Petitioner herein is the only entity that has been
disqualified at the pre-qualification stage based on adverse input from one of
its clients.
26. However, a perusal of the record shows that the very client (of the
Petitioner) whose adverse input has been relied upon by the Evaluation
Committee for disqualifying the Petitioner continues to avail the services of
the Petitioner. It is also not in dispute that the said client has neither issued
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any show cause notice alleging deficient performance nor communicated
any dissatisfaction regarding the services rendered by the Petitioner. The
experience certificates issued by the said client, as annexed with the bid
document as per Section III and IV do not contain any rider or adverse
remarks against the Petitioner. The genuineness and validity of the
experience certificates issued by the client, in favour of the Petitioner and
filed with the bid is also not in dispute. These facts show that the client, who
has offered an adverse input to Respondent No. 1, has however never
communicated the said input to the Petitioner herein.
27. In these circumstances, in our considered opinion, the reliance placed
by the Respondent No. 1/NISG on a (secretive) adverse input received from
the same client, who also issued certificates of performance has given rise to
irreconcilable inconsistency in the documents (issued by the same client) on
the record. It shows that this procedure of verification has led to absurdity
and anomaly as opposed to an accurate or appropriate outcome.
28. In the considered opinion of this Court, adverse input of a client, who
continues to engage the Petitioner’s services without protest cannot, in the
absence of any contemporaneous complaint or adverse communication to
the Petitioner, form the sole basis for disqualification of the bid.
The procedure adopted by Respondent No. 1 has thus resulted in a
manifest anomaly, inasmuch as the Evaluation Committee has chosen to
ignore the genuine experience certificates issued by same client as placed on
record by the bidder as per Section III and IV and, instead, the committee
has relied upon a (secretive) adverse input of deficient performance, which
has never been communicated to the Petitioner by the client.
The Evaluation Committee has acted upon an adverse input that was
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never disclosed to the Petitioner and was obtained secretively, without
affording any opportunity of explanation to the bidder. Such reliance of the
Evaluation Committee on undisclosed material, particularly when it is
inconsistent with the proven conduct of the same client in continuing the
contractual engagement with the bidder/Petitioner, is not only contrary to the
Tender conditions but has rendered the decision-making process opaque and
procedurally arbitrary.
29. The Petitioner has placed on record with its bid documentary material
evidencing the services rendered to its clients, and it remains an undisputed
position that none of the said clients have either disqualified or blacklisted
the Petitioner at any point in time.
30. Pertinently, it is also not the case of the Respondent No. 1 herein that
there is any disqualification suffered by the Petitioner as contemplated in the
Tender document i.e., black listing, etc.
31. In the facts of the present case, thus the procedure adopted by the
Respondent No. 1 for evaluation of the qualification cannot be regarded as
fair, just or reasonable, particularly when the alleged adverse input of the
employer stands in direct contradiction to the duly verified experience
certificates issued by the very same employer, who admittedly continues to
avail the services of the Petitioner without any demur or protest.
32. We are of the considered view that the procedure adopted by the
Respondent No. 1 in determining bid pre-qualification, by undertaking a
behind-the-scene verification from the bidder’s clients, the contents of
which are neither disclosed to the bidder nor put to the bidder for
explanation, appears manifestly arbitrary. Such a process effectively denies
the bidder any opportunity to be informed of the material relied upon or to
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present its explanation, thereby offending the principles of fairness and
transparency.
33. The anomaly of the procedure adopted by the Respondent No. 1 is
evident from the fact that the Petitioner herein, who has submitted its
experience certificate(s) as per Clause 3.2 of Section III and Section IV of
the Tender document are all found genuine. Thus, as a matter of fact the
same client has issued experience certificates in favour of the Petitioner,
which are genuine; however, in a behind-the-scenes (secretive) input, the
response submitted by the client is adverse. No reliance can be placed on
such an input, which contradicts the validly issued experience certificates in
favour of the Petitioner, by the same client.
34. We, therefore, hold that the procedure adopted by the Respondent No.
1 in verifying the experience certificates, in the facts and circumstances of
the present case, is neither as per the Tender conditions, nor capable of
ensuring accurate outcome and is thus vitiated by arbitrariness.
35. Since, the only basis for excluding the Petitioner from the bidding
process is the adverse input received from one of the petitioner’s client and
no other reason has been placed before this Court, and since, this Court has
concluded that this adverse input alone cannot be the basis of exclusion of
the Petitioner, considering the several experience certificates issued by the
same client, who also continues to avail the services of the Petitioner, makes
the exclusion of the Petitioner from the pre-qualification stage arbitrary.
36. The Respondent No. 1 has relied upon the judgment of the Supreme
6
Court in N Ramachandra Reddy v. State of Telangana and Others to
contend that the procedure of verification of the experience from the clients
6
(2020) 16 SCC 478 at paragraph nos. 34 and 40.
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of the bidders at the pre-qualification stage is reasonable, fair and just. The
judgment of the Supreme Court and its findings turn on the facts of the said
case. The Supreme Court held that, in the facts of the said case, the
procedure adopted by the Chief Engineer of seeking a report from the
Superintendent Engineer was fair. As the Court concluded, the
Superintending Engineer, who had given the report, was competent.
However, in the facts of this case we find that the client, who gave
(secretive) adverse input against the Petitioner herein, has acted
inconsistently as it has admittedly issued satisfaction certificates in favour of
the Petitioner and continues to avail services of the Petitioner without any
demur of protest. In these facts we find that the reliance placed on the
adverse input of the said client is arbitrary and could not have formed a
reasonable basis for the exclusion of the bid.
37. Question No. II is answered in favour of the Petitioner.
Question no. III and IV
38. The opacity of the procedure adopted by the Respondent No. 1 is
evident by the fact that the Petitioner has, to date , not been formally
communicated/informed of its alleged exclusion/disqualification at the pre-
qualification stage. The question of communicating reasons is therefore a
step away.
39. The Respondent No. 1 has taken a stand that the adverse input
received from the client of the Petitioner, which forms the basis of the
decision taken by the Evaluation Committee for concluding that the
Petitioner has not pre-qualified, can neither be shared with nor disclosed to
the Petitioner and refuge has been taken under Clause 29 of ITB/Section I. It
is also contended that the exclusion of the Petitioner at the pre-qualification
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stage is not stigmatic and there is no requirement to disclose the reasons for
the said exclusion.
40. We are unable to accept this submission of the Respondent No. 1
since, as is evident from the record, this stance of the Respondent No. 1 has
resulted in the procedure of evaluation for pre-qualification and rejection of
the bid of the Petitioner becoming opaque, unfair and arbitrary, which is
contrary to the judicial pronouncements which mandate that statutory
authorities must adopt a fair procedure which ensures transparency, in all
tendering processes.
41. The procedure of pre-qualification evaluation adopted by Respondent
No. 1 and its Evaluation Committee, in addition to being contrary to the
Tender document, has made the evaluation during pre-qualification process
opaque. The right of the Petitioner to know the reasons for the
exclusion/disqualification of its bid is an essential requirement of all tender
processes undertaken by statutory authorities and cannot be denied by the
statutory authority.
42. In our considered opinion, this procedure adopted by the Respondent
No. 1 of directly obtaining (secretive) inputs regarding performance from
the clients of the bidders, even though they are contrary to the experience
certificates issued by the same client, relying upon the (secretive) inputs to
evaluate the pre-qualification of the bid and deciding against the
bidder/Petitioner, without putting the said relevant material to the bidder and
without communicating this reason to the bidder as a basis of exclusion from
the bidding process, is neither justified as per the Tender conditions nor in
law as it leads to lack of transparency in the process for award of Tender.
43. The reliance placed by the Petitioner on the judgment of the
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Coordinate Bench of this Court in Jbmd Enterprises v. Sr. Dy. CGDA AN
7
and Ors. at paragraphs 7 and 8 is apposite in this regard and the same read
as under:
“7.
…….
The Petitioner having participated in the impugned tender process
is entitled to know the reasons for the disqualification of its bid
and not providing these answers is contrary to the requirement of
transparency. This is also essential, so as to enable the Petitioner,
to resolve the deficiencies in its documents to participate in the
future tenders.
8. We, accordingly, direct both Respondent No. 5 i.e., GeM Portal
and Respondent Nos. 1 to 4 to communicate to the Petitioner the
reasons for posting the remark ‘Not Evaluated’ against its bid. The
Respondents are directed to pass a speaking order and
communicate the same to the Petitioner within two weeks.”
(Emphasis supplied)
44. The requirement of the statutory authorities in a tender process to
provide reasons to the bidder for its exclusion is also stipulated in GFR
Rules, 2017 which reads as under:
“ Rule 173: Transparency, competition, fairness and
elimination of arbitrariness in the procurement process: All
government purchases should be made in a transparent,
competitive and fair manner, to secure best value for money. This
will also enable the prospective bidders to formulate and send
their competitive bids with confidence. Some of the measures for
ensuring the above are as follows:-
… …
(iv) Suitable provision should be kept in the bidding document to
enable a bidder to question the bidding conditions, bidding
7
2024 SCC OnLine Del 4281
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process and/ or rejection of its bid. The reasons for rejecting a
tender or non-issuing a tender document to a prospective bidder
must be disclosed where enquiries are made by the bidder.”
45. We therefore hold that the Petitioner having participated in the Tender
process is entitled to know the reasons for disqualification of its bid and
Respondent No. 1 has no legal basis for withholding the same.
46. The continued silence of the Respondent No. 1 in neither
communicating its decision nor the reasons for the Petitioner’s exclusion
demonstrates a clear lack of transparency in the process. The Respondent
No. 1 cannot rely upon Clause 29 to not communicate the reasons forming
basis of the exclusion to the bidder.
47. In these proceedings, the Respondent No. 1 has relied upon and
placed before us the adverse input that it has received from one of the clients
of the Petitioner in a sealed cover , with a plea that the same cannot be
shared with the Petitioner. The Petitioner has opposed this sealed cover
process adopted by Respondent No. 1 and contended that the same is
antithetical to Petitioner’s right to seek a judicial review and the Petitioner’s
right to know reasons.
48. In this regard, the reliance placed by the Petitioner on the judgment of
the Hon’ble Supreme Court in Madhyam Broadcasting Ltd. v. Union of
8
India is apposite in the facts of the present case. In the said decision, the
Supreme Court deprecated the procedure adopted by the High Court therein
in accepting the justification tendered by the statutory authority in a sealed
cover . It was observed that placing reliance on material furnished in a sealed
cover , without disclosing the same to the affected party, cannot form a
8
Civil Appeal no. 8129 of 2022
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reasonable basis to deny relief to a petitioner invoking the writ jurisdiction
of the High Court under Article 226 of the Constitution of India. The
relevant paragraphs 58, 59 and 159 of the said judgment reads as under:
“58. MHA disclosed the material forming the opinion for denying
of security clearance solely to the High Court. The High Court
instead of deciding if any other less restrictive but equally
effective means could have been employed, straight away received
the material in a sealed cover without any application of mind. It
is now an established principle of natural justice that relevant
material must be disclosed to the affected party. This rule ensures
that the affected party is able to effectively exercise their right to
appeal. When the state government claims non-disclosure on the
ground of public interest under Section 124 of the Evidence Act,
the material is removed from the trial itself. As opposed to this
method, when relevant material is disclosed in a sealed cover,
there are two injuries that are perpetuated. First, the documents are
not available to the affected party. Second, the documents are
relied upon by the opposite party (which is most often the state) in
the course of the arguments, and the court arrives at a finding by
relying on the material. In such a case, the affected party does not
have any recourse to legal remedies because it would be unable to
(dis)prove any inferences from the material before the
adjudicating authority.
59. This form of adjudication perpetuates a culture of secrecy and
opaqueness, and places the judgment beyond the reach of
challenge. The affected party would be unable to “contradict
errors, identify omissions, challenge the credibility of informants
51
or refute false allegations”. The right to seek judicial review
which has now been read into Articles 14 and 21 is restricted. A
corresponding effect of the sealed cover procedure is a non-
reasoned order. ……..
… …
… …
159. In view of the observations above, we are of the opinion that
the respondents by not providing a reasoned order denying the
renewal of license, not disclosing the relevant material, and by
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disclosing the material only to the court in a sealed cover have
violated the appellant’s right to a fair hearing protected under
Article 21 of the Constitution. The respondents were unable to
prove that the restrictions on the appellants’ right to a fair hearing
were reasonable. Therefore, the order of MIB dated 31 January
2022 denying permission for renewal of the license and the
judgment of the Division Bench of the High Court dated 2 March
2022 must be set aside on the ground of the infringement of
procedural guarantees.”
(Emphasis supplied)
49. We may also refer to the judgment of the Supreme Court in
9
Commander Amit Kumar Sharma v. Union of India wherein the
Supreme Court once again deprecated the emerging practice of statutory
authorities seeking to justify their decisions through material filed in sealed
covers and cautioned the Courts against accepting such stances by the
authorities, emphasizing that they undermine transparency and
accountability in administrative decision-making. The relevant paragraphs
read as follows:
“25. The elementary principle of law is that all material which is
relied upon by either party in the course of a judicial proceeding
must be disclosed. Even if the adjudicating authority does
not rely on the material while arriving at a finding, information
that is relevant to the dispute, which would with “reasonable
probability” influence the decision of the authority must be
disclosed. A one-sided submission of material which forms the
subject-matter of adjudication to the exclusion of the other party
causes a serious violation of natural justice. In the present case,
this has resulted in grave prejudice to officers whose careers are
directly affected as a consequence.
26. The non-disclosure of relevant material to the affected party
and its disclosure in a sealed cover to the adjudicating authority
(in this case AFT) sets a dangerous precedent. The disclosure of
9
(2022) SCC OnLine SC 1570
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relevant material to the adjudicating authority in a sealed
cover makes the process of adjudication vague and opaque.
The disclosure in a sealed cover perpetuates two problems. Firstly,
it denies the aggrieved party their legal right to effectively
challenge an order since the adjudication of issues has proceeded
on the basis of unshared material provided in a sealed cover. The
adjudicating authority while relying on material furnished in the
sealed cover arrives at a finding which is then effectively placed
beyond the reach of challenge. Secondly, it perpetuates a culture
of opaqueness and secrecy. It bestows absolute power in the hands
of the adjudicating authority. It also tilts the balance of power in a
litigation in favour of a dominant party which has control over
information. Most often than not this is the state. A judicial order
accompanied by reasons is the hallmark of the justice system. It
espouses the rule of law. However, the sealed cover practice
places the process by which the decision is arrived beyond
scrutiny. The sealed cover procedure affects the functioning of
the justice delivery system both at an individual case-to-case
level and at an institutional level .”
(Emphasis supplied)
50. In our considered view, the stance of Respondent No. 1 is legally
untenable, as no cogent or justifiable reason has been shown for resorting to
a sealed cover procedure in respect of the alleged adverse input received
during the tender evaluation. The pleadings in the counter-affidavit, as well
as the submissions advanced by the Respondent No. 1 before this Court,
fails to furnish any satisfactory explanation for adopting a secretive
verification mechanism or for withholding the material relied upon by the
Evaluation Committee.
51. In fact, if we were to accept this submission of the Respondent No. 1,
this Court would itself be committing an error by endorsing a course of
action that promotes opacity, an approach fundamentally antithetical to the
principles of fairness, transparency and accountability.
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52. We have already concluded that the exclusion of the Petitioner from
the bidding process is illegal and contrary to the terms of the Tender
conditions. We have also concluded hereinabove that Respondent No. 1 is
obliged to communicate the reasons of the exclusion of the bidder. We find
no justification for the sealed cover process adopted by the Respondent No.
1 in this Tender process and are of the opinion that it is illegal as it makes
the Tender process opaque.
53. Question No. III and IV are answered in favour of the Petitioner.
54. The contention of Respondent No. 1 that it is not a “State” and hence
not amenable to writ jurisdiction is wholly without merit. A perusal of the
counter-affidavit reveals that Respondent No. 1 is chaired by the Secretary
of the Ministry of Electronics and Information Technology (MeitY) and is
engaged in discharging functions of sovereign character on behalf of the
Government of India in relation to the Government of Sri Lanka. We may
also note that this plea though raised in the counter affidavit was not pressed
during arguments.
Relief
55. The Respondent No. 1 has relied upon the judgment of the Supreme
Court in Galaxy Transport Agencies, Contractors, Traders, Transports
and Suppliers v. New JK Roadways, Fleet Owners and Transport
10
Contractors and Others . In the said judgment, the Supreme Court was
satisfied that the procedure adopted by the tendering authority was neither
arbitrary nor mala fide and, therefore, the Court deemed it appropriate to not
interfere with the technical evaluation. Further, the Respondent No. 1 has
relied upon the judgment of the Supreme Court in Jagdish Mandal v. State
10
(2021) 16 SCC 808
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11
of Orissa & Ors. to contend that the scope of the judicial review is limited
in matters relating to public tenders.
56. On the other hand, the Petitioner has relied upon the judgment of the
Supreme Court in Bansidhar Constructions Pvt. Ltd. v. Bharat Coking
12
Coal Limited & Others wherein the Supreme Court set aside the decision
of the statutory authority on the finding that the disqualification of the
bidder therein was arbitrary, illegal, discriminatory and violative of Article
14 of the Constitution of India. The Petitioner has placed reliance upon the
13
judgment of the Supreme Court in Tata Cellular v Union of India ,
wherein it was authoritatively held that while the scope of judicial review in
tender matters is limited, the Court is empowered to interfere where the
decision-making process is found to be arbitrary, irrational, or in violation of
the principles of fairness and transparency.
57. Since we have, as a matter of fact, found that the procedure for pre-
qualification adopted by the Respondent No. 1 is arbitrary and in violation
of the Transparency Principle the exclusion/disqualification of the Petitioner
is liable to set aside and its bid is liable to proceed to the second stage for
technical evaluation.
58. It has been brought to our notice that the pre-qualified five (5) bidders
have been allowed to undertake a visit to Sri Lanka as per Clause 24.2 of
Section I of ITB, after which the Second Stage i.e. the technical bids are to
be evaluated.
59. In these circumstances, the writ petition is allowed and the exclusion
of the Petitioner from the bidding process is hereby set aside. The
11
(2007) 14 SCC 517 at paragraph nos. 21 and 21.3
12
2024 INSC 757, CIVIL APPEAL NO. 11005 OF 2024 at para no. 20, 21 and 29.
13
(1994) 6 SCC 651 at paragraph nos. 74, 75 and 77
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Respondent No. 1 is directed to proceed with the petitioner’s bid to the Step
2 process along with the other qualified bidders.
60. The Petition is allowed. Pending applications are disposed of.
MANMEET PRITAM SINGH ARORA, J
V. KAMESWAR RAO, J
msh/AJ
MARCH 10, 2026 /
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