Lc Infra Projects Private Limited vs Municipal Corporation Of Delhi & Anr.
- Court
- Delhi High Court
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on : 25.08.2026
Judgment delivered on : 01.09.2026
Judgment uploaded on : As per Digital Signature~
# CNR No. DLHC010394872026
+ W.P.(C) 12267/2026 & CM APPL. 56877/2026
LC INFRA PROJECTS PRIVATE LIMITED & ORS.
.....Petitioners
versus
MUNICIPAL CORPORATION OF DELHI & ANR.
.....Respondents
Advocates who appeared in this case
For the petitioners : Mr. Manik Dogra, Senior Advocate with
Ms. Ritu Bhalla, Ms.Niharica Khanna, Mr.
Himanshu Goel and Mr. Siddharth Gautam,
Advocate.
For the respondents : Mr. Chetan Sharma, ASG, Mr. Tushar
Sannu, SC, Mr. Vaibhav Tripathi, Mr.
Naman, Advocates. and Mr. Pranav Suhag,
CE and Mr. Bharat, ACE for MCD.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
JUDGMENT
V. KAMESWAR RAO, J.
1. The present petition has been filed challenging a Tender Summary
Report dated 20.08.2026, whereby the respondents - Municipal Corporation
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SHARMA
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of Delhi (MCD) has stated that the Earnest Money Deposit(EMD)/ Bank
Guarantee submitted by the petitioner no. 1 in furtherance of its bid, is “ not
in confirmation of RFP ”, and as such, the bid is not admitted.
2. At the outset we shall narrate a brief factual background of the present
case, as borne out from the petition. The petitioner no.1, LC Infra Projects
Private Limited, is a company incorporated under the provisions of the
Companies Act, 2013. Though this petition was initially filed only by LC
Infra Projects Private Limited, pursuant to the order of this Court dated
21.08.2026, Radhika Opto Electronics Limited and Esmart Energy Solutions
Limited were also brought on record as petitioner nos. 2 and 3 respectively.
Pursuant to a Consortium Agreement dated 27.07.2026 (hereinafter referred
to as the "Consortium Agreement"), the petitioner no. 1 was constituted as
and appointed the Lead Member of the Consortium, while petitioner no. 2-
Radhika Opto Electronics Limited was appointed as Consortium Member
no. 1 and petitioner no. 3 - Esmart Energy Solutions Limited was appointed
as Consortium Member no.2.
3. The respondent no.2 had issued a Request for Proposal (“RFP”) for
replacement of existing public lights along with comprehensive operation
and maintenance for six zones (Civil Line Zone, City & SP Zone, Karol
Bagh Zone, Keshavpuram Zone, Rohini Zone & Narela Zone) under the
jurisdiction of the respondent no.1 including unauthorized areas for a period
of 10 years. In the RFP, the respondent no.1 set out all necessary
information for conducting the works under the tender, evaluation
methodology of the bids, contractual conditions as well as the eligibility
criteria of bidders for the bidding process. The respondent no.2 by a
Corrigendum dated 07.07.2026 (hereinafter referred to as the
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“Corrigendum”) had modified and clarified certain Tender Conditions set
out under the RFP. On 24.07.2026, the respondent no.2 by way of a Notice
Inviting Tender (“NIT”) invited online percentage rate tenders on behalf of
respondent no.1 in a dual bid format for the "Replacement of existing public
lights along with Comprehensive operation and maintenance for Six Zones
(Civil Line Zone, City & SP Zone, Karol Bagh Zone, Keshavpuram Zone,
Rohini Zone & Narela Zone) under jurisdiction of MCD including
unauthorized areas for a period of 10 years", having a tender amount of
Rs.13,67,50,32,000/- for a period of 10 years. The earnest money to be
submitted by an interested bidder is Rs.13,77,50,520/- out of which
Rs.20,00,000/- is to be submitted online and remaining amount is to be
submitted by way of a Bank Guarantee or e-Bank Guarantee. As per the
NIT, the timelines for the bid submission commenced on 24.07.2026; pre-
bid meeting was to be held on 30.07.2026; bid submission and tender were
to close on 07.08.2026 at 1500 hours; technical bids were to be opened on
08.08.2026 at 1530 hours; financial bids were, tentatively, to be opened on
17.08.2026 at 1500 hours.
4. The respondent no.2 by way of the Corrigendum revised Clause J (D)
of the RFP to mean that the Lead Member shall be responsible and liable for
compliance with all obligations in relation to the agreement. The eligibility
criteria of the members of a Joint Venture/ Consortium were also clarified. It
is the case of the petitioners that on 05.08.2026, the petitioner no. 1, as the
Lead Member of the Consortium, submitted the bid (technical as well as
financial) within the stipulated time, together with the documents required
by Clause H 2(j) of the RFP including work-experience certificates, CA’s
turnover certificate with UDIN, Banker's/net worth certificate, affidavits
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SHARMA
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under Clause 1 (b) and Appendix 1, the Consortium Agreement and the
Power of Attorney. It is stated that in compliance with the terms of the NIT
and RFP, the Consortium through the petitioner no.1 also submitted
/deposited the total EMD of Rs.13,77,50,520/- and tender fees of Rs. l,770/-
with the MCD. The amount of Rs.20,00,000/- was submitted online and the
remaining amount was submitted by way of a Bank Guarantee bearing no.
49570GI8D320336 dated 04.08.2026, in favour of the Commissioner, MCD
i.e., respondent no.1, issued by Union Bank of India pursuant to an
application made by Consortium Member no. 2 (petitioner no. 3 herein). The
said Bank Guarantee is valid up to 05.02.2027, which is for a period of not
less than 180 days from the last date prescribed for submission of the bid.
On 05.08.2026, the petitioner no. 1 uploaded the Bank Guarantee, along
with a covering letter, on the MCD’s tender portal as part of the bid
documents. Thereafter, on 07.08.2026, the petitioner no. 1 submitted the
original physical copy of the Bank Guarantee along with the covering letter,
with respondent no. 1 by depositing the same in the designated drop box.
5. It is stated in the petition that upon submission of the bid, the
respondents were in possession of full security of Rs.13,77,50,520/- in
respect of the petitioners’ bid. The said security was fully encashable at the
discretion of the respondents in every circumstance in which the tender
conditions contemplated forfeiture of the EMD. There was, therefore, no
shortfall in the quantum of the EMD, no defect in the form of security
furnished, no deficiency in its validity period and no infirmity whatsoever
with regard to the identity of the beneficiary. However, the respondents did
not admit the technical bid submitted by the petitioners on the purported
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SHARMA
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ground that the EMD/Bank Guarantee submitted by them was not in
conformity with the requirements of the RFP.
6. Mr. Manik Dogra, the learned Senior Counsel for the petitioners
submitted that the respondents have merely by a one-line statement “ Earnest
Money Deposit /Bank Guarantee is not in confirmation of RFP ” rejected the
bid submitted by the petitioners. The respondents have failed to set out the
provision or relevant clause of the RFP or the Corrigendum which has not
been complied with by the petitioner no. 1 and other Consortium members.
According to him, the petitioners have duly complied with the requirements
set out in Clause J of the RFP read along with the Corrigendum by executing
and entering into the Consortium Agreement.
7. He stated that tender requires the prescribed EMD of
Rs.13,77,50,520/- to be furnished as security for the bid, with Rs.
20,00,000/- to be submitted online and the balance amount to be secured by
way of a Bank Guarantee/eBank Guarantee in favour of the Commissioner,
MCD. The petitioners, who form the Consortium, duly furnished the
prescribed security in favour of the Commissioner, MCD. The EMD is
intended to secure the interests of the tendering authority against the
contingencies contemplated under the tender. In the present case, the Bank
Guarantee has been furnished in favour of the Commissioner, MCD and by a
constituent member of the very Consortium which submitted the bid. There
is consequently no diminution whatsoever in the security available to MCD.
Thus, the substantive object of the EMD requirement stands fully satisfied,
and the identity of the Consortium Member furnishing the security does not
affect the existence, validity or enforceability of the security furnished in
favour of the MCD.
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SHARMA
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8. He also stated that the respondents, by ousting the petitioners without
any valid, cogent or legally sustainable reason, has materially curtailed the
rights of an eligible bidder and has thereby defeated the very object of
ensuring fair competition in the tender process, prejudicing not only the
petitioners but also public interest in securing the most competitive and
advantageous bid through a fair and open process. According to him, the
respondents, by arbitrarily preventing otherwise eligible participants from
competing, has conferred an undue advantage upon the remaining bidders
and has consequently distorted the level playing field, rendering the tender
process susceptible to arbitrariness, discrimination and unfair competition.
9. On the other hand, Mr. Chetan Sharma, the learned Additional
Solicitor General, appearing with Mr. Tushar Sannu, the learned Standing
Counsel for the respondents - MCD, contested the submissions advanced on
behalf of the petitioners. He stated that the original Bank Guarantee
submitted physically in the tender box on 07.08.2026 contained only two
documents- (i) Covering Letter dated 05.08.2026 by LC Infra Projects
Private Limited, i.e., the petitioner no.1; and (ii) Bank Guarantee dated
04.08.2026 issued by the Union Bank of India showing the name of the
applicant as “ M/s. ESMART ENERGY SOLUTIONS LIMITED ”, i.e., the
petitioner no. 3. Though the Covering Letter dated 05.08.2026 referred to
the Bank Guarantee dated 04.08.2026, it had no mention whatsoever of the
petitioner no.3, its role as the Consortium member no.2, or that the Bank
Guarantee was being furnished on behalf of the Consortium. Likewise, the
Bank Guarantee dated 04.08.2026 makes no reference to the petitioner no.1,
the Consortium, or any arrangement of a Consortium. The petitioner no.3 is
identified throughout the terms of the Bank Guarantee as the sole applicant.
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SHARMA
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10. According to him, on the face of the said two documents, the
following irreconcilable disparities arose:
(i) The Covering Letter identified the petitioner no. 1 as the
submitting party, but made no mention of the petitioner no. 3 or the
source/applicant of the Bank Guarantee.
(ii) The Bank Guarantee identified petitioner no. 3 as the sole
applicant but made no reference to the petitioner no.1, the
Consortium, or any Consortium arrangement.
(iii) No connecting language existed in either document to establish
that the Bank Guarantee furnished by the petitioner no. 3 constituted
EMD/security on behalf of the Consortium or the petitioner no. 1 as
the Lead Member.
11. As such, from the available documents, the respondents could not
establish the relationship of the applicant of the Bank Guarantee, i.e., the
petitioner no. 3, with the Lead Member, i.e., the petitioner no. 1. In other
words, in the documents, the petitioners failed to establish any relationship
inter se .
12. Mr. Sharma stated that on a proper and harmonious reading of the
RFP, the Corrigendum and the prescribed Consortium structure, the
respondents’ interpretation is that the Bid Security for a Consortium bid
must be furnished by, or be unequivocally referable to, the Lead Member
who represents the Consortium and bears the principal responsibility under
the tender. While conceding that the RFP does not contain a specific
provision stating that only the Lead Member may furnish the Bank
Guarantee, he stated that such a requirement necessarily flows from the
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scheme of the tender, which assigns distinct roles to the Lead Member and
other Consortium members.
13. The Bank Guarantee dated 04.08.2026, issued by Union Bank of India
for Rs. 13,57,50,520/-, expressly records the petitioner no. 3-M/s Esmart
Energy Solutions Limited as the applicant and, more importantly, treats it as
the “Contractor”. Clause 2 of the Bank Guarantee makes the Bank’s liability
referable to “ recoveries due or likely to be due from the said Contractor ”,
and the subsequent clauses similarly proceed with reference to liabilities of
that Contractor. The Bank Guarantee is also non-transferable and non-
assignable without the Bank’s consent. He stated that the defect is therefore
not merely who funded or procured the Bank Guarantee; it concerns the
identity and scope of the Bank’s own undertaking.
14. Further, he stated that this position is substantiated by the tender
structure. Clause J of the RFP provides that the Lead Member represents the
Consortium during the bidding process, while the Corrigendum places
responsibility and liability upon the Lead Member and separately
distinguishes requirements to be met by any one member, the Lead Member,
or all members. Clause (xxii) of the Corrigendum amended Clause J(D) of
the RFP to provide that “ the lead member shall be solely responsible and
liable for meeting all obligations in relation to the agreement ”. As such, the
RFP itself assigns distinct roles and responsibilities to the Lead Member and
other members. This distinction is further demonstrated by the
Corrigendum's eligibility matrix, which separately specifies requirements to
be fulfilled by “ any one member ”, the “ Lead Member ”, or “ all members
individually ”. The tender therefore consciously distinguishes between the
juridical capacities of the Consortium constituents and does not proceed on
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SHARMA
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the basis that each corporate entity is interchangeable for every tender
obligation. That distinction becomes material when the Bank Guarantee
does not merely show the petitioner no.3 as the entity arranging the security,
but actually proceeds by describing the petitioner no. 3 itself as the
Contractor whose liabilities are guaranteed.
15. The Consortium Agreement appoints petitioner no. 1 as the Lead
Member and Financial Custodian, authorises it to submit and bind the
Consortium, and places with it oversight over project funds, security bonds
and financial allocations. The objection of Mr. Sharma, is therefore not that
the petitioner no. 3 is a stranger or that no connection exists between it and
the Consortium, but that the Bank’s own undertaking identifies the petitioner
no. 3 individually as Applicant/Contractor, whereas the petitioners’ own
tender arrangement assigns the representative and financial-custodian role to
petitioner no. 1.
16. That apart, he stated that Clause K of the RFP expressly provides that
the Authority may disqualify the bidder as non-responsive where “ Bid
Security/Earnest Money Deposit do not conform to the provisions set forth
in this RFP or is not submitted ”. Thus, conformity of the Bid Security is
expressly made part of the responsiveness of the bid itself. The impugned
decision is therefore not founded upon a new eligibility condition
subsequently invented by respondents; it is an exercise of the evaluation
contemplated by the RFP itself. Clause H of the RFP further requires the
Bank Guarantee to be furnished within the prescribed bid period.
Consequently, any fresh confirmation or amended security now seeking to
establish that the Bank Guarantee of the petitioner no. 3 also secures the bid
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of the Consortium/ petitioner no. 1 would go beyond mere clarification and
would amount to post-bid curing of a material financial instrument.
17. It is also submitted that the electronic technical documents remain
encrypted until the technical opening, and the complete bid documents could
be substantively correlated only during evaluation. The record shows
technical scrutiny on 13.08.2026, following which the bid was rejected on
20.08.2026 with the portal showing reason as “ Earnest Money Deposit/Bank
Guarantee is not in confirmation of RFP ”.
18. He has drawn our attention to the judgments in the cases of Silppi
Constructions Contractors v. Union of India, (2020) 16 SCC 489 and
Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016)
16 SCC 818 , wherein the Supreme Court held that the author of the tender is
ordinarily the best judge of its requirements and that a reasonable
interpretation adopted by the tendering authority deserves deference. A
reference is also made to the judgment in National High Speed Rail
Corporation Ltd. v. Montecarlo Ltd., (2022) 6 SCC 401 , wherein the Court
specifically held that whether a deviation is material or substantial is
primarily for the tendering authority to determine and upheld technical
rejection without an automatic right to cure. Based on the above judgments,
it is the submission of Mr. Sharma that upon a reading of the RFP, NIT and
Corrigendum, the respondents who are the tender inviting authority, have
taken a stand that the Bank Guarantee in the present case cannot be
accepted.
19. Relying upon Ansal Engineering Projects Ltd. v. Tehri Hydro
Development Corporation Ltd., (1996) 5 SCC 450 , Mr. Sharma contended
that a Bank Guarantee is an autonomous and independent contract, the legal
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effect of which must principally be gathered from its own terms. The
respondents do not need to establish that the Bank Guarantee would
necessarily be incapable of invocation in every imaginable circumstance.
The relevant commercial question was whether a Bid Security exceeding Rs.
13.57 crore was sufficiently certain as to whose bid and whose defaults the
Bank had actually undertaken to secure. Reliance is also placed on the
judgment in the case of Central Coalfields Ltd. v. SLL-SML (JV
Consortium), (2016) 8 SCC 622 , which according to the learned ASG,
postulates strict treatment of essential Bank Guarantee requirements and
cautions against rearranging the “goalposts” after bids close.
20. Answering the submission of Mr. Dogra, he stated that increased
competition cannot override responsiveness. Public procurement requires
competition amongst responsive bidders on equal terms. A bidder cannot be
permitted to materially cure an error in essential Bid Security after technical
opening merely because its inclusion may increase the number of financial
bids.
21. Further, he stated that the case advanced by the petitioners requires
the Court to read the Bank Guarantee, Consortium Agreement, Power of
Attorney and Covering Letter together and treat the Bank Guarantee as
though Union Bank of India had itself expressly issued the undertaking for
the Consortium. Even if the Bank was to now confirm that the Bank
Guarantee should also be treated to cover the Consortium and/or the
petitioner no.1, such an act would in itself demonstrate the material
defect/uncertainty in the original instrument as on the bid due date.
Permitting such a substantive correction after technical opening would also
affect the level playing field, since every bidder was required to furnish a
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complete and legally adequate Bid Security within the stipulated period.
Further, Clause F of the RFP additionally provides that no further
information is to be entertained after submission of the eligibility documents
unless called for by the Employer. The clause does not give a bidder an
entitlement to improve or reconstruct an essential financial security after
submission.
22. The present project involves substantial public funds and a Bid
Security exceeding Rs.13.57 crore, and therefore, the respondents were
entitled to insist upon certainty as to the entity and liabilities actually
secured. Such a decision is a bona fide commercial assessment of a material
non-conformity and does not warrant interference under Article 226.
Reference is made to the judgments in Jagdish Mandal v. State of Orissa,
(2007) 14 SCC 517 , Michigan Rubber (India) Ltd. v. State of Karnataka,
(2012) 8 SCC 216 and Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272 ,
wherein the Supreme Court has emphasised judicial restraint in public
procurement where the tendering authority’s decision is bona fide , rational
and in public interest.
ANALYSIS AND CONCLUSION
23. Having heard the learned counsel for the parties and perused the
record, the challenge in the writ petition is primarily to the Tender Summary
Report uploaded by the respondents on their portal, wherein it is stated that
the bid of the petitioner no.1 has not been admitted as EMD/ Bank
Guarantee is not in conformity with the RFP.
24. At the outset, it may be stated that initially LC Infra Projects Private
Limited had filed the petition. Later in view of the order dated 21.08.2026
passed by this Court, Radhika Opto Electronics Limited and Esmart Energy
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Solutions Limited have been brought on record as petitioners. The amended
memo of parties was filed on 22.08.2026.
25. The case of the petitioner no. 1 is that it is a member of the
Consortium formed by way of the Consortium Agreement dated 27.07.2026.
The other members of the Consortium are Radhika Opto Electronics Limited
and Esmart Energy Solutions Limited i.e., the petitioners no. 2 & 3
respectively. It is the case of the petitioners that as per the tender conditions,
the bidders were to furnish an EMD of Rs.13,77,50,520/-, of which
Rs.20,00,000/- was required to be deposited online, while the balance
amount of Rs.13,57,50,520/- was required to be furnished by way of a Bank
Guarantee in favour of the Commissioner-MCD i.e., respondent no.1.
Consequently, the amount of Rs.20,00,000/- was remitted online on
05.08.2026 and the balance was furnished by way of the Bank Guarantee no.
495700G18DD3203368 dated 04.08.2026 issued by Union Bank of India in
favour of the Commissioner MCD on an application made by Esmart Energy
Solutions Limited i.e., petitioner no.3.
26. The rejection of the bid, as submitted by Mr. Sannu on the first date of
hearing is primarily on the ground that there is a mismatch between the
Covering Letter of the bid and the Bank Guarantee, as the former depicts
that the same has been submitted by the petitioner no.1, whereas the latter
depicts Esmart Energy Solutions Limited as the applicant/contractor. In
view of this mismatch, the tender has not been admitted.
27. According to Mr. Dogra, there is nothing in the RFP which bars
submission of the Bank Guarantee by a member of a Consortium. In other
words, there is no express provision that in the case of a Consortium, the
Bank Guarantee needs to be furnished by the Lead Member and not by any
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other member of the Consortium. He submitted that as such, the rejection of
the bid is not sustainable.
28. On the other hand, the attempt of Mr. Chetan Sharma is to justify the
rejection by stating that the covering letter attached to the bid reveals that
the bid has been submitted by the petitioner no.1. There is no reference
whatsoever to the Consortium or the members of the Consortium. The
respondents having found the mismatch, inasmuch as the Bank Guarantee
submitted was applied for by another entity, has not admitted the bid. He
also stated there was no occasion for the respondents to go through the
documents attached to the bid as the same are in encrypted format at this
stage. That apart, the submission of Mr. Sharma by drawing our attention to
the provisions of the RFP, more specifically Clause J read with the
Corrigendum, is that it is an essential tender condition that all the obligations
as contemplated in the RFP have to be fulfilled by the Lead Member and not
other members of the Consortium.
29. We are not in agreement with the submissions advanced by
Mr.Sharma. The stipulation in the RFP with regard to the EMD as found in
Clause H.2(i) reads as under:-
“(i) Out of total earnest money deposit (EMD) of
Rs.13,87,50,520/-, Rs.20.00 Lacs shall be submitted in
online mode. Balance amount shall be in the form of bank
guarantee or e-bank guarantee in favor of Commissioner,
MCD issued by commercial bank and should be scanned
and uploaded alongwith technical bid. The bank guarantee
should be valid upto 180 days or more from last date of
submission of bids. Original of the same should be
submitted in tender box kept at office of E.E. (Elect.) CLZ,
Lucknow Road, Timarpur New Delhi-110054 on or before
the last date and time of bids submission.”
Signature Not Verified
Signed By:PRADEEP
SHARMA
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W.P.(C) 12267/2026 Page 14 of 22
30. By way of the Corrigendum, some of the provisions of the RFP have
been revised, relevant part of which is reproduced as under:
“ (viii) EMD amount revised to Rs.13,77,50,320/-. Rest as per RFP
clause No. H.2. (i).
XXXX XXXX XXXX
(xi) Regarding joint Venture or Consortium it is clarified that any
individual eligibility criteria shall be by members of the Joint Venture
/ Consortium as under:
S.N. RFP
Clause
Eligibility Criteria Clause
applicability
1. H.2.a. Should have satisfactorily completed
or substantially completed the works
as mentioned below during the last
Seven years ending last day of the
month previous to the one in which
tenders are invited: -Three similar
completed works each costing not less
than Rs. 54,70,01,280 /OH Two
similar completed works each costing
not less than Rs.82,05,01,920/- OR
One similar completed work costing
not less than Rs.109,40,02,560/-
To be met by any
one member of the
Joint Venture/
Consortium
2. H.2.b. The sole bidder or at least one of the
Members of the Consortium / Joint
Venture needs to be light
manufacturer having minimum
average annual turnover of Rs.250
Crore from manufacturing of light
fixtures during the last three years.
The value of annual turnover figures
shall be brought to current value by
enhancing the actual turnover figures
at simple rate of 7% per annum. The
sole bidder or at least one of the
Members of the Consortium should
have manufacturing facility of light
fixtures in India and should utilize
their own product only for execution
of this project.
Signature Not Verified
Signed By:PRADEEP
SHARMA
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W.P.(C) 12267/2026 Page 15 of 22
3. H.2.d. The sole bidder or at least one of the
Members of Consortium/Joint Venture
should have manufacturing facility of
light fixtures in India and should
utilize their own product only for
execution of this project.
4. H.2.e. The bidder should have a Bankers
certificate from Commercial Bank for
at least Rs.547,00,12,800/· certified by
his bankers or the bidder should
submit Networth Certificate of
minimum Rs. 136,75,03,200/- issued
by certified Chartered Accountant.
5. H.2.c. Should have bad Average Annual
Financial Turnover of
Rs.410,25,09,600/- during the last
st
three years ending 31 March 2025
(Scanned copy of Certificate from CA
with Unique Document Identification
Number (UDIN) to be uploaded). The
value of annual turnover figures shall
be brought to the current value by
enhancing the actual turnover figures
at simple rate 7% per annum.
Both Criteria to be
met by lead
member of the
Joint Venture /
Consortium
6. H.2.e. The bidder should not have incurred
any loss (profit after tax should not be
negative) in more than two years
during available last five consecutive
balance sheets (standalone financial
statement), duly certified and audited
by the Chartered Accountant with
Unique Document Identification
Number (UDIN).
7. H.2.h. The bidder should enclose an affidavit
in his technical bid that he is not
debarred / blacklisted from
participating in tenders by any
Government or private organization /
company.
To be met by all
members of the
Joint Venture/
Consortium
individually.
XXXX XXXX XXXX
(xxii) Clause J. (D) of RFP to be read as “the lead member shall be
solely responsible and liable for meeting all obligations in relation
to the agreement.”
Signature Not Verified
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SHARMA
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W.P.(C) 12267/2026 Page 16 of 22
31. It is clear from the above that the EMD amount was revised to
Rs.13,77,50,320/- from Rs.13,87,50,520/-. The Corrigendum also clearly
demarcates the obligations to be fulfilled by the Lead Member and other
members of the Consortium.
32. However, there is no stipulation either in Clause H.2(i) of the original
RFP or the Corrigendum qua the same Clause, which puts the onus of
furnishing the Bank Guarantee on the Lead Member of the Consortium. In
fact, this position has been accepted by the respondents as well, as can be
seen from paragraph 74 of its counter affidavit, which reads as under:
“74.It is respectfully submitted that the case of MCD is ultimately
simple and consistent. Esmart's membership of the Consortium is
admitted. MCD does not contend that the RFP expressly prohibits
every constituent other than the Lead Member from arranging a Bank
Guarantee. The defect lies in what the Bank actually guaranteed.”
33. The submission of Mr. Sharma is that Clause J (D) of the RFP
(revised by way of paragraph (xxii) of the Corrigendum) which states that
“ the lead member shall be responsible and liable for meeting all obligations
in respect to the agreement ” puts the onus of furnishing the Bank Guarantee
on the Lead Member. This submission is not appealing for the simple reason
that a reading of the clause reveals that it contemplates all those obligations
put in the ‘ agreement ’ which would be entered into between the respondents
and a successful bidder in the future on award of work, and not the
obligations set forth by the RFP.
34. The concern of the respondents, as stated by Mr. Sharma, is that there
is a material defect in the actual guarantee given by the Bank, and that there
should be sufficient safeguards for the MCD to recover any money from the
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Consortium. This would only be possible if the Lead Member who
submitted the bid, has furnished the Bank Guarantee. However, we are of
the view that such a position does not arise from any of the conditions of the
RFP. If the respondents had any concerns with regard to recovery/
redemption of Bank Guarantees submitted by a Consortium bidder, they
ought to have expressly stated that the Bank Guarantee necessarily has to be
submitted by the lead partner who has signed the bid. Not having done so,
the respondents cannot now attempt to impose a condition that was not
contemplated by the terms of the RFP or the Corrigendum.
35. It is the submission of Mr. Sharma that the MCD being the author of
the tender, the prerogative to construe/ interpret the provisions of the RFP
rests exclusively with it and the same is beyond the scope of judicial review.
This submission is also not appealing. When the respondents themselves had
issued the Corrigendum dated 07.07.2026, categorically clarifying the
obligations cast on various members of a prospective Consortium bidder,
nothing precluded them from making an express provision, calling upon the
Lead Member to furnish the Bank Guarantee. In the absence of any such
stipulation, the ground on which the respondents have rejected the bid of the
petitioners cannot be sustained. Though interpretation of the terms of a
tender squarely falls within the domain of the tender inviting authority, such
interpretation has to be of provisions that were included in or at least
contemplated by the RFP/NIT.
36. In fact in Kimberly Club Pvt. Ltd. V. Krishi Utpadan Mandi
Parishad and others, 2025 INSC 1276 , relied upon by the learned Senior
Counsel for the petitioners, the Supreme Court has held as under:-
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“8. The issue which falls for consideration is whether
appellant, while submitting a valuation certificate issued by
a professional architect cum private valuer attached to the
Income Tax Department, had complied with Clause 18 of
NIT which required it to submit a ‘haisiyat praman patra’ of
minimum ₹10 crores.
9. Appellant has strenuously argued that nothing in the NIT
necessitated that ‘haisiyat praman patra’ be issued by a
District Magistrate. It contended ‘haisiyat praman patra’
submitted by the appellant was by an experienced valuer
who was empanelled with the Income Tax Department and
there was no justification to reject such certificate. It was
also argued that the valuation certificate assessed the value
of the asset at around ₹99 crores, of which appellant was
76.09 % shareholder, whereas as per clause 18 the bidder
was to furnish a ‘haisiyat praman patra’ of minimum ₹10
crores only.
st
10. In rebuttal, the 1 respondent-Mandi Parishad referred
to Uttar Pradesh government notification dated 29.10.2018
[Notification No.C.M.-648/One-9-2018-7(M)/18,hereinafter
referred to as “government notification] laying down the
procedure for issuance of ‘haisiyat praman patra’ by
District Magistrate. It was contended that Clause 18
required submission of such ‘haisiyat praman patra’ and
not valuation certificate issued by a private valuer. All
bidders apart from appellant had submitted ‘haisiyat
praman patra’ issued by District Magistrate. It was also
contended that valuation certificate does not disclose
appellant’s net worth as it fails to indicate whether the asset
so valued was free from encumbrances.
11. In tender matters, the court exercising judicial review
does not sit in appeal over the decision of a tendering
authority regarding disqualification of bid. Only in cases
where such decision is dehors the terms of the NIT or is
patently arbitrary would the Court exercise powers of
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judicial review and set aside such a decision.[Tata Cellular
v. Union of India, (1994) 6 SCC 651 (Para 94)]
12. Having scanned the NIT, we are of the considered view
that neither Clause 18 nor any other condition specifies that
the ‘haisiyat praman patra’ submitted by a prospective
bidder must be issued only by a District Magistrate in terms
of the government notification.
13. It is trite that the terms of an NIT must be clear and
unambiguous.[ Maha Mineral Mining & Benefication Pvt.
Ltd. V. Madhya Pradesh Power Generating Co. Ltd. & Anr.,
st
(2025) SCC Online SC 1942 (Para 19)] If 1 respondent-
Mandi Parishad intended that ‘haisiyat praman patra’ must
be issued by District Magistrate alone, it ought to have
specified so in the NIT conditions.
st
14. We are also unimpressed by 1 respondent-Mandi
Parishad’s submission that such condition was implied and
followed by other bidders, as nothing is placed on record to
show that the government notification was applicable to all
st
tenders floated by 1 respondentMandi Parishad. It may not
st
be out of place to bear in mind that the 1 respondent-
Mandi Parishad is not a government department to which
the notification is per se applicable but is a body constituted
under a statute, namely Uttar Pradesh Krishi Utpadan
Mandi Adhiniyam, 1964.
st
15. Given the situation, it was incumbent on 1 respondent-
Mandi Parishad to indicate in the tender conditions that the
‘haisiyat praman patra’ was to be obtained from a District
Magistrate as per the procedure laid down in such
st
government notification. Having failed to do so, the 1
respondent-Mandi Parishad could not have rejected the
certificate submitted by appellant on the ground that it was
not issued by a District Magistrate. That apart, appellant’s
certificate has been issued by an experienced valuer
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registered with the Income Tax Department who is
otherwise competent to issue such certificate.”
(emphasis added)
37. According to Mr. Sharma, it is only through the present writ petition
that the respondents have come to know that the bid has been submitted on
behalf of the Consortium. Suffice to state, the RFP itself permits bids by a
Consortium/Joint Venture, and lays down the conditions to be satisfied and
documents to be submitted by the Consortium/ Joint Venture. It is the case
of the petitioners that the bid is in compliance of all such requirements, and
that it had submitted the Consortium Agreement as well as the Power of
Attorney along with the bid. Be it noted, whether the bid fulfils the
requirements can only be known during its technical evaluation, which could
not happen due to the impugned action of the respondents, treating the bid as
not admitted.
38. In view of the foregoing, we hold that decision of the respondents to
not admit the bid on the ground that the Bank Guarantee is not in conformity
with the RFP, is not sustainable. We direct the respondents to admit the bid
and technically evaluate the same and proceed accordingly.
39. Mr. Sharma has relied upon a host of judgments in support of the
submissions, as recorded above. Though there is no cavil to the propositions
of law laid down in those judgments, they cannot come to the aid of the
respondents, in these facts and also in view of our discussion above.
40. We may clarify that we have only examined the limited issue which
has been raised in the petition based on the impugned report. We have not
ventured to examine as to whether the bid by the Consortium meets the
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conditions of the RFP on other aspects, which necessarily has to be looked
into by the respondents by considering the bid and the attached documents.
41. The petition is disposed of on the above terms. The pending
application is also disposed of.
V. KAMESWAR RAO, J
MANMEET PRITAM SINGH ARORA, J
SEPTEMBER 01, 2026
rk
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