M/S Konkan Railway Corporation Ltd. Thru. Auth. Mr. Om Prakash Verma vs Union Of India Thru. General Manager (N.E.R.) Gorakhpur U.P. And 5 Others

AFR
HIGH COURT OF JUDICATURE AT ALLAHABAD
LUCKNOW
WRIT - C No. - 5810 of 2026
M/S Konkan Railway Corporation Ltd. Thru. Auth.
Mr. Om Prakash Verma
.....Petitioner(s)
Versus
Union Of India Thru. General Manager (N.E.R.)
Gorakhpur U.P. And 5 Others
.....Respondent(s)
Counsel for Petitioner(s) : Alok Kumar Singh, Kazim Ibrahim
Counsel for Respondent(s) : A.S.G.I.

Court No. - 3
HON'BLE SHEKHAR B. SARAF, J.
HON'BLE ABDHESH KUMAR CHAUDHARY, J.
1. Supplementary affidavit filed today in Court by the petitioner is taken on
record.
2. Heard Sri Sudeep Seth, learned Senior Advocate assisted by Sri Alok
Kumar Singh and Kazim Ibrahim, learned counsel appearing on behalf of the
petitioner and learned counsel appearing on behalf of the respondents.
3. This is a writ petition under Article 226 of the Constitution of India,
wherein the writ petitioner has made the following main prayers:-
"i. Issue a writ, order or direction in the nature of Certiorari quashing the
impugned rejection of the Techno-Commercial Bid (Technical Bid) of the
Petitioner, submitted in furtherance of Tender No.EPC-PSI-GKC-CHPG-
NER, dated 30.09.2025, floated by the Respondent No. 2 (Annexure No.
1 - as communicated to Petitioner vide e-mail dated 19.05.2026 sent at
17:30 by the Respondent No. 2);
ii. Issue a writ, order or direction in the nature of Certiorari quashing the
impugned opening of financial bids, as notified on 19.05.2026 at 19:59:57
hours, i.e., within a span of three hours after the Petitioner was informed
via impugned email regarding the rejection of its technical bid. (contained
as Annexure No. 2);
iii. Issue a writ, order or direction in the nature of mandamus directing the

WRIC No. 5810 of 2026
2
Respondent No. 2 to re-evaluate the Techno-Commercial Bid (Technical
Bid) of the Petitioner, submitted in furtherance of Tender No. EPC-PSI-
GKC-CHPG-NER, dated 30.09.2025, floated by the Respondent No. 2;
iv. Issue a writ, order or direction in the nature of mandamus directing the
Respondent No. 2 to not proceed in furtherance of tender process
including declaration, execution and issuance of work order in favour of
L-1 or any other consequential action in the tender process."
4. The bid of the petitioner had been rejected on the technical ground that it
"did not fulfill the eligibility criteria". In the said impugned e-mail dated
May 19, 2026, nothing further had been stated, as had been pointed out by us
in our earlier order dated May 26, 2026. Thus, while staying the earlier
tender process as no further action had been taken by the authority after
opening of the financial bid, we also directed the respondents to provide a
copy of the reasoned order, within 24 hours to the petitioner.
5. Subsequently, on May 26, 2026, pursuant to the order passed by this
Court, a further explanation was provided by the North Eastern Railway,
wherein it was submitted as follows:-
"As pr our tender conditions and as per the legal opinion of North Eastern
Railway/Gorakhpur Legal Cell obtained in similar instances, the stamp
paper for the Bank Guarantee should have been as per UP Stamp Act.
However, you have not submitted the Stamp Paper of the requisite
amount. Therefore, there was a legal lacuna in considering your case. In
our tenders, rejection on this ground has been done for all non-
conforming tenders on this count."
6. Sri Sudeep Seth, learned Senior Advocate appearing on behalf of the
petitioner has submitted that adequacy of stamp duty is a curable defect and
the Stamp Act is a fiscal measure enacted to secure revenue for the State and
time and again the Courts have held that the provision of Stamp Act has not
been enacted to arm a litigant with a weapon of technicality to meet the case
of his opponent. To buttress his aforesaid argument, learned Senior
Advocate appearing on behalf of the petitioner has relied on a a judgment
rendered by Hon'ble the Supreme Court in Hindustan Steel Ltd. vs. M/s.
reported in ( )
Dalip Construction Company 1969 1 SCC 597.
7. It has been next submitted by the learned Senior Advocate appearing on
behalf of the petitioner that an authority inviting tenders is not bound to give
effect to every term and condition mentioned in the notice and is entitled to

WRIC No. 5810 of 2026
3
waive its condition even on technical irregularity. To buttress his aforesaid
argument, learned Senior Advocate appearing on behalf of the petitioner has
relied on a judgment rendered by Hon'ble the Supreme Court in
Poddar
reported in
Steel Corporation vs. Ganesh Engineering Works and others
. The relevant paragraph of the aforesaid judgment is
(1991) 3 SCC 273
delineated below:-
"6. It is true that in submitting its tender accompanied by a cheque of the
Union Bank of India and not of the State Bank clause 6 of the tender
notice was not obeyed literally, but the question is as to whether the said
non-compliance deprived the Diesel Locomotive Works of the authority
to accept the bid. As a matter of general proposition it cannot be held that
an authority inviting tenders is bound to give effect to every term
mentioned in the notice in meticulous detail, and is not entitled to waive
even a technical irregularity of little or no significance. The requirements
in a tender notice can be classified into two categories — those which lay
down the essential conditions of eligibility and the others which are
merely ancillary or subsidiary with the main object to be achieved by the
condition. In the first case the authority issuing the tender may be
required to enforce them rigidly. In the other cases it must be open to the
authority to deviate from and not to insist upon the strict literal
compliance of the condition in appropriate cases. This aspect was
examined by this Court in C.J. Fernandez v. State of Karnataka [(1990) 2
SCC 488] a case dealing with tenders. Although not in an entirely
identical situation as the present one, the observations in the judgment
support our view. The High Court has, in the impugned decision, relied
upon Ramana Dayaram Shetty v. International Airport Authority of India
[(1979) 3 SCC 489] but has failed to appreciate that the reported case
belonged to the first category where the strict compliance of the condition
could be insisted upon. The authority in that case, by not insisting upon
the requirement in the tender notice which was an essential condition of
eligibility, bestowed a favour on one of the bidders, which amounted to
illegal discrimination. The judgment indicates that the court closely
examined the nature of the condition which had been relaxed and its
impact before answering the question whether it could have validly
condoned the shortcoming in the tender in question. This part of the
judgment demonstrates the difference between the two categories of the
conditions discussed above. However it remains to be seen as to which of
the two clauses, the present case belongs."
8. On the other hand, learned counsel appearing for the respondents has
submitted that the financial bid has already been opened and L-1 had been

WRIC No. 5810 of 2026
4
declared and as such a right has accrued in favour of the L-1 in the present
tender.
9. We have heard the learned counsel for the parties and on a careful
consideration of the issues raised, we are of the view that apparently on May
19, 2026, when the technical bid of the petitioner was rejected the only
reason provided by the authority was "does not fulfill the criteria", without
any reason or whisper as to which criteria and in which manner the said
criteria has not been fulfilled. However, subsequently it was only after a
direction of this Court that on May 25, 2026, the authority came up with a
reason to justify the aforesaid rejection dated May 19, 2026 as is apparent
from the letter dated May 25, 2026 of the authority, wherein reasons of
deficient stamp duty in the bank guarantee has been provided with. We do
not appreciate this kind of improvement made by the authority in the
reasoning of rejecting the technical tenders as the law stands settled that
the authority cannot invent or add new justification for a decision already
taken during legal proceedings (see Mohinder Singh Gill v. Chief Election
Commr. reported in (1978) 1 SCC 405 ).
10. In any case, the above reason, namely that adequate stamp duty had not
been paid in accordance with the U.P. Stamp Act, in our view, is at the most
a lacuna and a curable defect which could have been sought to be cured by
the authority concerned. It is further to be noted, as pointed out by Sri
Sudeep Seth, learned Senior Advocate appearing on behalf of the petitioner,
that in the past, for another tender, a similar bank guarantee of Rs.500/- had
been accepted and the financial bid of the petitioner had been opened,
wherein the petitioner had been declared L-3. These documents are annexed
at Page Nos.159 and 163 of the supplementary affidavit.
11. In light of the above, it appears that the action of the authorities is mala
fide and is merely an attempt to eliminate the petitioner, who has submitted
the lowest financial bid.
12. As regards the contention of the learned counsel for the respondents that
financial bid had been opened, it has to be understood that it is well settled
that a bidder, even if declared the highest bidder, does not for that reason
alone obtain an indefeasible right to insist upon award of the contract. Until
the process matures into a concluded contractual relationship in accordance
with the governing tender conditions, the bidder's position remains

WRIC No. 5810 of 2026
5
provisional. The Supreme Court in Meerut Development Authority v.
Assn. of Management Studies reported in (2009) 6 SCC 171 has held that
State or authority under Article 12 of the Constitution of India is not bound
to accept bid of L1 bidder, but is only bound to act without arbitrariness and
favouristism. The relevant paragraphs of the aforesaid judgment are
delineated below:-
"27. The bidders participating in the tender process have no other right
except the right to equality and fair treatment in the matter of evaluation
of competitive bids offered by interested persons in response to notice
inviting tenders in a transparent manner and free from hidden agenda.
One cannot challenge the terms and conditions of the tender except on the
abovestated ground, the reason being the terms of the invitation to tender
are in the realm of the contract. No bidder is entitled as a matter of right
to insist the authority inviting tenders to enter into further negotiations
unless the terms and conditions of notice so provided for such
negotiations.
*
29. The Authority has the right not to accept the highest bid and even to
prefer a tender other than the highest bidder, if there exist good and
sufficient reasons, such as, the highest bid not representing the market
price but there cannot be any doubt that the Authority's action in
accepting or refusing the bid must be free from arbitrariness or
favouritism."
13. To the same effect, is the judgment of The Supreme Court in State of
Jharkhand v. CWE-SOMA Consortium reported in (2016) 14 SCC 172,
wherein it was held that there is no obligation on the part of the person
issuing tender notice to accept any of the tenders or even the lowest tender.
The relevant paragraphs of the judgment are quoted hereinbelow:
"13. In case of a tender, there is no obligation on the part of the person
issuing tender notice to accept any of the tenders or even the lowest
tender. After a tender is called for and on seeing the rates or the status of
the contractors who have given tenders that there is no competition, the
person issuing tender may decide not to enter into any contract and
thereby cancel the tender. It is well settled that so long as the bid has not
been accepted, the highest bidder acquires no vested right to have the
auction concluded in his favour (vide Laxmikant v. Satyawan [ Laxmikant
v. Satyawan , (1996) 4 SCC 208] , Rajasthan Housing Board v. G.S.
Investments [ Rajasthan Housing Board v. G.S. Investments , (2007) 1 SCC

WRIC No. 5810 of 2026
6
477] and U.P. Avas Evam Vikash Parishad v. Om Prakash Sharma [ U.P.
Avas Evam Vikas Parishad v. Om Prakash Sharma , (2013) 5 SCC 182 :
(2013) 2 SCC (Civ) 737] ).
*
21. Observing that while exercising power of judicial review, the Court
does not sit as appellate court over the decision of the Government but
merely reviews the manner in which the decision was made, in Tata
Cellular v. Union of India [ Tata Cellular v. Union of India , (1994) 6 SCC
651] , SCC in para 70 it was held as under: (SCC p. 675)
" 70 . It cannot be denied that the principles of judicial review would apply
to the exercise of contractual powers by government bodies in order to
prevent arbitrariness or favouritism. However, it must be clearly stated
that there are inherent limitations in exercise of that power of judicial
review. Government is the guardian of the finances of the State. It is
expected to protect the financial interest of the State . The right to refuse
the lowest or any other tender is always available to the Government. But,
the principles laid down in Article 14 of the Constitution have to be kept
in view while accepting or refusing a tender. There can be no question of
infringement of Article 14 if the Government tries to get the best person
or the best quotation. The right to choose cannot be considered to be an
arbitrary power. Of course, if the said power is exercised for any
collateral purpose the exercise of that power will be struck down."
(emphasis in original)
*
23. The right to refuse the lowest or any other tender is always available
to the Government. In the case in hand, the respondent has neither
pleaded nor established mala fide exercise of power by the appellant.
While so, the decision of the Tender Committee ought not to have been
interfered with by the High Court. In our considered view, the High Court
erred in sitting in appeal over the decision of the appellant to cancel the
tender and float a fresh tender. Equally, the High Court was not right in
going into the financial implication of a fresh tender."
14. The Supreme Court in Indore Vikas Praadhikaran (IDA) v. Shri
Humud Jain Samaj Trust reported in 2024 SCC OnLine SC 3511 has
recently reiterated the settled legal position reminiscing its precedents in
Tata Cellular v. Union of India, (1994) 6 SCC 651]; Master Marine Services
(P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC 138; Meerut

WRIC No. 5810 of 2026
7
Development Authority v. Assn. of Management Studies, (2009) 6 SCC 171;
Laxmikant v. Satyawan, (1996) 4 SCC 208 that lowest bidder does not
encompass an indefeasible right for issuance of letter of intent in its favour
and has held as follows:
"14. Keeping in view of the aforesaid judgments, this Court is of the
considered opinion that in the absence of allotment letter and acceptance
of highest bid, no relief could have been granted in favour of respondent
No. 1 as there was no concluded contract in the matter and the decision
taken by the Tender Evaluation Committee to generate more revenues
could not have been interfered with in the manner and method as has been
done by the Division Bench of the High Court of Madhya Pradesh at
Indore Bench. The bidder has no right in the matter of bid except of fair
treatment and cannot insist for further negotiation as has been done in the
present case. The terms and conditions of NIT, particularly condition No.
6, empowers the IDA to accept or reject any or all bids. In the present
case, the bid was rejected for valid and cogent reasons and, therefore, the
order passed by the Division Bench of the High Court of Madhya Pradesh
is set aside."
15. Accordingly, in the peculiar facts and circumstances and keeping in view
the arbitrary rejection of the technical bid on flimsy ground as mentioned
herein above, the tabulation of the financial bid prepared on May 19, 2026
(page No.24 of the writ petition) is quashed and set aside, with a direction
upon the authorities to once again reconsider the financial bids of all the
tenderers, including that of the petitioner, without considering the
impediment of inadequacy in stamp duty in the bank guarantee submitted by
the petitioner.
16. Furthermore, we also direct the petitioner to make good the deficiency in
stamp duty urgently on or before June 3, 2026, so that the exercise of
consideration of the financial bid, as aforesaid can be taken expeditiously in
accordance with law.
17. With the above directions, the writ petition is disposed of .
May 29, 2026
cks/-
(Abdhesh Kumar Chaudhary,J.) (Shekhar B. Saraf,J.)
Digitally signed by :-
CHANDRA KANT SINGH
High Court of Judicature at Allahabad,
Lucknow Bench