After Contractor Paid Two Years’ EPF/ESI Dues Late, P&H HC Upholds Haryana University Bid Rejection

In brief

The question

1. Whether the Committee’s interpretation and application of Clause 36(xii), in finding the petitioner technically ineligible because of delayed or deficient EPF/ESI compliance, warranted interference under Articles 226 and 227.

The court held

The Court held that the Committee’s application of Clause 36(xii) was justified and disclosed no ground for judicial interference.

It also directed

It dismissed the writ petition, with no order as to costs, and directed that pending miscellaneous applications, if any, also stand disposed of.

01Facts

The University invited tenders for “Field Operations for Farm Area.”

p. 2

Its Tender Evaluation and Finalization Committee found the petitioner technically ineligible under Clause 36(xii), which required continuing EPFO registration without default or dues and EPF/ESI challans for at least 20 persons deployed in each of the preceding two years.

p. 2 · p. 5

The petitioner challenged that decision under Articles 226 and 227, arguing that the tender did not expressly require contributions to be deposited within the same financial year and that its bid was the lowest.

pp. 2–3

The University relied on delayed or revised contributions for the relevant years and recovery notices concerning the petitioner’s earlier contracts.

p. 3 · pp. 6–7

02Issues

i.1. Whether the Committee’s interpretation and application of Clause 36(xii), in finding the petitioner technically ineligible because of delayed or deficient EPF/ESI compliance, warranted interference under Articles 226 and 227.

pp. 4–6

ii.2. Whether the University’s affidavit impermissibly supplemented the reasons for the impugned decision, or the petitioner established discriminatory treatment of other bidders.

p. 6

03Law Applied

Under Article 226, judicial review of tender decisions is directed principally to the decision-making process, not the merits of the administrative decision; interference is warranted where the process or decision is mala fide, arbitrary, irrational, biased, or perverse, and not merely because another view is possible (Tata Cellular v. Union of India, (1994) 6 SCC 651; Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517).

p. 4

The tendering authority, as author of the tender document, is best placed to interpret its requirements, and its interpretation is ordinarily not disturbed unless shown to be perverse, mala fide, or intended to favour a participant (Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818; Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489; N.G. Projects Ltd. v. Vinod Kumar Jain, (2022) 6 SCC 127).

pp. 4–5

Clause 36(xii) required continuing EPFO registration without default or dues and challans evidencing EPF/ESI contributions for a minimum of 20 persons in each of the preceding two years.

p. 5

04Reasoning

The Court read Clause 36(xii) as requiring evidence of statutory compliance for each relevant preceding year, consistent with the clause’s requirement of registration continuing without default or dues and its purpose of protecting workers and the University from liabilities arising from non-payment.

pp. 5–6

The record showed that contributions for substantial parts of the preceding two years were paid late or revised, including revised contributions for 40 employees deposited in August 2026 after the tender notice.

p. 6

The Court therefore declined to accept the petitioner’s argument that the clause permitted such delayed payment.

p. 6

It also held that the impugned decision itself reflected the essential ground of non-compliance, so the University’s affidavit did not render the decision unsustainable; evidence of delayed transactions by other bidders did not establish that they were similarly situated.

p. 6

The petitioner’s lower financial quotation did not cure its technical ineligibility, particularly in light of recovery notices relating to earlier contracts.

p. 7