E-payment bid security cannot be rejected for failure to submit an “original” receipt, Supreme Court rules

The appellant’s bid for a railway EPC project was rejected at the technical-bid stage because it had not physically submitted the original Bid Security. The appellant had paid the security through the respondent’s e-payment gateway and uploaded the digital receipt with its bid.

The Patna High Court’s Division Bench upheld the rejection. The Supreme Court granted leave and considered the appeal.

1. Whether a tenderer who paid Bid Security through the prescribed e-payment gateway and uploaded the digital receipt was required to produce a separate physical “original” to satisfy Clause 2.20.6(ii) of the RFP.

2. Whether rejection of the appellant’s bid for failing to produce such an original was a proper application of the tender conditions.

Clause 2.20.6 of the RFP permitted Bid Security to be furnished by several methods, including the authority’s e-payment gateway; Clause 2.20.6(i) required a scanned copy to be uploaded, while Clause 2.20.6(ii) required physical delivery of the furnished form to the nominated official.

Courts ordinarily defer to the procuring authority’s understanding of tender documents, as discussed in Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises and Others, (2026) 4 SCC 310; however, that deference does not preclude intervention where the interpretation or application is mala fide or perverse.

A tender condition should not be applied rigidly where compliance, as interpreted by the authority, is impossible and the tender’s substantive requirement has already been met.

The appellant used an expressly permitted payment method, transferred the security to the respondents’ account, and uploaded the digital receipt. Unlike a bank guarantee, demand draft, fixed deposit receipt, or banker’s cheque, an e-payment required no separate original to be physically delivered: the funds were already under the respondents’ control.

The Court therefore found the rejection perverse and distinguished Prakash Asphaltings, which concerned a materially different error in a financial bid and did not justify rigid enforcement of an impossible requirement in this case.

It directed the respondents to facilitate renewed e-payment of the Bid Security within two weeks, or, if technically impracticable, permit payment in another form within a further two weeks. Once the security was submitted, the appellant’s financial bid was to be opened and considered with the other bids, and the tender finalized in accordance with the remaining conditions.

The judgment also stated that the contract was to be awarded to the appellant.