Facts
The Petitioner, Navrang BNG Energy Private Limited, challenged the rejection of its bids for Sector 2 and Sector 3 in a tender process conducted by the Oil and Natural Gas Corporation Limited (ONGC/Respondent No. 1)
Source reference: p. 2ONGC rejected the bids via communications dated 25.02.2026 and 19.03.2026 on the grounds that the electronic Bank Guarantee (e-BG) submitted was in the format for "Performance Security" rather than the prescribed "Bid Security/Earnest Money Deposit (EMD)" format
Source reference: p. 3The Petitioner contended that this was a minor format discrepancy and that they had demonstrated substantive compliance
Source reference: p. 2On 19.03.2025 (sic), the Petitioner filed an appeal before the Independent External Monitor (IEM), which remained pending
Source reference: p. 3Issues
1. Whether the rejection of the Petitioner’s bid due to a format discrepancy in the bank guarantee was arbitrary, unreasonable, and violative of Article 14 of the Constitution
Source reference: p. 22. Whether the Court should intervene in the tender process while an appeal is pending before the Independent External Monitor (IEM)
Source reference: p. 3-4Law Applied
The Court evaluated the matter within the framework of Article 14 of the Constitution of India, which mandates non-arbitrariness in State action and tender evaluations
Source reference: p. 2It applied the principle that bidders must strictly conform to tender requirements, specifically distinguishing between the purposes of Bid Security and Performance Security
Source reference: p. 3The Court also relied on the procedural efficacy of alternative dispute resolution mechanisms in government contracts, such as the Independent External Monitor (IEM)
Source reference: p. 3-4Reasoning
The Petitioner argued that the rejection was overly technical because the submitted e-BG fulfilled the substantive requirement of security, even if the format was incorrect
Source reference: p. 2The Respondent (ONGC) countered that Bid Security and Performance Security serve distinct legal purposes and the failure to provide the correct EMD format rendered the bid effectively without a valid EMD
Source reference: p. 3Upon review, the Court explicitly stated it was "not in agreement" with the Petitioner’s submissions regarding the merits of the bid rejection
Source reference: p. 3However, noting that the Petitioner had already invoked the administrative remedy of an appeal to the IEM, the Court found it appropriate to hold the Respondent to its undertaking that the IEM would decide the matter expeditiously
Source reference: p. 3-4Holding
The Court declined to quash the rejection of the bid but disposed of the petition by recording the Respondent’s statement that the IEM would decide the Petitioner's appeal within one week
The Court held that the pending stay application (CM APPL. 19085/2026) was infructuous in light of this direction
Source reference: p. 4No interim stay was granted against the issuance of the Letter of Acceptance to third parties
Source reference: p. 4Original Court PDF
Navrang Bng Energy Private LimitedvsOil And Natural Gas Corporation Limited & Anr.
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