Non-Responsiveness of Bid Due to Execution of Joint Venture Documents by Unauthorized Signatory

The Petitioner, a Joint Venture (JV) between Respondent Nos. 4 and 5, participated in a tender issued on 04.09.2024 for railway gauge conversion and electrical works in the Nanded Division

On 23.04.2025, the Respondents rejected the Petitioner’s technical bid as non-responsive under Clause 2.1.11 of the Request For Proposal (RFP)

The Respondents contended that the JV agreement and the Power of Attorney (POA) for the nomination of the Lead Member were signed by Shri Krishna Chandra Behera on behalf of M/s. EVRASCON without specific authorization from the Board or sub-delegation by the authorized signatory, Shri Ajay Kumar Sharma

While a POA existed for signing the bid under Clause 2.1.5, it did not extend to executing documents under Appendix III and IV

The Petitioner sought a writ of certiorari to quash the rejection and a mandamus to open its financial bid

1. Whether the rejection of the Petitioner’s technical bid as non-responsive due to缺乏 proper authorization for executing the JV Agreement and Power of Attorney was legally sustainable under Clause 2.1.11 of the RFP.

The Court applied the principles of contractual compliance in public tenders, specifically focusing on Clause 2.1.11 of the RFP.

Clause 2.1.11 mandates that a Consortium/JV must nominate a Lead Member via a Power of Attorney (Appendix III) and enter into a binding Joint Bidding Agreement (Appendix IV).

The legal principle applied is that bid documents must be executed by a person possessing specific and valid authority (such as a Board Resolution or valid sub-delegation) to bind the constituent members of a JV, failing which the bid is liable to be declared non-responsive.

The Court examined the documents submitted by the Petitioner and found that Shri Krishna Chandra Behera, who executed the JV agreement and the POA for the Lead Member, lacked the requisite authorization from the Board of M/s. EVRASCON.

The Respondents successfully demonstrated that the existing POA granted to him was limited to signing the bid under Clause 2.1.5 and did not empower him to execute the substantive legal commitments required under Appendix III (Nomination of Lead Member) or Appendix IV (Joint Bidding Agreement).

The Court compared this with a previous instance involving the Petitioner (M/s. SRRIPL) where they had scrupulously followed authorization protocols, highlighting the Petitioner’s awareness of these requirements.

Consequently, because the documents were signed by an unauthorized individual, they failed to create a legally binding obligation on the JV members as required by the RFP.

The Court answered the issue in the affirmative, stating that the communication dated 23.04.2025 cannot be faulted.

The writ petition and all pending applications were dismissed for being devoid of merit.