Strict compliance with mandatory tender conditions justified rejection of the technically non-responsive bid.

The North East Frontier Railway issued Notice Inviting Tender No. Mech-LMG-ET-14-2025-26 for a ten-year BOOT contract relating to the establishment and operation of a mechanized laundry at Badarpur and associated linen services.

The tender required bidders to demonstrate, inter alia, liquidity equivalent to 5% of the estimated bid value and experience in setting up and operating a mechanized laundry with a minimum capacity of four tonnes per shift for twelve continuous months during the qualifying period.

The petitioner participated in the tender but its technical bid was declared non-responsive for, among other reasons, failure to submit a Chartered Accountant-certified banking reference and failure to establish the requisite experience of setting up a qualifying mechanized laundry.

The petitioner had submitted a bank certificate indicating availability of credit of approximately ₹9.20 crores, but the certificate was not certified by a Chartered Accountant.

It also relied on a certificate issued by the Office of the Director of Medical Education, Vijayawada, describing the work as supply of linen and mechanized laundry services; the Railway authorities found that the certificate did not establish that the petitioner had set up a mechanized laundry.

The petitioner challenged the rejection under Article 226 of the Constitution, contending that the tender conditions had been misread and that the rejection was arbitrary.

During the proceedings, the Court had directed that no further steps be taken to award the contract; the matter was thereafter finally heard.

Whether the petitioner’s banking reference was required to be certified by a Chartered Accountant under Clause 1.3(B) of the tender document, and whether rejection of the technical bid on that ground was legally sustainable.

Whether the documents submitted by the petitioner established the prescribed technical experience of setting up and operating a mechanized laundry of the required capacity for twelve continuous months, as required by the tender conditions.

Whether the Railway authorities’ decision to declare the petitioner’s technical bid non-responsive warranted interference in judicial review.

Clause 1.3(B) required the audited balance sheet and/or banking reference to be certified by a Chartered Accountant bearing the requisite stamp, signature and membership number; the banking reference also had to be issued by a scheduled bank and comply with the prescribed tender requirements.

The technical criteria required experience in setting up a mechanized laundry of at least four tonnes per shift, washing at least four tonnes per shift for twelve continuous months during the qualifying period.

Clause 1.4.1.1(vi), read with Annexures II and III, further required a list of similar completed or ongoing works supported by certificates from the concerned organisations.

In judicial review of tender decisions, the Court will not substitute its own interpretation or assessment for that of the tendering authority where the authority has applied the tender conditions in a non-arbitrary manner; interference is justified only where the decision is illegal, arbitrary or perverse.

The Court held that the words “and/or” in Clause 1.3(B) did not exempt a banking reference from Chartered Accountant certification.

They indicated that the bidder could rely on the audited balance sheet alone, where sufficient, or additionally submit a banking reference; in either event, the relevant document had to comply with the certification requirement stated in the clause.

Since the petitioner’s own liquidity was approximately ₹7.15 crores against the required ₹9.11 crores, the banking reference was material to satisfying the eligibility requirement.

Its failure to bear Chartered Accountant certification therefore constituted non-compliance with a mandatory tender condition.

On technical experience, the Court distinguished the requirements of Annexures XII and XII(A) from the separate requirement under Annexure II to provide a list of similar works under Clause 1.1.

The Vijayawada certificate referred to the supply of linen and mechanized laundry services but did not establish that the petitioner had set up a mechanized laundry of the stipulated capacity.

It therefore did not satisfy the express definition of “similar work” or the supporting-document requirement in Clause 1.4.1.1(vi).

The Railway authorities’ rejection was accordingly based on the tender terms and could not be characterised as arbitrary, illegal or perverse.

It held that the banking reference required Chartered Accountant certification and that the petitioner had failed to prove the prescribed technical experience of setting up a qualifying mechanized laundry.

The decision declaring the petitioner’s technical bid non-responsive was upheld as neither illegal nor arbitrary.

The writ petition was dismissed, the interim order was vacated, and no costs were imposed.