Tender authorities cannot accept bids quoting wages below the prescribed minimum wage.

Srivilliputhur Municipality invited tenders for engaging 50 dengue workers. An initial tender notification was issued on 04.06.2026, followed by a further notification/corrigendum prescribing minimum wages of ₹578.87 per worker per day.

Green Owill Waste Management quoted ₹578.87 per day, whereas R. Kavitha quoted ₹510 per day. Despite quoting below the prescribed minimum wage, Kavitha was declared L1.

Green Owill Waste Management challenged the declaration, contending that it ought to have been treated as the successful bidder and that Kavitha lacked requisite ESI-related documents; Kavitha challenged the rejection of her L1 status.

The learned Single Judge held that the declaration of Kavitha as L1 was improper and directed the authorities to issue a fresh tender. Both parties filed writ appeals against that order.

1. Whether a bidder quoting below the minimum wage prescribed in the tender could validly be declared the lowest bidder (L1).

2. Whether Green Owill, having quoted the prescribed minimum wage, ought to have been declared the successful bidder, or whether a fresh tender was required.

3. What procedure should govern the fresh tender if both bidders quoted the prescribed minimum wage.

The Court applied the fundamental principle that workers engaged under a public tender cannot be paid less than the minimum wage prescribed in the tender conditions.

A bid below the prescribed minimum wage cannot be treated as a valid basis for awarding a labour-supply contract.

The Court further applied the principles of fairness and procedural regularity in public procurement, holding that where compliance with the minimum-wage condition leaves only one eligible bidder, the authority may conduct negotiations or issue a fresh tender; in the event of equal bids after negotiation, experience may be considered as the distinguishing criterion.

The Court held that Kavitha’s bid of ₹510 per day was impermissibly below the prescribed minimum wage of ₹578.87 and therefore could not properly result in her being declared L1.

Green Owill had quoted exactly the prescribed minimum wage and was consequently the only bidder meeting that material tender requirement.

However, the Court declined to direct an automatic award to Green Owill because that would effectively leave only a single eligible tenderer, requiring either negotiations or a fresh tender.

The Court therefore endorsed the Single Judge’s direction for a fresh tender, while prescribing that the minimum wage must be expressly stated and that equal bids should first be subjected to negotiation, with experience determining the successful bidder if equality continued.

If both appellants quoted the same minimum wage, they were to be called for negotiations; if they continued to quote the same amount after negotiation, the more experienced bidder was to be selected.

The connected miscellaneous petitions were closed.