Tender authorities cannot reject technically eligible bids on hypertechnical authorization objections without seeking clarification.

The Ministry of Railways and the Government of Kerala formed Kerala Rail Development Corporation Ltd. (KRDCL) as a joint venture for developing railway infrastructure in Kerala.

KRDCL’s Board, at its meeting on 4 January 2024, authorised its Director (Business Development & Finance), Sri V. Ajith Kumar, to participate in tenders independently or through a joint venture/consortium and to appoint attorneys for that purpose.

On 27 September 2025, Marymatha Infrastructure Private Limited (MIPL) and KRDCL entered into a joint venture agreement to participate in Southern Railway’s tender for redevelopment of Chengannur Railway Station on an EPC basis.

The MIPL–KRDCL joint venture submitted the joint bidding agreement, MIPL’s Board resolution, and the relevant power of attorney executed by Sri. Ajith Kumar in favour of Sri. Ezhilan M. It also submitted an extract of KRDCL’s minutes dated 4 January 2024.

Southern Railway rejected the technical bid on the cryptic ground that “Submission of bid not valid”.

The learned Single Judge held that the rejection was hyper-technical, quashed the disqualification, and directed Southern Railway to evaluate MIPL’s technical bid and, if otherwise qualified, open and evaluate its financial bid.

Whether Southern Railway was justified in rejecting the MIPL–KRDCL joint venture’s technical bid for failure to submit a separate and specific Board resolution authorising formation of the joint venture, when the minutes and powers of attorney produced demonstrated such authority?

Whether the tender authority was required to seek clarification under Clauses 3.1.4 and 3.1.5 before rejecting the technical bid on the stated documentary ground?

Whether the Tender Committee could question the internal corporate authority and “Super Majority Resolution” of KRDCL, particularly when similar authorisation documents had previously been accepted by Southern Railway?

Whether the appeal filed by the competing bidder, M/s. SVCPL-JVEA (JV), was maintainable when its own bid had not yet been finally accepted and it had acquired no vested right to the contract?

The Court applied the tender conditions requiring submission of corporate authorisation and powers of attorney under Clause 2.11.2, read with Clauses 3.1.4 and 3.1.5, which empowered and required the tender authority to seek written clarification to facilitate evaluation of technical bids.

It applied the principles of judicial review in public-contract matters stated in Jagadish Mandal v. State of Orissa, under which intervention is warranted where the decision-making process is mala fide, arbitrary, irrational, or such that no reasonable authority could have reached the decision, particularly where public interest is affected.

The Court also relied on Shanti Construction Pvt. Ltd. v. State of Odisha, which holds that a public tender is an instrument of governance and must be interpreted consistently and in a manner promoting fairness, transparency, competition, and public value; a misconstruction of tender conditions that unjustifiably narrows competition is amenable to judicial review.

The Court further applied the principle that a bidder has no vested right to be awarded a contract merely by participating in a tender, while an eligible bidder is entitled to protection against manifestly arbitrary exclusion.

The Court held that the 4 January 2024 minutes showed a unanimous Board decision authorising Sri. Ajith Kumar to participate in tenders on a joint-venture or consortium basis and to appoint attorneys for that purpose.

Acting under that authority, Sri. Ajith Kumar executed the prescribed power of attorney in favour of Sri. Ezhilan M., and the joint bidding agreement expressly recorded the constitution, authority, and responsibilities of the MIPL–KRDCL joint venture.

The Court considered the distinction between a formal “resolution” and minutes recording an authorised Board decision to be hyper-technical where the substantive purpose of the requirement—proof of valid corporate authority—was satisfied.

The subsequent disclosures by KRDCL, including its expression-of-interest process, letter of acceptance, and Board minutes dated 20 November 2025, further confirmed that KRDCL had consciously participated in the tender with MIPL.

In these circumstances, the Tender Committee’s rejection was found to be irrational and unsupported by the tender documents.

The Committee should have sought clarification under Clause 3.1.4 instead of issuing a cryptic rejection, particularly because the alleged deficiency could readily have been addressed through the documents later disclosed in the proceedings.

The Court further held that the Tender Committee was not entitled to conduct an intrusive audit of KRDCL’s internal corporate proceedings or invalidate a decision supported by a unanimous Board authorisation, especially when Indian Railways participated in KRDCL’s Board structure and similar documents had previously been accepted.

The Court held that the documents submitted established sufficient corporate authority and that Southern Railway ought to have sought clarification before rejecting the bid.

Both writ appeals were dismissed without costs.

The order of the learned Single Judge quashing the disqualification and directing Southern Railway to permit MIPL’s participation, evaluate its technical bid, and, if it was otherwise qualified, open and evaluate its financial bid, accordingly stood affirmed.

The competing bidder’s appeal was also rejected as premature, since its own bid had not been finally accepted and it had no vested right to the award of the contract.