Tender authorities must apply bid-capacity formulas correctly and uniformly when determining bidder eligibility.

Dergaon Municipal Board invited bids for a water-network extension project under an NIT dated 29 August 2026.

The petitioner’s technical bid was rejected, while two other bidders qualified.

The petitioner challenged the evaluation, alleging that the Board had incorrectly applied Clause 4.7’s bid-capacity formula to the successful bidders.

The respondents accepted that the value of “N” used for those bidders was incorrect, but relied on certification by an Executive Engineer and also cited deficiencies in the petitioner’s bid, including its bid-capacity statement and site-inspection documents, and non-submission of GST returns.

The Court found that the successful bidders’ documents used an “N” value of 5.0, whereas the 90-day completion period required a value of 2.5 under the tender formula.

Whether the successful bidders’ technical qualification could stand despite the admitted incorrect application of Clause 4.7’s bid-capacity formula

Whether the petitioner’s alleged documentary deficiencies justified its rejection, and whether those requirements were mandatory and uniformly applicable to all bidders

Whether the appropriate relief was a fresh technical evaluation of all bids

In judicial review of public tenders, the Court ordinarily does not substitute its technical assessment for that of the tendering authority; it reviews the legality and fairness of the decision-making process (*Tata Cellular v. Union of India*, (1994) 6 SCC 651).

Interference is warranted where a decision is mala fide, intended to favour a bidder, or so arbitrary and irrational that no responsible authority could have reached it, having regard to public interest (*Jagdish Mandal v. State of Orissa*, (2007) 14 SCC 517).

The tender-authoring authority’s interpretation generally receives deference, but must be supported by the tender’s language and cannot be unfair, perverse, or arbitrary (*Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd.*, (2016) 16 SCC 818; *M/S Mickey Traders v. M/S LRY Labor Contractor*, 2026 INSC 1025).

Tender conditions must be applied consistently and public authorities must adhere to the standards they have prescribed (*Ramana Dayaram Shetty v. International Airport Authority of India*, (1979) 3 SCC 489).

Whether a condition is essential or merely ancillary depends on its language, object, and context (*Poddar Steel Corporation v. Ganesh Engineering Works*, (1991) 3 SCC 273).

Under Clause 4.7, available bid capacity is calculated as A × N × 2 − B, and the bid-capacity statement must be countersigned by an Engineer not below the rank of Executive Engineer.

The Court held that certification of the successful bidders’ statements did not cure an incorrect calculation: authentication and accuracy are distinct, and the Evaluation Committee remained responsible for applying Clause 4.7 correctly.

Because the admitted error could affect eligibility, it was material and rendered the decision to qualify those bidders arbitrary.

The petitioner’s own alleged deficiencies did not validate the erroneous qualification of other bidders, nor did the challenge entitle the petitioner automatically to qualify.

As the character and consequences of the GST-return and site-inspection requirements required interpretation of the tender documents as a whole, the Court left those questions to the Committee on fresh evaluation, requiring a reasoned and uniform approach.

The technical evaluation under the NIT dated 29 August 2026 was set aside, and the matter remitted for fresh technical evaluation of all participating bidders under the original tender conditions.

The Committee was directed to apply Clause 4.7 correctly, determine the status of the GST-return, site-inspection, and other requirements by reasoned interpretation, and apply the same standard to all bidders.

The Court did not direct that the petitioner or any other bidder be declared qualified or awarded the contract; the fresh evaluation was to be completed preferably within two weeks, without precluding a fresh tender where reasonable grounds existed.

The parties were directed to bear their own costs.