Tharu And Sons, Rep. By Its Authorised Signatory v. Leotech Process, Rep. By Its Proprietor
2026-01-30
GADI PRAVEEN KUMAR, MOUSHUMI BHATTACHARYA
body2026
DigiLaw.ai
JUDGMENT : Moushumi Bhattacharya, J. 1. The Writ Appeal arises out of an order passed by a learned Single Judge on 15.12.2025 in W.P. No.23084 of 2025 filed by the respondent No.1 herein (M/s. Leotech Process) for a Writ of Mandamus seeking to declare the action of the respondent Nos.3, 4 and 5 therein (South Central Railway, Secunderabad) in qualifying the appellant in respect of a Tender Notice dated 15.05.2025 as being illegal and contrary. By the impugned order, the learned Single Judge allowed the Writ Petition and set aside the qualification of the appellant in the tender process and directed the respondent Nos.2 to 6/South Central Railway to take further steps strictly in accordance with the Tender Conditions and law. 2. The appellant was the respondent No.6 in the Writ Petition whose selection/qualification in the Tender was set aside. The appellant has hence preferred the present Writ Appeal. 3. The e-Tender Document dated 15.05.2025 issued by respondent No.6/the Chief Environment and Housekeeping Manager, South Central Railway, Secunderabad, was the subject-matter of the Writ Petition related to a Custom Bid for Services for collection of soiled linen from coaches, transportation to laundry, washing, drying, ironing and delivery of packed linen items and other items. Following the e-Tender procedure, the official respondents qualified the appellant for the Contract. However, the respondent No.1/writ petitioner was disqualified under Clause 2.8 of the e-Tender Document. Aggrieved by the said disqualification, the respondent No.1 filed a Writ Petition seeking to quash the decision of the South Central Railways to qualify and select the appellant. The learned Single Judge allowed the petition and set aside the appellant’s qualification via the impugned order. 4. Learned Senior Counsel appearing for the appellant submits that the impugned order is required to be interfered with as it is a settled principle of law that the Tendering Authority is the best Judge of the interpretation of its own Tender conditions and the Writ Court should accept such interpretation given by the Authority. Senior Counsel also submits that the Writ Court should exercise Judicial restrain and refrain from substituting its own view from that of the Tendering Authority, even if an alternative interpretation is possible, provided the decision is not manifestly, arbitrary or mala fide.
Senior Counsel also submits that the Writ Court should exercise Judicial restrain and refrain from substituting its own view from that of the Tendering Authority, even if an alternative interpretation is possible, provided the decision is not manifestly, arbitrary or mala fide. It is also submitted that Clause 2.8(iii) of the e-Tender Document dated 15.05.2025 envisages disqualification of a Contractor from participating in the bidding for services in a Railway Division under clause 2.8 (iii) (a) specifies that if any previous contract held by the Tenderer, or any of its constituents, had been terminated under clause 7.4 in that specific Division, within two years from the date of submission of bids. Senior Counsel further submits that the appellant’s Contract had been terminated by the Delhi Division of the Northern Railway and not by the South Central Railway, as such, the appellant is not disqualified from participating in the present Tender as per Clause 2.8(iii) of the e-Tender Document. 5. Learned Senior Counsel appearing for the respondent No.1/writ petitioner places Clause 2.8(iii) of the e-Tender condition to urge that the appellant was under an obligation to disclose the fact of termination of its earlier Contract with the Railway. Senior Counsel submits that the appellant approached the Writ Court with unclean hands since the appellant did not give any explanation as to why the appellant failed to give the satisfactory declarations as per Annexures- XIX and XX which requires affirmation of truthfulness of all statements made in the Bid and disclosure of prior termination/debarment. It is also submitted that the appellant’s Bid had been rejected by the Guntakal Division of South Central Railway on the ground of non-disclosure of an earlier termination which establishes that non-disclosure was treated as a serious and disqualifying defect. Senior Counsel emphasises on the suppression of material facts on the part of the appellant and its consequential impact on the decision taken by the South Central Railway. It is also submitted that the reliance placed on the appellant on an interim order of the Delhi High Court dated 28.08.2024 in W.P.(C) No.8745 of 2024 provides no assistance since the interim order did not impact either the termination of the appellant’s earlier Contract nor mitigated the legal consequences arising out from such termination. 6.
It is also submitted that the reliance placed on the appellant on an interim order of the Delhi High Court dated 28.08.2024 in W.P.(C) No.8745 of 2024 provides no assistance since the interim order did not impact either the termination of the appellant’s earlier Contract nor mitigated the legal consequences arising out from such termination. 6. The learned Additional Solicitor General of India, appearing for the respondent Nos.2 to 6, submits that the appellant was selected as the L-1 Bidder, by quoting a bid price lower than the bid price quoted by the L-2 Bidder/writ petitioner. The Tender Committee accordingly selected the appellant on the basis of the quoted price. The Additional Solicitor General of India also submits that the appellant has obtained an interim order on 28.06.2024 despite the termination by the Northern Railway the appellant has participated in several Contracts and was awarded more than 30 Work Orders from different Railways. The writ petitioner has also participated in few of those Tenders, but has chosen to question the appellant declaration only for the subject contract with regard to the appellant being chosen for the work. The Additional Solicitor General of India further submits that there is urgency for the work to proceed as the Tender was issued on 15.10.2025. 7. A brief list of dates relevant to the matter is given below: Date Event 15.05.2025 The respondent No.6 issued an e-Tender Notice for a Turnkey Contract for setting up of mechanised laundry at Secunderabad on Build, Own, Operate and Transfer (BOOT) model. 18.06.2025 The appellant submitted its bid on the GeM Portal with all the relevant documents supporting its eligibility. 26.07.2025 The writ petitioner submitted its Bid. On the same day, the Technical Bids were opened in which the appellant and the writ petitioner were declared as qualified. 30.07.2025 The financial bids were opened and the appellant was declared as L-1 and the writ petitioner was declared as L-2. 01.08.2025 The writ petitioner submitted a representation to the Additional General Manager, South Central Railway, Secunderabad, stating that the qualification of the appellant was contrary to the Tender Conditions. 03.08.2025 The writ petitioner filed W.P.No.23084 of 2025 challenging the qualification of the appellant as contrary to the instructions in the e-Tender Document. 8.
01.08.2025 The writ petitioner submitted a representation to the Additional General Manager, South Central Railway, Secunderabad, stating that the qualification of the appellant was contrary to the Tender Conditions. 03.08.2025 The writ petitioner filed W.P.No.23084 of 2025 challenging the qualification of the appellant as contrary to the instructions in the e-Tender Document. 8. The issue germane to the adjudication before us is whether the appellant (respondent No.6 in the Writ Petition) should have been disqualified under the conditions of the e-Tender Document dated 15.05.2025. The South Central Railway qualified the appellant presumably on the premise that the appellant did not attract the disqualification clause i.e., Clause 2.8 of the e-Tender Document. The South Central Railway accordingly selected the appellant as the L-1 Bidder which led to the writ petitioner (declared as L-2) challenging the qualification and filing the Writ Petition. The learned Single Judge accepted the contention of the writ petitioner and held that the appellant had failed to disclose material facts as mandated by the e- Tender Document. The learned Single Judge accordingly set aside the appellant’s selection on primary ground that the appellant had suppressed material information, the disclosure of which would have had a direct bearing on its qualification. 9. The List of Mandatory Documents forms part of Annexures-XIX and XX of the e-Tender Document. Annexure-XIX headlines ‘Undertaking for Truthfulness/Correctness of the Documents submitted/uploaded by the tenderer along with the tender’. Annexure- XX gives the format for a Declaration and continues from Annexure- XIX, i.e., the Undertaking given by the Tenderer of the truthfulness/correctness of the documents submitted along with the Tender. Annexure-XIX contains, inter alia, Clauses 4 and 7 where the Tenderer declares and certifies that it has not made any misleading or false representation in the forms, statements and attachment in proof of the qualification requirements and that the Bidder understands that the Tender EMD would be forfeited and the Bidder would face banning of business for a period of five years, if the certificates regarding eligibility criteria are found to be forged/false or incorrect at any time during the process for evaluation of Tenders, respectively. 10.
10. Annexure-XX consists of a Declaration that the Bidder has not been blacklisted or debarred by the Railways or by any other Ministry/Departments/PSU (Public Sector Undertaking) of the Government of India/State Government from participation in bids and also that the Bidder would be debarred from the subject Tender if any previous Contract executed by the Bidder or by any of its constituents had been terminated under Clause 7.4 of the General Conditions of the Contract for Services in ‘that Railway division within the previous two years from the date of submission of bids for the subject Tender’. 11. Therefore, Annexures-XIX and XX of the List of Mandatory Documents envisage complete disclosure on the part of the Bidder in respect of its eligibility criteria and blacklisting or debarment suffered by the Bidder or the termination of any previous Contract within the immediate two years preceding the submission of bids. In essence, Annexures-XIX and XX demand full disclosure of the conditions enumerated therein and cast an obligation on the Bidder not to make any false or misleading representations either by way of Statement or Documents attached as proof of qualification. 12. In the present case, it is undisputed that Northern Railway rescinded Contract dated 09.10.2023 with the appellant under Clause 7.4 of the General Conditions of the Contract (GCC). The appellant was also debarred from participating in any bid issued by the Northern Railway for a period of two years from the date of issue of the aforesaid Letter dated 21.06.2024. The appellant approached the Delhi High Court by way of a Writ Petition (W.P.(C) No.8745 of 2024) and obtained an interim order on 28.06.2024 by which the Delhi High Court stayed the operation of the Northern Railway’s letter dated 21.06.2024. 13. The appellant, however, argues that the touchstone of the question in relation to disqualification would be Clause 2.8 of the e- Tender Document. Clause 2.8 relates to ‘Disqualification of Bidders’ and sub-clause (iii) thereof states that a Contractor shall be disqualified from participating in the bidding for services in a Railway Division (iii)(a) if any previous Contract of the Tenderer or any of its constituents had been terminated under Clause 7.4 in ‘that’ Railway Division within the previous two years from the date of submission of bids.
The appellant’s contention places emphasis on ‘a Railway Division’ preceding ‘that Railway Division’ to mean that the disqualification is specific to the particular Railway Division which issued the Tender Document. The argument is that the appellant would not be disqualified under Clause 2.8(iii) of the e-Tender Document since its contract with Northern Railway had been terminated (as opposed to the South Central Railway which was the Tender issuing Authority in the present case). 14. On the other hand, the argument of the writ petitioner is that ‘that Railway Division’ in Clause 2.8(iii) is only referential to ‘a Railway Division’ and cannot be expanded to indicate that the termination in another Railway Division is irrelevant for the purposes of the Tender. 15. It is evident from the above that both the appellant as well as the writ petitioner intend to rely on contradictory interpretations of Clause 2.8(iii) of the e-Tender Document in a manner which would suit their claims to qualify for the Tender. It is settled that the author of the Tender/Tender issuing Authority is the best Judge for construing the terms of the Tender and also selecting the entity best-suited for the job. Whether the words ‘in a Railway Division’ would qualify ‘that Railway Division’ in Clause 2.8(iii) of the e-Tender Document so as to exempt the appellant from material disclosure is strictly within the domain of the Tender - issuing Authority, i.e., South Central Railway. 16. The appellant’s argument that it was not under any obligation to disclose the fact of its debarment by Northern Railway must be tested against the disclosure mandates of Annexures-XIX and XX of the e-Tender Document. 17. As stated above, these Annexures require complete and correct disclosure on the part of the Bidder including whether the Bidder suffered termination of any its previous contracts with ‘that Railway Division’ within two years from the date of submission of Bids under Clause 7.4 of the GCC. Incidentally, the words ‘that Railway Division’ in Annexure-XX does not have a clarificatory reference as to the particular Railway Division contemplated under Annexure XX. The requirement of full disclosure with regard to termination, debarment and blacklisting assumes significance in light of the appellant being debarred and its Contract terminated under Clause 7.4 of the GCC by the Northern Railway on 21.06.2024.
The requirement of full disclosure with regard to termination, debarment and blacklisting assumes significance in light of the appellant being debarred and its Contract terminated under Clause 7.4 of the GCC by the Northern Railway on 21.06.2024. Admittedly, the appellant did not disclose this fact in the Declarations under Annexures-XIX and XX of the e-Tender Document. 18. The appellant’s reliance on the Delhi High Court order of stay dated 28.08.2024 cannot be used as a defense to the disclosure requirement under Annexures XIX and XX of the e-tender documents. Further, the appellant’s failure to disclose the termination and debarment by Northern Railway is significant, since Annexure XX specifically refers to termination under clause 7.4 of the GCC, which was the precise nature of termination mentioned in Northern Railway’s letter of 21.06.2024. Further, an interim order, for all practical purposes is temporary in nature and subsists for a limited timeframe. An interim order cannot be sought to be implemented as if it is a final verdict in as much as the same would not only amount to per-judging the final verdict but would also entail prejudice to the other bidders as also the principal employer [ REC-Power Development and Consultancy Limited v. North Bihar Power Distribution Co. Ltd. Civil Writ Jurisdiction Case No.16313 of 2021.[ Hence, the appellant does not have any explanation to offer for its failure to disclose the fact of termination and debarment solely on the ground of the interim relief granted by the Delhi High Court. 19. The more important issue is whether the appellant could have construed either Annexures XIX and XX or Clause 2.8 (iii) of the e-Bid Document in a self-serving manner even before submitting its document for the Tender. 20. As stated above, the construction of ‘that Railway Division’ as opposed to ‘a Railway Division’ and whether the former expression was used with reference to the second Railway Division is a matter of interpretation which could only have been done by the respondent – South Central Railway after full disclosure of all the material information by all the bidders. None of the bidders, including the appellant, could have quibbled over these words for their own benefit and thereby decided to suppress certain material information in respect of their eligibility.
None of the bidders, including the appellant, could have quibbled over these words for their own benefit and thereby decided to suppress certain material information in respect of their eligibility. After all, the purpose of requirement of complete disclosure is not for punishing the bidder on the information furnished but for gauging the eligibility and fitness of the bidders in terms of its antecedents withholding material information amounts to moral turpitude Devendra Kumar v. State of Uttaranchal and Ors. , (2013) 9 SCC 366 21. It is of further relevance that the Guntakal Division of South Central Railway had rejected the appellant in a tender on the ground of non-disclosure of an earlier termination. We hence find substance in the contention of the writ petitioner that non-disclosure of the termination was treated as a serious defect amounting to disqualification by the very same official respondent. 22. Without expressing any opinion on the correctness/error of the selection of the appellant, we wish to state that the respondent- Railway is expected to follow a consistent interpretation of the relevant clauses of the e-tender and treat all bidders with equality and fairness. 23. We cannot have a different view of the cases cited on behalf of the appellant in respect of the limited jurisdiction of a Writ Court in tender matters. Interference in such matters is not warranted unless it is prompted by mala fides or bias or the decision-making process is vitiated by irrationality, unreasonableness or procedural impropriety Agmatel India Private Limited v. Resoursys Telecom , (2022) 5 SCC 362 The Writ Court should be even more circumspect in contracts involving technical issues and the approach of the Court should be not to find fault with a magnifying glass in its hands and the Court should examine as to whether the decision-making process is after complying with the procedure contemplated by the tender conditions N.G. Projects Limited v. Vinod Kumar Jain , (2022) 6 SCC 127 and the authority issuing a tender is the best judge of its terms and requirements. Judicial intervention in tender matters is limited, with Courts instructed not to substitute their own interpretations unless the tendering authority’s decision is arbitrary or malicious Silppi Constructions Contractors v. Union of India , (2020) 16 SCC 489 24.
Judicial intervention in tender matters is limited, with Courts instructed not to substitute their own interpretations unless the tendering authority’s decision is arbitrary or malicious Silppi Constructions Contractors v. Union of India , (2020) 16 SCC 489 24. We however wish to reiterate that there are an equally large number of decisions where the Writ Court found it necessary to interfere on the ground that the decision-making process was vitiated by violation of the mandatory tender conditions and lack of transparency. 25. The learned Single Judge set aside the appellant’s qualification primarily on the ground of suppression of material facts which was required to be disclosed under the terms of the e-tender document. Although, we do not wish to express our views on the correctness of the qualification of the appellant (or the disqualification of the writ petitioner) on the interpretation of clause 2.8 (iii) of the tender document, we wish to make it clear that the appellant has failed to give an indefensible answer to non-disclosure of the material fact of its termination and debarment on 21.06.2024. 26. We hence agree with the conclusion reached by the learned Single Judge in setting aside the qualification of the appellant on the ground of suppression of material facts. We accordingly do not find any reason to set aside the impugned order dated 15.12.2025. 27. We however deem it fit to direct the official respondent/SCR, Secunderabad, to arrive at a fresh decision on the complete disclosure made by the appellant as required under Annexures-XIX and XX and Clause 2.8 of the e-Tender Document. The official respondents shall arrive at the decision in a manner which is in line with the object of the conditions and in consonance with the policy adopted by the respondent – Railway in cases involving similar facts. 28. W.A.No.1490 of 2025, along with all connected applications, is accordingly disposed of in terms of the above. Interim orders, if any, shall stand vacated.