Rejection Dehors the NIT Is Unsustainable

The Hon’ble Supreme Court of India, in the case of Kimberley Club Pvt. Ltd. v. Krishi Utpadan Mandi Parishad, (2025 SCC OnLine SC 2323), dated October 31, 2025, examined the rejection of a technical bid on the ground that the “haisiyat praman patra” (solvency certificate) submitted by the appellant, Kimberley Club Pvt. Ltd, had not been issued by the District Magistrate. The tender, which related to the lease of a banquet hall/terrace lawn for ten years, required bidders under Clause 18 of the Notice Inviting Tender (NIT) to submit a “haisiyat praman patra” of at least ₹10 crores along with the technical bid. The appellant furnished a certificate issued by an experienced valuer registered with the Income Tax Department, but its bid was rejected by the Mandi Parishad for the sole reason that the certificate was not issued by a District Magistrate. The High Court of Allahabad upheld this rejection.

The Hon’ble Supreme Court held that neither Clause 18 nor any other term of the NIT required the “haisiyat praman patra” to be issued only by a District Magistrate. It reiterated that the terms of an NIT must be clear and unambiguous, and if the tendering authority intended to insist on a solvency certificate issued exclusively by the District Magistrate in accordance with the Uttar Pradesh Government notification dated October 29, 2018, it ought to have expressly included such a requirement in the NIT. Having failed to stipulate this condition, the Mandi Parishad could not reject the appellant’s technical bid for non-compliance with a requirement that did not form part of the tender conditions.

 Additionally, the Court also noted that the Mandi Parishad had raised for the first time in its counter affidavit the contention that the valuation certificate did not disclose whether the asset was free from encumbrances. The Court held that this was a new ground not forming part of the original rejection, and in terms of Mohinder Singh Gill v. Chief Election Commissioner, [(1978) 1 SCC 405], dated December 2, 1977, such a belated justification could not be relied upon to sustain the rejection of the bid.

The Court further noted that the valuation certificate on record showed that the appellant’s share in the asset far exceeded the minimum financial requirement of ₹10 crores prescribed under Clause 18, and that if the Mandi Parishad had any doubt regarding encumbrances, it ought to have sought clarification rather than reject the bid outright. Holding that the rejection was dehors the terms of the NIT, the Supreme Court set aside the High Court’s judgment and remanded the matter to the Mandi Parishad to reconsider the appellant’s technical bid in accordance with Clause 18. The authority was directed to assess whether the net worth disclosed in the certificate meets the requirement and, if so, to accept the technical bid and decide, after negotiations between the appellant and the successful bidder, whether the remainder of the contract should be awarded to the appellant or allowed to continue with the successful bidder if it matches the higher bid.

In conclusion, the judgment reaffirms that rejection of a bid must strictly conform to the terms of the NIT, and a tendering authority cannot impose unstated conditions or subsequently justify rejection on grounds not originally recorded.