Supreme Court Holds Tender Authority Unfairly Disqualified Bid for Non‑production of JV Agreement, Remands Spare‑Capacity Issue

A bench of Justices Surya Kant and Joymalya Bagchi heard an appeal by Maha Mineral Mining & Benefication Pvt. Ltd. against a Division Bench of the Madhya Pradesh High Court upholding disqualification of the bidder from a tender called by the Madhya Pradesh Power Generating Company Ltd. (MPPGCL). The challenge arose from the rejection of the appellant’s technical bid for run‑of‑mine coal beneficiation and logistics on the ground that it had not produced a joint venture (JV) agreement to demonstrate its proportionate share in a previous consortium relied upon to meet past‑experience requirements.

The Court set aside the High Court’s conclusion that non‑production of the JV agreement alone justified disqualification under Clause 5(D) of the NIT, and remanded a separate, subsequently raised contention on spare washery capacity under Clause 5(B) for fresh consideration. The Court found that Clause 5(D) did not itself mandate the JV agreement as the exclusive proof of proportionate share where a work‑execution certificate plainly recorded the bidder’s share and performance. The Court, in its reasoning, observed: The Court also noted that the tendering authority “reserved the right to seek such additional information as it may deem fit to satisfy itself of the eligibility of the bidder” and could have sought clarification under Clause 8.8.

Background The dispute arose from a NIT dated 17.05.2024 by MPPGCL for beneficiation and dispatch of coal sourced from Western Coalfields Ltd. Three bidders participated; one failed to furnish earnest money, leaving the appellant and a rival, Rukhmai Infrastructure Pvt. Ltd. The Tender Evaluation Committee rejected the appellant’s technical bid on 04.07.2024 relying on Clause 5(D), recording that the bidder “is disqualified due to non‑submission of credentials as per Clause No. (5)D of the NIT.” The appellant had submitted a work‑execution certificate from Maharashtra State Mining Corporation (MSMC) stating that it was a 45% consortium partner of M/s Hind Maha Mineral LLP and had executed similar washery work, including quantities and contract value, and that the JV agreement had been submitted to MSMC.

The appellant challenged the rejection in the High Court. The High Court affirmed the decision, concluding that the appellant had failed to file the JV agreement at the time of bidding and that Clause 8.1 and a government circular dated 29.11.2023 barred post‑bid submission of missing documents. The High Court further held, on the basis of written submissions by the rival bidder, that even if the JV agreement had been produced the appellant would be disqualified under Clause 5(B) because its washeries were committed to MSMC in terms of clauses of the JV agreement.

On appeal, the Supreme Court analysed Clause 5(D) and the documents tendered. It held that Clause 5(D) permitted a bidder to use past experience of a previous consortium “proportionate to its share in that consortium if defined in the Consortium Agreement, otherwise, lead partner,” but did not expressly make the JV agreement the sole permissible proof. The MSMC work‑execution certificate, which stated the appellant’s 45% share and detailed quantities, satisfied the past‑experience requirement on its face. The Court found that MPPGCL could, and should, have sought clarificatory information under its contractual discretion (Clause 8.8) instead of treating non‑submission of the JV agreement as an automatic ground for rejection. The Court rejected allegations of mala fides and concealment by the appellant because the proportionate share remained consistent across documents.

However, the Court held that the High Court erred in deciding the Clause 5(B) spare‑capacity issue without affording the appellant an opportunity to meet the newly raised contention; that question was “contentious” and had not been considered by the Committee. The Supreme Court remanded the matter for fresh consideration of whether the appellant possessed the requisite spare washery capacity and directed the High Court to decide the remanded issue expeditiously, preferably within two months from communication of the order. The appeal was accordingly partly allowed and the impugned judgment was set aside to the extent indicated.

Case Details: Case No.: 2025 INSC 1085 Case Title: Maha Mineral Mining & Benefication Pvt. Ltd. v. Madhya Pradesh Power Generating Co. Ltd. & Anr. Appearances: For the Petitioner(s): Mr. Narender Hooda, Senior Counsel For the Respondent(s): Mr. Bijender Chahar, Senior Counsel (for MPPGCL); Mr. Shyam Divan, Senior Counsel and Mr. Balbir Singh, Senior Counsel (for Rukhmai Infrastructure Pvt. Ltd.)