Supreme Court Quashes Rejection For Non‑DM Solvency Certificate, Remands Tender For Reconsideration

A bench of Justices Surya Kant and Joymalya Bagchi heard an appeal by Kimberley Club Pvt. Ltd. challenging an Allahabad High Court order that had upheld the Krishi Utpadan Mandi Parishad’s decision to reject the appellant’s technical bid for a banquet‑hall lease. The dispute arose from a two‑stage tender where Clause 18 of the notice required submission of a “haisiyat praman patra” of at least ₹10 crore with the technical bid; the appellant’s certificate was issued by a private valuer empanelled with the Income Tax Department, while the authority treated a District Magistrate’s certificate as the only acceptable form.

The Court set aside the High Court’s decision and remanded the matter to the Mandi Parishad for fresh consideration, holding that the tender conditions did not expressly limit the source of the solvency certificate to the District Magistrate and that the tendering authority could not sustain rejection on a ground not disclosed in the rejection order. The Court emphasised that the terms of an NIT must be “clear and unambiguous” and that judicial review of tender decisions was confined to cases where the decision was dehors the NIT or patently arbitrary. The Court, in its reasoning, observed: Background The dispute arose from a tender floated by the Krishi Utpadan Mandi Parishad to lease a banquet hall/terrace lawn for ten years through a two‑stage bidding process (technical then financial). Clause 18 required a “haisiyat praman patra” of minimum ₹10 crore. Kimberley Club submitted a technical bid supported by a valuation certificate from a professional valuer empanelled with the Income Tax Department; the Parishad disqualified the bid on the ground that the certificate had not been issued by the District Magistrate. The appellant argued that the NIT did not mandate a District Magistrate‑issued certificate, that its valuer assessed the asset at around ₹99 crore of which the appellant held 76.09%, and that the certificate met Clause 18. The Parishad relied on a Uttar Pradesh government notification prescribing DM issuance of such certificates, and argued other bidders had submitted District Magistrate certificates. The Allahabad High Court dismissed the writ petition, holding that a private architect’s valuation could not be treated as a “haisiyat praman patra”.

This Court observed that neither Clause 18 nor any other condition in the NIT explicitly required a District Magistrate’s certificate, and that if the Parishad intended such a limitation it should have specified it in the tender. The Court noted the settled principles on judicial review of tender decisions (citing Tata Cellular and other precedents) and declined to permit the Parishad to rely on a new ground raised for the first time in its counter‑affidavit. The Court set aside the High Court order, remanded the matter to the Parishad to re‑evaluate the appellant’s technical bid and, if satisfied that the net worth (free of encumbrances) met Clause 18, to accept the technical bid and negotiate with the successful bidder; if the successful bidder matched an enhanced offer by the appellant, the successful bidder could continue for the remaining period. The Supreme Court disposed of the appeal with these directions; an interim direction issued on 17.12.2021 had stayed further work under the tender subject to final orders.

Case Details: Case No.: CIVIL APPEAL NO.____________/2025 (@ SLP (C) No. 20557/2021) Case Title: KIMBERLEY CLUB PVT. LTD. v. KRISHI UTPADAN MANDI PARISHAD & ORS. Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]