E-Paid Bid Security Cannot Be Rejected for Absence of a Physical Original: Supreme Court Clarifies Tender Interpretation

Case Overview

Case Name: Hardev Construction Private Limited Vs Union of India & Ors. (Supreme Court of India)
Appeal Number: Civil Appeal No.___ of 2026 (Arising Out of SLP (C) No. 25855 of 2026)
Date of Order: 12/10/2026
Court: Supreme Court of India

Background: The Tender, the Payment, and the Rejection

Hardev Construction Private Limited submitted a bid in response to a tender floated by the Railways for the Engineering Procurement and Construction (EPC) of guide bunds, launching aprons, and associated river protection works in connection with the Bikramshila-Katareah New Line Rail Link Project (Bid/Package No. ECR-CAO-C-S-EPC-05-25-26 dated 06.01.2026).

The tender document permitted bid security to be furnished through multiple modes, including a bank guarantee, account-payee demand draft, fixed deposit receipt, banker's cheque, or the authority's e-payment gateway. The assessee opted for the electronic payment route, remitting the bid security directly into the Railways' account and uploading a scanned copy of the digital payment receipt on the e-procurement portal alongside its bid.

Despite the security amount having been received in the Railways' account, the bid was rejected on the ground that the appellant had not submitted a physical original of the bid security document, as mandated under Clause 2.20.6(ii) of the Request for Proposal (RFP). The Division Bench of the Patna High Court upheld this rejection, leading the appellant to file a Special Leave Petition before the Supreme Court.

Arguments Raised Before the Supreme Court

Appellant's Position

The assessee's counsel contended that the requirement to produce an "original" document could not logically or practically apply to an electronic payment transaction. Once the money was credited to the Railways' account and the digital receipt was uploaded with the bid, there was no further physical instrument that could or needed to be handed over. The very nature of e-payment rendered the demand for a physical original an impossibility.

The appellant also sought to highlight that its financial bid was substantially lower than the successful tenderer's bid, implying a potential loss to the public exchequer.

Respondent Railways' Position

The Railways maintained that Clause 2.20.6(ii) of the RFP explicitly required the physical submission of the original bid security document, and that the appellant's failure to comply with this express condition justified the rejection. No deviation from this stipulation could be permitted.

Position of the Successful Tenderer (Third Respondent)

The third respondent relied upon the Supreme Court's earlier decision in Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises and Others, (2026) 4 SCC 310, arguing that tendering authorities are best placed to interpret their own tender documents, and constitutional courts should generally defer to such interpretation. It was contended that there was no room for relaxation regarding the submission of original documents.

On the financial bid comparison argument, the Railways correctly pointed out that since the appellant's bid had been rejected at the technical evaluation stage itself, its financial bid was never opened, and therefore no comparative assessment was possible.

The Full Text of the Supreme Court's Judgment

Leave granted.

2. The appellant's bid for the project 'Engineering Procurement and Construction (EPC) of Construction of guide bunds, Launching Aprons and Associated River Protection Works etc. in connection with Bikramshila-Katareah New Line Rail Link Project on EPC Mode"—Bid/Package No. ECR-CAO-C-S-EPC-05-25-26 dated 06.01.2026' was rejected for reason of non-submission of original of the Bid Security furnished; stipulated vide Clause 2.20.6 (ii) of the Request For Proposal (RFP), as indicated in the e-portal of the respondent, a copy of which is produced at Annexure P3. The Division Bench of the Patna High Court affirmed the rejection, which is impugned in the instant appeal.

3. We heard Sri A. K. De, learned Counsel for the appellant, Sri Kanakamedala Ravindra Kumar, learned A.S.G. for the respondent-Ministry of Railways and Ms. Nina R. Nariman, learned Counsel for the 3rd respondent, who was the successful tenderer.

4. Learned Counsel for the appellant points out that the rejection was only on the ground that the appellant had not submitted the original of the Bid Security furnished, which in the case of the appellant was submitted through the e-payment Gateway of Authority. The Bid Security was remitted to the account of the respondent through e-payment, the receipt of which in the digital form was scanned and uploaded along with the bid.