Case Note & Summary
The dispute arose from a tender process initiated by the Diesel Locomotive Works, Indian Railways, for the disposal of Ferrous scrap. The appellant submitted a tender with a cheque from the Union Bank of India, while the tender notice required earnest money to be deposited via cash or a demand draft from the State Bank of India. The appellant's tender was accepted as the highest bid, leading to a challenge from respondent no. 1, whose tender was rejected for not depositing earnest money. The High Court ruled that the appellant's tender was invalid due to non-compliance with the payment condition. The appellant contended that the cheque was certified and verified, thus substantially complying with the requirement. The Supreme Court analyzed the nature of tender conditions, distinguishing between essential and ancillary requirements. It concluded that the Diesel Locomotive Works had the authority to waive the technical non-compliance, especially since the Tender Committee had verified the cheque's authenticity. The court set aside the High Court's judgment, allowing the appeal and dismissing the writ petition filed by respondent no. 1, thereby affirming the acceptance of the appellant's tender.
Headnote
A) Tender Law - Compliance with Tender Conditions - Waiver of Technical Irregularities - Constitution of India, Articles 226 and 136 - The court held that an authority inviting tenders is not bound to enforce every term in meticulous detail and may waive minor technical irregularities. The appellant's tender was accepted despite the cheque being from a different bank, as the Tender Committee verified its authenticity, thus allowing for a waiver of strict compliance (Paras 1-8).
Issue of Consideration
Whether the acceptance of the appellant's tender was valid despite the payment being made via a cheque from a bank other than the one specified in the tender notice.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's judgment, and dismissed the writ petition filed by the respondent, affirming the acceptance of the appellant's tender.
Law Points
- Tender conditions
- waiver of technical irregularities
- compliance with tender requirements
