Supreme Court Revives Railway Tender Bid Rejected for Missing Original E-Payment Receipt
The Supreme Court has set aside the rejection of a construction company's bid for a railway river protection project, holding that the bid could not be thrown out for failing to hand over the original of a bid security that had been paid online. Demanding an original for an e-payment, the Court said, was demanding an impossibility, and the rejection was perverse.
A Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran reversed a Division Bench of the Patna High Court, which had upheld the Railways' decision. The Court directed the contract to be awarded to the appellant and, since the bid security had been refunded after the rejection, laid down a timeline for it to be paid again, after which the appellant's financial bid is to be opened, considered along with the other bids, and the tender finalised under the remaining tender conditions.
The ruling turns on a question every bidder in a digital tender has faced: when the rules were written for paper instruments, what does an original mean for money that has already landed in the authority's account?
Case at a Glance
Case Title: Hardev Construction Private Limited v. Union of India and Ors.
Citation: 2026 INSC 1110 (Non-Reportable)
Case No.: Civil Appeal No. ___ of 2026, arising out of SLP (C) No. 25855 of 2026
Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran (author)
What Was Challenged: Patna High Court Division Bench order upholding the rejection of the appellant's technical bid under Clause 2.20.6(ii) of the Request for Proposal
Tender: EPC work for guide bunds, launching aprons and river protection works for the Bikramshila-Katareah New Line Rail Link Project, Package No. ECR-CAO-C-S-EPC-05-25-26 dated 06.01.2026
Date of Judgment: 12 October 2026
Outcome: Appeal allowed; rejection set aside; bid security to be resubmitted and the appellant's financial bid to be opened and considered
Background: A Bid Lost Over a Receipt
The appellant, Hardev Construction Private Limited, bid for an Engineering, Procurement and Construction contract tendered by the Railways in connection with the Bikramshila-Katareah New Line Rail Link Project. Its bid was rejected at the technical stage on a single ground: it had not physically handed over the original of its bid security as required by Clause 2.20.6(ii) of the Request for Proposal.
The appellant had paid its bid security through the authority's own e-payment gateway. The money went straight into the respondents' account, and the digital payment receipt was scanned and uploaded along with the bid. The Patna High Court, in a Division Bench ruling, upheld the rejection. The appellant then approached the Supreme Court.
What the Tender Clause Required
Clause 2.20.6 of the Request for Proposal allowed bid security to be furnished in any of five forms:
Bank Guarantee
Account Payee Demand Draft
Fixed Deposit Receipt
Banker's Cheque
e-payment Gateway of Authority
Clause 1 required a scanned copy of the bid security to be uploaded on the e-procurement portal at the time of applying. Clause (ii) then required the instrument in which the bid security was furnished to be delivered in person, physically, to a nominated official. It was this second requirement that the appellant was found to have breached.
What the Parties Argued
Hardev Construction: There Is No Original of an Online Payment
Counsel for the appellant argued that once payment was made through the e-payment gateway, the money was already with the respondents and the digital receipt had been uploaded, so there was nothing left to produce. The appellant also contended that its financial bid was far lower than that of the successful bidder and that its exclusion caused loss to the public exchequer.
Ministry of Railways and the Successful Bidder: The Clause Is Mandatory
The Additional Solicitor General, appearing for the Ministry of Railways, argued that Clause 2.20.6(ii) specifically required the original to be submitted, so the rejection was proper. He also pointed out that the financial bids could not be compared at all, because the appellant was knocked out at the technical stage and its financial bid was never opened.
The successful bidder, the 3rd respondent, relied on Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises, (2026) 4 SCC 310, to argue that the tendering authority is best placed to interpret its own tender documents, that constitutional courts should defer to that interpretation, and that there was no elbow room on producing original documents.
Why the Supreme Court Called the Rejection Perverse
The Court agreed with the appellant. It explained the purpose of the physical delivery requirement: a bank guarantee, demand draft, fixed deposit receipt or banker's cheque cannot be enforced, and no lien can be exercised on it, unless the original physically reaches the authority. That is why bidders upload a scanned copy first and hand over the original later.
An e-payment is different. The money has already been transferred to the authority's account, and the authority has full control over it. Nothing further could be produced, particularly when the digital receipt had already been uploaded with the bid.
Rigid adherence to the letter of a document cannot be countenanced, especially when there is a clear impossibility in compliance of the same.
Prakash Asphaltings Distinguished
The Court explained that Prakash Asphaltings involved a toll collection tender where one bidder quoted about Rs. 9.73 lakh, while others quoted in crores, and later claimed it had mistakenly quoted a single day's collection instead of the total for 1,095 days. In that context, the Court had held that the words of a tender cannot be treated as redundant and that such an error could not be explained away.
Importantly, the same decision, while asking constitutional courts to defer to the authority's reading of tender documents, carved out an exception where that reading is mala fide or perverse. The Court held that this case fell squarely within that exception: rejecting a valid e-payment only because no original was produced amounted to clear perversity.
The Directions Issued
The Court set aside the Patna High Court's order and directed the contract to be awarded to the appellant. Since the appellant's bid security had been refunded after its bid was rejected, the Court laid down the following steps:
Respondent Nos. 1 and 2 must facilitate an e-payment of the bid security within two weeks.
If there is any technical difficulty, the appellant must furnish the amount in any other permitted form within a further two weeks.
On submission of the bid security, the appellant's financial bid shall be opened and considered along with the other bids.
The tender shall then be finalised in accordance with the other tender conditions.
What It Means Going Forward
Digital Tenders Need Digital Common Sense
Many tender documents still carry clauses written for paper instruments while offering online payment options. This ruling makes clear that authorities cannot apply a physical original requirement mechanically to a payment that exists only in digital form. The deference that courts normally show to tendering authorities ends where their reading of a clause becomes perverse or demands the impossible.
For Bidders
Keep the digital payment receipt, upload it with the bid, and record the transaction details. If a bid is rejected on a purely formal ground that cannot logically apply to the payment mode chosen, challenge it promptly, as this ruling gives strong support.
For Tendering Authorities
Review bid security clauses so that physical delivery requirements apply only to paper instruments such as bank guarantees, demand drafts, fixed deposit receipts and banker's cheques, and state expressly how e-payments will be verified.
For Writ Courts Reviewing Tender Decisions
Deference to the authority's interpretation of its own tender is the rule, but Prakash Asphaltings itself preserves an exception for mala fide or perverse readings. An interpretation that requires compliance with an impossibility falls within that exception.
Note: This is a Non-Reportable judgment decided on its specific facts, but its reasoning on e-payments and the impossibility of compliance is likely to be cited widely in tender disputes.
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Frequently Asked Questions
What did the Supreme Court hold in Hardev Construction v. Union of India (2026 INSC 1110)?
The Supreme Court held that the Railways could not reject a bid for not physically submitting the original bid security when the security had been paid through the authority's e-payment gateway and the digital receipt uploaded. It called the rejection perverse, set aside the Patna High Court's order, and directed the appellant's financial bid to be opened after the bid security is resubmitted.
Can a tender bid be rejected for not submitting an original e-payment receipt?
According to this ruling, no. Where bid security is paid online into the authority's account and the digital receipt is uploaded, insisting on an original is an impossibility, and rejecting the bid on that ground is perverse.
Why do tenders require the original bid security to be submitted physically?
For instruments like bank guarantees, demand drafts, fixed deposit receipts and banker's cheques, the authority cannot enforce the security or exercise a lien on it unless it holds the original. That reason does not apply to e-payments, where the money is already in the authority's account.
Do courts always defer to the tendering authority's interpretation of tender conditions?
Courts generally defer to the authority's understanding of its own tender documents, as held in Prakash Asphaltings v. Mandeepa Enterprises. But that deference does not extend to interpretations that are mala fide or perverse.
What happens next for Hardev Construction after the Supreme Court ruling?
The appellant must resubmit the bid security by e-payment within two weeks, or in another form within a further two weeks if there is a technical difficulty. Its financial bid will then be opened, considered with the other bids, and the tender finalised under the remaining tender conditions.
Keywords
Hardev Construction v Union of India, 2026 INSC 1110, bid security e-payment tender, original bid security tender rejection, railway tender Supreme Court, Bikramshila-Katareah rail link tender, Prakash Asphaltings v Mandeepa Enterprises, perversity in tender decisions, judicial review of tenders, Patna High Court tender
Read the Full Judgment
Case Title: Hardev Construction Private Limited v. Union of India and Ors.
Case No.: Civil Appeal No. ___ of 2026 (Arising out of SLP (C) No. 25855 of 2026)
Citation: 2026 INSC 1110
Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran
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