Telangana High Court Questions Railways Over Tender Rejection, Highlights Risk to Public Funds
Hyderabad: The Telangana High Court has sharply criticised the practice of disqualifying tender bids on minor technicalities, cautioning that such rigid adherence to procedural norms could lead to significant financial losses for the public exchequer.
The observation came during the hearing of a petition filed by ASG Supreme Laundry Services, which had challenged the rejection of its bid for a ₹435 crore contract related to laundry services for the Indian Railways. The bid was rejected on the grounds that the Memorandum of Association (MoA) and Articles of Association (AoA) of its joint venture partner, Supreme Laundry Service, were not uploaded with the bid documents.
Justice NV Shravan Kumar, presiding over the case, expressed concern that the South Central Railway disqualified the petitioner without even opening its financial bid. He remarked that such actions could result in awarding the contract to a higher bidder, potentially placing an unnecessary financial burden on public funds.
Senior advocate Venkatesh, appearing for ASG Supreme Laundry Services, contended that the company had met the essential conditions of the tender and that the omission was minor. He argued that the rejection was unjust, especially considering the scale of the project and its implications for public money.
Countering the arguments, Additional Solicitor General B. Narasimha Sharma, representing the Railways, maintained that the rules of the tender process were clearly laid out and that the failure to upload mandatory documents by the stipulated deadline of July 26 was a valid reason for rejection. He stressed that allowing post-deadline submissions would undermine the integrity of the tendering system.
However, Justice Kumar questioned the necessity of such inflexible adherence to procedure in cases where large public contracts are involved. He suggested that a broader view must be taken to ensure public interest is protected.
The court has directed the railway authorities to file a counter-affidavit and adjourned the matter for further hearing.
