Delhi High Court sets aside disqualification of Sapphire Media's Tender Bid, directs NBCC to reconsider

A Division Bench of the Delhi High Court comprising Justice Anil Kshetarpal and Justice Amit Mahajan, vide judgment dated May 11, 2026, allowed a writ petition filed by M/s Sapphire Media Limited, setting aside the disqualification of its Technical Bid in a tender floated by NBCC Services Limited for interior and fit out works at the India International Arbitration Centre (IIAC), World Trade Centre, Nauroji Nagar, New Delhi.

On March 14, 2026, NBCC Services Limited (Respondent No. 1) issued Tender No. NSL/CEO/IIAC/NIT/2026/845 for interior and fit out works at the IIAC. The estimated cost of the project was Rs. 31,64,86,727. The Notice Inviting Tender (NIT) required bidders to submit a self-certified Bank Solvency Certificate from a Nationalised or Scheduled Bank for an amount of at least 40% of the estimated project cost, issued within six months from the original last date of tender submission (March 23, 2026).

Sapphire Media submitted its bid on March 22, 2026 along with two solvency certificates, one from Axis Bank dated August 30, 2025, and another from Kotak Mahindra Bank dated March 12, 2025, both certifying solvency for amounts exceeding the minimum requirement of 40% of the estimated project cost under the NIT.

On March 24, 2026, NBCC raised technical objections, noting that the submitted certificates were beyond the six month period from the date of submission of the Tender and were issued in the name of different entities (NBCC India Limited and Maha Mumbai Metro Operation Limited). The Petitioner was directed to submit revised certificates by March 25, 2026.

In response, Sapphire Media submitted two revised certificates, one from Kotak Mahindra Bank (Rs. 35 crores) dated March 23, 2026 and another from Punjab National Bank (PNB) (Rs. 15 crores) dated February 11, 2026. Both individually exceeded the 40% threshold. Despite this, on March 28, 2026, NBCC rejected the Petitioner's Technical Bid for "not meeting the eligibility criterion," without assigning any specific reasons.

Subsequently, the tender was awarded to Respondent No. 2 (M/s Studio XP Management Consultants Pvt. Ltd.). Notably, the Petitioner's financial bid was substantially lower than that of Respondent No. 2. Sapphire Media was prompt in approaching the Court by way of a writ petition before the financial bids were even opened.

The Court prefaced its analysis by reiterating the well settled principles governing judicial review in tender matters as laid down in State of Punjab v. Mehar Din (2022) 5 SCC 648 and Tata Cellular v. Union of India (1994) 6 SCC 651, namely that courts do not sit in appeal over tender decisions and that interference is warranted only where there is illegality, irrationality, arbitrariness, or mala fide.

On the Kotak Mahindra Bank certificate, the Court held that Clause 2(B)(iii) of the NIT was vague and did not unequivocally mandate that the underlying financial data must also pertain to the six month period preceding the tender deadline. Solvency certificates, the Court noted, are typically based on audited balance sheets. Neither the NIT nor the clarification communication dated March 24, 2026, itself held to be vague, specified that the revised certificate must evidence solvency for the period September 23, 2025 to March 23, 2026. NBCC's insistence on base data from that window constituted an impermissible post facto addition to the tender terms.

The Court also noted a telling inconsistency: the original Kotak Mahindra Bank certificate submitted with the initial tender was itself based on tangible net worth as on March 31, 2024. Had the NIT truly required financial data from the six month window, NBCC could have flagged this at the outset. Its failure to do so, and its subsequent reliance on that very ground to reject the revised certificate, exposed the arbitrariness of its position.

On the PNB certificate, the Court squarely disagreed with NBCC's position. Having itself invited the Petitioner to submit a revised solvency certificate, NBCC could not then reject a document that admittedly met all NIT criteria, merely on the ground that it was a fresh document. The Court held that such hyper-technical objections defeat the very objective of a tender process, which is to encourage maximum participation on fair terms.

The Court further noted the disparity in treatment: the solvency certificate submitted by the successful bidder (Respondent No. 2), which referenced financial data spanning "the last thirteen years as per bank record," also appeared to fall short of strict compliance with Form E requirements, yet was accepted without demur.

Drawing on Shanti Construction (supra) and MDC Pharmaceuticals Ltd. v. Union of India (2022 SCC OnLine Del 488), the Court reiterated that excluding bidders on myopic or hyper-technical grounds is antithetical to the foundational objective of maximising public value through competitive tendering.

The significance of this judgment lies not merely in the outcome but in the principle it reinforces: procedural requirements in tender documents must be interpreted in light of their purpose, not weaponised to achieve exclusion. Two aspects of the Court's reasoning deserve particular attention. First, the finding that Clause 2(B)(iii) was vague is analytically important. Where a tender clause is ambiguous, a procuring authority cannot selectively adopt the stricter interpretation after bids have been received, especially while applying a more lenient standard to the rival bidder. The asymmetry in how NBCC treated the Petitioner's certificates versus those of Respondent No. 2 was a significant, if implicit, factor in the Court's conclusion. Second, the Court's treatment of the PNB certificate identifies a trap that procuring authorities must avoid: inviting clarification and then penalising the bidder for the form of the response, when the substance of that response meets all stated requirements, is conduct that cannot shelter behind the doctrine of executive discretion. Taken together, the judgment sends a clear message to evaluating authorities that the power to set and enforce eligibility conditions, while broad, is not a licence for post hoc standard-setting that serves to reduce competition rather than protect the integrity of the process.

The Court set aside the disqualification of Sapphire Media's Technical Bid communicated vide email dated March 28, 2026, and directed NBCC Services Limited to consider the Petitioner's bid in accordance with the NIT conditions and thereafter take an appropriate decision on awarding the tender to the best-suited bidder. The petition was disposed of accordingly.

About the author: Varun Singh is a Founder and Managing Partner at Foresight Law Offices India.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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