Tender Bid Cannot Be Rejected For Missing Original Receipt After E-Payment Of Bid Security: Supreme Court

The Supreme Court has held that a bid cannot be rejected for failure to submit an “original” Bid Security receipt when the amount has already been transferred to the respondent’s account through e-payment and the digital receipt has been uploaded with the bid. It said tender conditions cannot be applied rigidly when compliance is impossible.

A Bench of Justices J B Pardiwala and K Vinod Chandran made the observation while setting aside the rejection of Hardev Construction Private Limited’s bid for a railway infrastructure project on the ground that it had not submitted the original Bid Security, despite having made the payment electronically.

The Bench said, "Rigid adherence to the letter of a tender document cannot be countenanced when compliance is clearly impossible, particularly where the digital payment in question has already been transferred to the respondent’s account.

Court held that requiring an original receipt for an e-payment, when the payment itself was already in the respondent’s possession, was an impossibility and amounted to perversity.

Hardev Construction Private Limited filed an appeal against the rejection of its bid for the project concerning the construction of guide bunds, launching aprons and associated river protection works for the Bikramshila-Katareah New Line Rail Link Project.

The bid, submitted under Bid/Package No. ECR-CAO-CS-EPC-05-25-26 dated January 6, 2026, was rejected on the ground that the appellant had failed to submit the original of the Bid Security, as required under Clause 2.20.6(ii) of the Request for Proposal (RFP).

The division bench of the Patna High Court upheld the rejection, following which the company approached the Supreme Court.

Counsel for Hardev Construction submitted that the rejection was solely on the ground that the original Bid Security had not been submitted. In the appellant’s case, however, the Bid Security had been furnished through the e-payment gateway of the authority. The amount had been remitted directly to the respondent’s account, while the digital payment receipt was scanned and uploaded along with the bid.

The Ministry of Railways, on the other hand, relied on Clause 2.20.6(ii), which specifically required submission of the original, and argued that the rejection was therefore justified.

The Supreme Court disagreed.

“We are perfectly in agreement with the contention of the appellant, especially looking at the various forms in which the Bid Security can be furnished; a Bank Guarantee/Account Payee Demand Draft/Fixed Deposit Receipt/Banker’s Cheque, unless physically furnished to the respondent, there can be no lien exercised on the Bid Security,” Court said.

Court noted that the tender condition contemplated that, where the Bid Security was furnished in such physical forms, a scanned copy would first be uploaded with the bid and the original would subsequently be handed over to the nominated official.

However, the position was different where the Bid Security had been furnished through e-payment.

“Insofar as the appellant was concerned, the money was deposited to the account of the respondents and there was nothing further required to be produced insofar as the e-payment made, especially when the digital payment receipt had been uploaded along with the bid document,” Court observed.

The Bench held that rejecting the bid merely because the original receipt had not been produced was perverse, since there could be no physical “original” of an e-payment receipt that was already digitally available and, more importantly, the money itself had already reached the respondent.

“We are convinced that here, there is a clear perversity; insofar as an e-payment was made, as required by the tender document, the digital receipt of which was scanned and uploaded, rejected only since the original was not produced; which is an impossibility. Rigid adherence to the letter of a document cannot be countenanced, especially when there is a clear impossibility in compliance of the same,” the Bench said.

Court further pointed out that when Bid Security is furnished through other modes, it cannot be enforced unless the original instrument comes into the hands of the respondents. In the case of e-payment, however, the money had already been transferred to their account and was under their full control.

The Supreme Court accordingly set aside the impugned order and directed that the contract be awarded to the appellant, subject to compliance with the other tender conditions.

The appellant informed the Court that, following rejection of its bid, the amount deposited through the e-portal had been refunded.

In these circumstances, Court directed the respondents to facilitate e-payment of the Bid Security within two weeks. If there was any technical difficulty, the appellant would be required to submit the amount in any other permissible form within a further period of two weeks.

Once the Bid Security was submitted, the appellant’s financial bid would be opened and considered along with the other bids, and the tender would thereafter be finalised in accordance with the remaining tender conditions, Court clarified

Case Title: Hardev Construction Private Limited Vs Union of India & Ors

Bench: Justices J B Pardiwala and K Vinod Chandran

Date of Judgment: October 12, 2026