The Delhi High Court has annulled the disqualification of Sapphire Media Limited’s tender bid and instructed NBCC Services Limited to reevaluate the bid. This decision was delivered by a Division Bench comprising Justice Anil Kshetarpal and Justice Amit Mahajan on May 11, 2026.
Background of the Case
NBCC Services Limited issued a tender in March 2026, designated as Tender No. NSL/CEO/IIAC/NIT/2026/845, for interior and fit-out works at the India International Arbitration Centre, World Trade Centre, Nauroji Nagar, New Delhi. The project carried an estimated cost of Rs. 31,64,86,727. According to the Notice Inviting Tender (NIT), bidders were required to provide a self-certified Bank Solvency Certificate from a recognized bank, covering at least 40% of the estimated project cost, issued within six months from the original tender submission deadline of March 23, 2026.
Sapphire Media submitted its bid on March 22, 2026, alongside two solvency certificates from Axis Bank and Kotak Mahindra Bank, dated August 30, 2025, and March 12, 2025, respectively. Both certificates certified solvency exceeding the required 40% of the project cost as per the NIT.
Concerns were raised by NBCC on March 24, 2026, regarding the certificates’ validity, as they were outdated and issued in names of different entities. The petitioner was asked to submit updated certificates by March 25, 2026. Sapphire Media complied by submitting revised certificates from Kotak Mahindra Bank and Punjab National Bank, dated March 23, 2026, and February 11, 2026, respectively, which individually exceeded the 40% solvency requirement.
Nevertheless, NBCC rejected Sapphire Media’s technical bid on March 28, 2026, citing non-compliance with eligibility criteria without providing detailed reasons. The contract was subsequently awarded to M/s Studio XP Management Consultants Pvt. Ltd., though Sapphire Media’s financial bid was notably lower.
Court’s Analysis and Judgment
In its analysis, the Court referenced established legal principles for judicial review in tender cases, as outlined in State of Punjab v. Mehar Din (2022) and Tata Cellular v. Union of India (1994), emphasizing that courts should intervene only in cases of illegality, irrationality, arbitrariness, or mala fide actions.
The Court found Clause 2(B)(iii) of the NIT to be ambiguous, as it did not explicitly require financial data within the six-month period preceding the tender deadline. The Court observed that solvency certificates rely on audited balance sheets, and neither the NIT nor NBCC’s subsequent communications clarified the requirement for revised certificates to reflect data from September 23, 2025, to March 23, 2026. The Court deemed NBCC’s post facto insistence on such data as an impermissible alteration of tender conditions.
NBCC’s rejection of the Kotak Mahindra Bank certificate was found to be arbitrary since the original certificate submitted was based on data from March 31, 2024, and was not challenged initially. The rejection of the Punjab National Bank certificate was also criticized, as it met all NIT criteria and was unfairly dismissed as a fresh document.
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The Court highlighted inconsistencies in NBCC’s evaluations, noting that the successful bidder’s solvency certificate did not fully comply with Form E requirements, yet was accepted without objection.
Significance and Implications
This ruling underscores the importance of interpreting procedural requirements in tender documents according to their intent, avoiding exclusionary tactics. The judgment emphasizes that tender authorities must not impose stricter interpretations post-bid submission and should maintain fairness and transparency in evaluations.
The Court’s decision annulled the disqualification communicated via email on March 28, 2026, and directed NBCC Services Limited to reassess Sapphire Media’s bid in line with the NIT conditions, ultimately deciding on awarding the tender to the most suitable bidder.
Varun Singh, the author of this analysis, is the Founder and Managing Partner at Foresight Law Offices India.
Disclaimer: The views expressed in this article are solely those of the author and do not represent the views of Bar & Bench.
