Caterer Challenges BPCL Government Canteen Tender Rejection Over Annual Contract Values; Bombay High Court Upholds Disqualification, Says Completed Contracts Must Meet Contract Eligibility Threshold
BPCL Rejects Caterer’s Bid After Averaging Multi-Year Contracts; Bombay High Court Dismisses Challenge, Holds Corrigendum Applies Only to Ongoing Contracts, Not Earlier Completed Work Orders
Facts
Bharat Petroleum Corporation Limited (BPCL) invited bids for a three-year contract to outsource canteen services at its Mumbai Refinery (GeM Bid GEM/2026/B/7565032; CRFQ 1000456762). M/s Vidya Caterers, a partnership firm providing institutional and industrial catering, bid as a Micro and Small Enterprise (MSE). Under Clause 1.2, an MSE relying on three work orders had to demonstrate an annualized basic value of at least ₹11.72 crore for each qualifying work. Other alternatives permitted one work of ₹17.58 crore or two works of ₹14.65 crore each.
Vidya Caterers relied on two completed contracts from Mangalore Refinery and Petrochemicals Limited (MRPL) and one from Bharat Earth Movers Limited (BEML). BPCL divided the total value of each completed multi-year contract by its duration: approximately ₹10.195 crore, ₹12.66 crore and ₹8.50 crore respectively. Only the second MRPL contract met the ₹11.72-crore threshold. BPCL rejected the technical bid and communicated its methodology on 24 August 2026.
The petitioner relied on Corrigendum No. 1 dated 8 June 2026, which permitted individual-year work completion certificates for multi-year contracts, and sought quashing of its disqualification, re-evaluation and consideration of its financial bid.
Issues
Whether BPCL lawfully annualized the value of completed multi-year contracts by dividing their total values by contractual tenure; whether the 8 June 2026 corrigendum required BPCL to consider a higher individual year’s executed value for completed contracts; and whether the rejection warranted interference under Article 226.
Petitioner’s Arguments
The petitioner argued that BPCL applied an undisclosed averaging formula absent from Clause 1.2 and contrary to the published corrigendum. It submitted that the corrigendum permitted individual-year work completion certificates for multi-year contracts without restricting that permission to ongoing contracts. Its illustration, selecting a higher annual executed value, could not narrow the operative clarification. The petitioner claimed it was not seeking relaxation of the threshold, but faithful application of the notified criteria, and that the rejection was arbitrary and changed the rules after bids were submitted.
Respondent’s Arguments
BPCL submitted that all three completed work orders had to independently meet the annualized threshold of ₹11.72 crore. The corrigendum arose from pre-bid queries concerning ongoing or running contracts and was intended to expand eligibility for bidders whose contracts were not yet completed, rather than alter the calculation for completed contracts. Of eight bids, five qualified and three were rejected; the lowest bidder (L-1) qualified on completed contracts with annualized values of ₹13.42 crore, ₹13.48 crore and ₹16.61 crore. BPCL relied on judicial deference to the tender-authoring authority’s reasonable interpretation.
Analysis of the Law
Under Article 226, review of government tender decisions is directed to the legality of the decision-making process, not a fresh technical assessment by the writ court. Tender conditions are ordinarily interpreted by the authority that framed them. Courts may intervene for mala fides, manifest arbitrariness, perversity, irrationality or illegality, but not merely because a competing construction is possible. Clause 1.2 required annualized experience thresholds; the Court distinguished completed contracts governed by that clause from ongoing contracts addressed by the corrigendum.
Precedent Analysis
The Court discussed Agmatel India Private Limited v. Resoursys Telecom (2022) 5 SCC 362, which restates restraint in judicial review of tender interpretation, and Galaxy Transport Agencies v. New J.K. Roadways (2021) 16 SCC 808. It also referred to Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. (2016) 16 SCC 818; Bharat Coking Coal Ltd. v. AMR Dev Prabha (2020) 16 SCC 759; Silppi Constructions Contractors v. Union of India (2020) 16 SCC 489; Jagdish Mandal v. State of Orissa (2007) 14 SCC 517; Montecarlo Ltd. v. NTPC Ltd. (2016) 15 SCC 272; and Michigan Rubber (India) Ltd. v. State of Karnataka. Collectively, these decisions establish that expert tender evaluations should not be substituted by judicial preferences absent legally significant arbitrariness or improper conduct.
Court’s Reasoning
The Division Bench accepted BPCL’s method for completed contracts. On the three work orders tendered by Vidya Caterers, only the second MRPL work order exceeded the annualized threshold. The Court read Corrigendum No. 1 in the context of the pre-bid clarification: its purpose was to admit qualifying evidence from ongoing multi-year work, not to displace the annualized computation applicable to completed work. It also noted that the L-1 bidder qualified on the same completed-contract basis and that the evaluation was transparently explained. No mala fides, manifest arbitrariness or illegality justifying judicial intervention was established.
Conclusion
The Bombay High Court dismissed the writ petition and discharged the Rule. It upheld the technical disqualification of Vidya Caterers, finding that two of its three completed contracts fell below the stipulated annualized MSE experience threshold. The judgment emphasizes deference to a reasonable tender-authority interpretation and confines the individual-year certificate clarification to ongoing contracts on the facts of this tender.
Case Details
Case: M/s Vidya Caterers v. Bharat Petroleum Corporation Ltd. & Ors.
Court: High Court of Judicature at Bombay, Ordinary Original Civil Jurisdiction
Case Number: Writ Petition (L) No. 29700 of 2026; 2026:BHC-OS:22146-DB
Judges: Chief Justice Mahesh Chandra Tripathi and Justice Advait M. Sethna
Reserved On: 30 September 2026
Date: 9 October 2026
Result: Writ petition dismissed; Rule discharged; technical disqualification upheld.
