Court’s Decision
The Delhi High Court dismissed a writ petition filed by an infrastructure company challenging Bharat Sanchar Nigam Limited’s (BSNL) rejection of its bid in the 2024 BharatNet tender worth nearly ₹65,000 crores. The petitioner had claimed experience as a consortium partner with Sterlite Technologies in a 2013 defence network project and argued that BSNL wrongly excluded its bid by misinterpreting eligibility. The Court rejected these claims, holding that the 2013 tender did not permit consortiums, that the petitioner was only an EPC partner of Sterlite, and that oral claims of consortium were legally impermissible. It further ruled that the petitioner’s failure to challenge the amended Note 8 of the 2024 tender—which barred reliance on teaming agreements and subcontracting—was fatal. The petition was dismissed with no order as to costs.
Facts
In 2013, BSNL floated a tender for optical fibre infrastructure for the Defence Network. Sterlite Technologies bid as an OFC manufacturer and engaged the petitioner as its EPC contractor under a Teaming Agreement. An Advance Purchase Order was issued to Sterlite as the sole bidder, designating the petitioner only as EPC partner.
In February 2024, BSNL issued Tender 2024 for the BharatNet middle-mile network project under the DBOM model. The petitioner, as part of a consortium led by Bharat Electrical Limited, bid for Package 13. However, on 30.05.2024, BSNL issued Amendment No. 23 to Note 8 of the tender conditions, clarifying that experience from teaming agreements, subcontracting, or EPC partnerships could not be counted—only consortium experience was valid.
Despite this, the petitioner submitted its bid on 06.08.2024, relying on its prior association with Sterlite. BSNL rejected the bid as non-responsive on 05.11.2024, and awarded Package 13 to Sterlite. The petitioner challenged the rejection, alleging BSNL’s interpretation was arbitrary and that it was wrongly excluded.
Issues
- Whether the petitioner was a consortium partner with Sterlite in the 2013 defence network tender.
- Whether the petitioner could rely on experience certificates from that project to qualify under Tender 2024.
- Whether Amendment No. 23 to Note 8 of Tender 2024 validly excluded teaming and EPC arrangements from eligibility.
- Whether BSNL acted arbitrarily in rejecting the petitioner’s bid.
Petitioner’s Arguments
The petitioner contended that it was effectively a consortium partner with Sterlite in the 2013 tender, pointing to a Teaming Agreement of 2014, an affidavit of joint liability, an Integrity Pact, purchase orders listing it as EPC partner, and an experience certificate issued by BSNL in 2024. It argued that these demonstrated a consortium in substance, if not in form.
It further submitted that the amendment to Note 8 of Tender 2024 did not affect its case since it was relying on consortium experience, not subcontracting. The rejection of its bid as non-responsive was therefore arbitrary.
Respondent’s Arguments
BSNL, represented by senior counsel, argued that the petitioner had not challenged the amendment to Note 8 and thus could not rely on prior EPC arrangements. It submitted that only consortium experience was admissible, and the petitioner was never a consortium partner with Sterlite.
Sterlite also denied any consortium, stating that it had bid independently as OFC manufacturer in 2013, furnished the EMD alone, and bore the contractual risks. The petitioner was only an EPC partner engaged to perform part of the work, and documents like the Teaming Agreement or Integrity Pact did not create a consortium.
Other respondents stressed that tendering authorities are best placed to interpret their own conditions, citing the Supreme Court’s ruling in Agmatel India Pvt. Ltd. v. Resoursys Telecom (2022) 5 SCC 362, and that courts should not intervene absent mala fides or arbitrariness.
Analysis of the Law
The Court examined Clause 13 of the 2013 tender, which allowed only EPC contractors or OFC manufacturers to bid, implicitly barring consortiums. It found that Sterlite had bid as OFC manufacturer, designating the petitioner only as EPC partner after being declared L1, in line with Clause 13.6.
The Court reiterated that government authorities enjoy freedom of contract and are entitled to interpret tender terms. Unless mala fides or arbitrariness is shown, judicial interference is unwarranted. Documentary records, including the Advance Purchase Order and contractual agreements, consistently showed Sterlite as sole bidder and the petitioner only as EPC partner. Oral claims of consortium were held to be legally impermissible.
On Tender 2024, the Court noted that Amendment No. 23 to Note 8 explicitly barred reliance on teaming or EPC arrangements. Since the petitioner had not challenged the amendment, it was bound by it.
Precedent Analysis
- Agmatel India Pvt. Ltd. v. Resoursys Telecom (2022) 5 SCC 362 – Held that tendering authorities are best placed to interpret their documents; courts must exercise restraint unless mala fides or arbitrariness exist.
- Pace Digitek Pvt. Ltd. v. BSNL (Delhi HC, 2025) – Earlier case involving the same BharatNet tender, where the Court upheld BSNL’s interpretation of eligibility conditions for different packages.
- General principles of tender law – Documentary proof prevails over oral assertions; freedom of contract entitles State entities to design and interpret their tender processes.
Court’s Reasoning
The Court concluded that:
- There was no consortium between the petitioner and Sterlite in the 2013 tender. The petitioner’s claim was unsupported by documents and contradicted by Sterlite itself.
- Documents like the Teaming Agreement, Integrity Pact, and Experience Certificate did not establish a consortium; at best, they reflected an EPC partnership.
- The amendment to Note 8 of Tender 2024 barred such EPC-based experience, and the petitioner’s failure to challenge the amendment was fatal.
- BSNL’s rejection of the bid was in line with tender terms and could not be said to be arbitrary or mala fide.
Conclusion
The petition was dismissed. The Court held that the petitioner had no right to rely on prior EPC arrangements to meet eligibility in Tender 2024. It ruled that tendering authorities’ interpretation of their documents must be respected, and vague claims of consortium cannot override explicit tender conditions.
Implications
This ruling reinforces that bidders must strictly comply with tender eligibility conditions. It warns against vague or oral claims of consortium, emphasizes the binding force of tender amendments, and reiterates judicial deference to the commercial wisdom of State entities. It sets a precedent in large public infrastructure projects, particularly BharatNet, where strict scrutiny of eligibility is paramount.
FAQs
Q1. Can oral agreements establish consortium eligibility in tenders?
No. The Court held that documentary proof is essential, and oral claims cannot override explicit tender conditions.
Q2. What was the effect of Amendment No. 23 to Note 8 of Tender 2024?
It barred reliance on teaming agreements, subcontracting, or EPC partnerships, restricting eligibility experience to formal consortium arrangements.
Q3. Why did the Court dismiss the petition despite BSNL’s broad discretion?
Because BSNL’s decision was consistent with tender terms, free of mala fides, and supported by documentary evidence.
