Chattisgarh High Court
Madhucon Project Limited vs South Eastern Coalfields Limited on 30 April, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
NAFR
Digitally signed
INDRAJEET by INDRAJEET
SAHU
HIGH COURT OF CHHATTISGARH AT BILASPUR
SAHU Date: 2026.05.05
15:09:44 +0530
WPC No. 2108 of 2026
1 - Madhucon Project Limited Through Its CEO-Cum-Director, Kothapalli
Venkateswarlu S/o Nageswara Rao, Aged About 62 Years, Having Registered
Office At Madhucon House, Plot 1129/A, Road No. 36, Hitech City Road,
Jubilee Hills, Hyderabad, Telangana, 500033.
... Petitioner(s)
Versus
1 - South Eastern Coalfields Limited Through Its Chairman Cum Managing
Director, Seepat Road, Bilaspur, Distt. Bilaspur (C.G.), 495006
2 - General Manager (Civil)/hod South Eastern Coalfields Limited, Through
The General Manager (Civil)/HOD, Head Office, Seepat Road, Bilaspur
District - Bilaspur (C.G.).
3 - Tender Committee,south Eastern Coalfields Limited Through The General
Manager (Civil)/ HOD, Head Office, Seepat Road, Bilaspur, District - Bilaspur
(C.G.)
4 - Meco Technologies Pvt.Ltd.(JV) Through Its Managing Director Having
Registered Office At H.No. 414, Rajiv Vihar Near Vashant Vihar Bilaspur,
District Bilaspur ( C.G.)
... Respondent(s)
(Cause-title taken from Case Information System) For Petitioner : Shri Kishore Narayan, Advocate. For Respondents 1 to 3 : Shri Manoj Paranjpe, Sr. Advocate along with Shri Chetan Singh Chauhan, Advocates.
Hon'ble Shri Justice Ramesh Sinha, CJ Hon'ble Shri Justice Ravindra Kumar Agrawal, J Judgment on Board 2 30.04.2026 Per, Ramesh Sinha, CJ.
1 The petitioner has filed this petition seeking following reliefs:
"10.1 That, the Hon'ble Court may kindly be pleased to issue appropriate writ setting aside impugned communication/order dated 10.03.2026 (Annexure P/8) passed by the Respondent no.
2 in connection with Tender ID 2025_SECL_346075_1 whereby the technical bid (wrongly mentioned financial bid/ of the petitioner company was rejected in an illegal, and arbitrary manner in violation of Article 14 and 19(1) (g) of the Constitution of India, in the interest of justice.
10.2 That, the Hon'ble Court may kindly be pleased to issue appropriate writ setting aside impugned order dated 15.04.2026 (Annexure P/13) issued by Respondent no. 2 containing the recommendation of IEM as being illegal arbitrary and based on non application of mind.
10.3 That, the Hon'ble Court may kindly be pleased to issue appropriate writ setting aside impugned Letter of Acceptance (LOA) dated 20.04.2026 (Annexure P/14) being illegal an arbitrary.
10.4 That, the Hon'ble Court may kindly be pleased to issue appropriate writ/directing the respondent company reconsider and accept the company's technical bid in Tender ID 2025 SECL_346075_1 and further direct the respondent to initiate fresh Tender process commencing from financial bid stage and permit the petitioner to participate in the said fresh Tender process.
10.5 That, the Hon'ble Court may kindly be placed to pass any other appropriate order/direction considering the facts and circumstances of the writ, in the interest of justice." 2 Brief facts of the case are that the petitioner is a company incorporated under the provisions of Companies Act and engaged in the field of infrastructure development and execution of engineering and 3 construction works. As per petitioner, the Net Worth of petitioner- company is 503.44 Crores. The respondents SECL issued an NIT on 22.10.2025 for "Planning, Design, Engineering, Construction, Fabrication, Erection, Supply, Installation, Testing Trail Rune and Commissioning of Coal Handling Plant (CHP) including Operation & Maintenance (O&M) during Defect Liability Period (DLP) of 5 Years on Turnkey Basis at Amadand OCP (4.00 MTY) of Jamuna & Kotma Area." The estimated cost of the said work inducing GST was fixed at Rs.290,13,55,000/-. As per Clasue-8(C) of the said NIT, the bidder must have minimum Net Worth of 10 percent of the estimated project cost put to the tender at the close of the last financial year from the date of NIT based on their latest audited annual accounts i.e. 10 percent of 2,90,13,55,000/- which comes to Rs.29,01,35,500/-. The petitioner submitted its bid through online mode on 06.12.2025 with all requisite documents including certificate dated 03.12.2025 of Net Worth i.e. Rs.503.44 Crore for the financial year 2024-25. They also submitted Chartered Accountant's Certificate dated 26.11.2025 showing audited financial figure for the preceding five financial years based on audited balance sheet. The respondent SECL raised a query on 10.01.2026 that uploaded Net Worth Certificate is not in accordance with Clause-8(C) and directed the petitioner to submit a clarification from Chartered Accountant explicitly indicating the value of relevant parameters in accordance with definition contained in Clause-8 (C), to which the petitioner submitted its reply on 16.01.2026 and submitted another certificate of Net Worth issued on 13.01.2026 with clear breakup under different heads. However, vide order impugned dated 4 10.03.2026 the petitioner's technical bid was rejected due to non fulfillment of eligibility requirement of Net Worth and three bids were accepted for further tender process and for opening of price bid. Hence this petition.
3 Learned counsel for the petitioner would submit that the impugned action on the part of respondent is arbitrary, unreasonable and violative of Article 14 of the Constitution of India and therefore liable to be interfered with by this Court under Article 226 of the Constitution of India. The petitioner company has not rejected the technical bid of the petitioner on the ground of absence of financial capacity, negative net worth, concealment of material facts or on account of any false in the audited financial data. The rejection is solely on a hyper-technical ground of not submitting the document in proper format and calculation of Net Worth is not properly assessed. The Net Worth of the petitioner is much higher than the required financial strength i.e. more than 10 percent of estimated cost of work. The counsel for the petitioner would further submit that against rejection of technical bid of the petitioner due to non fulfillment of eligibility requirement of Net Worth, they preferred representation on 12.03.2026 as also a complaint before Independent External Monitors (IEM) on 25.03.2026, upon which a virtual conference was fixed on 31.03.2026. The complaint of petitioner was examined on 31.03.2026, however, the IEM wrongly concurred with the decision of Tender Committee in rejecting the technical bid of the petitioner and communicated the same to the petitioner vide reference H/416, dated 15.04.2026 and illegally issued the financial bid on 15.04.2026 followed by Letter of Acceptance on 20.04.2026 in 5 favour of respondent No.4. Therefore the entire tender process vitiates and the same may be quashed.
4 On the other hand, learned counsel for the SECL/respondents opposes the submissions made by the learned counsel for the petitioner and submits that method of computation of Net Worth by the petitioner was not in accordance with the definition of Net Worth as petitioner did not mention the values of revaluation reserves, miscellaneous expenditure were not written off and further reserves not available for distribution to shareholders, and has also not included additional parameters such as surplus in statement of profit and loss, other components of equity and securities premium without establishing their admissibility as per Clause-8 (C) of the NIT. He further submits that as there is no arbitrary or mala fide action on part of the respondents, hence, the present writ petition be dismissed.
5 We have learned counsel for the parties, perused the material annexed with the petition.
6 The Hon'ble Supreme Court in the case of Tata Motors Limited v The Brihan Mumbai Electric Supply & Transport Undertaking (Best) and Others passed in Civil Appeal No. 3897 of 2023 vide judgment dated 19.05.2023 held as follows :
"48. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction.6
No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. (See: Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489).
52. Ordinarily, a writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer unless something very gross or palpable is pointed out. The court ordinarily should not interfere in matters relating to tender or contract. To set at naught the entire tender process at the stage when the contract is well underway, would not be in public interest. Initiating a fresh tender process at this stage may consume lot of time and also loss to the public exchequer to the tune of crores of rupees. The financial burden/implications on the public exchequer that the State may have to meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind. This is evident from a three-Judge Bench decision of this Court in Association of Registration Plates v. Union of India and Others, reported in (2005) 1 SCC
679.
53. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned.
Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest 7 requires interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v. State of Orissa and Others, reported in (2007) 14 SCC 517, that while invoking power of judicial review in matters as to tenders or award of contracts, certain special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes."
7 Upon perusal of the judgment passed by the Hon'ble Supreme Court in Tata Motors Limited (Supra), the Apex Court has categorically held that judicial review in contractual and tender matters must be exercised with great restraint and it would be exercised only in cases where clear arbitrariness, mala fides, bias or irrationality is demonstrated. In the present case, no such exceptional circumstance is made out. The scope of judicial review in contractual and tender matters is limited and the Court ordinarily does not interfere unless the decision-making process is found to be arbitrary, irrational or contrary to law, which is not established in the present case. It is not a case where the petitioner did not submit Net Worth, however, it is a case where the documents related to Net Worth were not submitted as per Formula i.e. Clause- 8(C) and no proper calculation of Net Worth was made. This defect were detected in bid of all the tenderers and they were afforded opportunity. They rectified the defects, however, the petitioner couldn't despite adequate opportunity to submit the details of clarification in prescribed form and his calculation of Net Worth was not calculated in accordance with definition of Net Worth as stipulated under Clause 8 8 (C) of NIT. Even in second round the Tender Committee was of the opinion that Net Worth computation reflected in the uploaded certificate does not conform to Clause 8 (C) of NIT and as such he could not be considered for the purpose of evaluation of bid and accordingly rejected his technical bid due to non fulfillment of eligibility requirement of Net Worth as per relevant Clause of NIT, in which, we do not see any reason to interfere with the same at this stage where LOA has been issued in favour of respondent No.4.
8 Thus, the present petition being devoid of merit deserves to be and is hereby dismissed.
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
inder