Public tender fairness requires fresh bidding after material term changes, and mandatory earnest money compliance remains essential.

In public tendering, alteration of an essential eligibility condition after the bid deadline justified setting aside the earlier award and directing a fresh process, because revised terms could attract wider participation and better bids while preserving fairness, equal treatment, and non-arbitrariness. The authority's discretion in framing tender conditions was respected, but the process had to remain consistent with public interest. A bid that was not accompanied by earnest money in the prescribed form was validly rejected, as a photocopy of the demand draft, even if notarised, did not satisfy the mandatory tender requirement.

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Issues: (i) Whether the award of the contract in favour of one bidder was liable to be set aside and a fresh tender process directed after deletion of an eligibility condition under the municipal law. (ii) Whether a tender offer not accompanied by the prescribed earnest money in the required form was validly rejected.

Issue (i): Whether the award of the contract in favour of one bidder was liable to be set aside and a fresh tender process directed after deletion of an eligibility condition under the municipal law.

Analysis: Public contracts must be awarded without arbitrariness and in a manner consistent with public interest. Where an eligibility condition is deleted after the last date for submission of tenders, the process cannot be confined only to the existing bidders if the altered terms may attract wider participation or better bids. The authority inviting tenders is best placed to decide the conditions, but the process must preserve fairness and equal treatment among participants.

Conclusion: The direction setting aside the earlier award and requiring a fresh tender process was justified.

Issue (ii): Whether a tender offer not accompanied by the prescribed earnest money in the required form was validly rejected.

Analysis: The notice inviting tender required earnest money to accompany the bid in the specified form. A photocopy of a demand draft, even if notarised, did not satisfy that mandatory condition, and the explanation offered for non-compliance was not accepted as credible.

Conclusion: The rejection of that tender offer was valid.

Final Conclusion: The contractual process was to proceed on the basis of the revised tender exercise, and the rejection of the non-compliant tenderer was sustained, with no basis to compel acceptance of the earlier bid.

Ratio Decidendi: In public tender matters, a change in essential tender conditions after the submission deadline justifies a fresh process to ensure fairness, non-arbitrariness, and the widest possible competition, while non-compliance with mandatory tender conditions renders a bid liable to rejection.

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