Tender eligibility interpretation must generally follow the author's construction unless the decision is arbitrary or perverse.

In tender eligibility disputes, the interpretation adopted by the tender author is ordinarily entitled to judicial deference, and writ interference is justified only if the decision is mala fide, irrational, arbitrary or perverse. Applying that standard, the Court accepted the evaluation that the bidder did not satisfy the prescribed net worth criterion because only reserves arising from revenue profit were relevant under the RFP, not capital reserve generated on extinguishment of liabilities under an approved resolution plan. The doctrine of contra proferentem was held inapplicable to the tender eligibility condition on the facts, and the bid rejection was upheld.

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Issues: Whether the rejection of the bidder's offer for meeting the prescribed net worth criterion under the RFP was arbitrary or contrary to the tender terms, and whether the Court should interfere in exercise of writ jurisdiction.

Analysis: The tender defined net worth as the aggregate of paid-up share capital and reserves created out of profits and securities premium account, while excluding reserves arising from revaluation, depreciation write-back and amalgamation. The bidder's case was that capital reserve arising from extinguishment of liabilities under an approved resolution plan should be counted. The Court held that in tender matters the author of the document is best placed to interpret its terms, and constitutional courts must defer to that interpretation unless it is shown to be mala fide, irrational, arbitrary or perverse. The Court found the financial consultant's evaluation to be a reasoned application of the RFP and accepted the respondent's view that only reserves arising out of revenue profit were relevant. The doctrine of contra proferentem was held inapplicable to tender eligibility conditions in the absence of arbitrariness or ambiguity warranting intervention.

Conclusion: The bid rejection was upheld and no interference under Article 226 of the Constitution of India was warranted.

Ratio Decidendi: In tender eligibility disputes, the interpretation adopted by the tender author must ordinarily be accepted, and ambiguity cannot be construed in favour of one bidder under contra proferentem unless the decision is shown to be arbitrary, mala fide, irrational or perverse.

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