This writ petition was filed by M/S Konkan Railway Corporation Ltd. (a government enterprise) challenging the arbitrary rejection of its financial bid by the North Eastern Railway authorities through a communication dated June 8, 2026, under the guise of an incorrect beneficiary name in a bank guarantee. The Division Bench severely criticized the railway authorities for adopting shifting, hyper-technical, and malafide grounds to eliminate the petitioner—who had submitted the lowest financial bid (L1) for an EPC project worth INR 262.12 Crores. Noting that another arm of the very same organization (Southern Railway) explicitly treated incorrect beneficiary names in bank guarantees as curable defects, the Court held the North Eastern Railway’s actions to be whimsical, discriminatory, and violative of natural justice. Consequently, the High Court quashed the rejection letter and directed the respondents to evaluate the petitioner’s financial bid after accepting the corrected bank guarantee within three working days.
- Challenge to Rejection: The petitioner approached the High Court challenging the impugned letter dated June 8, 2026, which rejected and refused to open its financial bid due to technical or legal considerations.
- History of Procedural Obstacles: Despite earlier interventions by the Court on May 29, 2026 (Writ C No. 5810 of 2026) where stamp duty deficiencies were addressed, the railway authorities introduced a brand new, previously unmentioned objection regarding an incorrect beneficiary name in the bank guarantee to shut out the lowest bidder.
- Contradictory Standards Within Railways: The Court exposed the double standards of the respondents by highlighting an official communication from Southern Railway (another arm of the railways) which treated an identical bank guarantee beneficiary error as a completely curable defect during a contract’s currency.
- Arbitrariness and Lack of Fair Play: The bench observed that state instrumentalities must function uniformly and fairly, ruling that the respondent authorities acted with hidden agendas, engaged in a game of “hide and seek,” and subjected the petitioner to targeted harassment.
- Final Directions: The writ petition was disposed of by setting aside the impugned rejection letter dated June 8, 2026, and issuing a mandatory direction to Respondent No. 2 to accept the corrected bank guarantee and evaluate the petitioner’s financial bid within three working days.
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M/S Konkan Railway Corporation Ltd. Thru. Authorised Representative Mr. Om Prakash Verma v. Union of India, Thru. General Manager, North Eastern Railway U.P. And 5 others (D.O.J. June 2026 (Decided subsequent to interim/earlier orders dated 29.05.2026)
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