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SUPREME COURT OF INDIA
Sanjiv Khanna, Dipankar Datta, JJ.
M/s. Omsairam Steels & Alloys Pvt. Ltd. – Appellant
Versus
Director of Mines And Geology, BBSR & Ors. – Respondents
Civil Appeal No. 7812 of 2024 [Arising out of SLP (Civil) No. 6920 of 2023]
Decided on : 15-07-2024
(A) Government Contract – e-auction – Mistake in bid – Forfeiture of entire security deposit – Rejection of prayer for recommencement of e-auction process – Normally, courts would be loath to interfere in commercial matters, especially when such interference has effect of delaying execution of mega projects of national importance – While undertaking exercise of judicial review of matters relating to tenders, court has to strike a fair balance between interests of Government, which is always expected to advance financial interests of State and private entities – Not every small mistake must be perceived through lens of a magnifying glass and blown up unreasonably – A mere typographical error forms fulcrum of present lis and principles of proportionality, reasonableness and equity demand that appellant's grievance be heard – Appellant made multiple calls to first respondent immediately upon realising that it had committed an error – Appellants have wasted no time in informing respondents and sought opportunity to rectify the same – Impugned judgment and order set aside – In interest of equity and in exercise of power under Article 142 of Constitution, impugned communication quashed. (Paras 12, 14, 18, 20, 26 and 27)
(B) Doctrine of Proportionality – Applicability of – This doctrine has slowly but steadily found its way into this Court's jurisprudence – Path of rendering justice to parties has to be treaded carefully to ensure that interests of both respondents and appellant do not suffer disproportionately. (Paras 22 and 23)
Facts of the case:
High Court, vide impugned judgment, held that appellant having admitted to have made bid of 140.10%, such bid could not at a subsequent stage be pleaded as mistake. Appellant was further held to be bound by its bid. Dispute was also held to be beyond confines of writ jurisdiction of High Court, which led to summary dismissal of appellant's writ petition.
Findings of Court:
Out of Rs 3,00,00,000/- paid by appellant, Rs.2,75,00,000/- shall be appropriated towards loss of revenue arising out of delay in commencing mining activities, costs towards expenses incurred for earlier e-auction process and for fresh process that is underway or to be conducted in terms of this order, as the case may be, and other sundry purposes, if any. Remaining Rs.25,00,000/- should be expended towards charitable purposes for development of young tribal population of district where subject mine is situate.
Result : Civil appeal partly allowed.
JUDGMENT
Dipankar Datta, J.
Leave granted.
2. The final judgment and order dated 29th March, 2023 of the High Court of Orissa[High Court], dismissing the writ petition[Writ Petition (Civil) 9630/2023] presented by the appellant, is under assail in the present appeal.
3. We find in the array of parties three respondents. The Director of Mines and Geology, Bhubaneshwar is the first respondent, under whose aegis MSTC Ltd., i.e., the second respondent, conducted an e-auction which forms the genesis for the present appeal. State of Odisha is the third and final respondent.
4. The factual matrix relevant for deciding the present appeal, as discerned from the records, is that:
II. To participate in the process to follow, the appellant submitted the requisite fees of Rs 5,00,000/- (Rupees five lakh only). Thereupon, the appellant was permitted to submit its online bid.
III. Clause 14 of the tender document mandated the submission of Bid Security in a sum of Rs 9,12,21,315/- (Rupees nine crore twelve lakh twenty-one thousand three hundred and fifteen only) in the form of a bank guarantee in favour of the first respondent, which too the appellant complied with on 17th February, 2023.
IV. The Mineral Auction Rules, 2015[MA Rules], promulgated under the Mines and Minerals (Development and Regulation) Act, contemplate a two-round process - (i) submission of technical bids and initial price offers; and (ii) selection of technically qualified bidders for participation in the e-auction. Per requirements of the e-auction, the qualified bidders have to propose their Final Price Offer, over and above the Floor Price, with each bidder being allowed to make a higher bid by a minimum increment of 0.05%. Each bidder would have 8 (eight) minutes' time from the last highest bid to enhance their bid, and upon the expiry of eight minutes, the last highest bid prevailing would triumph as the winning bid.
V. The appellant cleared the first round of the process and was subsequently informed that the e-auction would be conducted from 11.00 AM to 1.00 PM (subject to auto extension of eight minutes) on 21st March, 2023 for which the Floor Price would be 84.00%.
VI. As scheduled, the auction process commenced on 21st March, 2023 and it lasted for almost seven hours, possibly much beyond what the first respondent had anticipated. In due course of time, the bidders went on enhancing their bids, so much so that the bids at 06.09 PM had increased from 84% to 104.05% after 136 (one hundred thirty six) attempts made by the bidders. At 06.13 PM, the appellant intending to better the bid by the minimum margin of 0.05% once again made its entry in the online portal, but contrary to its intended submission of 104.10%, entered a bid of 140.10% at the overall 137th attempt. With no bidder countering the same, the e-auction concluded at 6.17 PM with the last bid recorded as that of the appellant at 140.10%.
VII. Having realized that it had committed a mistake, if not a blunder, the appellant made frantic calls to the first respondent. Since the calls went unheeded, the appellant by an email sent to the first respondent at 08.17 PM sought to inform it of the mistake and prayed for rectification of its bid. The email sent by the appellant contained, inter alia, the following prayer:
"***
Subject - Regarding Miss (sic, Mis) Bidding in Orahuri manganese & Iron Ore Mineral Block NIT dated January 09, 2023
***
With reference to the above subject, it is to inform that while bidding for the above mentioned Orahuri Manganese & Iron ore Mineral Block, the running Bid Percentage of Competitor was 140.05 (sic, 104.05), by mistake, we mentioned 140.10 instead of 104.10. Please guide us that how to rectify the mistake in this regard and oblige. Thanking you in anticipation and expecting due direction.
***"
VIII. The next day, i.e. 22nd March, 2023, th
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