Sanctity of Tender Process is Paramount; Post-Bid Rectification of Bids Impermissible Even for Higher Revenue: Supreme Court - 2025-09-15

Sanctity of Tender Process Paramount, Post-Bid Rectification Impermissible: Supreme Court

New Delhi: The Supreme Court, in a significant ruling on tender law, has held that the sanctity of the tender process must be maintained at all costs and that a bidder cannot be allowed to rectify their financial bid after the bids have been opened, even if the correction would lead to higher revenue for the state exchequer.

The bench, comprising Justice Ujjal Bhuyan and Justice Manoj Misra , set aside a Calcutta High Court Division Bench judgment that had permitted a bidder, Mandeepa Enterprises, to correct what it claimed was an "inadvertent error" in its bid for a road user fee collection contract in West Bengal.

Case Background

The case arose from a tender floated by the West Bengal government for a road user fee collection contract for 1095 days. After the technical evaluation, four bidders, including Prakash Asphaltings and Toll Highways (India) Limited (the appellant) and Mandeepa Enterprises (the respondent), were found qualified.

Upon opening the financial bids, Prakash Asphaltings was declared the highest bidder (H1) with an offer of ₹91.19 crores. Mandeepa Enterprises, in stark contrast, was the lowest bidder (H4) with a bid of ₹9,72,999.

Subsequently, Mandeepa Enterprises claimed it had mistakenly quoted the per-day amount instead of the total amount for the 1095-day contract period. It requested the tendering authority to rectify its bid to ₹106.54 crores (₹9,72,999 x 1095 days), which would make it the highest bidder by a margin of over ₹15 crores. The authority rejected this request.

A single judge of the Calcutta High Court upheld the authority's decision, but a Division Bench reversed it, directing the authority to consider the rectified bid and even allow other bidders to match the new price, citing public interest in maximizing revenue.

Arguments Before the Supreme Court

• Prakash Asphaltings (Appellant): Represented by Senior Advocate Kavin Gulati, the appellant argued that allowing post-bid rectification violates the fundamental principles of fairness and transparency, destroying the sanctity of the tender process. They pointed to tender conditions that explicitly prohibited any changes to the Bill of Quantity (BOQ) template. They also contended that the High Court's order was passed in violation of the principles of natural justice, as the H1 bidder (Prakash Asphaltings) was not made a party to the proceedings.

• Mandeepa Enterprises (Respondent): The respondent argued that the error was a bona fide, inadvertent mistake and that rectifying it was in the larger public interest as it would fetch the state an additional ₹15 crores in revenue. They contended that tender clauses allowing for clarification could be interpreted broadly to permit such corrections.

• State of West Bengal: The State supported the appellant, arguing that allowing such post-tender modifications would set a bad precedent, unduly delay contract finalization, and undermine the integrity of the bidding process.

Court's Analysis and Key Precedents

The Supreme Court meticulously analyzed the tender conditions, noting Clause 4(g) which stated, "Any change in template of BOQ will not be accepted under any circumstances." The Court found that the clause allowing authorities to seek "clarification" could not be stretched to permit a complete rectification of the financial bid itself.

The bench observed that Mandeepa Enterprises' bid document explicitly required the amount to be entered for 1095 days, which the company filled as ₹9,72,999 in both figures and words. The Court stated, “In such circumstances, it cannot be said to be an inadvertent or unintentional mistake... Allowing respondent No. 1 to rectify such mistakes after finalization of the financial bid would be highly improper as it would have the effect of unsettling the entire tender process.”

Citing landmark judgments like Jagdish Mandal vs. State of Orissa and Afcons Infrastructure Limited vs. Nagpur Metro Rail Corporation Limited , the Court reiterated the limited scope of judicial review in contractual matters. The Court emphasized that its role is to check for lawfulness, not soundness, of the decision, and interference is warranted only in cases of mala fides, arbitrariness, or irrationality.

Redefining Public Interest and Sanctity of Process

A crucial aspect of the judgment was its interpretation of 'public interest' in commercial contracts. The Court held that public interest is not limited to financial gain alone.

“While benefit or accrual of more revenue to the public exchequer is certainly an important aspect, equally important, if not more, is adherence to the rules and conditions of tender; sanctity of the tender process being paramount and should be maintained at all cost.”

The Court also held that the High Court erred by not impleading the H1 bidder, whose rights were directly and adversely affected by the order, thus violating the principles of natural justice.

Final Decision

The Supreme Court allowed the appeal, setting aside and quashing the Division Bench's judgment. It affirmed the rejection of Mandeepa Enterprises' request for rectification and permitted the West Bengal authorities to proceed with finalizing the contract based on the originally submitted bids. This ruling reinforces the critical importance of procedural integrity and adherence to tender conditions in public procurement.