Contract Act, 1872 – s.20 – Mistake of fact – Tender dispute – Forfeiture of bank guarantee/bid security on default – Respondent no.2- Border Road Organisation invited bids for the construction of tunnels and appellant ranked as L-1 bidder – When financial bids opened, the appellants discovered their mistake that instead of appellant’s bid price of Rs.1569 Crores, the quoted amount appeared to be just Rs.1569/- – Next day, the appellant informed the authorities regarding the mistake but respondent no.2 called upon the appellant to justify the quoted amount of Rs.1569/- – Respondent no.2, stating that the appellant had been declared a defaulter, and their bid security was to be forfeited, asked the appellant’s bank to encash the bank guarantee and remit Rs.15,04,64,000 to respondent no.2 – Writ petition by the appellant – Dismissed by the High Court – Correctness:
Held: As per explanation to s.20, an erroneous opinion as to the value of the thing which forms the subject matter of an agreement is not deemed to be a mistake as a matter of fact – Instant case does not fall under any exception to the general principle on a person seeking relief in equity on account of mistake, for the error or mistake in quoting a price of Rs.1,569/- is self-evident – Contract for an estimated value of more than Rs.1,500 crores requiring construction of roads and tunnels in a hilly terrain can never be executed for a mere Rs.1,569/- – Appellant was at fault and had made the mistake, of having failed to add the required zeros in the financial bid – Plea of a system glitch cannot be accepted, as others had successfully uploaded their bids without problem – Claim of BRO that delay was entirely due to the appellant’s mistake is flawed, ignoring its own lapses – Mistakes, including by authorities, to be resolved through corrective steps – Practical approach could have avoided the delay, which was caused by BRO’s refusal to acknowledge appellant’s genuine error and unwarranted cancellation of the bid – Alleged two-month delay by appellant is incorrect – Appellant promptly acknowledged the mistake – Appellant directed to pay Rs.1 crore to BRO, as a consequence of their error – Upon receiving this payment, BRO to return the appellant’s original bank guarantee or demand draft of Rs.15.04 crores – Impugned judgment set aside. [Paras 5, 10, 13-17]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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