Odisha Minor Mineral Concession Rules, 2016 – r.27(4)(iv) – Interpretation of the term ‘previous Financial Year’ – Auction of sand quarry lease for five years – Appellant quoted highest bid but was unsuccessful bidder and was declared nonresponsive on the ground that it failed to comply with provision of r.27(4)(iv) since it did not submit the Income Tax Return for financial year 2021-2022 but for 2020-21 – Bidder who quoted much lower rate was found to be technically responsive and was declared to be the highest bidder – Unsuccessful bidder filed a writ petition challenging the award of tender in favour of successful bidder – High Court held that bid of the unsuccessful bidder was rightly rejected on account of non-compliance with r.27(4)(iv) and upheld the grant of tender in favour of successful bidder, however, called upon the successful bidder to match the highest price offered by the unsuccessful bidder – Correctness:
Held: Reasonable understanding of the term ‘previous Financial Year’ must be treated to mean the year immediately preceding Financial Year, ie 2020-2021 – Term ‘previous Financial Year’ in the case of unsuccessful bidder was to be treated as Financial Year 2020-2021 for which the unsuccessful bidder had filed the Income Tax Return and not 2021- 2022 – Said interpretation is in consonance with the provisions of the Income Tax Act, 1961 – Tender Committee, however, proceeded on a narrow and erroneous understanding of the expression of the term ‘previous Financial Year’ and erroneously concluded that since the unsuccessful bidder had not filed the Income Tax Return for Financial Year 2021-2022, thus it had not complied with the mandate contained in r.27(4)(iv) – Tender Committee erroneously interpreted the tender condition which excludes the highest bidder and defeats the purpose of the tender – Such an interpretation by the Tender Committee undermines the principle that State must act to enhance and not diminish, the public exchequer in case it is dealing with natural resources – When an authority acting under a tender misinterprets the tender condition that diminishes competition and deprives the State of its legitimate revenue, the constitutional duty of the court to interfere is beyond question – High Court while deciding the writ petition failed to advert itself to the said aspect of the matter – Bid of the successful bidder was accepted for a period of five years, out of which a period of three years and three months has already lapsed – No material on record to indicate the present rate of sand per cubic meter, however, there is an upward trend in the prices of sand – Successful bidder after filing the SLP, at the time of hearing of the appeal, submitted that successful bidder is now willing to match the rate offered by the unsuccessful bidder – In view thereof, the impugned judgment passed by the High Court cannot be sustained and is quashed and set aside – Tehsildar to issue a fresh auction notice for grant of lease of extraction of sand as per Rules, 2016. [Paras 14-16]
Tender – Purpose of public tender – Interpretation of tender conditions:
Held: Public tender is not a private bargain – It is instrument of governance, a mechanism through which the State discharges its solemn duty as trustee of public wealth – Its purpose is not merely procedural compliance, but maximisation of public value through a process-fair, transparent and competitive – Obligation of the Tendering Authority is thus, twofold, namely, to interpret its own terms with consistency and to ensure that such interpretation advances, not defeats, the object of tender – Court must intervene in a case of demonstrable misconstruction of a tender condition or irrationality which affects the public interest – When an interpretation of a tender condition narrows competition and excludes the highest bidder on a ground unsupported by law, the decision making process is vitiated – Interpretation of the terms of tender must, thus, serve the object and purpose of the tender mainly to maximise the revenue to the State, when it deals with a natural resource. [Para 10]
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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