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TMI Blog2024 (7) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... the principles of proportionality, reasonableness and equity demand that the appellant s grievance be heard. This Court, on the facts of the case in Patel Engineering Co. Ltd. [ 2001 (1) TMI 921 - SUPREME COURT] , held that negligent mistakes in bid documents could not be permitted to be corrected on the basis of equity. There, the bidders had merely informed the State authorities of the alleged mistake in their bid more than two months after the same was announced in front of all the bidders who responded to the tender. It is as clear as daylight that the forfeiture of the entirety of the appellant s security deposit worth Rs 9,12,21,315/- as against evident human error, which has not been shown to even border on mala fides, or knowingly done, is punitive. The enforcement of an otherwise commercially unviable bid, with the forfeiture of the deposit hanging over the appellant s head akin to a sword of Damocles, can hardly be said to be in either party s best interests. Perhaps, the respondents could consider to provide a cross check and affirmation, from the party, to avoid human errors and mistakes. The impugned communication issued by the first respondent - The civil appeal stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormed 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the appellant having admitted to have made a bid of 140.10%, such bid could not at a subsequent stage be pleaded as a mistake. The appellant was further held to be bound by its bid. The dispute was also held to be beyond the confines of the writ jurisdiction of the High Court, which led to summary dismissal of the appellant s writ petition. 5. The appellant has taken exception to this judgment of the High Court in the present appeal on multiple grounds. As noted by the High Court, there is no dispute that the appellant had made the highest bid of 140.10%. The task before us is limited to determining whether the appellant can attribute this bid to a bona fide mistake, and pray for recommencement of the e-auction process. 6. Mr. Rohatgi, learned senior counsel for the appellant, in laying a challenge to the impugned judgment advanced the following submissions: a) In a bidding period of 7 hours starting from 11.00 AM till 18.09 PM, the bids had only increased from 84.00% to 104.05%, i.e., an increment of only 20.05%. On most of the occasions the bidders enhanced their bid by 0.05%, which was the minimum in terms of the terms and conditions of the tender document. It is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the system. This formality, according to the respondents, the appellant complied and hence, it cannot be permitted to turn around and say that the bid of 140.10% was by mistake. 10. Both parties have submitted to us a visual step-by-step of how the eauction process functions, and a perusal of the same makes it evident that once the bidder enters the numerical value and clicks on Bid , a pop-up does appear showing the bid in numerical and in words; however, the system does not apparently provide any option to cancel such bid or to re-type the bid amount, should any error or mistake in the bid be noticed. The only option the system pop-up gives to the bidder is to submit the bid with the Digital Signature Certificate with no scope for rectification or retraction. We, thus, presume that in case of an error or mistake, a bidder may choose not to submit the bid with the Digital Signature Certificate with the result that it has to quit the process. This lends weight to the appellant s submission that there was indeed a human error or mistake, rectification of which was not permitted by the system. 11. We now proceed to examine the issue whether such an error or a mistake would entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a mere mistake, was laid down by this Court in W. B. State Electricity Board v. Patel Engg. Co. Ltd. ( 2001 ) 2 SCC 451 , in the following words: 27. Exceptions to the above general principle of seeking relief in equity on the ground of mistake, as can be culled out from the same para, are: (1) Where the mistake might have been avoided by the exercise of ordinary care and diligence on the part of the bidder; but where the offeree of the bid has or is deemed to have knowledge of the mistake, he cannot be permitted to take advantage of such a mistake. 2) Where the bidder on discovery of the mistake fails to act promptly in informing to the authority concerned and request for rectification, withdrawal or cancellation of bid on the ground of clerical mistake is not made before opening of all the bids. (3) Where the bidder fails to follow the rules and regulations set forth in the advertisement for bids as to the time when bidders may withdraw their offer; however where the mistake is discovered after opening of bids, the bidder may be permitted to withdraw the bid. 16. While deciding Patel Engineering Co. Ltd. (supra), this Court was referred by senior counsel for the respondents 1 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase allowing the bidders at least some scope of correction. Rule 20 of the MA Rules allows rectification of clerical or arithmetic mistakes only with respect to orders passed by the Government or authorities thereunder, but not bids of the nature under consideration. 20. Despite the respondents contention to the contrary, it is evident that there was no opportunity available on the platform for the appellant to rectify the error in the bid, having once entered it. Even if any bidder like the appellant had realized that the bid amount requires to be rectified, it could not have done so because of the system not permitting such a course. It had either to suffer the effects of the error or mistake, i.e., forfeiture of Bid Security on failure to deposit the first instalment of the upfront payment, or quit the process realising such error / mistake having been committed by it. It seems that anyone committing an error or mistake in submitting the bid and seeking to rectify it would be caught between the devil and the deep sea. Upon discovery of the error or mistake that was committed, the appellants have satisfied us on the point that they wasted no time in informing the respondents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion that the path of rendering justice to the parties has to be treaded carefully to ensure that the interests of both the respondents and the appellant do not suffer disproportionately. 23. It is here that we consider it appropriate to examine the applicability of the doctrine of proportionality. This doctrine has slowly but steadily found its way into this Court s jurisprudence. In Coimbatore District Central Coop. Bank v. Employees Assn. ( 2007 ) 4 SCC 669 , albeit discussing the proportionality of the punishment imposed on striking workmen, this Court delineated the basis of the doctrine as follows: 18. Proportionality is a principle where the court is concerned with the process, method or manner in which the decision-maker has ordered his priorities, reached a conclusion or arrived at a decision. The very essence of decision-making consists in the attribution of relative importance to the factors and considerations in the case. The doctrine of proportionality thus steps in focus true nature of exercise the elaboration of a rule of permissible priorities. 19. de Smith states that proportionality involves balancing test and necessity test . Whereas the former (balancing test) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which is bound to cost the public exchequer heavily in terms of time, effort and expense. 26. Whether forfeiture of security deposit of Rs. 9,12,21,315/- (Rupees nine crore twelve lakh twenty one thousand three hundred and fifteen only), is in the form of penalty or liquidated damages is an issue which we choose not to delve into in the present matter, to give the lis a quietus. In the interest of equity and in exercise of power under Article 142 of the Constitution, we thus deem it fit to pass the following orders. We quash the impugned communication issued by the first respondent. A coordinate Bench of this Court, vide interim order dated 06th April, 2024, had extended to the respondents the liberty to conduct a fresh e-auction as per law. We, thus, confirm the liberty so extended to the respondents to conduct such fresh e-auction, if not conducted already. Further, in order to maintain the balance between the interest of the State and the private party, i.e., the appellant, we do not wish to let the appellant go scot-free. On account of the appellant s failure to act with the required degree of care, which has not only had the effect of inevitably delaying the mining project b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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