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TMI Blog2025 (2) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... tter of an agreement is not deemed to be a mistake as a matter of fact. This will not be a case covered by Section 20 of the Contract Act. However, this is not the first time that this question has arisen either before this Court or Courts outside of India. In West Bengal State Electricity Board [2001 (1) TMI 921 - SUPREME COURT], the private party, the bidder did not succeed for several reasons, including the factum that the error was not obvious and self-evident. Further, the correction of such mistakes after one and a half months after the opening of the bids would have violated the express clauses relating to the computation of the bid amount. Thus, waiver of the rule or conditions in favour of the one bidder would have created unjustifiable doubts in the minds of others impairing the rule of transparency and fairness and providing room for manipulation for awarding contracts. The Appellant was at fault and had made the mistake, of having failed to add the required zeros in the financial bid. The plea of a system glitch should not be accepted, as others had successfully uploaded their bids without a problem - BRO justified encashing the bank guarantee by citing delays caused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, like others, had furnished a bank guarantee of Rs.15,04,64,000/-. On 05.06.2023, technical bids were opened and seven bidders, including the Appellant, were declared technically qualified. On 24.08.2023, the financial bids of seven bidders, including the Appellant, were opened and the results were declared. The Appellant was ranked as L-1 bidder, with the bid price of Rs.1,569/- (Rupees One thousand five hundred and sixty-nine only). According to the Appellant, they had quoted a bid price of Rs.1,569 crores. However, due to what they claim was a system error, the quoted amount appeared as just Rs.1,569. The Appellant claims that they discovered the mistake on 24.08.2023 when the financial bids were opened and announced, and therefore, on the next day, 25.08.2023, they informed the authorities that their actual bid was Rs.1,569 crores, not Rs.1,569. They attributed the error to a typographical mistake or a critical technical issue with the server. While we would not accept the plea of system error, the figure quoted was clearly unrealistic, a patent error and a mistake given the scale and nature of the work tendered. Though the mistake was bald-faced, what followed is inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has arisen either before this Court or Courts outside of India. In West Bengal State Electricity Board v. Patel Engineering Company Limited and Others (2001) 2 SCC 451, this Court referred to paragraph 84 of American Jurisprudence (2nd Edition, Volume 64 at page 944), which reads: "As a general rule, equitable relief will be granted to a bidder for a public contract where he has made a material mistake of fact in the bid which he submitted, and where, upon the discovery of that mistake, he acts promptly in informing the public authorities and requesting withdrawal of his bid or opportunity to rectify his mistake particularly when he does so before any formal contract is entered into." 6. Thereafter, reference was made to two decisions of the Supreme Court of the United States in Moffett, H. and C. Co. v. Rochester 178 U.S. 373 (1900) and Hearne v. New England Marine Ins. Co. 22 L. Ed. 395 wherein it is observed that where the mistake is apparent and the party promptly informs the other as soon as it is discovered but before entering into a contract, equitable orders may be passed. However, the mistake should be clear, explicit, and undisputed. Further, a mistake on one side m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or awarding contracts. 9. The decision in West Bengal State Electricity Board (supra) was referred to and followed where a relief to the bidder was apparent before this Court in M/s Omsairam Steels & Alloys Pvt. Ltd. v. Director of Mines and Geology, BBSR & Ors. 2024 INSC 520 This decision observes that while the Court must exercise a lot of restraint in exercising the power of judicial review in contractual commercial matters, the doctrine of proportionality nevertheless applies when the error or mistake is writ large and equity merits the grant of some relief. Reference was made to the decision in Coimbatore District Central Cooperative Bank v. Coimbatore District Central Cooperative Bank Employees Association and Another (2007) 4 SCC 669 where discussing the question of proportionality or punishment imposed on the striking workmen it is observed: "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 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essfully uploaded their bids without a problem. 12. BRO justified encashing the bank guarantee by citing delays caused by issuing a second notice inviting bids. This claim is baseless, as BRO was aware of the Rs.1,569/- error. Instead of declaring the bid non est due to the clear mistake, BRO asked the appellant to justify the bid, cancelled the notice, declared the Appellant a defaulter, invoked the bank guarantee, and issued a fresh notice inviting bids. 13. Thus, BRO's claim that the delay was entirely due to the Appellant's mistake is flawed, ignoring BRO's own lapses. Mistakes, including by authorities, should be resolved through corrective steps. A practical approach could have avoided the delay, which was caused by BRO's refusal to acknowledge the Appellant's genuine error and the unwarranted cancellation of the bid. 14. The alleged two-month delay by the Appellant is incorrect. The error, submitted on 03.06.2023, became apparent only when financial bids were opened on 24.08.2023. The Appellant promptly acknowledged the mistake on 25.08.2023. 15. A fresh tender was issued, and financial bids opened on 09.01.2024 revealed the lowest bid of Rs.1,290 crores, lower than the ..... 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