Andhra Pradesh High Court - Amravati
Mc Lean India Limited vs The State Of Andhra Pradesh on 18 August, 2025
APHC010411982025
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3328]
(Special Original Jurisdiction)
MONDAY, THE EIGHTEENTH DAY OF AUGUST
TWO THOUSAND AND TWENTY FIVE
PRESENT
THE HONOURABLE SRI JUSTICE GANNAMANENI RAMAKRISHNA
PRASAD
WRIT PETITION NO: 21232/2025
Between:
1.MC LEAN INDIA LIMITED, REPRESENTED BY ITS CHIEF
EXECUTIVE OFFICER C.N. SANJAY, S/O C.N. NARSIMHA, AGED
ABOUT 51 YEARS, OFFICE AT 1-89/3/8/40 TO 42/KS/101, KRISHE
SAPPHIRE, 1ST FLOOR, MADHAPUR, HI-TECH CITY, HYDERABAD,
TELANGANA
...PETITIONER
AND
1.THE STATE OF ANDHRA PRADESH, REPRESENTED BY ITS
PRINCIPAL SECRETARY, DEPARTMENT OF MEDICAL AND
HEALTH AND FAMILY WELFARE, A.P SECRETARIAT BUILDINGS,
VELAGAPUDI, GUNTUR DISTRICT.
2.THE ANDHRA PRADESH MEDICAL SERVICES AND
INFRASTRUCTURE DEVELOPMENT CORPORATION APMSIDC,
REP BY ITS MANAGING DIRECTOR, AT 1ST FLOOR, PHYCARE
BUILDING, PLOT NO. 9, APIIC IT PARK, SURVEY NO. 49, NEAR
A/ISALANDRA PRINTING PRESS, AUTONAGAR, MANGALAGIRI-
522503, ANDHRA PRADESH.
3.THE CHIEF ENGINEER, APMSIDC, AT 1ST FLOOR, PHYCARE
BUILDING, PLOT NO. 9, APIIC IT PARK, SURVEY NO. 49, NEAR
VISALANDRA PRINTING PRESS, AUTONAGAR, MANGALAGIRI-
522503 ANDHRA PRADESH
4.THE DIRECTOR OF SECONDARY HEALTH, (DSH), ANDHRA
PRADESH.
...RESPONDENT(S):
2
Counsel for the Petitioner:
1.JAVVAJI SARATH CHANDRA Counsel for the Respondent(S):
1.GP FOR MEDICAL HEALTH FW
2.S PRANATHI The Court made the following ORDER:
Heard Sri B. Adinarayana Rao, learned Senior Counsel appearing on behalf of Sri Javvaji Sarath Chandra, learned Counsel for the Writ Petitioner and Sri Dammalapati Srinivas, learned Advocate General appearing on behalf of Smt. S. Pranati, learned Standing Counsel for APMSIDC.
2. The present Writ Petition is filed seeking the following relief:
"Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ or order or direction more particularly a writ in the nature of a Writ of Mandamus declaring the action of Respondents in rejecting the bids of the Petitioner herein vide rejection orders in T.N.No.2-5/APMSIDC/Technical/2025-26 and T.N.No.2-6/APMSIDC/Technical/2025-26, dt. 05.08.2025 as illegal, arbitrary, discriminatory, unjust and violative of Articles 14, 19 (1) (g) and 300A of the Constitution of India and to consequently to set-aside the said rejection orders dt.05.08.2025 and direct the Respondents to accept the bids of Petitioner herein with respect to Tender Notifications vide T.N.No.2- 5/APMSIDC/Technical/2025-26and T.N No.2- 6/APMSIDC/Technical/2025-26, dt. 22.05.2025 and to pass."
Submissions of the Writ Petitioner:-
3. Sri B. Adinarayana Rao, learned Senior Counsel, briefed by Sri Javvaji Sharath Chandra, learned Counsel for the Writ Petitioner has submitted the facts involved in the present case to the effect that the Writ Petitioner is a service provider with regard to Sanitation and House Keeping and executing 3 various contracts; that the Writ Petitioner had several hospitals as clients; that the AIG Hospital, Hyderabad and KIMS Hospital, Hyderabad are also the clients of the Writ Petitioner; that the Government of Andhra Pradesh has issued Tender Notification on 22.05.2025 bearing Tender Notification No.1 (Ex.P3) inviting bids for providing Sanitation (House Keeping) Services for the Hospitals/Institutions under the control of the Director of Secondary Health (Zone-II), West Godavari, Eluru, Krishna, NTR, Guntur, Bapatla, Palnadu, Prakasam and Nellore Districts under Package-V; that the said Tender Notification No.1 was published in the e-Procurement Portal on 31.05.2025; that a similar notification bearing Tender Notification No.2 was also issued on 22.05.2025 for similar services for Zone-III-Tirpuati, Chittoor, YSR Kadapa, Annamayya, Kurnool, Nandyal, Anantapuram, Sri Satya Sai Districts under Package-VI; that the present tender conditions are identical to the Tender Notification that was issued by the Government during the earlier years; and that the Writ Petitioner has submitted its bids vide Tender I.D.No.817143 and Tender I.D.No.817156 in response to both the Tender Notifications bearing Tender Notification No.1(Zone-II) and Tender Notification No.2(Zone-III).
4. It is further submitted that the closing date for submission of the tender documents is fixed as 02.07.2025; that vide proceedings dated 30.07.2025, the Official Respondents have conveyed through e-mail, the Final Technical Evaluation Report, thereby requiring the bidders to peruse the same and raise objections if any on the Final Technical Evaluation Report on or before 12:00 P.M., on 31.07.2025; that at Sl.No.12 of the said proceedings of the Managing Director dated 30.07.2025, in respect of Package Nos. V and VI; that the following shortfalls/clarifications were sought;
S.No. Name of the Package Shortfalls/Clarifications Decisions
Firm/Bidder No.
12. LA MCLEAN V & VI 1. Private hospital Not
India Limited experience certificate qualified
(AIG, KIMS) are
supported only by
4
26ASFY2024-25, which is
outside the required range
(2019-2023)
2. Furnished form 16A
for the period from APR-
2025 to DEC-2024, but
not furnished for the
period from APR-2023 to
Mar-2024
5. It is further submitted that the Writ Petitioner has received an e-mail, also on the same date i.e., 30.07.2025, from the Official Respondents with the following text:
"You are requested to raise objections if any on the Final Technical Evaluation report on or before 12.00 P.M dated 31.07.2025."
6. It is further submitted by the learned Senior Counsel by drawing the attention of this Court to the reply given by the Writ Petitioner on the next date i.e., 31.07.2025 (Ex.P15), thereby giving all clarifications and also placing on record the material which is in response to the shortfalls/clarifications in the communication of the Respondents dated 30.07.2025; that the clarification dated 31.07.2025 had stated that the Writ Petitioner has provided experience certificate from 2019-2020 to 2023-2024 as stipulated. It is also submitted that the GST receipts as proof of payment, documentation from 2019-2020 to 2023-2024 and for subsequent years (2024-2025) due to ongoing projects with the intent to provide most correct information. It is also stated that proof of payment of GST for the respective contract agreements (KIMS and AIG Hospitals) is submitted from page Nos. 1013 to 1192 for the period 2021-2022 to 2023-2024; that it is also stated that the said GST receipts confirms the proof of payment received from AIG Hospital, Hyderabad and KIMS Hyderabad; and that it is stated that the GST paid receipts are a strong indication that the Writ Petitioner has received payments from the client viz., LA-MCLEAN.
57. It is further submitted that the paid GST receipts would be sufficient to establish proof of payment; that the Writ Petitioner has also submitted the Form-26AS (IT Department) for further corroboration. Form-26A, documents from IT Department for the period 2023-2024 were also submitted; and that the Writ Petitioner has submitted the following documents along with covering letter dated 31.07.2025 (Ex.P14);
"Supporting Documentation Provided along with the bid:
Experience Certificates: annexure 6 submitted duly notarized Experience Certificate from AIG (2019-20 to 2024-25) and KIMS (2019-20 to 2024-25) were included. These certificates specifically include the period stipulated (2019-20 to 2023-24) Work orders and Agreements: Full agreements with AIG and KIMS were enclosed, covering the respective start years 2019 until 2025(ongoing), documenting the continuity and tenure of our services.
Payment Documents: We have furnished the latest Form 16A issued by our clients as proof of ongoing payment for the year 2024-25, confirming sustained service provision.
Proof of payment of GST for respective contract agreement-Submitted as proof of payment.
We respectfully request the committee to kindly review the enclosed documents, noting that all experience for the desired window (2019-20 to 2023-24) is not only covered but further supported by both client attestations and payment proof. The inclusion of later years was meant to display our ongoing engagement and in no way omits or substitutes the mandated period."
8. Learned Senior Counsel has drawn the attention of this Court to the checklist for the bidder. He has drawn the attention of this Court to Sl.No.4 of the checklist relating to the experience certificate of general experience relating to the governmental works and as well as private works. He has also 6 drawn the attention of this Court to clause-2 that stipulates that the bidder must be a service provider in the field of Sanitation Services (Housekeeping Services) and should have experience of such services in any one year during the last five (5) financial years i.e., between 2019-20 to 2023-24. He has also drawn the attention of this Court to Sl.No.3 of the eligibility criteria in clause- 6.1 that stipulates that the minimum total sq.feet should be five lakh in any one year, during the last five (5) financial years.
Submissions of the Respondents:
9. Learned Advocate General appearing behalf of the Official Respondents has submitted that the indispensable condition laid down in the Tender conditions have not been fulfilled by the Writ Petitioner. He has drawn the attention of this Court to the checklist for the bidder. He has drawn the distinction between the experience certificates relating to government works and experience certificates and documents required to be submitted by the Writ Petitioner in respect of private works. He would submit that the documents that are required to be submitted by the bidder in respect of private works are four-fold in nature, in as much as the bidder is required to submit: (i) experience certificates issued by the private agency; (ii) proof of contract agreement; (iii) proof of payment for services; and,(iv) proof of payment of GST for the respective contract agreement. He has also drawn the attention of this Court to paras-D and E of clause-3 dealing with e-Procurement process.
Para-D stipulates that offline bids will not be entertained by the Tender Inviting Authority for the tenders published in e-Procurement portal. Para-E stipulates the procedure for uploading the scanned copies where the bidders are required to fix their signatures.
10. Learned Advocate General has also drawn the attention of this Court and would submit that in so far as Sl.No.3 of Clause-6 is concerned, the Official Respondents have clearly stipulated that the proof of payments for and 7 proof of payments of GST receipts for the respective contract agreements are the documents which are required. He would also submit that the tender conditions stipulated uploading of the documents and hardcopies will not be accepted. He would also submit that the compliance of the tender conditions vide proceedings dated 31.07.2025 is impermissible as per the tender condition, in as much as the Writ Petitioner has submitted such details belatedly (which are filed in the present paperbook from page Nos.594 to 610 and 611 to 622).
11. Learned Advocate General has also drawn the attention of this Court to Clause-6.3 dealing with the evaluation criteria. He has drawn the attention of this Court to paras- (a) to (e) of the said clause-6.3 dealing with the evaluation criteria for financial proposal. The said paragraphs (a) to (e) are usefully extracted hereunder:
"6.3 Evaluation criteria for financial proposal Bidders shall upload the financial proposal in the formats at Annexure-13A, 13B & 13C (the "Financial Proposal"), in Indian Rupees, and signed by the Bidder's authorized signatory. While submitting Financial Proposal, the Bidder shall ensure the following:
a) Evaluation of the technical bids will be carried out based on the criteria mentioned in the bidding document and the documents furnished by the bidder in their technical bid.
b) The bids will be initially examined to determine whether they are complete, whether required sureties have been furnished, whether the documents have been properly authenticated, and whether the bids are generally in order and without any material deviation, reservation or omission. A material deviation, reservation or omission is one that (i) if accepted would affect in any substantial way, the scope, quality or performance of the services specified in the contract (or) (ii) limit in any substantial way, inconsistent with the bidding document, the Purchaser's rights or the bidder's obligation under the contract (or)(iii) if rectified, would unfairly affect the competitive position of the other bidders presenting substantially responsive bid.8
c) If a bid is not substantially responsive to the requirements of the bidding document it shall be rejected by the purchaser and shall not subsequently be made responsive by the bidder by correction of the material deviation, reservation or omission.
d) Provided that a bid is substantially responsive the purchaser may waive any non-material nonconformities (deviation, reservation or omission) in the bid.
e) Provided that a bid is substantially responsive, the purchaser may request the bidder to submit the necessary information or documentation within a reasonable period of time to rectify nonmaterial nonconformities. Requesting information or documentation on such nonconformities shall not be related to any aspect of the price of the bid.
Failure of the bidder to comply with the request may result in the rejection of its bid."
12. In the light of the above Clause-6.3, learned Advocate General would submit that the bids of the Writ Petitioner were treated as non-responsive and that the Writ Petitioner has failed to comply with the essential conditions.
13. Learned Advocate General has referred to the judgment rendered by the Division Bench of the High Court of Bombay in Arav Infratech Private Limited V. State of Goa and others: (2021) 1 High Court Cases (Bom) 451, the relevant portion of the para Nos. 34 and 37 are usefully extracted hereunder:
34. Clause 2(d) of the tender notice in clear terms requires the system generated mail/sms from the Commercial Tax Department, Government of Goa showing the latest application reference number (ARN) generated on GST common portal after filing the latest return which was due as per GST law. In fact, the said clause specifically mentions GSTR-1, GSTR-3B and any other returns. The petitioner no doubt filed the GSTR-1 but failed to upload GSTR-3B along with the application form. In fact, it appears that GSTR-3 was filed by the petitioner on 7-12-
2020 at 11:07 p.m. and that too for the month of October. The petitioner now cannot stand to say that GSTR-3B was not a essential document and the same could have been produced by the petitioner on being asked. Admittedly, the 9 petitioner had not filed the said document till the filing of the petition and as noted above, what has been filed is GSTR-3B for the month of October 2020. It is also in dispute that Respondents 4 and 5 had produced both, GSTR-1 and GSTR-3B and as such their bids were accepted and were opened. It is also not in dispute that out of the 6 bids received, bids of4 bidders viz. Abcon, AravInfratechPvt. Ltd, Creative Enterprises and KishorNaik were rejected as they were not accompanied by necessary documents i.e. GSTR-1 and GSTR-3B.
35. xxx
36. xxx
37. In the facts, we are of the opinion, that Respondents 2 and 3 were the best persons to understand and appreciate the requirements and interpret the documents. We do not find any perversity or illegality or mala fides or arbitrariness in the said interpretation. As authors of the tender documents, their interpretation will have to be accepted. Merely because another interpretation is plausible that, by itself, is not a reason warranting interference in the interpretation, in the facts. We also, in the facts, do not see any substantial public interest involved warranting interference in writ jurisdiction, in exercise of our powers of judicial review. It appears that the last date of filing GSTR-3B by the petitioner for September and October 2020 was over and that the petitioner had not filed the said returns at the time when the tender/application was to be submitted for the bid. It also appears that the petitioner had not even submitted the ARN of GSTR-3B for the month of September 2020 when the legal notices were sent by the petitioner to the authorities. Although, mala fides have been alleged, having considered the facts in question, we do no see any mala fides or arbitrariness in rejection of the petitioner's bid on the premise of non-submission of GSTR-3B documents, which according to the respondents was an essential document of the tender."
Rejoinder by the Writ Petitioner:
14. Learned Senior Counsel has submitted that in the conditions of eligibility of the bidders (Clause-6.1), no specific details were provided by the draftsmen of the document as regards: (i) the nature of the proof of payment for the 10 services; and, (ii) the nature of proof of payment of GST for the respective contract agreement. Since there is no specific mention of the nature of the documents sought by the Respondents, the Writ Petitioner has initially submitted the experience certificate issued by the AIG Hospital and KIMS Hospital for the period from 2019-2020 to 2024-2025. Similar documents were also provided for GST for the said period. He would submit that it is only to indicate the ongoing contract between the Writ Petitioner and AIG Hospital on one hand and between the Petitioner and the KIMS Hospital on the other hand, the Writ Petitioner has submitted the details relating to the year 2024-2025, while the requirement is only to furnish the certificates from 2019-2020 to 2023-2024. He would also submit that the very fact that the Respondents have communicated the deficiencies to the Writ Petitioner with a direction to raise objections or comply with the same is the proof that the Respondents have treated the bids of the Writ Petitioner as 'substantially responsive' and that minor deficiencies that were curable were sought to be rectified. He would submit that in response to such e-mail from the Respondents on 30.07.2025, the Writ Petitioner has immediately responded vide proceedings dated 31.07.2025 furnishing of the required documents. He would also submit that the submission of the required documents is not inconsistent with the bid documents that are already submitted and therefore the Writ Petitioner does not suffer any disqualification as contemplated in paragraphs (a) to (c) of Clause-6.3 dealing with evaluation criteria for financial proposal. He would also submit that the case of the Writ Petitioner falls under paragraphs (d) and
(e) of Clause-6.3.
15. The Official Respondents have not filed counter affidavit and in lieu of the same, learned Advocate General has passed across the Bench, material papers on which he proposes to rely upon. He has drawn the attention of this Court to the document which is at page No.159 of those material papers and would submit that in so far as GST payment is concerned, the receipt does not indicate the name of the employer and therefore it becomes difficult for the 11 Respondents to see that the GST has been paid with respect to the Sanitation (Housekeeping) Services undertaken by the Writ Petitioner with respect to either AIG Hospital or KIMS Hospital.
Analysis:
16. This Court has perused the Clauses referred by both the sides. This Court has also perused the documents. This Court has perused the reasons specified by the Official Respondents for rejecting the bids of the Writ Petitioner vide e-mail dated 05.08.2025 (Ex.P1). The reason for disqualification is usefully extracted hereunder:
Technical Parameters List Description Parameter Parameter Comments Max Value Parameter Evaluation Date Type Min Value Operator Remarks Fulfilled Name Value Disqualified, the bidder N/A N/A As per Tender Document As per tender As per Tender Document N/A Yes Yes Text has furnished proof of payment for Private Experience only 26AS for FY 2024-25 as against the proof of payment for Private hospital experience certificate (AIG,KIMS) for the financial years 2019-20 to 2023-24 which is outside the required range (2019-20 to 2023-24). Furnished from 16A for the period from December, 2024 to April, 2025, but not furnished for the period from April-2023 to March-2024.
17. The above extract in juxtaposition to the document submitted by the Writ Petitioner would indicate that the payment of GST by the Writ Petitioner is evidenced only through the Income Tax Document which does not specify 12 whether such GST has been paid, in connection with the subsisting contract with AIG Hospital and KIMS Hospital for the financial years 2019-20 to 2023-
24.
18. It is also stated that Form-16A for the period from December, 2024 to April, 2025 is submitted, but the Writ Petitioner has not furnished for the period from April, 2023 to March, 2024. As compared to the initial objection raised by the Respondents on 30.07.2025 and the final response of the Official Respondents on 05.08.2025 (impugned herein), it is noticed that they are one and the same. The Official Respondents would not have communicated the deficiencies and would not have required the Writ Petitioner to cure the deficiencies vide e-mail dated 30.07.2025 had the Official Respondents treated the bids of the Writ Petitioner as non-responsive. The very fact that the Official Respondents have communicated its response with regard to the shortcomings thereby giving an opportunity to the Writ Petitioner to attend to such deficiencies would indicate that the Official Respondents have treated the bids of the Writ Petitioner as substantially responsive. This apart, this Court has noticed that there is no inconsistency or contradiction between initial documents submitted by the Writ Petitioner on the date of submission of the bids and the documents submitted by the Writ Petitioner on 31.07.2025 in response to the e-mail of the Official Respondents on the previous date. The Writ Petitioner has merely supplied the clarification since the Official Respondents, due to lack of clarity whether GST amounts have been received by the Writ Petitioner from any other client other than AIG Hospital and KIMS Hospital. In so far as, these deficiencies are concerned, the Writ Petitioner has immediately furnished necessary details. The non-furnishing of such specific details by splitting the GST amounts received from AIG Hospital and KIMS Hospital, is viewed by this Court that such deficiencies have crept into the bids of the Writ Petitioner on account of lack of clarity in the conditions of eligibility of bidders that are spelt out in Clause-6.
1319. This Court has formed this opinion upon perusal of various conditions that are required to be fulfilled under the conditions of eligibility of bidders. In this view of the matter, it cannot be stated that non-furnishing of the specific details would substantially alter the terms and conditions which the bidder is required to comply nor is it meant to give any undue or unfair advantage to the present bidder/Writ Petitioner over and above other bidders. This apart, this Court is also of the opinion that the material that is now supplied to the Official Respondents on 31.07.2025 is not inconsistent with the initial tender documents, in as much as, initial tender documents supplied by the Writ Petitioner had made it clear that there is not only subsisting contract with AIG Hospital and KIMS Hospital but the said arrangement has been under currency atleast from 2019-20 till date. Therefore, this Court does not see or perceive that the Writ Petitioner is trying to introduce new documents that would materially give undue and unfair advantage to the Writ Petitioner. This apart, this Court is also in agreement with the stand of the Writ Petitioner that at the inception, the Official Respondents have in fact treated the bids of the Writ Petitioner as substantially responsive and therefore, had communicated the deficiencies to the Writ Petitioner with a view to rectify the same, on or before 12:00 P.M., on 31.07.2025 and that the Writ Petitioner had complied within the stipulated time by responding and supplied all the material documents on 31.07.2025 itself. If the Writ Petitioner wanted to make out a new case by producing something new which never existed, that could not have been fabricated by the Writ Petitioner by the next date itself, in as much as the said documents are uploaded to various governmental departments including the Income Tax Department as well as GST Departments from 2019 onwards.
20. In the light of the above discussion, this Court opines that when minor mistakes occur in the bidding process which are unintentional and which does not substantially alter the materials supplied by the bidder at the inception nor would give undue advantage to the bidder such bidder should be permitted to 14 submit the supporting documents. This view is fortified by the dictum of the Hon'ble Supreme Court in ABCI Infrastructures Private Limited V. Union of India and others: (2025) 6 SCC 813 at para Nos. 16 to 23, which are usefully extracted hereunder:
"16. A mistake may be unilateral or mutual, but it is always unintentional. If it is intentional, it ceases to be a mistake. Mistakes or errors, though avoidable, are committed inadvertently. They have varied consequences in law. As per Section 20 of the Contract Act, 1872 (hereinafter "the Contract Act") whereby both parties to an agreement are under a mistake as to matter of fact essential to an agreement, the agreement is void. The Explanation to Section 20 says that 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.
17. 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 W.B. SEB v. Patel Engg. Co. Ltd., this Court referred to para 84 of American Jurisprudence (2nd Edn., Vol. 64 at p. 944), which reads: (SCC p. 468, para
26) "26. 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." "
18. Thereafter, reference was made to two decisions of the Supreme Court of the United States in Moffett Hodgkins Clarke Co. v. City of Rochester³ and Hearne v. Marine Insurance Co.¹ 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 may be a ground for rescinding but not for reforming a contract where the minds of the parties have not met, yet there is no contract and hence none to 15 be rectified. Relief may not be granted where it is inequitable.
19. While accepting this legal position, this Court in W.B. SEB2 has propounded the following exceptions to the general principle on a person seeking relief in equity on account of mistake: (SCC p. 469, para 27) "27.... (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."
20. This judgment also refers to a decision of the Superior Court of New Jersey in Spina Asphalt Paving Excavating Contractors Inc. v. Borough of Fairview [Spina Asphalt Paving Excavating Contractors Inc. v. Borough of Fairview, 304 NJ Super 425 (App Div 1997)] . The said case is related to the rectification of mistakes in the bid specifications. Relief granted in the said case was upheld by the Superior Court with the caution that generally an error in the statement of a price would not be treated as immaterial and it is only when the case of error was patent and the true intent of the bidder obvious that such an error might be disregarded.
21. In W.B. SEB [W.B. SEB v. Patel Engg. Co. Ltd., (2001) 2 SCC 451] , 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 16 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.
22. The decision in W.B. SEB [W.B. SEB v. Patel Engg. Co. Ltd., (2001) 2 SCC 451] was referred to and followed where a relief to the bidder was apparent before this Court in Omsairam Steels & Alloys (P) Ltd. v. State of Odisha [Omsairam Steels & Alloys (P) Ltd. v. State of Odisha, (2024) 9 SCC 697 : (2024) 4 SCC (Civ) 279 :
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.
23. Reference was made to the decision in Coimbatore District Central Coop. Bank v. Employees Assn. [Coimbatore District Central Coop.
Bank v. Employees Assn., (2007) 4 SCC 669 : (2007) 2 SCC (L&S) 68] where discussing the question of proportionality or punishment imposed on the striking workmen it is observed: (SCC pp. 678-79, paras 18-20) "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) permits scrutiny of excessive onerous penalties or infringement of rights or interests and a manifest imbalance of relevant considerations, the latter (necessity test) requires infringement of human rights to the least restrictive alternative. [Judicial Review of Administrative Action (1995), pp. 601-05, para 13.085; see also Wade & Forsyth: Administrative Law (2005), p. 366.] 17
20. In Halsbury's Laws of England (4th Edn.), Reissue, Vol. 1(1), pp. 144-45, para 78, it is stated:
'The court will quash exercise of discretionary powers in which there is no reasonable relationship between the objective which is sought to be achieved and the means used to that end, or where punishments imposed by administrative bodies or inferior courts are wholly out of proportion to the relevant misconduct. The principle of proportionality is well established in European law, and will be applied by English courts where European law is enforceable in the domestic courts. The principle of proportionality is still at a stage of development in English law; lack of proportionality is not usually treated as a separate ground for review in English law, but is regarded as one indication of manifest unreasonableness.' "
Accordingly, in the said case the appellant was directed to make a payment of Rs 3 crores within the stipulated period and on the said payment the security deposit in the form of a bank guarantee of over Rs 9 crores was directed to be refunded.
21. The view of this Court is also fortified by the findings rendered by the Hon'ble Apex Court in Rashmi Metaliks Limited and Another V. Kolkata Metropolitan Development Authority and others: (2013) 10 SCC 95, at para Nos.17 and 18 which is usefully extracted hereunder:
"....17. So far as clause (j) of the detailed notice inviting E-tender No.01/KMDA/MAT/CE/2013-2014 dated 10.5.2013 emanating from the office of the Chief Engineer is concerned, it seems to us that contrary to the conclusion in the impugned judgment, the clause is not an essential element or ingredient or concomitant of the subject NIT. In the course of hearing, the Income Tax Return has been filed by the Appellant-company and scrutinized by us. For the Assessment Year 2011-2012, the gross income of the Appellant-company was Rs.15,34,05,627, although, for the succeeding 18 Assessment Year 2012- 2013, the income tax was NIL, but substantial tax had been deposited.
18. We think that the Income Tax Return would have assumed the character of an essential term if one of the qualifications was either the gross income or the net income on which tax was attracted. In many cases this is a salutary stipulation, since it is indicative of the commercial standing and reliability of the tendering entity. This feature being absent, we think that the filing of the latest Income Tax Return was a collateral term, and accordingly the Tendering Authority ought to have brought this discrepancy to the notice of the Appellant-company and if even thereafter no rectification had been carried out, the position may have been appreciably different. It has been asserted on behalf of the Appellant-company, and not denied by the learned counsel for the Respondent- Authority, that the financial bid of the Appellant-company is substantially lower than that of the others, and, therefore, pecuniarily preferable."
22. In the above premise, this Writ Petition is allowed. The Official Respondents are directed to process the bids of the Writ Petitioner in terms of the findings rendered by this Court, which shall however be subjected to all other just exceptions and compliance of the other tender conditions.
23. Interlocutory Applications, if any, stand closed in terms of this order.
______________________________________ GANNAMANENI RAMAKRISHNA PRASAD, J Dt: 18.08.2025 Note: LR Copy to be marked.
UPS/DSV 19 201 HON'BLE SRI JUSTICE GANNAMANENI RAMAKRISHNA PRASAD WRIT PETITION No.21232 OF 2025 Dt: 18.08.2025 Note: LR Copy to be marked.
UPS/DSV