Supreme Court of India
M/S SHANTI CONSTRUCTION PVT. LTD.versusTHE STATE OF ODISHA & ORS.
- Citation
- 2025 INSC 1295
- Decided
- 7 November 2025
- Disposal
- Disposed off
- Bench
- SANJAY KUMAR
Holding
The term ‘previous Financial Year’ must be understood as the year immediately preceding the financial year of the bid (FY 2020‑21), so the unsuccessful bidder had complied with Rule 27(4)(iv), making the Tender Committee’s rejection erroneous and necessitating a fresh auction.
Summary
The State of Odisha issued an auction notice for a five‑year sand‑quarry lease; Shanti Construction Pvt. Ltd., the highest‑price bidder, was declared non‑responsive for not submitting an Income Tax Return for FY 2021‑22, while a lower‑priced bidder was declared successful. The dispute centered on the meaning of “previous Financial Year” in Rule 27(4)(iv) of the Odisha Minor Mineral Concession Rules, 2016. The High Court upheld the rejection of the highest bid but directed the successful bidder to match the higher price, a direction the Supreme Court examined. The Supreme Court held that “previous Financial Year” must be read as the year immediately preceding the bid year (FY 2020‑21), which the unsuccessful bidder had filed, rendering the Tender Committee’s interpretation erroneous. Consequently, the Court set aside the High Court order, ordered a fresh auction, and directed refund of the deposit with interest. The appeals were disposed of.
Issues considered
- Interpretation of the term ‘previous Financial Year’ under Rule 27(4)(iv) of the Odisha Minor Mineral Concession Rules, 2016
- Validity of rejecting the highest bidder’s bid for alleged non‑compliance with the income‑tax‑return requirement
- Lawfulness of the High Court’s direction to compel the successful bidder to match the higher price
- Whether a fresh auction should be ordered and the deposit refunded
Legislation cited
Headnote
Issue for Consideration Issue arose as regards the interpretation of the term ‘previous Financial Year’ as defined in r.27(4)(iv) of Odisha Minor Mineral Concession Rules, 2016; and justification of the order passed by the High Court that bid of the unsuccessful bidder was rightly 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. Headnotes† Odisha Minor Mineral Concession Rules, 2016 – r.27(4)(iv) –
Subjects
Term ‘previous Financial Year’Bid of the unsuccessful bidderTenderSuccessful bidderHighest priceAuction of sand quarry leaseIncome Tax ReturnFinancial yearAward of tenderTender CommitteeTender conditionPublic exchequerPublic auctionsPrinciples of fairness and transparencyTehsildarPrinciple of restitutionInterpretation of tender conditions
Judgment
[2025] 11 S.C.R. 475 : 2025 INSC 1295
M/s Shanti Construction Pvt. Ltd.
v.
The State of Odisha & Ors.
(Civil Appeal No. 13484 of 2025)
07 November 2025
[Sanjay Kumar and Alok Aradhe,* JJ.]
Issue for Consideration
Issue arose as regards the interpretation of the term ‘previous
Financial Year’ as defined in r.27(4)(iv) of Odisha Minor Mineral
Concession Rules, 2016; and justification of the order passed
by the High Court 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.
Headnotes†
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 non-
responsive 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
* Author
476 [2025] 11 S.C.R.
Supreme Court Reports
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
[2025] 11 S.C.R. 477
M/s Shanti Construction Pvt. Ltd. v. The State of Odisha & Ors.
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]
Case Law Cited
B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. & Others [2006]
Supp. 8 SCR 11 : (2006) 11 SCC 548; Jagdish Mandal v. State of
Orissa & Others [2006] Supp. 10 SCR 606 : (2007) 14 SCC 517;
UFLEX Limited v. Government of Tamil Nadu & Others [2021] 7
SCR 571 : (2022) 1 SCC 165; Afcons Infrastructure Ltd. v. Nagpur
Metro Rail Corporation Ltd. & Anr. [2016] 3 SCR 551 : (2016) 16
SCC 818; Gujarat Pottery Works v. B.P. Sood, Controller of Mining
Leases for India [1967] 1 SCR 695 : 1966 SCC OnLine SC 126;
Bhushan Power and Steel Ltd. v. S.L. Seal, Addl. Secretary (Steel
and Mines), State of Odisha & Ors. [2016] 11 SCR 149 : (2017)
2 SCC 125; Doiwala Sehkari Shram Samvida Samiti Ltd. v. State
of Uttaranchal and Ors. [2006] Supp. 10 SCR 807 : (2007) 11
SCC 641; Prakash Asphaltings and Toll Highways (India) Ltd. v.
Mandeepa Enterprises and Ors., 2025 SCC OnLine SC 1959;
Subodh Kumar Singh Rathour v. Chief Executive Officer and Ors.
[2024] 7 SCR 532 : 2024 SCC OnLine SC 1682 : (2024) 15 SCC
461; Michigan Rubber (India) Ltd. v. State of Karnataka & Others
[2012] 8 SCR 128 : (2012) 8 SCC 216; Banshidhar Construction
Pvt. Ltd. v. Bharat Coking Coal Ltd. & Others [2024] 10 SCR 425 :
(2024) 10 SCC 273; TATA Cellular v. Union of India [1994] Supp.
2 SCR 122 : (1994) 6 SCC 651; Natural Resources Allocation,
In Re, Special Reference No.1 of 2012 [2012] 9 SCR 311 : (2012)
10 SCC 1 – referred to.
Aane Mines and Minerals, Nagarjuna Hills, Panjagutta, Hyderabad v.
State of Karnataka & Another 2019 SCC OnLine Kar 3791 –
referred to.
List of Acts
Odisha Minor Mineral Concession Rules, 2016; Constitution of India.
478 [2025] 11 S.C.R.
Supreme Court Reports
List of Keywords
Term ‘previous Financial Year’; Bid of the unsuccessful bidder;
Tender; Successful bidder; Highest price; Auction of sand quarry
lease; Income Tax Return; Financial year; Award of tender; Tender
Committee; Tender condition; Public exchequer; Public auctions;
Principles of fairness and transparency; Tehsildar; Principle of
restitution; Interpretation of tender conditions.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 13484
of 2025
From the Judgment and Order dated 01.03.2023 of the High Court
of Orissa at Cuttack in WP (C) No. 20402 of 2022.
With
Civil Appeal No. 13485 of 2025
Appearances for Parties
Advs. for the Appellant:
Ashok Panigrahi, Sr. Adv., R. Chandrachud, Ms. Geetanjali Das
Krishnan, Dhuli Venkata Krishna, Aryan Singh, Surajit Bhaduri,
Dhananjaya Mishra, Amritesh Mohanty, Navneet Dogra.
Advs. for the Respondents:
Ashok Panigrahi, Sr. Adv., Shibashish Misra, Dhananjaya Mishra,
Amritesh Mohanty, Navneet Dogra, R. Chandrachud, Dhuli Venkata
Krishna, Ms. Geetanjali Das Krishnan, Aryan Singh.
Judgment / Order of the Supreme Court
Judgment
Alok Aradhe, J.
Leave granted.
2. Both these appeals emanate from the judgment dated 01.03.2023
passed by the High Court of Orissa in a writ petition. These appeals
involved the issue of interpretation of the term ‘previous Financial
[2025] 11 S.C.R. 479
M/s Shanti Construction Pvt. Ltd. v. The State of Odisha & Ors.
Year’ as defined in Rule 27(4)(iv) of Odisha Minor Mineral Concession
Rules, 2016 (hereinafter, referred to as ‘the Rules’).
3. The relevant facts leading to filing of these appeals are as under.
3.1 The Tehsildar, Tangi Chowdwar, Cuttack on 11.07.2022 issued
a notice inviting bids for extraction of sand on lease for a period
of five years of Mahanadi Sand Quarry under Tehsil Tangi
Chowdwar, District Cuttack, in the State of Orissa (hereinafter,
referred to as ‘auction notice’). The bids were required to be
submitted in a sealed cover on or before 18.07.2022. The
sealed envelopes were to be opened on 19.07.2022 and after
verification of bid documents, the lease was to be granted in
favour of the highest bidder. Clause 5 of the tender incorporates
provision of the amended Rule 27(4)(iv) of the Rules and
requires the bidders to submit either (i) Income Tax Return of
previous financial year showing annual income for an amount
not less than the amount of additional charge offered and the
royalty payable for the minimum guaranteed quantity for one
whole year; Or (ii) Bank Guarantee valid for a period of eighteen
months for the amount not less than the amount as above.
3.2 In response to the auction notice, 20 bidders submitted their bids.
The unsuccessful bidder submitted its bid for grant of quarry
lease for a period of five years quoting rate of Rs.2127.27 per
cubic meter, whereas, the successful bidder submitted its bid
quoting a rate of Rs.1250/- per cubic meter.
3.3 The Tender Committee in its meeting held on 19.07.2022
examined the bids. The bid of the unsuccessful bidder who
had quoted the highest rate was declared non-responsive on
the ground that it failed to comply with provision of Rule 27(4)
(iv) of the Rules, as it did not submit the Income Tax Return
for financial year 2021-2022. The bid of the successful bidder
was found to be technically responsive and he was declared
to be the highest bidder.
3.4 The Tehsildar on 25.07.2022 issued Form-F by which intimation
was sent to the successful bidder informing him that he is
successful bidder and he was called upon to (i) convey his
acceptance to the terms and conditions and (ii) to deposit
an amount of Rs.1,26,75,000/- under Rule 27(7) and 27(9)
480 [2025] 11 S.C.R.
Supreme Court Reports
of the Rules. The successful bidder on 25.07.2022 conveyed
his acceptance to the terms and conditions prescribed in the
communication dated 27.07.2022 and deposited an amount of
Rs.1,26,75,000/- through RTGS from Bank of India.
3.5 The unsuccessful bidder filed a writ petition, on 10.08.2022,
before the High Court, in which challenge was made to award
of tender in favour of successful bidder. The High Court by an
ex-parte interim order dated 24.08.2022 directed that any action
taken in pursuance of issuance of Form-F to the successful
bidder shall not be given effect to till further orders.
3.6 The High Court by an order dated 01.03.2022 inter alia held that
bid of the unsuccessful bidder was rightly rejected on account
of non-compliance with Rule 27(4)(iv) of the Rules and upheld
the grant of tender in favour of successful bidder. However, the
High Court held that there is a huge difference between the
rates quoted by unsuccessful and successful bidder and the
grant of tender to successful bidder shall result in huge loss to
public exchequer. The Tehsildar was, therefore, directed to call
upon the successful bidder to match the highest price offered by
the unsuccessful bidder, in the interest of the State exchequer
and public at large. The unsuccessful bidder is aggrieved by
the impugned judgment in so far as it upholds the rejection
of its bid, whereas the successful bidder is aggrieved by the
impugned judgment in so far as it requires him to match bid of
the unsuccessful bidder. In the aforesaid factual background,
both the unsuccessful bidder as well as the successful bidder,
are before us.
4. A Bench of this Court in the Special Leave Petition filed by the
unsuccessful bidder, granted an ad-interim order on 29.03.2023,
directing the parties to maintain status quo in relation to the contract
in question until further orders.
5. Learned senior counsel for the unsuccessful bidder submitted that the
Tender Committee ought to have appreciated that the unsuccessful
bidder had submitted the Income Tax Return for the financial year
2020-2021 along with its bid. It is further submitted that Tender
Committee ought to have appreciated that the tender was floated
in the midst of the year and the unsuccessful bidder had filed the
provisional balance sheet for the financial year 2021-2022, as, the last
[2025] 11 S.C.R. 481
M/s Shanti Construction Pvt. Ltd. v. The State of Odisha & Ors.
date for filing the Income Tax Return for unsuccessful bidder, which
is a company, was 31.10.2022. It is, therefore, urged that Tender
Committee had misinterpreted Rule 27(4)(iv) of the Rules and it ought
to have appreciated that the unsuccessful bidder had complied with
the mandate of the Rule. It is urged that the High Court has failed to
exercise its jurisdiction under Article 226 of the Constitution of India.
It is pointed out that out of the period of five years of lease, a period
of three years and three months, has already expired. Therefore, in
the facts and circumstances of the case, the Tehsildar be directed
to issue a fresh tender. In support of aforesaid submissions, reliance
has been placed on the decisions in B.S.N. Joshi & Sons Ltd. v.
Nair Coal Services Ltd. & Others1, Jagdish Mandal v. State of
Orissa & Others2 and UFLEX Limited v. Government of Tamil
Nadu & Others3.
6. Learned counsel for the State submitted that it is ready and willing
to award the tender for the remainder of the period in favour of
successful bidder, on the rate quoted by the unsuccessful bidder.
Alternatively, it is submitted that respondent Nos. 1 and 2 are willing
to refund the amount deposited by the successful bidder without
any interest, as the lease deed could not be executed in favour of
successful bidder due to the litigation.
7. On the other hand, learned counsel for the successful bidder urged
that the decision of the Tender Committee which rejected the bid of
the unsuccessful bidder is justified, as it failed to comply with Rule
27(4)(iv) of the Rules. It is pointed out that the Income Tax Returns
now produced by the unsuccessful bidder do not disclose an annual
income above the threshold value. It is urged that, in the absence
of arbitrariness or mala fides, the terms of a Tender are not open to
judicial scrutiny. In support of aforesaid submission, reference has
been made to a decision of this Court in Afcons Infrastructure
Ltd. v. Nagpur Metro Rail Corporation Ltd. & Anr.4 It is contended
that upon declaration of successful bidder coupled with acceptance
of terms and conditions of the grant and on deposit of statutory
1 (2006) 11 SCC 548
2 (2007) 14 SCC 517
3 (2022) 1 SCC 165
4 (2016) 16 SCC 818
482 [2025] 11 S.C.R.
Supreme Court Reports
amount, a vested right is created in favour of a successful bidder
and execution of formal lease deed is a ministerial act. In support of
aforesaid submission, reliance has been placed on decisions of this
Court in Gujarat Pottery Works v. B.P. Sood, Controller of Mining
Leases for India5, Bhushan Power and Steel Ltd. v. S.L. Seal,
Addl. Secretary (Steel and Mines), State of Odisha & Ors.6 and
a decision of Karnataka High Court in Aane Mines and Minerals,
Nagarjuna Hills, Panjagutta, Hyderabad v. State of Karnataka
& Another7.
8. It is submitted that delay in execution of the lease deed is not
attributable to the successful bidder and the lease deed could not
be executed due to litigation. It is further submitted that an act of
Court cannot prejudice a party i.e. actus curiae neminem gravabit.
In support of aforesaid proposition, reference has been made to a
decision in Doiwala Sehkari Shram Samvida Samiti Ltd. v. State
of Uttaranchal and Ors.8 It is contended that public auctions are
corner stones of public accountability and transparency and concluded
auction in the absence of mala fides or breach of law should not
be cancelled. In support of aforesaid submission, reliance has been
placed on the decisions in Subodh Kumar Singh Rathour v. Chief
Executive Officer and Ors.9 and Prakash Asphaltings and Toll
Highways (India) Ltd. v. Mandeepa Enterprises and Ors.10 Lastly,
it is contended that the successful bidder is now ready to match the
rates offered by the unsuccessful bidder and therefore, the Tehsildar
be directed to execute the lease deed in favour of the successful
bidder for a fresh period of five years.
9. We have considered rival submissions and have perused the record.
The contours of judicial review in contractual matters are settled by a
long line of authority. The ‘heart beat of fair play’ in tender matters is
non-arbitrariness and fairness in State action. The court’s interference
is limited to cases where the decision making process is shown to
be arbitrary, irrational, mala fide or contrary to public interest. (See :
5 1966 SCC OnLine SC 126
6 (2017) 2 SCC 125
7 2019 SCC OnLine Kar 3791
8 (2007) 11 SCC 641
9 2024 SCC OnLine SC 1682 : (2024) 15 SCC 461
10 2025 SCC OnLine SC 1959
[2025] 11 S.C.R. 483
M/s Shanti Construction Pvt. Ltd. v. The State of Odisha & Ors.
Michigan Rubber (India) Ltd. v. State of Karnataka & Others11).
The same principle resonates in Banshidhar Construction Pvt.
Ltd. v. Bharat Coking Coal Ltd. & Others12 wherein this Court
reiterated that decisions of the Government must be free from
arbitrariness and guided by the constitutional mandate contained
in Article 14 of the Constitution of India. The principle of restraint
enunciated in TATA Cellular v. Union of India13 that Courts do not
interfere in contractual matters of the State, is accompanied by an
equally strong duty to intervene in decision making process if the
same is irrational, perverse or against public interest.
10. A 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 i.e.
fair, transparent and competitive. The obligation of the Tendering
Authority is therefore twofold, namely, to interpret its own terms with
consistency and to ensure that such interpretation advances, not
defeats, the object of tender. The 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.
The interpretation of the terms of tender must, therefore, serve the
object and purpose of the tender mainly to maximise the revenue
to the State, when it deals with a natural resource.
11. Now, we apply the aforesaid well settled legal principles to the facts
of these cases. The controversy in both these appeals essentially
turns upon the correct interpretation of Rule 27(4)(iv) of the Rules,
as amended on 11.03.2022. The said Rules reads as under :-
“(iv) Income Tax Return of previous financial year showing
annual income for an amount not less than the amount
of additional charge offered and the royalty payable for
the minimum guaranteed quantity for one whole year or
11 (2012) 8 SCC 216
12 (2024) 10 SCC 273
13 (1994) 6 SCC 651
484 [2025] 11 S.C.R.
Supreme Court Reports
Bank guarantee valid for a period of eighteen months for
the amount not less than the amount as above.”
12. Clause 5 of the auction notice which substantially incorporates the
aforesaid Rule is extracted below:-
“5. As per the provision of Section 27(4)(iv) of the OMMC
Rules 2016, the applicant has to deposit the equivalent
amount of the royalty against the minimum guaranteed
quantity (MGQ) and the proposed additional charges
or a bank guarantee of more than that amount valid for
next 18 months or the income-tax return of the previous
financial year. Bank Guarantee > MGQ X (Royalty + offered
Additional Charge).
13. Thus, Clause 5 of the auction notice which incorporates
Rule 27(4)(iv) of the Rules and inadvertently refers to it as
Section 24(4) of the Rules, mandates the applicant (i) to deposit the
equivalent amount of royalty against the minimum guarantee quantity
and the proposed additional charges or a (ii) bank guarantee of
more than that amount valid for next 18 months or (iii) the Income
Tax Return of previous financial year.
14. The unsuccessful bidder is a company. It is axiomatic from the stand
taken by the State in its counter, that the unsuccessful bidder had
filed the Income Tax Return for the Financial Year 2020-2021. The
auction notice was issued in the midst of the year i.e. on 11.07.2022.
The proper construction of the phrase ‘previous Financial Year’
therefore, assumes critical importance. Rule 27(4)(iv) of the Rules
requires the bidder to produce an Income Tax Return of the “previous
Financial Year”. The said Rule has to be read in harmony with the
provisions of the Income Tax Act, 1961. Under Section 139(1) of
the aforesaid Act, a company may file the Income Tax Return for
the Financial Year 2021-2022 up to 31st of October, 2022. As per
auction notice, the bids were required to be submitted on 18.07.2022.
The period for filing the Income Tax Return for Financial Year 2021-
2022 (relevant to Assessment Year 2022-2023) was yet to expire.
Therefore, on the said date the bidder could not have been expected
to file an Income Tax Return for Financial Year 2021-2022 along
with its bid documents, as the statutory period for filing the same
had not expired.
[2025] 11 S.C.R. 485
M/s Shanti Construction Pvt. Ltd. v. The State of Odisha & Ors.
15. The reasonable understanding of the term ‘previous Financial Year’
must therefore, be treated to mean the year immediately preceding
Financial Year i.e. 2020-2021, for which the unsuccessful bidder
had filed the Income Tax Return. The term ‘previous Financial Year’
in the case of unsuccessful bidder was to be treated as Financial
Year 2020-2021 and not 2021-2022. The aforesaid interpretation is
in consonance with the provisions of the Income Tax Act, 1961. The
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, therefore
it had not complied with the mandate contained in Rule 27(4)(iv) of
the Rules. The Tender Committee has 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. The High Court while deciding the writ petition
has failed to advert itself to the aforesaid aspect of the matter. The
impugned judgment passed by the High Court, therefore, cannot be
sustained. In view of our aforesaid conclusion, it is not necessary
for us to advert to various other contentions urged by the parties.
16. Now, we advert to the relief which may be granted to the unsuccessful
bidder. It is well settled that tenders and public auctions, specially
for natural resources, are not mere commercial transactions, but an
exercise in public trust. The State as custodian of natural wealth is
obligated to secure the best value for public resources consistent
with the principles of fairness and transparency [(See : Natural
Resources Allocation, In Re, Special Reference No.1 of 201214
and Subodh Kumar Singh Rathour (supra)]. In the instant case,
the auction notice was issued on 11.07.2022. The Tehsildar issued
a Form-F in favour of the successful bidder on 25.07.2022. The bid
of the successful bidder was accepted for a period of five years,
14 (2012) 10 SCC 1
486 [2025] 11 S.C.R.
Supreme Court Reports
out of which a period of three years and three months has already
lapsed. There is no material on record to indicate the present rate
of sand per cubic meter. However, there is an upward trend so far
as prices of sand is concerned which can safely be inferred from
the fact that successful bidder after filing the Special Leave Petition,
at the time of hearing of the appeal, has submitted that successful
bidder is now willing to match the rate offered by the unsuccessful
bidder. However, the successful bidder is entitled to refund of the
amount deposited by him along with interest on the principle of
restitution. Therefore, in the facts and circumstances of the case,
we issue following directions :-
(i) The impugned judgment dated 01.03.2023 passed in Writ
Petition (C) No. 20402 of 2022 passed by the High Court is
quashed and set aside.
(ii) The Tehsildar Tangi Chowdwar, Cuttack, shall issue a fresh
auction notice for grant of lease of extraction of sand for
Mahanadi Sand Quarry as per Odisha Minor Mineral Concession
Rules, 2016.
(iii) The unsuccessful and successful bidders, including all
concerned, shall be entitled to submit their bids.
(iv) The contract for extraction of sand shall be awarded in respect
of Mahanadi Sand Quarry in accordance with Odisha Minor
Mineral Concession Rules, 2016.
(v) The State shall refund the amount deposited by the successful
bidder within 30 days along with interest at the rate of 6% per
annum from the date of deposit till such payment is made.
17. Accordingly, the appeals are disposed of.
Result of the case: Appeals disposed of.
†
Headnotes prepared by: Nidhi Jain
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