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M/s ABCI Infrastructures Pvt. Ltd. v. Union of India

Civil Appeal · 2025 INSC 215Decided 14 Feb 2025
C.A. No.-002546-002546 - 2025 (arising out of SLP(C) No. 25394/2023)
Chief Justice · Justice Sanjay Kumar · Justice K.V. Viswanathan

Background

The Border Roads Organisation (BRO) invited bids worth roughly Rs. 1,504 crore for constructing twin tunnels in Himachal Pradesh/Ladakh, and the appellant company was ranked the lowest (best) bidder, but due to what it said was a system/typographical error, its quoted price appeared as just Rs. 1,569 instead of Rs. 1,569 crore. The company immediately flagged the error the next day and repeatedly asked to withdraw its bid without penalty, but BRO instead pressed the company to justify the impossible price, later declared it a defaulter, and directed the bank to encash its Rs. 15.04 crore bank guarantee.

Decision Breakdown

The Supreme Court held that the pricing error was self-evident and undeniable: no contract of this scale could ever be executed for a token sum like Rs. 1,569, and that the appellant had acted properly by promptly informing the authorities the very next day after the mistake became apparent, consistent with legal principles on relief for obvious bidding mistakes. At the same time, the Court found the appellant was still at fault for its own carelessness in failing to check its bid, and that BRO's justification for delay (blaming the appellant entirely) ignored its own unreasonable insistence on holding the company to an impossible price. Balancing both sides' conduct and invoking principles of proportionality, the Court set aside the forfeiture, directed the appellant to pay Rs. 1 crore to BRO as a consequence for its error, and ordered BRO to return the full bank guarantee/demand draft.

Lesson Learnt

When a bidder makes an obvious, good-faith clerical error in a tender and promptly informs the authority before any contract is signed, punitive forfeiture of the entire bid security is disproportionate. Courts can craft a middle-ground remedy that holds the bidder partly accountable without imposing the full penalty, especially where the inviting authority's own rigid conduct contributed to the dispute.

Official source (sci.gov.in)View Judgment (PDF)

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