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Om Prakash Sharma v. Ramesh Chand Prashar & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 5101 of 2016)Decided 13 May 2016
Civil Appeal No. 5101 of 2016
Chief Justice T.S. Thakur · Justice Uday Umesh Lalit

Background

Himachal Tourism invited bids for the outright purchase of a café site, and the appellant's bid of Rs. 27,15,000 was the highest among bidders, leading to a Letter of Intent and a Sale Deed in his favour. A rival bidder running a nearby dhaba, who had submitted a much lower bid, challenged the sale in the High Court, arguing the appellant had not submitted his annual turnover and net worth figures as required by the tender advertisement. Both the Single Judge and the Division Bench of the Himachal Pradesh High Court sided with the challenger, quashing the sale and ordering the process to be redone, prompting the appellant's appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that the High Court had wrongly relied on an Expert Committee's internal reserve-price figure that was never actually disclosed in the public advertisement, so the appellant's bid could not be faulted on that ground. On the turnover/net-worth requirement, the Court applied its earlier ruling in Poddar Steel Corporation v. Ganesh Engineering Works, distinguishing between "essential" tender conditions (which must be rigidly enforced) and "ancillary" ones (from which authorities may validly deviate). Since this was a one-time outright sale (not an ongoing relationship requiring assurance of continuing financial capacity) and the appellant had in fact paid the full bid amount, the turnover/net-worth condition was only ancillary, and the authorities' decision to overlook its strict compliance could not be faulted. The Court allowed the appeal, upheld the original Letter of Intent and Sale Deed in the appellant's favour, dismissed the rival bidder's writ petition, and ordered the money the rival had deposited with the Court to be returned with interest.

Lesson Learnt

Not every condition in a government tender notice is "mandatory" merely because it is written into the advertisement: courts will distinguish between conditions essential to the tender's core purpose and those that are merely ancillary, and a technical non-compliance with an ancillary condition does not automatically invalidate an otherwise valid winning bid.

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

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