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Pooja Ceratech Private Limited v. Oil and Natural Gas Corporation Ltd. & Anr.

Special Leave Petition (Civil) · 2021 INSC 925Decided 3 Dec 2021
Special Leave Petition (Civil) No. 19006 of 2021
Justice M.R. Shah · Justice B.V. Nagarathna

Background

The petitioner had participated in a tender floated by ONGC for the sale of gas and, after its price bid was due to be opened, sought to modify its bid on the ground that it had made a pricing error. When ONGC proceeded to open the bids without permitting the change and later disqualified the petitioner, it also invoked the bank guarantee furnished as a security deposit. The petitioner's writ petition challenging this forfeiture was dismissed by the Gujarat High Court, leading to this appeal before the Supreme Court.

Decision Breakdown

The Supreme Court held that under the specific tender clause (Clause 14.5), ONGC was entitled to forfeit the security deposit if a bidder sought to vary or modify its bid in a manner not acceptable to ONGC during the bid's validity period, and that what the petitioner called a mere "arithmetical correction" was in substance a request to modify its bid price after the bidding process had closed. The Court distinguished the petitioner's reliance on an earlier decision requiring proof of actual loss before forfeiting a security deposit, holding that the specific contractual term governing forfeiture here was validly invoked. The special leave petition was accordingly dismissed, and the High Court's order was upheld.

Lesson Learnt

Bidders in a tender process should carefully verify their bid figures before submission, since attempting to correct a pricing mistake after bids have been opened can be treated as an impermissible unilateral modification of the bid, entitling the tendering authority to forfeit the security deposit under the tender's own terms.

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

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