Strict compliance with tender conditions required where bid documents and verification process remain incomplete in quarry settlement

Essential tender conditions in a statutory auction must be strictly complied with. The successful bidder's documents were held not to satisfy the requirement of producing the previous financial year's income tax return, and the GST no-dues document was not treated as a statutory, unconditional certificate. The decision to finalise the quarry settlement on the same day, despite the selection committee's own direction that the documents required verification and confirmation, was found inconsistent with the prescribed process and arbitrary. The impugned settlement was set aside, and the authorities were directed to conduct a fresh tender process in accordance with law.

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Issues: (i) Whether the successful bidder's bid complied with the essential tender conditions relating to production of the previous financial year income tax return and GST no-dues particulars; (ii) Whether the decision to settle the quarry in favour of the successful bidder was vitiated by arbitrariness and non-compliance with the prescribed tender process.

Issue (i): Whether the successful bidder's bid complied with the essential tender conditions relating to production of the previous financial year income tax return and GST no-dues particulars.

Analysis: Rule 27(4)(iv) of the Odisha Minor Minerals Concession (Amendment) Rules, 2022 required production of the income tax return of the previous financial year or an equivalent bank guarantee. The bid documents of the successful bidder showed that the income tax return enclosed related to an earlier assessment year and not the financial year required by the tender notice. The GST no-dues document was also not treated as a statutory and unconditional certificate. The tender terms required strict compliance, and incomplete compliance with essential conditions could not be overlooked.

Conclusion: The successful bidder did not comply with the essential tender conditions.

Issue (ii): Whether the decision to settle the quarry in favour of the successful bidder was vitiated by arbitrariness and non-compliance with the prescribed tender process.

Analysis: Once the selection committee itself recorded that the bid documents required verification and confirmation from the concerned authorities, finalisation of the tender on the very same day without awaiting such verification was inconsistent with the declared process. In judicial review of contractual matters, interference is warranted where the decision-making process is arbitrary, irrational, unreasonable, or contrary to the governing terms. Since the petitioner's objection to the defect in the competing bid was not duly addressed and the decision was taken contrary to the prescribed scrutiny process, the settlement could not be sustained.

Conclusion: The decision-making process was arbitrary and unsustainable, and the settlement in favour of the successful bidder was liable to be quashed.

Final Conclusion: The impugned settlement was set aside and the authorities were directed to undertake a fresh tender process in accordance with law.

Ratio Decidendi: Essential tender conditions in a statutory auction must be strictly complied with, and a public authority acts unlawfully if it finalises a tender despite unresolved deficiencies that the authority itself treated as requiring verification.

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