TaxTMI 
TaxTMI 
2025 (11) TMI 1952
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....interpretation of the term 'previous Financial 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 ....
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.... 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 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 mis....
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.... Bhushan Power and Steel Ltd. v. S.L. Seal, Addl. Secretary (Steel and Mines), State of Odisha & Ors. [(2017) 2 SCC 125] and a decision of Karnataka High Court in Aane Mines and Minerals, Nagarjuna Hills, Panjagutta, Hyderabad v. State of Karnataka & Another [2019 SCC OnLine Kar 3791]. 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. [(2007) 11 SCC 641]. 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. [2024 SCC OnLine SC 1682, (2024) 15 SCC 461] and Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises and Or....
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....h 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 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 notic....
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....oneously 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 w....