Examining The Judicial Limits For Rectification Of Bids In Public Tenders

In public procurement, the tender process is designed to ensure transparency, equal treatment, and certainty among competing bidders. However, commercial realities often present situations where mistakes surface after bids have already been submitted. The terms of a public tender generally bar rectification of bids during the bid validity period to ensure procedural integrity. Yet, bidders may, upon discovering an evident mistake, seek to rectify their bids. Courts, while exercising restraint, have on occasion permitted such rectification where a mistake on the part of the bidder was established, and the tender inviting authority's refusal to allow rectification was deemed irrational or contrary to principles of fairness. This note seeks to examine the judicial approach to rectification of bids in cases of admitted mistakes and highlight the principles governing the confluence of rectification and procedural finality.

Recent judicial decisions underscore an increasingly stringent stance by Courts against bid rectification. While Courts may, in exceptional circumstances, permit correction of genuine bona fide errors, such relief is rare and may come at a significant financial cost. Some rulings that highlight this trend are as follows:

• Prakash Asphaltings & Toll Highways (India) Ltd v. Mandeepa Enterprises:¹ The dispute arose from a tender issued by the Public Works (Roads) Directorate, Government of West Bengal, for Road User Fee (RUF) collection on a state highway for 1095 days, whereupon bidders had to quote a consolidated amount. Out of 7 bidders, 4 were technically qualified, including the Appellant, Prakash Asphaltings and the Respondent, Mandeepa Enterprises. On the opening of financial bids, the Appellant emerged as the highest bidder (H1) with a financial bid of INR 91.19 crore, while the Respondent emerged as the fourth highest bidder (H4) with a financial bid of INR 9.72 lakh. The Respondent later sought rectification, claiming the quoted figure was a 'per day' rate that should be multiplied by 1095, making its bid INR 106.54 crore, thereby placing the Respondent as the H1 bidder. The tender inviting authority rejected this contention, citing the sanctity of the process. A Single Bench of the Calcutta High Court upheld this rejection, while the Division Bench allowed rectification, holding that clarifications were permissible under the relevant Instructions to Bidders and other bidders could match the corrected rate. In appeal, the Supreme Court of India laid emphasis on the principle that once financial bids are opened, no modification or rectification is permissible. Allowing post-opening rectification would undermine the tender's sanctity. Emphasising that public interest lies as much in fairness and adherence to tender terms as in revenue maximisation, the Court reaffirmed that once financial bids are opened, no rectification is permissible, even for genuine mistakes.
• ABCI Infrastructures Pvt Ltd v. Union of India:² In this case, the Appellant was ranked as the lowest bidder with a financial bid of INR 1569. According to the Appellant, it had quoted a bid price of INR 1569 crore, but due to a system error, the quoted amount appeared just as INR 1569. After the financial bids were opened and announced, the Appellant stated that it had discovered the mistake and informed the Respondent Authority, clarifying that its actual bid was INR 1569 crore and sought withdrawal from the tender. The Respondent Authority, Border Roads Organisation, however, insisted on accepting the financial Bid of INR 1569. Ultimately, the Respondent Authority declared the Appellant a defaulter and decided to forfeit its bid security. In this context, the Supreme Court observed that though the mistake was self-evident, it nonetheless agreed with the Respondent Authority that the Appellant was at fault and had made the mistake of having failed to add the required zeroes in the financial bid. The plea of system glitch was not accepted, as other bidders had successfully uploaded their bids without any problem. The Court finally directed the Appellant to pay INR 1 crore to the Respondent Authority as a consequence of its error, and upon receipt of the same, the Respondent Authority was directed to return the Appellant's original bid security.
• Omsairam Steels and Alloys Pvt Ltd v. Director of Mines and Geology, BBSR:³ Due to the Appellant's bona fide error in uploading the bid security, the Supreme Court of India directed re-commencement of e-auction. As this error had not only inevitably delayed the mining project but also caused the tender authorities and other bidders to waste significant time, effort, and money, the Court directed the Appellant to pay INR 3 crore to the Respondent within one month from the date of the judgment for failure to exercise the required degree of care. This decision indicates that the right to rectify a bid after submission of the financial bids is granted in cases of genuine errors and underscores that public interest in government contracts is broader than mere fiscal calculations. It establishes that administrative actions must be fair, accountable, and measured, and that commercial participants are entitled to protection against punitive consequences arising from honest errors.

From the above decisions, the clear message for bidders is that diligence at the submission stage is not merely advisable but decisive. In this context, bidders should remain mindful of the following:

• Rectification is an exception, not a right: Courts approach requests for correction with extreme caution, and will permit them only where the error is obvious on the face of the record, bona fide, and incapable of conferring any unfair advantage.
• Carelessness is not shielded by fairness: Tender authorities are under no obligation to accommodate negligent or avoidable mistakes merely in the name of equity or commercial hardship.
• Institutionalise rigorous internal checks: Bidders should adopt robust, multi-layered verification mechanisms prior to submission, as post-bid corrections are seldom entertained.
• Assume strict adherence to tender conditions: Even technical or procedural deviations may lead to outright rejection, particularly where the tender terms are explicit and leave little scope for discretion.
• Factor legal risk into bid strategy: The possibility of disqualification, or costly litigation, should be treated as a commercial risk, reinforcing the need for legal review of bid documents in complex or high-value tenders.

Courts have made it clear that relief for admitted mistakes is an exception, not the norm, and shall be provided only where strict enforcement of the terms of the tender would be manifestly unfair. Once financial bids are opened, the sanctity of the tender process prevails, demanding utmost diligence and precision from every bidder.

Footnotes

1. 2025 SCC OnLine SC 1959

2. Special Leave Petition (Civil) No. 25394 of 2023

3. Civil Appeal No. 7812 of 2024

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.