Mistake of contractor in giving in bid price – Encashment of bank guarantee
On 23.2.2023, the respondent No.2 Border Road Organization invited bids for design and construction of two-lane tunnels at the cost of Rs.1504.64 crores). The bid security was Rs.15.04 crores.
On 3.6.2023, the appellant submitted its online technical and financial bids and furnished bank guarantee.
On 5.6.2023, the technical bids were opened.
On 24.8.223, the financial bids were opened. However, it was found that the bid price was only Rs.1,569/- as against Rs.1569 crores.
On discovery of the mistake, on 25.8.2023, the appellant informed BRO that its actual bid was Rs.1,569 crores and not Rs.1,569/- which was typographical mistake or critical technical issue with the server.
Instead of accepting the mistake, the BRO proceeded with the tender process.
On 30.8.2023, the appellant again reiterated the mistake and by the letter dated 7.9.2023 the appellant informed BRO not to consider it as L1 bidder and to return bank guarantee without encashment.
On 16.9.2023, the BRO asked SBI to encash bank guarantee since the appellant was declared
HELD that a mistake may be unilateral or mutual but it is always unintentional. If it is intentional, it ceases to be a mistake. Mistakes or errors, though avoidable, are committed inadvertently. They have varied consequences in law. As per section 20 of the Contract Act, when both the parties are under a mistake as to matter of fact essential to an agreement, the agreement is void.
Instead of declaring the bid as non est due to clear mistake, BRO asked the appellant to justify the bid, cancelled the notice, declared the appellant as default, invoked bank guarantee and issued a fresh notice inviting bids.
However, the appellant was directed to pay Rs.1 crore to BRO as a consequence of this error and on receiving this payment BRO shall return BG or demand draft of Rs.15.04 crores within one week.
Judgment dated 14.2.2025 of the Supreme Court of India in Civil Appeal No.2546 of 2025 of M/s. ABCI Infrastructures Pvt Ltd Vs. Union of India and others
