Holding

Corrections to bid documents are limited to arithmetic errors under Clause 29; substantive changes such as unit‑rate alterations are not permitted, and the High Court’s direction to allow such corrections is set aside.

Summary

The West Bengal State Electricity Board (the Board) invited tenders for a power project and, under its Instruction to Bidders (ITB), evaluated bids. Respondents 1‑4 (Patel Engineering and others) claimed that a systematic computer error had caused clerical mistakes in their bid documents and sought correction, asserting that the unit rates should govern. The Board corrected the bids, citing Clause 29 of the ITB, and rejected the respondents' request for further amendment. The High Court directed the Board to permit the corrections and consider the bid, but the Board appealed. The Supreme Court held that the ITB allows correction only of arithmetic errors, not of unit rates or other substantive entries, and that equity cannot override the explicit contractual terms. Consequently, the High Court’s direction was set aside, and the appeal was allowed in part. The Court affirmed that the lowest‑bid principle applies only when all other conditions are met, and that the Board is not obliged to award the contract to the lowest bidder if the bid is non‑compliant.

Issues considered

The scope of Clause 29 of the Instruction to Bidders regarding correction of errors in bid documents.
Whether the High Court erred in directing the Board to permit correction of substantive errors and to consider the corrected bid.
Whether equity can be invoked to rectify clerical or mechanical mistakes in a public tender.
The applicability of the lowest‑bid principle when a bid contains inconsistencies.
The extent of judicial review over the Board's tender evaluation decisions.

Subjects

government contractstenderbid correctioncontract awardlowest bidequitymistakejudicial reviewpublic procurementInstruction to BiddersClause 29Clause 27international competitive bidding

Judgment

A WEST BENGAL STATE ELECTRICITY BOARD
v.
PATEL ENGINEERING CO. LTD. AND ORS.

JANUARY 15, 2001

B [S.S.M. QUADRI AND S.N. PHUKAN, JJ.]

Government Contracts;

Tender-Bids-Correction of-State Electricity Board invited tenders
C for a proposed power project-The Instructions to Bidders (/Tf!), iter alia,
provided that in case of discrepancy between the unit rate and the line item
total resulting from multiplying the unit rate by the quantity, the unit rate
as quoted would govern-After su.bmission of bids, one of the bidders informed
the Board that there was "a repetitive systematic computer typographical
D transmission failure" and requested that it be corrected-It was further pointed
out that the Indian Rupee unit stated in the first line Item 0.2 was repeated
in the next two succeeding lines, which was clerical in nature and not an
arithmetic error-Board evaluated the bid and informed the bidder that
there were number of errors and requested for their response-Bidder filed
a writ petition-Single Judge by an interim order directed the Board to
E consider representation of the bidder-The decision taken by the Board not
approved by High Court-Therefore, Single Judge directed the Board to
reconsider representation of the bidder-Division Bench dismissed appeals
and cross objections-Correctness of-Held: A mistake may be unilateral or
mutual but it is always unintentional-If it is intentional it ceases to be a
mistake-The mistakes were not beyond the control of the bidder-Such
F mistakes could have been corrected before submission of bid-Jn an
inlernational competitive bidding. bidders should have the assistance of
technical experts-Great degree of care is required in such bidding-No
change in the price or substance of the bid after its opening can be sought,
offered or permitted-Hence, High Court erred in permitting the bidders to
G correct the errors in their bids.

Tender-Bids-Lowest bid-Contract-Awarding of-Principles-Held:
Principle of awarding of contract to lowest tenderer applies when all things
are equal-Merely because a bid is lowest compliance of rules and conditions
cannot be dispensed with-On facts, lowest bid directed not to be considered
H 352
W. BENGAL STATE ELEC. BOARD v. PATEL ENG. CO. LTD. 353

~
due to inconsistencies between particulars of bids and total bid amount. A
~
The appellant invited tenders for a power project. Clause 29.1 of the
Instruction to Bidders (ITB) provided, inter alia, that in case of discrepancy
between the unit rate and the line item total resulting from multiplying the
unit rate by the quantity, the unit rate as quoted would govern. Respondents
I to 4 after submission of their bids .informed the appellant that there was B
"a repetitive systematic computer typographical transmission failure" and
lT requested that it be corrected. Respondents I to 4 further pointed out that
Indian Rupee unit stated in the first line Item 0.2 was repeated in the next
two succeeding lines, which was clerical in nature and not an arithmetic
error. Respondents I to 4 also emphasised that their bids were the lowest
and assured that they would maintain the bid price. The appellant evaluated
c
their bids and informed respondents I to 4 that a number of errors were
)( discovered and requested for their response.

Being aggrieved respondents I to 4 filed a writ petition before the High
Court. Single Judge by an interim order directed the appellant to consider D
the representation of respondents 1 to 4. The decision taken by the appellant
was not approved by the High Court. Therefore, the Single Judge directed

... the appellant to reconsider the representation of respondents I to 4. The
Division Bench dismissed the appeals and cross objections filed by the
appellant and respondents 1 to 4 respectively and upheld the order of the
Single Judge. Hence this appeal.
E

Allowing the appeal partly, the Court

-· HELD: I. The only prohibition contained in the Instruction to Bidders
(ITB) is that no change in the price or substance of the bid after its opening
can be sought, offered or permitted. In that regard the appellant had made
its position clear. The prohibition is, therefore, not aitracted. In these
F

circumstances any reasonable person in the position of the appellant would
have sought clarification from respondents I to 4. Even assuming that no
clarification was required to be sought by the appellant, it cannot but be held
G
that correction of the errors taking note of the unit rates which are mere
~· repetitions of the unit rates quoted for a different work item is mechanical
and without application of mind by the appellant. Such a correction is far
beyond the scope of Clause 29 of the ITB. From the description of the
mistakes and the correction and evaluation made by the appellant, it is
evident that except the error in the first line against the work item 'Rock H
354 SUPREME COURT REPORTS [2001] I S.C.R.

A Excavation' and Schedule 'N' day work, all other mistakes/errors arc beyond
the scope of Clause 29.1, so Clause 29.2 will not be attracted. It follows that
the corrections in the bid documents of respondents I to 4 carried out by
the appellant, evaluation of bid under clause 29.2 and the impugned
communications of the appellant are unsustainable and of no consequence.
1368-D-E-F-G)
B
2. The mistakes/errors in question, it is stated, are unintentional and
occurred due to the fault of the computer termed as "a repetitive systematic
computer typographical transmission failure". It is difficult to accept this
contention. A mistake may be unilateral or mutual, but it is always
unintentional. If it is intentional it ceases to be a mistake. Here the mistakes
c may be unintentional but it was not beyond the control of respondents I to
4 to correct the same before submission of the bid. Had they been vigilant
• in checking the bid documents before their submission, the mistakes would
have been avoided. Further, correction of such mistakes after one and a half )I,
month of opening of the bids will also be violative of the ITB.1369-F-Gl
D 3. The controversy in this case has arisen at the threshold. It cannot
be disputed that this is an international competitive bidding, which postulates
keen competition and high efficiency. The bidders have or should have
assistance of technical experts. The degree of care required in such a
bidding is greater than in ordinary local bids for small works. It is essential ,.
E to maintain the sanctity and integrity of process of tender/bid and also award
of a contract. The appellant, respondents I to 4 and respondents I 0 and 11
are all bound by the ITB, which should be complied with scrupulously. In a
work of this nature and magnitude bidders who fulfil pre-qualification alone
are invited to bid. Adherence to the instructions cannot be given a go-bye by
branding it as a pedantic approach; otherwise it will encourage and provide
F scope for !liscrimination, arbitrariness and favouritism which are totally •
opposed to the Rule of law and our Constitutional values. The very purpose
of issuing Rules/instructions is to ensure their enforcement lest the Rule
of law should be a casualty. Relaxation or waiver of a rule or condition,
unless so provided under ITB, by the State or its agencies (the appellant) in
G favour of one bidder would create justifiable doubts in the minds of other
bidders, would impair the rule of transparency and fairness and provide room
for manipulation to suit the whims of the State agencies in picking and '!·
choosing a bidder for awarding contracts as in the case of distributing
bounty or charity. Such an approach should always be avoided. Where power
to relax or waive a rule or a condition exists under the Rules, it has to be
H done strictly in compliance with the Rules. Therefore, adherence to ITB or
W. BENGAL STATE ELEC. BOARDv. PATliL ENG. CO. LTD. 355
Rules is the best principle to be followed, which is also in the best public A
interest. 1369-H; 370-A-B-C-D]

4.1. The project undertaken by the appellant is undoubtedly for the
benefit of the public. The mode of execution of the.workof the project should
also ensure that the public interest is best served. Tenders are invited on the
basis of competitive bidding for execution of the work of the· project as it B
serves dual purposes. On the one hand it offers a fair opportunity to all those
who are interested in competing for the contract relating to execution of the
work and on the other hand it affords the appellant a choice to select the best
of the competitors on competitive price without prejudice to the quality of the
work. Above all it eliminates favouritism and discrimination in awarding . C
public works to contractors. The contract is, therefore, awarded normally to
the lowest tenderer, which is in public interest. The principle of awarding
contract to the lowest tenderer applies when all things are equal. It is equally
in public interest to adhere to the rules and conditions subject to which bids
are invited. Merely because a bid is the lowest the requirements of compliance
of rules and conditions cannot be ignored. It is obvious that the bid of D
respondents 1 to 4 is the lowest of the bids offered. As the bid documents
of respondents 1 to 4 stand without correction there will be inherent
inconsistency between the particulars given in the annexure and the total bid
amount, it cannot be directed to be considered along with the other bids on
the sole ground of being the lowest. 1374-A-B-C-D] E
4.2. In a highly competitive bid of global tender, the appellant was
justified in not permitting respondents 1 to 4 to correct the errors of the
nature and the magnitude which, if permitted, will give a different complexion
to the bid. The High Court erred in directing the appellant to permit
respondents 1 to 4 to correct the errors in the bid documents. [370-E] p
Tata Cellular v. Union of India, 1199416 SCC 65; Moffett, H & CCo.
v. Rochester, 178 U.S. 373; Hearne v. Marine Ins. Co., 22 Led 306; Spina
Asphalt Paving Excavating Contractors, Inc. v. Borough of Fairview; 404
N.J. Super 425 and American Jurisprudence (Second Edn)) Vol. 64 para 84
p. 944, referred to. G
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4921 of
2000 ..

From the Judgment and Order dated 4th April, 2000 passed by the
Hon'ble Division Bench of the High Court of Calcutta in Appeal No. M.A.T. H
356 SUPREME COURT REPORTS [2001] 1 S.C.R.

A· No. 398 of2000.

Altaf Ahmed, ASG, P. Chidambaram, Sudipto Sarkar, Anil B. Diwan,
Ashok H. Desai, R.F. Nariman, Bhaskar P. Gupta H.K. Puri, S.K. Puri, Udayan
Sen, Rajesh Srivastava, Ms. Anindita Gupta, Padam Khaitan, Ms. Gauri
R.asgotra, Suman J. Khaitan, Rajiv Chopra, B.V. Desai, Ms. Kumud Singh,
B Keshar Thakur, Girish Mishra, Gourab K. Banerjee, C.R. Addy, P. Addy, S.
Saxena, G. Joshi, T.C. Sharma, S.B. Upadhyay, Pawan Upadhyay, Ravi Kant,
M.C. Dhingra and Ujjal Banerjee for the appearing parties.

The Judgment of the Court was delivered by

C SYED SHAH MOHAMMED QUADRI, J. This appeal by the West
Bengal State Electricity Board is from the common judgment of a Division
Bench of the High Court at Calcutta in M.A.T. No. 398 of 2000, C.A.N. No.
1089 of2000 and M.A.T. No. 523 of2000 with cross objections (C.O.T. No.
522 of 2000) dated April 4, 2000 dismissing the appeals and cross objections
D and confirming the order of the learned Single Judge in W.P. No. 22458(W)
of 1999 dated February 3, 2000.

To appreciate the controversy in this case narration of the following
relevant facts will be necessary.

E As a pragmatic solution to meet the peak demand of the energy/power
by the West Bengal and also to cater to the requirements of the entire Eastern
Region, the West Bengal State Electricity Board (for short, 'the appellant')
formulated "Purulia Pumped Storage Project" (for short, the Project), at an
estimated cost of about Rs. 3,188.9 crores with an installed capacity of 900
M. W. For funding that project the Central Government entered into a loan
F agreement with the Overseas Economic Cooperative Fund now Japan Bank of
International Cooperation (for short, 'the J.B.l.C.'). The Project is proposed
to be completed in six Lots of which Lot No. 4 relates to main civil works.
For carrying out the work of Lot No. 4, the appellant, after complying with
the formalities and after satisfying itself of the pre- qualification of the bidders,
G invited revised tenders (hereinafter referred to as, 'the tenders'). The bids
were to be submitted on or before April 27, 1998. Three bidders are now in
fray. The first is a consortium of four companies (respondent Nos. I to 4), the
second is Mis. Taisei Corporation (respondent No. I0) and the third is Mis.
Skanska International (respondent No. I I). They submitted their bids along
with the summary sheets thereof. On September 8, 1999 the bids were opened
H in the presence of the representatives of the bidders and they were read out;
W. BENGAL STATE ELEC. BOARD, .. PATEL ENG CO LTD. [QUADRI, J.] 357
the bid of respondent Nos. I to 4 was Rs. 647.90 crores, of respondent No. I I A
was Rs. 691.22 crores and of respondent No. I 0 was 726.50 crores. While the
~
details of the bid were under scrutiny, by letter dated October 25, 1999,
respondent Nos. I to 4 informed the appellant that there was "a repetitive
systematic computer typographical transmission failure" and requested that
it be corrected. On December 17, 1999 they sent another letter stating that
they had reason to believe that the appellant was evaluating their price bid
B
by an illogical and incorrect application of the Instructions To Bidders (for
'Y short, the ITB) and pointed out that the mistake indicated in their letter of
October 25, 1999 was that Indian Rupee unit rate stated in the first line Item
0.2 was repeated in the next two succeeding lines, which is clerical in nature
and not an arithmetic error. They emphasised that their bid was the lowest c
at Rs. 647.90 crores and assured that they would maintain the said bid price.
Under the !TB, the appellant evaluated their bid and on December 18, 1999
informed them that during checking of their bid documents a good number
of arithmetic errors was discovered. Copies of duly corrected documents were
communicated to the said respondents for their response to be sent in writing
to the appellant before December 27, 1999 ( 1700 IST). A ·caveat was also D
eniered that the said letter did .not provide any confirmation towards
acceptance of their bid and subsequent award of contract by the appellant.
,.._ Challenging the validity of the said letter of the appellant dated December
" 18, 1999, respondent Nos. I to 4 filed the aforementioned writ petition in the
E
High Court at Calcutta. On December 21, 1999 a learned Single Judge of the
High Court granted an interim direction to the appellant to consider the
representation which would be made to it by the writ petitioners (respondent
. Nos. I to 4). A representation was accordingly made to the appellant on
December 23, 1999, which was decided by the Evaluation Committee of the
~
appellant on January 6, 2000. The decision taken by the appellant pursuant F
to the order of the High Court dated December 21, 1999 did not meet with the
approval of the High Court. On February 3, 2000, while disposing of the writ
petition, a learned Single Judge of the High Court directed the appellant to
reconsider the representation of respondent Nos. I to 4, after giving hearing
to them, and to pass and communicate a reasoned order within one week from
G
the date of the order. Against the said order of the learned Single Judge, the
~ aforementioned appeals and cross-objections were filed both by the appellant
as well as by respondent Nos. I to 4. A Division Bench of the High Court at
Calcutta, by the impugned common judgment, dismissed the appeals and the
cross-objections upholding the order of the learned Single Judge, directed the
appellant to per!T!it respondent Nos. I to 4 to correct the errors in the bid H
358 SUPREME COURT REPORTS [200 I] I S.C.R.

A documents and then consider their bid along with the other bids and take a
decision objectively and rationally.
+-
Mr. Altaf Ahmed, the learned Additional Solicitor General, appearing for
the appellant, has submitted that the appellant is bound by the !TB and it
acted accordingly. The letter dated October 25, 1999 of respondent Nos. I to
B 4 did not indicate the errors in the bid documents and the correction sought
by them. Even their letter of December 17, 1999 did not specify in any detail
the desired corrections, therefore, the appellant proceeded to evaluate the bid ~
in terms of !TB. The actual scope of correction sought by respondent Nos. I
to 4 came to light in their representation dated December 23, 1999, tiled after
approaching the High Court. The appellant, submitted the learned Additional
c Solicitor General, committed no wrong in rejecting the representation as the
same was not acceptable in terms of Clause 29 of the !TB because neither the
unit rate can be changed nor the price bid can be altered at the request of
the bidder; the unit rate quoted is final and the appellant can correct only
'i
arithmetic mistakes in the line total on the basis of the quoted unit rate.
D
Mr. Ashok H. Desai, the learned senior counsel appearing for respondent
No. I I, argued that the resolution of the appellant rejecting the representation
on January 6, 2000 was in accordance with Clause 29. l(b) of the !TB and that
there was no case for interference by the High Court. The decision of the
~ ~
appellant in evaluating the bid documents in terms of !TB, submitted the
E learned counsel, could not be termed as arbitrary or illegal; in the example:
A x B = C; B being the quantity for which the bid is offered; A and C being
the unit rate and the result of the multiplication respectively, are unalterable
at the instance of the bidder. If any arithmetic error in arriving at the line total
is noticed by the appellant, that alone could be corrected by it. But, the
correction sought by respondent Nos. I to 4, was in effect a change in the ~
F
unit rate which was impermissible and, therefore, the decision of the appellant
could not have been interfered with by the High Court.

Mr. Bhaskar P. Gupta, the learned senior counsel appearing for
respondent No. I 0, submitted that the unit rate given by respondent Nos. I to :
G 4 was an essential term which would be evident from Clauses 14, 27 and 29
of the ITB, so permitting them to correct the bid would tantamount to modifying
the essential term of the bid and as such the High Court ought not to have -t-
directed the appellant to permit correction of bid documents and further to
consider their bid along with the other bids.

H Mr. P. Chidambaram, the learned senior counsel appearing for respondent
W. BENGAL STATE ELEC BOARD r. PATEL ENG. CO. LTD. [QUADRI, l] 359
Nos.I to 4, argued that in Annexures l to 9 which comprised of 749 items A
_,.._ there were mistakes in only 37 items due to the fault of the computer; the
nature of mistake was not arithmetic (which would mean in multiplication or
addition) but mechanical, attributable to the computer and that such mistakes
are not covered by Clause 29 of the ITB; in a case of an unintended mistake,
a court of equity would not be a silent spectator and the High Court, being
both a court of law and equity, had rightly directed the appellant to permit
B
correction of the mistakes by respondent Nos. I to 4. It was submitted that
having regard to the nature of the mistakes, the appellant itself ought to have
sought clarification from the said respondents under Clause 27 of!TB instead
of evaluating the bid on the basis of an unintended unit rate to reach an
astonishing figure which was wholly dis proportionate to the cost of the c
Project. His contention is that once the total bid price is maintained, the unit
rate is a matter of arithmetic exercise which should have been corrected by
the appellant; further the mode of payment by the appellant for the work done
is not on the basis of each unit but on the basis of bid price. Accepting that
the bid price is unalterable, the unit rate should be regarded as adjustable.
It was also argued by Mr. Chidambaram that there was no mistake in giving D
the unit rate as such; the mistake was in giving the conversion equivalent in
US Dollars and, therefore, the correction not being the one falling under
Clause 29 of the ITB was rightly permitted to be corrected by the High Court .
~
• Finally, he contended that their bid being less than the bids of respondent
Nos. I! and I 0 by Rs. 40 crores and Rs. 80 crores respectively, the High Court E
rightly directed consideration of the bid of respondent Nos. I to 4 after due
correction of the bid documents in public interest which did not warrant
interference by th is Court.

In the light of the above contentions, we have to examine as to what
is the permissible course of action under ITB. A,_ reference to the relevant F
clauses of the ITB will be apposite here. Clause 14. l says that unless stated
otherwise in the bid documents, the Contract shall be for the whole Works
as described in sub-clause 1.1 thereof based on the schedule of unit rates and
prices submitted by the bidder. Clause 14.2 enjoins all the bidders to fill in

. rates and prices for all items of the Works described~n the Bill of Quantities
both in figures and words and cautions that items against which no rate or
price is entered by the bidder will not be paid for by the Employer (the
appellant herein) on the execution of items of those works and the same shall
G

be deemed covered by the other rates and prices in the Bill of Quantities. With
regard to the currencies of the bid, Clause 15. I directs that unit rates and
prices shall be quoted by the bidder in Indian Rupee (INR) and either in H
360 SUPREME COURT REPORTS (2001] I S.C.R.

A U.S. Dollar oi· Japanese Yen. The bidders are given option to assess the
component of currency requirements as follows:

(a) for those inputs to the Works which the bidder expects to
supply from within the Employers country (the appellants country
- India) in Indian Rupee; and
B (b) for those inputs to the Works which the bidder expects to
supply from outside the Employers i.e., outside India in U.S.
Dollar or Japanese Yen.

In regard to modification and withdrawal of bids, Clause 24.1 provides that
C the bidder may modijj1 or withdraw his bid after bid submission but before
the deadline for submission of bids. The mandate of Clause 24.3 of the ITB
is that no bid shall be modified by the bidder after the deadline for submission
of bids.

Inasmuch as Clauses 27 and 29 of the ITB deal with clarification of bids
D and correction of errors respectively and their true interpretation has a bearing
on the decision in this case, it will be apt to quote them here :

"27. Clariflcution of Bids

27. I To assist in the examination, evaluation and comparison of bids, ...
the Employers authorised representative may, at his discretion,
E
ask any or all bidders for clarification of his/their Bids, including
breakdowns of unit rates, technical information, documents and
materials after opening of the Bid. The request for clarification
and the response shall be in writing or by cable, but no change
in the price or substance of the Bid after opening the Price Bid
F shall be sought, offered or permitted except as required to confirm
the correction of arithmetic errors discovered by the Employers
authorised representative in the evaluation of the bids in
accordance with Clause 29 of ITB.
29. Correction of Errors
G
29.1 Bids determined to be substantially responsive will be checked
by the Employers authorised representative for any arithmetic
errors. Errors will be corrected by the Employers authorised
representative as follows:

H (a) where there is a discrepancy between the amounts in figures
W. BENGAL STATE ELEC. BOARD v. PATEL ENG. CO. LTD. [QUADRI, J] 361

and in words, the amount in weirds will govern; and A
(b) where there is a discrepancy between the unit rate and the
line item total resulting from multiplying the unit rate by the
quantity, the unit rate as quoted will govern.

(c) Where there is a discrepancy between figures and in words B
of an unit rate, the unit rate as quoted in words will govern.

29.2 The amount stated in the Form of Bid will be adjusted by the
Employers authorised representative in accordance with the
above procedure for the correction of errors and shall be
communicated to the Bidder in writing for his acceptance iri C
writing within seven (7) days from the date of issue of such
communication. Such corrections however shall be binding
upon the Bidder. If the Bidder does not accept the corrected
amount of bid, his bid will be rejected, and the bid security
shall be forfeited in accordance with sub-clause 17 .6(b) of ITB.
D
It may be seen that Clause 27.1 enables the appellant or its authorised
representative to ask any or all bidders for clarification of his/their bids,
including breakdowns of unit rates, technical information, documents and
materials after opening of the bid. The request for such clarification is required
to be made in writing or by cable, so also the response to such request. It E
is important to note that the said clause prohibits seeking, offering or permitting
any change in the price or substance of the bid after opening of the price bid,
The exception provided to that mandate is correction of arithmetic errors
discovered by the appellant's authorised representative in the evaluation of
the bids in accordance with Clause 29 thereof.
F
A plain reading of Clause 29.1 shows it has two limbs; the first limb
imposes a duty on the appellants authorised representative to check bids
determined to be substantially responsive for any arithmetic errors and the
second postulates correction of such errors by the authorised representative
in the manner laid down in sub-clauses (a) to (c) thereof. Sub-clause (a) says G

•• that in the event of discrepancy between the amounts in figures and in words,
the amount in words will govern; sub-clause (b), which is germane for our
· discussion, provides that in case of a discrepancy between the unit rate and
the line item total resulting from multiplying the unit rate by the quantity,
the unit rate as quoted will govern; and the import of sub-clause (c) is that
in case of a discrepancy between figures and in words of any unit rate, the H
362 SUPREME COURT REPORTS [2001] I S.C.R.

A unit rate as quoted in words will govern. Where errors are corrected in
accordance with the above guidelines by the appellants authorised
representative, Clause 29.2 specifies the procedure to adjust the amount
stated in the Form of _Bid. The authorised representative has to communicate
the correction of errors to the bidder in writing for his written acceptance
B within seven days from the date of issue of such communication. It also
provides that such corrections shall be binding upon the bidder and in the
event of the bidder not accepting the corrected amount of bid, his bid will
be rejected and the bid security is liable to be forfeited in accordance with
sub- clause 17.6 (b) of the ITB.

C Now adverting to the Annexures, the statement of"B. Upper Dam" price
bid submitted by respondents i to 4 discloses that with reference to each
work item the quantity thereof is mentioned. The bidder is expected to give
the unit price in Indian Rupee as well as in U.S. Dollar both in figures as well
as in words and ~:nter the line item total resulting from multiplying the unit
D rate by the quantity. A plain reading of sub-clause (b) of Clause 29.1, referred
to above, leaves no room for doubt that once the unit rate and line item total
are filled in by the bidder, both the quoted unit rate and item total are treated
as unalterable at the instance of the bidder though arithmetic errors in arriving
at line item total by multiplication are permitted to be corrected by the ~
appellants authorised representative.
E
This being the intendment of the ITB, we shall now examine : (i) whether
the correction made by the appellant in the bid documents of respondent
Nos. I to 4 and consequential evaluation of their bid communicated with letter
dated December 18, 1999 are valid in law; and (ii) whether respondents I to
F 4 are entitled to seek correction in their bid documents either under ITB or
in equity and the direction given by the High Court to the appellant to permit
the correction of errors, is sustainable.

Before proceeding to ascertain answers to the above questions, it will
G be useful to bear in mind the principles governing the exercise of power of
judicial review by the High Courts. We consider it unnecessary to refer to
cases on the scope of the power of judicial review of administrative action
by the High Court as a three Judge Bench of this Court has, after exhaustive
consideration of long line of authori~es, succinctly summarised the position
and laid down the following principles in Tata Cellular v. Union of India,
H [1994] 6 sec 651:
W. llENGi\L STATE ELEC. BOARD"· Pi\ TEL ENG CO. LTD. (QUADRI, J.] 363

"(I) The modern trend· points to judicial restraint in administrative A
action.

(2) The court does not sit as a court of appeal but merely reviews
the manner in which the decision was made.

(3) The court does not have the expertise to correct the B
administrative decision. If a review of the administrative decision
is permitted it will be substituting its own decision, without the
necessary expertise which itself may be fallible.

(4) The_ terms of the invitation to tender cannot be open to judicial C
scrutiny because the invitation to tender is in the realm of
contract. Nornially speaking, the· decision to accept the tender
or award the contract is reached by process of _negotiations
through several tiers. More often than not, such decisions are
made qualitatively by experts. D
(5) The Government must have freedom of contract. In other words,
a fair play in the joints is a necessary concomitant for an
administrative body functioning in an administrative sphere or
quasi-administrative sphere. However, the decision must not E
only be tested by the application of Wednesbury princ-iple of
reasonableness (including its other facts pointed out above) but
must be free from arbitrariness not affected by bias or actuated
by mala fides.

(6) Quashing decisions may impose heavy administrative burden on F
the administration and lead to increased· and unbudgeted
expenditure".

In the light of these principles, we shall determine the aforementioned
points. Taking up the first question first; it will be necessary to understand G
~ the nature of errors, correction made by the appellant and the relief sought
by respondent Nos. I to 4 in respect of 37 items in the bid documents. We
shall extract here, as a sample of errors in 37 items, the price bid submitted
by respondent Nos. I to 4 relating to 'B Upper Dam' found on page No. 70
of Vol. IV of the documents (marked 'A'). It reads thus: H
364 SUPREME COURT REPORTS 12001) 1 S.C.R.

A Annexure
B. Upper Dam 'A'
Price Bid as Submitted

Unit Price
INR Clause
B US$ In
Esc. Spcci-
ti cations
Item Work Coeff. Rem- Unit Quan- Figure Words Amount
Item arks tity
I. Care of river
c
02 Rock Exca- Cum 1000 148.08 One hundred 48.077.97 7.4
vation forty-eight
point nil eight

148.08 One hundred 3.384.64
forty-eight
D point nil eight

03 lmpervi- Cum 148.08 One hundred 328.418.53 9.5
ous Core forty-eight
Embankment point nil eight.
1.92 One point 7.506.71
E ninety-two

According to respondents I to 4, the above price bid should be corrected to
read as given in the following statement (marked B):

'B'Unit Price
~
F INR Clause
USS In
Esc. Speci-
fications

Item Work Coeff. Rem- Unit Quan- Figure Words Amount
Item arks lily
G I. Care of river
02 Rock Cum 1000 148.08 One hundred 148.077.97 7.4
Excavation forty eight point
nil eight

3.38 Three point 3.384.64
H thirty eight
W. BENGAL STATE ELEC. BOARD v. PA TEL ENG. CO LTD. lQUADRI, J] 365
03 Impervi- Cum 3.900 84.21 Eight four point 328,4 I 8.53 9.5 A
ous Core twenty one
Emhak-
1ncnt
1.92 One point 7,506.71
ninety two

A perusal of the !Jrice bid statement A shows that the unit price filled B
in by the bidder in the first line against Item (02) - Work lte!n -, Rock
Excavation is repeated in two lines - in t~e second line of the same item and
in the first line of Item (03) - Work item - 'Impervious Core Embankment'. In
the quantity column, '1000' is noted by the appellant. The unit rate for Rock
Excavation is given by respondent Nos. I to 4 in the first line in Indian Rupee C
as Rs.148.08 both in figures as well as in words. In the amount column
Rs.148,077.97 is entered which is arrived at by multiplying quantity, 1000, by
unit rate, Rs.148.08. It contains an arithmetic error; instead of Rs.148,080.00,
it is noted as Rs.148,077.97. It has been noticed above that under Clause
29. l(b) of the !TB, such an error in the line total in the amount column is
amenable for correction and not the unit rate noted by the bidder in the figure D
column. In the second line, the same entry is repeated though that line should
contain unit rate in U.S. Dollar which is rupee equivalent of the unit rate
mentioned in the first line. Respondent Nos. I to 4 seek correction of' 148.08'
in the second line as '3.38' in the figure column and also in words to conform
to 3,384.64 which is noted in the amount column, to wit as US Dollar equivalent E
of 148,077.97 Indian Rupee in the first line. This appears to be the import of
their letter of December I 7, 1999.

Respondent Nos. I to 4 seek co~rection of the entries in the third line
also which is the first line against work item 'Impervious Core Embankment'.
It is plain that .against this Work Item the entries in the first line are quite F
different. The quantity column is blank, though '3900' should have been
noted therein. In that line also the entries in the first line are repeated. There
the correction sought is that the figure column should read as 84.21 both in
figure and words. It is stated that in the second line the unit rate 1.92 both
in figures and words, represents U.S. Dollar equivalent of 84.21 Indian Rupee G
which is now sought to be inserted. The errors in other 36 items are said to
be similar. Had the errors been confined to these aspects, it would not have
resulted in material change in the unit rate because the unit rate in one of the
permissible currencies is correctly given and there will be no discrepancy as
envisaged in sub-clause (b) of Clause 29.1. It would not really be a case of
incorporatir a new unit rate but a case of either recording U.S. Dollar H
366 SUPREME COURT REPORTS [2001] 1 S.C.R.

A equivalent of the unit rate already noted in Indian Rupee or vice versa as
given in statement 'B' above. In such a case, perhaps, they would have been
entitled to equitable relief of rectification of mistake. But here, as would be
shown presently, the position is different.

With regards to the mistakes in the bid documents, for the first time
B respondent Nos. I to 4 informed the appellant in their letter of October 25, 1999
which runs as follows :

"Re : Purulia Pumped Storage Project lot 4 - Main Civil Works -
Resubmit/a/ Price Bid.

C Dear Sirs,

We regret that certain repetitive systematic computer typographical
data transmission failure have occurred in items as per attached annexure ~
in our bid submitted to you on 08.09.99.

D In order to dispel any doubts, we hereby unconditionally declare that
we stand by the amounts (both INRs and US $) against the affected
schedules A to I, announced at the opening of the revised price bid on the
8th of September at WBSEB and reiterate that there is no change in the price
or substance of our bid. Our unit bid prices should be computed accordingly -4
for the aforesaid items.
E
This letter is strictly without prejudice to our rights and contentions...

It may be noticed that in this letter they informed that certain mistakes had
crept in the items mentioned in the annexure to the letter and declared that no change
in the price or substance of the bid was asked for and that they stood by the
F amounts announced at the time of the bids on September 8, 1999. However,
the actual mistakes are not pointed out.

In their letter of December 17, 1999 they attempted to clarify the position.
The relevant excerpt of that letter may be quoted here:
G "West Bengal State Electricity Board,

Office of the Project Manager,

Mr. S.K. Roy Choudhury,

H The Project Manager,
W. BENGAL STATE ELl:C BOARD v. PATEL ENG. CO l TD. [QUADRI, J.J 367
Purulia Pumped Storage Project, A
Vidyut Bhawan, 5th Floor,

Salt Lake City, Calcutta - 700 091, India,

Fax No. 0091 33 3591854 I 3581533 1999-12-17
B
Purulia Pumped Storage Project

Dear Sir,

We refer to our telefax dated 25th October 1999. A copy thereof is
again enclosed for your convenience. c
We request that "the systematic computer typographical transmission
failure" pointed out in the said telefax is merely clerical in nature and
not arithmetical and do not in any way affect the validity of our bid.
Its nature is fully explained below.
D
I. The computer has unfortunately systematically copied, in the
first page (Serial items 2 & 3) of the BOQ (Schedule A to I),
the INR unit rates stated in line I Serial Item 2 to the next two
~ succeeding lines i.e. the computer has overwritten the unit
rates in US$ terms for the serial item no.2 and the !NR unit
rates for the immediately succeeding serial item. E
However. the figures appearing the amount column of the BOQ
for the said Iin es/items in which the above mentioned errors
have occurred are the correct tendered figures both in US$ terms
as well as JNR terms.
F
II. Further the BOQ quantities stated in the quantity column of
serial item no.3 on each and every page has been erased.

Enclosed is an al/achment which would show the applicable unit
rates (in the lower half) and the unit rates which were overwritlen
due to computer failure (in the upper half). G
~
It is an admitted position that at the time of opening of the tender
on 8th September 1999, our bid was the lowest at Rs. 647.90 crores.
The bid of Skanska was Rs. 691.22 crores and that of Taisei was Rs.
726.50. We confirm that we have all along maintained and still maintain
the said bid price of Rs.647.90 crores. H
368 SUPREME COURT REPORTS [2001] I SCR

A However, we have reasons to believe that you have chosen to ignore
our said letter and have proceeded to evaluate our price bid by an
illogical and mis-application of the rules for the evaluation of the bids
set down in the ITB.

We, therefore, once again call upon you to evaluate our bid after
B taking into consideration the applicable unit rates. As already
mentioned in our earlier fax th~re is no change in the price or substance
of our bid as mentioned in the amount column of the BOQ".
(Emphasis supplied)
Here, though the nature of mistakes are pointed out yet the scope of the
c correction sought is not indicated.
The appellant could not have ignored these letters. Had the appellant
taken note of these letters and the mistakes occurring due to repetition of
entries in 37 items in the bid documents, it would not have proceeded with
D correction of such mistakes and evaluation of their bid without first seeking
clarification from respondents I to 4 under Clause 27. I. We have already
referred to the gist of that clause. The only prohibition contained therein is
that no change in the price or substance of the bid after its opening can be
sought, offered or permitted. In that regard they had made their position clear.
The prohibition is, therefore, not attracted. In these circumstances any
E reasonable person in the position of the appellant would have sought
clarification from respondent Nos. I to 4 under Clause 27.1. Even assuming
that after the letter of December 17, 1999, no further clarification was required
to be sought by the appellant, we cannot but hold that correction of the errors
taking note of the unit rates which are mere repetition of the unit rates quoted
for a different work item is mechanical and without application of mind by the
F appellant. In our view such a correction is far beyond the scope of Clause
29. From the description of the mistakes, noted above, and the correction and
evaluation made by the appellant, it is evident that except the error in the first
line against the work item Rock Excavation and Schedule N day work, all other
mistakes/errors are beyond the scope of Clause 29. I, so Clause 29.2 will not
G be attracted. It follows that the corrections in the bid documents ofrespondent
Nos. I to 4 carried out by the appellant, evaluation of bid under Clause 29.:2
and the impugned communication of the appellant dated December 18, 1999
are unsustainable and of no consequence.

Now, reverting to the relief of correction of errors, Mr. Chidambaram has
H argued that in the two lines against each of the Work Items, the first line
W. BENGAL STATE ELEC. BOARD 1. PATEL ENG. CO.LTD. [QUADRI, I] 369

denotes 50 per cent of the quoted unit rate in Indian Rupee and the second A·
line represents the other 50 per cent of the unit rate in U.S. Dollar. According
"to him the actual rate quoted for quantity IOOO is the sum total of two lines
i.e., 148.08 in Indian Rupee plus 3.38 in U.S. Dollar. This is not noted either
in statement 'A' or in statement 'B '. Be that as it may, quoting the unit rate
50 per cent in Indian Rupee and 50 per cent in U.S. Dollar is not provided
in the !TB. Nothing is brought to our notice to justify splitting of unit rate B
in that ratio. There is no indication of this fact in the price bid documents
submitted by the said respondents to explain that the unit rate has been so
quoted. This is also not in conformity with Clause 15 of !TB which. as noted
above, requires a bidder to quote unit rates and prices in Indian Rupe<: and
either in U.S. Dollar or Japanese Yen. The learned Additional Solicitor i .~ncral, C
in our view, is right in his submission that till the representation was made
by the said respondents on December 23, 1999, after the interim direction of
the High Court, the appellant was unaware of the quoted unit rate being in
such proportion. A combined reading of ITB and the annexure, extracted
above, makes it clear that the second line against each work item is meant for
writing U.S. Dollar or Japanese Yen equivalent of the unit rate and line total D
in the amount column entered in the first line and not for writing bifurcated
unit price in different currencies in the ratio of 50 : 50. On these facts, the
)>-- errors cannot be termed as mere clerical or mechanical. Permitting correction
of such errors, if they can be so called, would result in not only re,writing
unit rates in 37 entries in which such errors are said to have been committed E
but also appending an explanation thereto regarding splitting of unit rates in
terms of representation dated 23.12.1999 of respondent Nos.I to 4. Neither
Clauses 27 and 29 nor any other clause in the ITB permits such corrections.

-,.. The mistakes/errors in question, it is stated, are unintentional and
occurred due to the fault of computer termed as "a repetitive systematic F
computer typographical transmission failure''. It is difficult to accept this
contention. A mistake may be unilateral or mutual but it is always unintentional.
If it is intentional it ceases to be a mistake. Here the mistakes may be
unintentional but it was not beyond the control of respondent Nos. I to 4 to
correct the same before submission of the bid. Had they been vigil in checking G
the bid documents before their submission, the mistakes would have been
avoided. Further, correction of such mistakes after one and a half month of
opening of the bids will also be violative of Clauses 24.1, 24.3 and 29. l of ITB.

The controversy in this case has arisen at the threshold. It cannot be
disputed that this is an international competitive bidding which postulates H
370 SUl'REMF COlllU REPORTS [200 I J I S.C.R.

A keen compet1t10n and high efficiency. The bidders have or should have
assistance of technical experts. The degree of care required in such a bidding >--
is greater than in ordinary local bids for small works. It is essential to maintain •
the sanctity and integrity of process of tender/bid and also award of a
contract. The appellant, respondent Nos. I to 4 and respondent Nos. I 0 & 11
are all bound by the ITB which should be complied with scrupulously. In a
B work of this nature and magnitude where bidders who fulfil pre-qualification
alone are invited to bid, adherence to the instructions cannot be given a go-
bye by branding it as a pedantic approach otherwise it will encourage and
provide scope for discrimination, arbitrariness and favouritism which are
totally opposed to the Rule of law and our Constitutional values. The very
C purpose of issuing Rules/instructions is to ensure their enforcement lest the
Rule of law should be a casuality. Relaxation or waiver of a rule or condition.
unless so provided under !TB, by the State or its agencies (the appellant) in
favour of one bidder would create justifiable doubts in the minds of other
bidders, would impair the rule of transparency and fairness and provide room
for manipulation to suit the whims of the State agencies in picking and
D choosing a bidder for awarding contracts as in the case of distributing bounty
or charity. In our view such approach should always be avoided. Where
power to relax or waive a rule or a condition exists under the Rules, it has
to be done strictly in compliance with the Rules. We have, therefore, no ·"-
hesitation in concluding that adherence to !TB or Rules is the best principle
E to be followed, which is also in the best public interest.
For all these reasons, in such a highly competitive bid of global tender,
the appellant was ju,tified in not permitting respondent Nos. I to 4 to correct
the errors of the nature and the magnitude which. if permitted. will give a
different complexion to the bid. The High Court erred in directing the appellant
F to permit respondent Nos. I to 4 to correct the errors in the bid documents.

Mr. Chidambram, however, submitted that .in equity respondent Nos. I
to 4 would be entitled to relief of correction of mistakes. He invited our
attention to para 84 of the American Jurisprudence (Second Edition, Volume
64. Page No. 944). It will be useful to quote the relevant part of that para here:
G "As a general rule. equitable relief will be granted to a bidder for
a public contract where he has made a material mistake of fact in
the bid which he submitted, and where. upon the discovery of that
mistake. he acts promptly in infi>rming the public authorities and
requesting withdrawal of his bid or opportunity to rectifj· his mistake
H particularzv where he does so before any formal contract is entered
W. BENGAL STATE ELEC. BOARlh. PATEL ENG. CO LTD. [QUADRI, J] J7J

inio". A
The principle is based on the judgment of the Supreme Court of USA. in
Mofle//, H & C Co. v. Rochester, 178 U.S. 373; 44 L Ed 1108, 20 S Ct 957.
There the plaintiff gave proposals by way of bid for two works of excavation
of earth, quoting the unit rate 1.5 Dollar instead of 15 Dollars and 50 cents
instead of 70 cents per cubic yard. The City of Rochester which called for B
tenders, was promptly informed of the mistake by the plaintiffs agent as soon
as it was discovered but before entering into contract. However, the proposal
of the plaintiff was accepted by the City of Rochester in regard to one work
and the other work was allotted to another bidder. The plaintiff declined to
enter into a contract with the City of Rochester which took steps to enforce C
execution of the contract. The plaintiff filed the suit for correction of proposals
to conform to the asserted intention in making them and for execution of the
contract on corrected rates or alternatively for the recission of the proposals.
It also sought injunction against the officers of the City of Rochester declaring
it to be defaulter, its bond forfeited or enforced. It was found that the price
noted was grossly inadequate and far below what would be the actual cost D
of the work under the most favourable circumstances. The trial court decreed
the suit holding that the proposals of the bidder be rescinded, cancelled and
declared null, void, and of no effect and granting the injunction prayed for.
But on appeal the decree was reversed by the circuit court of appeals. On
further appeal to the Supreme Court of U.S.A., it was observed that both the
courts below found that there was a mistake and while the trial court opined E
it was clear, explicit and undisputed, the court of appeal was of the view that
it was not a mistake in any legal sense but was a negligent omission arising
from an inadequate calculation of the cost of the work and held that the
mistake was not sufficient to preclude a claim for relief ifthe mistake justified
it. The Supreme Court relied on the following observation in an earlier judgment F
of that Court in Hearne v. Marine Ins. Co. 22 L ed. 305.

"A mistake on one side may be a ground for rescinding, but not for
reforming, a contract. Where the minds of the parties have not met
there is no contract, and hence none to be rectified".

..,t, And it was concluded that the last two propositions might be claimed to be
G
pertinent to that case even though the transactions between the parties be
considered as a completed contract and held that the action of the City of
Rochester in awarding one contract to another bidder and forcing the plaintiff
to enter into the second contract after it had declared there was a mistake in
its proposal was inequitable. H
372 SUPREME COURT REPORTS 12001 J I S.C.R.

A Exceptions to the above general principle of seeking relief in equity on
the ground of mistake, as can be culled out from the same para, are :

(I) where the mistake might have been avoided by the exercise of
-
ordinary care and diligence on the part of the bidder; but where
the offeree of the bid has or is deemed to have knowledge of
B the mistake, he cannot be permitted to take advantage of such
a mistake.
"t"
(2) where the bidder on discovery of the mistake fails to act promptly
Ill informing to the concerned authority and request for

rectification, withdrawal or cancellation of bid on the ground of
c clerical mistake is not made before opening of all the bids.

(3) where the bidder fails to follow the rules and regulations set
~
forth in the advertisement for bids as to the time when bidders
may withdraw their offer; however where the mistake is 1

discovered after opening of bids, the bidder may be permitted
D
to withdraw the bid.

In the instant case, we have also noted that the mistakes in the bid
documents of respondent Nos. I to 4 even though caused on account of ,.
faulty functioning of computer, could have been discovered and notified by
E the said respondents with exercise of ordinary care and diligence. Here, the
mistakes remained in the documents due to gross negligence in not checking
the same before the submission of bid. Further Clauses 24 and 27 of ITB
permit modification or withdrawal of bids after bid submission but before the
dead line for submissions of the bids and not thereafter. And equity follows
the law. Having submitted the bid they did not promptly act in discovering
F the errors and informing the same to the appellant. Though letters were
written on October 25, 1999, and December 17, 1999, yet the real nature of
errors/mistakes and corrections sought were not pointed out till December 23,
1999 when representation was made after interim direction of the High Court
was given on December 21, 1999. Indeed it appears to us that they improved
G their claim in the representation. In our view the said respondents are not
entitled to rectification of mistakes/error for being considered along with the ,4.
other bidders.

Mr. Chidambaram relied upon a decision of the Superior Court of New
Jersey in Spina Asphalt Paving Excavating Contractors. Inc., v. Borough of
H Fairview, [304 N.J. Super 425] to justify the claim for rectification of mistakes.
W 13LNGi\L STATE El.EC. BOARD r. PATEL ENG. CO. LTD. [QUADRI, J] 373

In that case, the Borough of Fairview invited tenders. Spina and one Tomaro A
participated in the bid. The bid was on a unit price basis and the proposals
were submitted on Forms supplied by the Borough. The bid specifications
provided, inter alia :

"in the event there is a discrepancy between the unit price and the
extended total, the unit price shall prevail. The Borough reserved the B
right to waive any informality if deemed in the best interests of the
owner''.

On the evening when the bids were opened, Spina discovered that its
secretary had erroneously indicated the unit price for one of the items as 400
dollars per square yard though it should have been 4 dollars per square yard C
as reflected in the total bid for that work. Spina faxed the Borough indicating
that the intended unit price was 4 dollars per square yard. On the basis of
400 dollars per square yard Spinas bid was calculated which obviously worked
out far higher than the intended bid amount. Taking note of that amount the
Borough awarded the contract to Tomaro. Spina instituted action claiming
that the Borough arbitrarily failed to recognise that its bid was lower than that D
of Tomaro. The Law Division held that the error in the bid was non-material
and subject to waiver. The Superior Court while agreeing with the Law Division
)>.. observed that they did not hold that generally an error in the statement of
a price could be treated as immaterial and ii was only when as in that case
the error was patent and the true intent of the bidder obvious that such an E
error might be disregarded. The Superior Court held that when as in that
case the failure to waive the deviation would thwart the aims of the public
bidding laws, the municipality was obliged to grant the waiver.
(Emphasis supplied)

Though Clause 29 in this case appears to be similarly worded as in the F
bid documents in Spinas case (supra), a close reading of these clauses shows
that no power of waiver is reserved in the case on hand. That apart, the nature
of the error in these two cases is entirely different. There, the error was
apparent $ 400 for $ 4, non-material and waiveable by the Corporation; in the
present case the errors pointed out above are not simply arithmetic and G
clerical mistake but a deliberate mode of splitting the bid which would amount
to re-writing the entries in the bid document and cannot be treated as non-
material. Therefore, the judgment in Spinas case (supra) does not help
respondent Nos. I to 4.

The submission that remains to be considered is that as the price bid H
374 SUPREME COURT REPOR'I S [200 I j I S.C.R.

A of respondent Nos. 1 to 4 is lesser by 40 crores and 80 crores than that of
respondent Nos. 11 and 10 respectively, public interest demands that the bid ""
of respondent Nos. I to 4 should be considered. The project undertaken by
the appellant is undoubtedly for the benefit of public. The mode of execution
of the work of the project should also ensure that the public interest is best
B served. Tenders are invited on the basis of competitive bidding for execution
of the work of the project as it serves dual purposes. On the one hand it offers
a fair opportunity to all those who are interested in competing for the contract
relating to execution of the work and on the other hand it affords the appellant
a choice to select the best of the competitors on competitive price without
prejudice to the quality of the work. Above all it eliminates favouritism and
C discrimination in awarding public works to contractors. The contract is,
therefore, awarded normally to the lowest tenderer which is in public interest.
The principle of awarding contract to the lowest tenderer applies when all
things are equal. It is equally in public interest to adhere to the rules and
conditions subject to which bids are invited. Merely because a bid is the
lowest the requirements of compliance of rules and conditions cannot be
D ignored. It is obvious that the bid of respondent Nos. I to 4 is the lowest of
bids offered. As the bid documents of respondent Nos. I to 4 stands without
correction there will be inherent inconsistency between the particulars given
in the annexure and the total bid amount, it cannot be directed to be considered ,.
along with other bid on the sole ground of being the lowest.
E
We find no force in the submission that as under Clause 14.2 items
against which no rate or price is entered by the bidder will not be paid by
the employer when executed and shall be deemed covered by the other rates
and prices in the bill of quantities, the unit price in items containing errors
be ignored and the bid be considered on the basis of total price bid which
F is the lowest. In our view, there is a basic distinction between a case where
against some items no rates or prices are quoted and a case where some rate
is quoted. Whereas in the former case the bidder will not be entitled to claim
any specific amount for the work done by him in the absence of any rate for
that work, because in the aforementioned clause it is clarified that the bidders
G will not be paid by the employer and that the execution of the work shall be
deemed covered by other rates and prices in the bill of quantities but in the
latter case the bidder will be entitled to claim for the work executed on the
basis of quoted price/rate.

We may, however, clarify that the appellant is not obliged to award
H contract to any of the bidders at their quoted price bid. It is always open to
W BENGAL STATE F.LEC. BOARD 1•. PATEL ENG. CO LTD. [QUADRI, J.] 375

the appellan! to negotiate with the next lowest bidder for awarding the A
contract on economically viable price bid.

For the reasons abovementioned, though the impugned order of the
High Court insofar as it relates to quashing of letter of the appellant dated
December 18, 1999, falls within the purview of judicial review, yet the direction
to the appellant to permit correction of errors by respondents l to 4 in their B
bid documents and consider their bid along with other bid, goes far beyond
the scope of judicial review, as elucidated by this Court in Tata Cellular
(supra). In the result, we uphold the impugned order of the Division Bench
insofar as it relates to quashing of communication and letter dated December
18, 1999 and set aside that part of the impugned order giving direction to the C
appellant to permit respondent Nos. 1 to 4 to correct bid documents and to
consider their bid after correction along with other bids. The appeal is thus
allowed in part. On the facts and in the circumstances of this case we leave
the parties to bear their own costs.

v.s.s. Appeal partly allowed.