Facts of the Case

This case turns on tender/contract law, not on any GST interpretation, though GST pricing features in the facts. The petitioner, Gandharva Infrastructure and Projects Limited, participated in a tender (No. MCF/CMG/BH/ETN-08/2019-20) on 25.07.2019. Bids were opened on 26.07.2019. On 05.08.2019 — after the bids were opened and just one day before the work order was to be accepted — the petitioner wrote to the authority stating that its quoted price had excluded GST, effectively seeking to revise its bid upward. The authority proceeded to accept the work order on 06.08.2019, and the petitioner ultimately withdrew from the bid only on 01.10.2019, by which time its offer had already been accepted. Respondent No. 3 then forfeited 100% of the petitioner's Earnest Money Deposit (FDR No. 530401038029902), and the petitioner sought a writ restraining this forfeiture.

Issues Involved

  1. Whether omission of GST from the quoted bid price could be treated as an inadvertent mistake entitling the petitioner to revise its bid after the bids were opened.
  2. Whether forfeiture of 100% of the EMD was justified in these circumstances.

Petitioner's Arguments

  • The omission of the GST component from the quoted price was an inadvertent error, akin to a bona fide mistake that should not attract forfeiture of the entire EMD, relying on Supreme Court precedent on inadvertent bidding errors.

Respondent's Arguments

  • The petitioner's own conduct — raising the GST omission only after the bids were opened and just before acceptance, and formally withdrawing only after the work order was accepted — showed this was a deliberate attempt to revise the price, not a genuine inadvertent slip.

Court Order / Findings

  • The Court held that a person exercising ordinary care and diligence cannot omit the GST component from a price quote by inadvertence, particularly since the petitioner raised the issue only 10 days after participating and just one day before the bid was accepted.
  • The Supreme Court precedent relied on by the petitioner (involving an inadvertent bid of Rs. 49,88,55,000/- corrected within two minutes) was distinguished on facts, since the petitioner here took no prompt corrective action.
  • Finding no infirmity in the decision to forfeit 100% of the EMD, the writ petition was dismissed.

Important Clarification

This case is a caution for bidders in government tenders: a price quoted without factoring in applicable GST will not later be excused as an inadvertent mistake if the bidder seeks to revise it only after the bids are opened — full forfeiture of EMD can follow. It offers no interpretation of GST law itself.

Sections Involved

  • General Financial Rules / Tender Conditions — governing EMD forfeiture (no specific GST provision was interpreted)

Decision – In Favour of

Decided in favour of the Respondents (Union of India and tendering authority) — the writ petition challenging EMD forfeiture was dismissed.

Case Details

Court: High Court of Delhi at New Delhi
Case No.: W.P.(C) 9736/2023 & CM APPL. 37314/2023
Coram: Hon'ble Mr. Justice Subramonium Prasad
Date of Decision: 8 August 2023

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.