Supreme Court Imposes ₹3 Crore Cost On Bidder for Negligence, Says Greater Care Needed In Public Auctions To Prevent Waste Of Public Funds

The Supreme Court held that a government auction is a competitive bidding process, and bidders have to exercise a greater than ordinary degree of care to prevent situations that cost the public exchequer heavily in terms of time, effort and expense. On account of the appellant's failure to act with the required degree of care, which has not only had the effect of inevitably delaying the mining project but would also cost both the respondents and the other participant bidders precious time, effort and money, we direct the appellant to pay to the first respondent Rs 3,00,00,000/- within a month from date.” The case involves an e-auction conducted by MSTC Ltd. under the aegis of the Director of Mines and Geology, Bhubaneswar. Qualified bidders then had to propose their Final Price Offer over and above the Floor Price, with bids to be made in minimum increments of 0.05 percent within eight minutes of the previous bid. The respondent informed the court that the e-auction platform shows a pop-up displaying the bid amount both numerically and in words, requiring authentication via a Digital Signature Certificate, which the appellant complied with. The court held that the appellant's bid of 140.10 percent made little commercial sense and was a bona fide mistake, allowing which to stand would be unconscionable.