Supreme Court Overturns High Court Order in Sand Quarry Tender Dispute: Key Legal Analysis

The Supreme Court of India recently delivered a significant judgment in the case of M/S Sri Venkateswara Constructions versus the State of Odisha & Ors., overturning the High Court’s decision and reinstating the Tahasildar’s order declaring the appellant as the successful bidder for the Karangadihi Sand Quarry lease. The judgment, dated April 25, 2025, provides a detailed analysis of the tender conditions, compliance by the bidders, and the judicial review of administrative decisions in tender matters.

The case arose from a tender notice issued by the Tahasildar, Banspal, on July 18, 2022, for the long-term lease of the Karangadihi Stone Quarry for five years. The tender required bidders to submit specific documents, including the Income Tax Return (ITR) of the previous financial year and a ‘no dues’ certificate from the GST jurisdictional officer. Five bids were received, and after scrutiny, M/S Sri Venkateswara Constructions (the appellant) was declared the successful bidder, having quoted the highest additional charge of Rs. 589/-. However, M/S P.K. Minerals (P) Ltd. (respondent no.4) challenged this decision, alleging non-compliance with tender conditions by the appellant.

The High Court of Orissa allowed the writ petition filed by respondent no.4, quashing the Tahasildar’s order and directing a fresh tender process. The High Court held that the appellant had failed to submit the ITR for the correct financial year and that the GST ‘no dues’ certificate submitted was conditional. Aggrieved by this decision, the appellant approached the Supreme Court, which ultimately overturned the High Court’s judgment.

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The Supreme Court, in its judgment, meticulously examined the arguments presented by both parties. The appellant’s counsel argued that the ITR submitted for the financial year 2020-21 was valid as the due date for filing the 2021-22 return was October 31, 2022, for tax-audited entities like the appellant. The counsel also contended that the GST certificate issued by the jurisdictional officer was valid, despite the conditional disclaimer, and that the Tahasildar had rightly verified the documents before declaring the appellant as the successful bidder.

On the other hand, respondent no.4’s counsel argued that the appellant had not complied with the tender conditions, as the ITR submitted was for the wrong financial year and the GST certificate was conditional. They also alleged that the Tahasildar had acted hastily in declaring the appellant as the successful bidder without awaiting necessary clarifications from the relevant authorities.

The Supreme Court, after hearing both sides, held that the appellant had indeed complied with the tender conditions. The Court noted that the ITR for 2020-21 was the latest available return at the time of bidding, given the statutory deadline for filing the 2021-22 return. The Court also observed that the GST certificate, despite its conditional nature, was valid as it confirmed no outstanding dues at the time of issuance. The Court emphasized that the Tahasildar’s satisfaction regarding the appellant’s compliance was reasonable and did not warrant judicial interference.

The Court further highlighted that the appellant’s bid was significantly higher than respondent no.4’s, which would benefit the state exchequer. The Court criticized the High Court for interfering with the administrative decision, stating, “the decision of the revenue authorities namely the Tahasildar and the Sub-Collector were just, and the High Court committed gross error in allowing the petition.”

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In conclusion, the Supreme Court allowed the appeal, quashed the High Court’s order, and reinstated the Tahasildar’s decision declaring the appellant as the successful bidder. The judgment underscores the principles of judicial restraint in tender matters and the importance of adhering to statutory deadlines and administrative discretion.

Petitioner Name: M/S Sri Venkateswara Constructions.
Respondent Name: State of Odisha & Ors..
Judgment By: Justice Bela M. Trivedi, Justice Prasanna B. Varale.
Place Of Incident: Karangadihi Sand Quarry, Odisha.
Judgment Date: 25-04-2025.
Result: allowed.

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