A bidder cannot withdraw an accepted bid without forfeiting the bid security.

The Gwalior Development Authority issued an online notice inviting bids for various plots. Respondent No. 1 bid for Plot No. J-143, measuring 181.5 sq. metres. Against the reserve price of Rs.29,94,750/-, she submitted a bid of Rs.3,38,05,555/- and deposited the prescribed security amount.

Her bid was opened on 14 February 2025 and accepted on 24 February 2025. On 28 February 2025, she sought permission to withdraw, stating that the bid amount had been entered erroneously. The Authority permitted withdrawal but forfeited the security amount under Rule 6(iv) and Form-C of the Madhya Pradesh Vikas Pradhikaron Ki Sampatiyon Ka Prabandhan Tatha Vyayan Niyam, 2018.

The Single Judge quashed the forfeiture and directed refund of the security amount, holding that the online bidding system lacked safeguards for correction or review of an erroneously entered bid. The Authority preferred the present writ appeal.

Whether the respondent could withdraw her bid after it had been opened and accepted without forfeiture of the bid security under Rule 6(iv) and Form-C of the 2018 Rules?

Whether the absence of an online facility to review or correct the bid amount justified setting aside the forfeiture, when the respondent had not sought withdrawal before the bids were opened?

Whether the High Court could interfere with the Authority’s decision in a contractual/tender matter merely because the respondent’s explanation appeared bona fide?

The Court applied Rule 6(iv) of the Madhya Pradesh Vikas Pradhikaron Ki Sampatiyon Ka Prabandhan Tatha Vyayan Niyam, 2018, read with Form-C, under which the security of a bidder whose offer has been accepted is liable to forfeiture if the bidder withdraws the offer.

It relied on Tata Cellular v. Union of India, (1994) 6 SCC 651, Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818, National High Speed Rail Corporation Ltd. v. Montecarlo Ltd., (2022) 6 SCC 401, and Uflex Ltd. v. Government of Tamil Nadu, (2022) 1 SCC 165, for the principles that judicial review in tender matters is confined to the decision-making process; courts should not substitute their views for that of the tendering authority; and interference is warranted only where the decision is mala fide, arbitrary, irrational, perverse, discriminatory, or contrary to public interest.

The Court also applied the principle of strict compliance with tender conditions and held that the rules of the bidding process cannot be changed midway.

The Court held that the respondent did not claim to have discovered the mistake before the bids were opened, nor did she seek withdrawal before 14 February 2025.

Once the bid was opened and subsequently accepted on 24 February 2025, Form-C expressly permitted withdrawal only upon forfeiture of the security amount.

The respondent waited until 28 February 2025—fourteen days after the opening of the bid and after its acceptance—so the Court rejected the finding that she had acted with promptitude.

The alleged absence of a correction facility was held immaterial because no pre-opening request for correction or withdrawal had been made.

The Single Judge had impermissibly assessed the bona fides and commercial reasonableness of the bid, whereas the appellate court’s role was limited to examining the legality of the decision-making process.

Since the Authority had merely enforced the applicable tender conditions and there was no finding of mala fides, arbitrariness, perversity, or public-interest prejudice, judicial interference was unwarranted.

It upheld the Authority’s action of forfeiting the security because the respondent withdrew her bid after it had been opened and accepted, in accordance with Rule 6(iv) and Form-C of the 2018 Rules.

The writ petition consequently stood dismissed, and there was no order as to costs.