Authorities Cannot Alter Tender Conditions or Extend E-Auction Process Post-Completion to Accommodate Defaulting Bidders.

In brief

The question

1. Whether the respondent authorities acted legally and within their jurisdiction by directing an "extended e-auction" after the original bidding process was concluded and the previous litigation had attained finality

The court held

The court answered the issues in the negative, holding that the impugned communication was unsustainable under law.

It also directed

The court set aside and quashed the decision of the Port Trust dated June 24, 2026, to conduct an extended e-auction.

The Port Trust was directed to take a final decision regarding the allotment to the petitioners or cancellation of the tender strictly in accordance with the findings of the previous judgment dated April 23, 2026.

The writ petition was allowed.

01Facts

The petitioners participated in an e-tender for a 30-year lease of Port Trust land, where they emerged as the highest bidder after a live auction on March 26, 2026

¶ 1, 21

Respondent No. 4, a competing bidder, had faced a technical glitch during the auction and previously filed a writ petition (WPA No. 7776 of 2026) seeking a re-bid from the stage of the glitch

¶ 2, 6

That petition was dismissed by the High Court and affirmed by the Appellate Court, which noted that the glitch was at the bidder's end and left the final "fate of the bidding process" to the Port Trust’s discretion

¶ 3, 23-24

Following this, the Port Trust negotiated with the petitioners to revise the plot area and price, which the petitioners accepted

¶ 8, 31

On June 24, 2026, the Port Trust issued a communication seeking to conduct an "extended e-auction" among qualified bidders using the petitioners' negotiated price as the new base price

¶ 4, 31

02Issues

i.1. Whether the respondent authorities acted legally and within their jurisdiction by directing an "extended e-auction" after the original bidding process was concluded and the previous litigation had attained finality

¶ 20, 30

ii.2. Whether the Port Trust could invoke Clause 5(h) of the tender document to extend the auction process after the rules of the game were effectively altered through post-bid negotiations and judicial findings

¶ 30, 33

03Law Applied

The court primarily applied the principle that authorities cannot "change the rules of the game" in the middle or after the selection process has commenced

¶ 10, 33

The court relied on Sorath Builders vs. Shreejikrupa Buildcon Limited regarding the necessity of adhering strictly to tender instructions to prevent arbitrariness

¶ 9

The court relied on Golden Food Products India vs. State of Uttar Pradesh, which dictates that the decision to discard a highest bid must have a rational nexus to the objective

¶ 11

The court applied the doctrine of finality of judgments, noting that the Port Trust could not indirectly grant a relief (re-bidding) that was expressly denied to Respondent No. 4 in previous judicial proceedings

¶ 34

Provisions in the judgment · 4

Tender Document Section 5Section 12Section 16Section 23

04Reasoning

The court reasoned that the original auction officially closed at 22:49:34 hours on March 26, 2026, and the court in the first round of litigation had already ruled that Respondent No. 4’s failure to bid was due to its own technical glitch

¶ 21, 26

The Port Trust’s attempt to invoke the "extension" clause under 5(h) was found to be a misinterpretation; "extending a tender" typically refers to deadlines before closing, not restarting a concluded auction

¶ 29

The court observed that the Port Trust had already moved to the next stage by negotiating a revised area and price with the petitioners, which the petitioners had accepted

¶ 31

By allowing Respondent No. 4 to participate in an "extended" auction now, the Port Trust was effectively bypassing the previous court judgment that dismissed Respondent No. 4’s claim for a re-bid

¶ 34

The court found that altering the proposed area and base price after the auction constituted a prohibited change in the "rules of the game"

¶ 33