REJECTION OF HIGHEST BIDS FOR TECHNICAL IRREGULARITIES DEFEATS THE OBJECTIVE OF MAXIMIZING PUBLIC REVENUE PROCEEDS.

The petitioners participated in an e-auction notice dated January 12, 2026, for mining leases under Chapter IV of the U.P. Minor Minerals (Concession) Rules, 2021

Their bids were rejected on technical grounds, specifically for failing to submit physical copies of original documents (affidavits, demand drafts, or challans) prior to the opening of bids, as allegedly required by Clause 4 of the auction notice

The petitioners argued they had successfully uploaded the digital copies and that the authorities manipulated the process by removing physical submissions to favor other bidders

The respondents contended that Clause 4 was mandatory and its violation necessitated rejection

1. Whether the rejection of bids based on the non-submission of physical hard copies, despite the digital uploading of required documents, was legally sustainable or constituted a misconstruction of tender conditions

2. Whether the requirement to submit a physical challan and original affidavit is an essential condition whose omission warrants the exclusion of a higher bidder in the context of maximizing state revenue

the principle that a public tender is an instrument of governance intended to maximize public value

tender conditions must be interpreted consistently to advance the object of the tender (revenue maximization) rather than defeat it through demonstrable misconstruction or irrationality [Shanti Construction Pvt. Ltd. vs. State of Odisha (2025)]

Rules 26 and 27 of the U.P. Minor Minerals (Concession) Rules, 2021, which govern e-auction procedures and eligibility regarding outstanding mining dues

The court found that Clause 4 of the tender notice, while mentioning physical submission for verification, did not explicitly mandate rejection for mere failure of physical delivery if digital uploading was completed

The court reasoned that since all bids were opened simultaneously, the technical disqualification after the fact suggested "doubtful action"

It held that an omission to file a physical affidavit or a specific bank challan reached the level of a "mere irregularity" rather than a fatal flaw, especially since the authority could verify the status of mining dues or request re-issuance of demand drafts later

The court emphasized that the state’s duty to maximize revenue from natural resources outweighs hyper-technical procedural requirements that exclude higher bidders without affecting the substance of the bid

The Court quashed and set aside the Letters of Intent (LoIs) issued to the private respondents (Serial Nos. 7, 8, and 9). It directed the petitioners to deposit fresh demand drafts and ordered the State to issue new LoIs in favor of the petitioners within three weeks, citing their higher bid amounts. The court further dispensed with the "right of first refusal" for landowners as they had failed to exercise it against the earlier lower bids.