Supreme Court limits judicial review in tenders—BCCL’s e-auction upheld; no public-law violation by resuming bidding after technical glitch
Case Name: Bharat Coking Coal Ltd. & Ors. v. AMR Dev Prabha & Ors.
Citation: 2020 INSC 307
Date of Order: 18 March 2020
Bench: Chief Justice S.A. Bobde, Justice B.R. Gavai, and Justice Surya Kant
Held: The Supreme Court held that courts should exercise extreme restraint in interfering with tender processes and can intervene only where arbitrariness, mala fides, or public-law violations are proved. It ruled that the Jharkhand High Court erred in quashing BCCL’s e-auction and directing a re-bid, as the decision to resume bidding after a temporary internet failure was bona fide and aimed at ensuring better price discovery. The Court observed that the writ petition by AMR Dev Prabha involved no element of public interest only private commercial rivalry and therefore was not maintainable under Article 226.
Summary: BCCL had conducted an online e-reverse auction through C1 India Ltd. for a ₹1,694 crore coal mining contract. On the final day of bidding, a temporary network outage occurred due to a fiber cut, leading to automatic closure of the auction at 1:03 p.m., when AMR Dev Prabha’s Rs. 2,345 crore bid stood as the lowest. After restoring connectivity, C1 India after informing all bidders resumed the auction at 2:30 p.m., during which M/s RK Transport emerged successful with a lower bid of Rs. 2,043 crore. BCCL awarded the contract accordingly. Three months later, AMR Dev Prabha challenged the process, claiming that the resumed auction was illegal and that it had become the L1 bidder when the auction first closed.
The Single Judge dismissed the writ, holding that the resumption was justified under the tender terms and that AMR Dev Prabha had participated without protest. However, the Division Bench set aside the contract, ordering re-auction and vigilance inquiry, citing procedural irregularities.
Reversing the High Court, the Supreme Court held that judicial review in contractual tenders is confined to examining legality, rationality, and procedural propriety not the merits of commercial decisions. It found that the decision to resume the auction was taken in good faith, backed by technical verification from the service provider and CERT-In, and aimed at securing a better deal for the public exchequer. The Court further held that AMR Dev Prabha’s writ lacked any public-law dimension, being motivated purely by private commercial interest, and that participation in the resumed auction barred subsequent challenge.
Decision: Appeals allowed; the High Court judgment was set aside, and AMR Dev Prabha’s writ petition dismissed. The Court reaffirmed that in public tenders, judicial review cannot be used to enforce private contractual claims and that executive commercial decisions, if bona fide and reasonable, must be respected to preserve the sanctity and efficiency of public procurement.