Supreme Court: cancelling a government tender for a lower bid needs proof the asset was undervalued, not just a comparison with the bidder's own earlier bid

The Supreme Court set aside a Madhya Pradesh High Court judgment and restored two sand-mining e-tenders that the Madhya Pradesh State Mining Corporation had cancelled. Sahakar Global Limited and Dhanlaxmi Merchandise Pvt. Ltd. had earlier surrendered mining contracts for the Shahdol and Katni sand groups, then won a fresh e-tender-cum-auction for the same groups in 2025 — but at annual bids lower than what they had themselves quoted in the earlier round. The Corporation's Board cancelled the auction on that ground alone. The Court reiterated the settled principle, traced to Ramana Dayaram Shetty v. International Airport Authority of India, that a public authority awarding a contract may reject even the highest bid, but that power remains public power and must satisfy Article 14 of the Constitution: the decision must be supported by reasons germane to it, while judicial review under Tata Cellular v. Union of India examines the legality of the decision-making process, not the court's own commercial judgment.

A reliable valuation showing material undervaluation, collusion, depressed bidding or a genuine policy change can justify rejecting even an above-reserve bid, but the Board here only showed that the fresh bids were lower than the appellants' own earlier bids — not that they were below what the market could reasonably fetch in October 2025. A Rule amendment of January 2026 barring a surrendering bidder from re-participating could also not be applied retrospectively to the already-concluded 2025 auction. The tender process stood restored.