Decoding ‘Previous Financial Year’: Supreme Court Clarifies Tender Interpretation in Odisha Minor Mineral Auction.


07 November 2025 Civil Appeals >> Civil & Consumer Law  

The Supreme Court of India has passed an important judgment on the issue of interpretation of the expression "previous financial year" as appearing in Rule 27(4)(iv) of the Odisha Minor Mineral Concession Rules, 2016. The judgment has resulted from two interconnected appeals against the rejection of a tender bid for the extraction of sand from the Mahanadi River in Cuttack, Odisha.

The controversy arose out of an auction notice issued by the Tehsildar, Tangi Chowdwar, in July 2022, inviting tender for a five-year sand lease. One of the bidders was rejected because of his failure to provide an income tax return for the assessment year 2021–22, although he had provided the return for the year 2020–21 and a provisional balance sheet for 2021–22. The Tender Committee construes the rule to imply that the return for the year 2021–22 was imperative, even though the statutory deadline for filing the said return had not expired.

 

 

On a writ petition, the High Court upheld the rejection but ordered the successful bidder to match the higher rate quoted by the disqualified bidder to ensure public revenue. Both parties approached the Supreme Court against the impugned judgment.

The apex court reviewed the purview of judicial review in contractual matters and reiterated that the courts are bound to intervene when the process of arriving at a decision suffers from arbitrariness or is not in consonance with public interest. A tendering process, the court underlined, is not solely a contractual arrangement but rather a method whereby the State discharges its constitutional duty as trustee of natural resources.

Delving into the language of Rule 27(4)(iv), the court observed that the phrase “previous financial year” must be interpreted in harmony with the Income Tax Act, 1961. Since the auction occurred in July 2022, before the statutory date for filing the 2021–22 return, the bidder could not have been expected to enclose it. Therefore, the “previous financial year” for compliance purposes was 2020–21.

Holding that the interpretation by the Tender Committee was too narrow and restrictive of competition, it set aside the committee's decision and the judgment of the High Court. To maintain the integrity of fairness and transparency, the court ordered a fresh auction in accordance with the law. The State was directed to refund the deposit of the earlier successful bidder along with interest at 6 percent per annum.

Accordingly, this decision reinforces several foundational principles of administrative and contract law:
  • Tender conditions to be interpreted literally and in a manner that allows competition.
  • The State’s responsibility over natural resources requires that it acts in a manner that derives the maximum benefit for the public.
  • Judicial restraint in tender disputes does not exclude intervention when the public interest and/or fairness are impaired. 
While interpreting the meaning of "previous financial year," the Supreme Court has ensured that procedural rigidity does not eclipse substantive justice or the overarching objective of maximizing the value of public resources.