[Cites 18, Cited by 0]
Madhya Pradesh High Court
Shri Yamuna Publicity Joint Venture ... vs The State Of Madhya Pradesh on 17 February, 2026
Author: Pranay Verma
Bench: Pranay Verma
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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PRANAY VERMA
ON THE 17th OF FEBRUARY, 2026
WRIT PETITION No. 3472 of 2026
SHRI YAMUNA PUBLICITY JOINT VENTURE ADOCEAN GLOBAL
PRIVATE LIMITED THROUGH ITS MEMBER 2/DIRECTOR MR.
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Rajat Raghuwanshi - Advocate for the petitioner.
Shri Rahul Sethi, Shri Shashank Shrivastav and Shri Ashutosh Gondli
- Advocate for respondent No.3.
ORDER
With the consent of learned counsel for the parties, the matter is finally
heard.
02. This petition under Article 226 of the Constitution of India has
been preferred by the petitioner being aggrieved by the Letter of Acceptance
(LOA) dated 12.01.2026 (Annexure P/1) issued by respondent No.3 in
favour of respondent No.4 for allotment of advertisement rights on the
unipoles located at AB Road, Indore.
03. On 05.11.2025 respondent No.3, Atal Indore City Transport
Services Limited (AICTSL) issued a notice inviting E-Tenders for allotment
of advertisement rights on 42 unipoles located at AB Road, Indore for a
period of three years. It was specified that the license fee quoted must be
above Rs.100/- per square feet per month. The petitioner also submitted his
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tender form along with the requisite documents. On 29.12.2025 respondent
No.3 conducted technical evaluation of bids and uploaded the evaluation
report. A total of 18 bidders participated in the tender process out of which
15 including the petitioner and respondent No.4 were declared technically
qualified. The financial bids were then opened in which respondent No.4 was
declared as H-1 bidder and the petitioner was declared as H-2 bidder.
04. As per the petitioner, the figure quoted by respondent No.4 was
Rs.4.56 Lakh Crores which was an impossible figure. The petitioner then
submitted his objection before respondent No.3 but no response was
received. On 30.12.2025 respondent No.4 addressed a letter to respondent
No.3 stating that the amount quoted by it is erroneous and sought
cancellation of the entire tender process. However, on 12.01.2026 respondent
No.3 issued Letter of Acceptance (LOA) in favour of respondent
No.4 accepting its commercially absurd bid. By communication dated
24.01.2026, respondent No.4 itself admitted that the amount quoted by it is
mistaken and sought correction of the financial bid which is legally
impermissible. The petitioner has every apprehension that respondent No.3
may arbitrarily cancel the entire tender process to benefit respondent No.4.
05. Learned counsel for the petitioner has submitted that the Letter of
Acceptance (LOA) issued in favour of respondent No.4 is illegal and
contrary to law. As per Clause 5.4 of the Request For Proposal (RFP)
guidelines, if successful bidder fails to acknowledge the Letter of Acceptance
(LOA) or the conditions mentioned therein, the next bidder is mandatorily
required to be considered. Since respondent No.4 itself expressed its
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unwillingness to deposit the tender amount quoted by it, the petitioner is
entitled to be considered for the bid. As per Clause 5.5 of the Request For
Proposal (RFP), if the unsuccessful bidder is unable to execute the agreement
within the stipulated time period, respondent No.3 is under an obligation to
immediately withdraw the offer and replace it with appropriate subsequent
bidder. Provision in this regard is also contained in Clause 5.6 of the Request
For Proposal (RFP). The action of respondent No.3 in intending to scrap the
entire tender process is illegal and prejudices the legal rights of the
petitioner. Reliance has been placed by the learned counsel for the petitioner
upon the decision of the Apex Court in Tata Cellular Vs. Union of India
1994 SCC (6) 651, The Silppi Constructions Contractors Vs. Union of India
2020 (16) SCC 489, W.P. No.11842/2025 (Pragmatic Infrastructure Pvt. Ltd.
Through Director Pranvir Singh Kushwaha Vs. M.P. Housing and
Infrastructure Development Board and Others) decided on 16.10.2025, W.P.
No.18584/2017 (Shri Mahadev Shahra Sukrat Trust Vs. Ministry of Urban
Development and Environment and Others) decided on
22.03.2024, Chairman Cum Managing Director Indian Oil Corporation Ltd.
Vs. Sunita Kumari 2014 (16) SCC 790, W.P. No.1294/2022 (Amit Sharma
Vs. M.P. Housing and Infrastructure Development Board and
Others) decided on 18.10.2022 and Golden Food Products India Vs. State of
U.P. and Others 2026 SCC Online SC 24.
06. Reply has been filed by respondent No.3 and learned counsel for
respondent No.3 has submitted that no judicial review is expected in
commercial matters unless a case of arbitrariness, malafide, bias or
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irrationality is made out which contingencies are not existent in the present
case. There is no patent illegality or perversity. As per office memorandum
dated 21.04.2022 of the Government of India, if the bidder who has been
found to be the lowest withdraws or fails to sign the contract, the procuring
entity is required to retender the case hence respondent No.3 is bound to
scrap the present tender process. As per manual for procurement of non-
consultancy services 2025, vide Clause 7.4.11, the same procedure is
required to be followed. The bid submitted by respondent No.4 was an
impossible bid hence respondent No.3 has been constrained to scrap
the entire tender process. The petitioner does not have any right to demand
the allotment to be considered in its favour as per the terms of Request For
Proposal (RFP). It is hence submitted that the petition deserves to be
dismissed. Reliance has been placed by the learned counsel for respondent
No.3 upon the decision of this Court in Rajbahdur Yadav Vs. State of M.P.
and Others W.P. No.22902/2025 decided on 08.08.2025, Raju Bokade Vs.
M.P. Housing and Infrastructure Board W.P. No.21856/2023 decided on
31.08.2023, Siemens Aktiengeselischaft and Siemens Limited Vs. Delhi
Metro Rail Corporation Ltd. and Others 2014 (11) SCC 288, Maa Binda
Express Carrier and Another Vs. North-East Frontier Railway and Others
2014 (3) SCC 760 and State of Jharkhand and Others Vs. CWE - SOMA
Consortium 2016 (14) SCC 172.
07. I have heard learned counsel for the parties and have perused the
record.
08. The different aspects of scope of judicial review in contract/tender
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matter has been subject matter of consideration before the Apex Court as
well as this Court on a number of occasions. Not only the scope of judicial
review, but the question of arbitrariness, bias and other related aspects have
been discussed in detail. The same have been lucidly summarised by the
Division Bench of this Court in the matter of Pragmatic Infrastructure Pvt.
Ltd. (Supra) in which it has been held as under:-
"36. In the case of Tata Cellular (supra) , the exhaustive judgment on different
aspects of scope of judicial review in contract/tender has been discussed. Not
only scope of judicial review but the question of arbitrariness, bias and other
related aspects have been discussed in detail. Relevant paragraphs of the
aforesaid judgment are reproduced hereinbelow for ready reference and for
bringing clarity in the issue :-
68. Having regard to the above arguments we propose to deal with the
matter from the following five aspects :-
1. The scope of judicial review in matters of this kind.
2. Whether the selection is vitiated by arbitrariness ? -
(a) regarding financial projection and
(b) regarding rental.
3. Bias of Mr. Nair - Whether affected the selection ?
4. Whether the Apex Committee has been bypassed ?
5. Evolving of hidden criteria - whether valid ?
1. Scope of Judicial Review
69. A tender is an offer. It is something which invites and is
communicated to notify acceptance. Broadly stated, the following are the
requisites of a valid tender :
1. It must be unconditional.
2. Must be made at the proper place.
3. Must conform to the terms of obligation.
4. Must be made at the proper time.
5. Must be made in the proper form.
6. The person by whom the tender is made must be able and
willing to perform his obligations.
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7. There must be reasonable opportunity for inspection.
8. Tender must be made to the proper person.
9. It must be of full amount.
70. It cannot be denied that the principles of judicial review would apply
to the exercise of contractual powers by Government bodies in order to
prevent arbitrariness or favouritism. However it must be clearly stated
that there are inherent limitations in exercise of that power of judicial
review. Government is the guardian of the finances of the State. It is
expected to protect the financial interest of the State. The right to refuse
the lowest or any other tender is always available to the Government.
But the principles laid down in Article 14 of the Constitution have to be
kept in view, while accepting or refusing a tender. There can be no
question of infringement of Article 14 if the Government tries to get the
best person or the best quotation. The right to choose cannot be
considered to be an arbitrary power. Of course, if the said power is
exercised for any collateral purpose the exercise of that power will be
struck down.
71. Judicial quest in administrative matters has been to find the right
balance between the administrative discretion to decide matters whether
contractual or political in nature or issues of social policy; thus they are
not essentially justiciable and the need to remedy any unfairness. Such
an unfairness is set right by judicial review.
75. In Chief Constable of the North Wales Police v. Evans (1982)
3 All ER 141, 154 Lord Brightman said :
"Judicial review, as the words imply, is not an appeal from a decision but
a review of the manner in which the decision was made.
xx xx xx
Ju the decision-madicial review is concerned, not with the decision, but
with the decision-making process. Unless that restriction on the power of
the court is observed, the court will in my view, under the guise of
preventing the abuse of power, be itself guilty of usurping power."
In the same case Lord Hailsham commented on the purpose of the
remedy by way of judicial review under RSC, Ord. 53 in the following
terms :
"This remedy, vastly increased in extent, and rendered, over a long
period in recent years, of infinitely more convenient access than that
provided by the old prerogative writs and actions for a declaration, is
intended to protect the individual against the abuse of power by a wide
range of authorities, judicial, quasijudicial and, as would originally have
been thought when I first practiced at the Bar, administrative. It is not
intended to take away from those authorities the powers and discretion
properly vested in them by law and to substitute the courts as the bodies
making the decisions. It is intended to see that the relevant authorities
use their powers in a proper manner."
In R. v. Panel on Take-overs and Mergers, ex p. Datafin plc, (1987) 1
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All ER 564, Sir John Donaldson, M.R. Commented :
"An application for judicial review is not an appeal."
In Lonrho plc v. Secretary of State for Trade and Industry, (1989)2 All
ER 609, Lord Keith said :
"Judicial review is a protection and not a weapon."
It is thus different from an appeal. When hearing an appeal the Court is
concerned with the merits of the decision under appeal. In Amin, Re
(Amin v. Entry Clearance Officer, (1983) 2 All ER 864, Lord Fraser
observed that :
"Judicial review is concerned not with the merits of a decision but with
the manner in which the decision was made ..... Judicial review is
entirely different from an ordinary appeal. It is made effective by the
court quashing the administrative decision without substituting its own
decision, and is to be contrasted with an appeal where the appellate
tribunal substitutes its own decision on the merits for that of the
administrative officer."
77. The duty of the court is to confine itself to the question of legality. Its
concern should be :
1. Whether a decision-making authority exceeded its powers?
2. Committed an error of law,
3. Committed a breach of the rules of natural justice,
4. Reached a decision which no reasonable tribunal would have reached
or,
5. Abused its powers.
Therefore, it is not for the court to determine whether a particular policy
or particular decision taken in the fulfilment of that policy is fair. It is
only concerned with the manner in which those decisions have been
taken. The extent of the duty to act fairly will vary from case to case.
Shortly put, the grounds upon which an administrative action is subject
to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly
the law that regulates his decision-making power and must give effect to
it.
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of
further grounds in course of time. As a matter of fact, in R. v. Secretary
of State for the Home Department, ex Brind 1991 (1) AC 696), Lord
Diplock refers specifically to one development, namely, the possible
recognition of the principle of proportionality. In all these cases the test
to be adopted is that the court should, "consider whether something has
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gone wrong of a nature and degree which requires its intervention".
78. What is this charming principle of Wednesbury unreasonableness ?
Is it a magical formula ? In R. v. Askew (1768) 4 Burr 2186 : 98 ER 139,
Lord Mansfield considered the question whether mandamus should be
granted against the College of Physicians. He expressed the relevant
principles in two eloquent sentences. They gained great value two
centuries later :
"It is true, that the judgment and discretion of determining upon this
skill, ability, learning and sufficiency to exercise and practise this
profession is trusted to the College of Physicians and this Court will not
take it from them, nor interrupt them in the due and proper exercise of it.
But their conduct in the exercise of this trust thus committed to them
ought to be fair, candid and unprejudiced; not arbitrary, capricious, or
biased; much less, warped by resentment, or personal dislike."
81. Two other facets of irrationality may be mentioned.
(1) It is open to the court to review the decision-maker's evaluation of
the facts. The court will intervene where the facts taken as a whole could
not logically warrant the conclusion of the decision-maker. If the weight
of facts pointing to one course of action is overwhelming, then a decision
the other way, cannot be upheld. Thus, in Emma Hotels Ltd. v. Secretary
of State for Environment (1980 41 P & CR 255), the Secretary of State
referred to a number of factors which led him to the conclusion that a
non-residents bar in a hotel was operated in such a way that the bar was
not an incident of the hotel use for planning purposes, but constituted a
separate use. The Divisional Court analysed the factors which led the
Secretary of State to that conclusion and, having done so, set it aside.
Donaldson, L.J. said that he could not see on what basis the Secretary of
State had reached his conclusion.
(2) A decision would be regarded as unreasonable if it is impartial and
unequal in its operation as between different classes. On this basis in R.
v. Barnet London Borough Council, ex p. Johnson (1989 88 LGR 73) the
condition imposed by a local authority prohibiting participation by those
affiliated with political parties at events to be held in the authoritys parks
was struck down.
94. The principles deducible from the above are :
(1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the
manner in which the decision was made.
(3) The court does not have the expertise to correct the administrative
decision. If a review of the administrative decision is permitted it will be
substituting its own decision, without the necessary expertise which
itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial
scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the
contract is reached by process of negotiations through several tiers. More
often than not, such decisions are made qualitatively by experts.
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(5) The Government must have freedom of contract. In other words, a
fair play in the joints is a necessary concomitant for an administrative
body functioning in an administrative sphere or quasi-administrative
sphere. However, the decision must not only be tested by the application
of Wednesbury principle of reasonableness (including its other facts
pointed out above) but must be free from arbitrariness not affected by
bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the
administration and lead to increased and unbudgeted expenditure. Based
on these principles we will examine the facts of this case since they
commend to us as the correct principles.
37. In the case of Tata Selular (supra), Apex Court interfered in two cases (out
of many cases filed at the instance of service providers) on the ground of
arbitrariness and violation of principle justice. Relevant paragraph No.151 in
this regard is reproduced as under :-
151. In the above two cases, we are obliged to interfere on the
ground of arbitrariness and violation of the principle of natural
justice confining ourselves to the doctrine of judicial restraint,
however, by the application of permissible parameters to set right
the decision-making process.
38. In the case of Jagdish Mandal (supra), while relying upon the judgment
delivered in Tata Cellular (supra) as well as Sterling Computers Limited
(supra), Apex Court has given the guidance in the following manner :-
22. Judicial review of administrative action is intended to prevent
arbitrariness, irrationality, unreasonableness, bias and malafides.
Its purpose is to check whether choice or decision is made
"lawfully" and not to check whether choice or decision is "sound".
When the power of judicial review is invoked in matters relating
to tenders or award of contracts, certain special features should be
borne in mind. A contract is a commercial transaction. Evaluating
tenders and awarding contracts are essentially commercial
functions. Principles of equity and natural justice stay at a
distance. If the decision relating to award of contract is bona fide
and is in public interest, courts will not, in exercise of power of
judicial review, interfere even if a procedural aberration or error in
assessment or prejudice to a tenderer, is made out. The power of
judicial review will not be permitted to be invoked to protect
private interest at the cost of public interest, or to decide
contractual disputes. The tenderer or contractor with a grievance
can always seek damages in a civil court. Attempts by
unsuccessful tenderers with imaginary grievances, wounded pride
and business rivalry, to make mountains out of molehills of some
technical/procedural violation or some prejudice to self, and
persuade courts to interfere by exercising power of judicial review,
should be resisted. Such interferences, either interim or final, may
hold up public works for years, or delay relief and succour to
thousands and millions and may increase the project cost
manifold. Therefore, a court before interfering in tender or
contractual matters in exercise of power of judicial review, should
pose to itself the following questions :
(i) Whether the process adopted or decision made by the authority
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is mala fide or intended to favour someone;
OR
Whether the process adopted or decision made is so arbitrary and
irrational that the court can say : "the decision is such that no
responsible authority acting reasonably and in accordance with
relevant law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference
under Article 226. Cases involving black-listing or imposition of
penal consequences on a tenderer/contractor or distribution of state
largesse (allotment of sites/shops, grant of licences, dealerships
and franchises) stand on a different footing as they may require a
higher degree of fairness in action.
39. Similarly, in the case of Reliance Energy (supra), Apex Court held that
"legal certainty' is an important aspect of the rule of law in the matters of
tender because in absence of clarity or objectivity it may result unequivocal
and discriminatory treatment. Apex Court also stressed over doctrine of 'level
playing field'. Relevant discussion is as under :-
37. In Union of India v. International Trading Co., (2003)5 SCC
437, the Division Bench of this Court speaking through Pasayat, J.
had held :
"14. It is trite law that Article 14 of the Constitution applies also to
matters of governmental policy and if the policy or any action of
the Government, even in contractual matters, fails to satisfy the
test of reasonableness, it would be unconstitutional.
15.While the discretion to change the policy in exercise of the
executive power, when not trammelled by any statute or rule is
wide enough, what is imperative and implicit in terms of Article
14 is that a change in policy must be made fairly and should not
give impression that it was so done arbitrarily or by any ulterior
criteria. The wide sweep of Article 14 and the requirement of
every State action qualifying for its validity on this touchstone
irrespective of the field of activity of the State is an accepted tenet.
The basic requirement of Article 14 is fairness in action by the
state, and nonarbitrariness in essence and substance is the heart
beat of fair play. Actions are amenable, in the panorama of judicial
review only to the extent that the State must act validly for a
discernible reasons, not whimsically for any ulterior purpose. The
meaning and true import and concept of arbitrariness is more
easily visualised than precisely defined. A question whether the
impugned action is arbitrary or not is to be ultimately answered on
the facts and circumstances of a given case. A basic and obvious
test to apply in such cases is to see whether there is any discernible
principle emerging from the impugned action and if so, does it
really satisfy the test of reasonableness."
38. When tenders are invited, the terms and conditions must
indicate with legal certainty, norms and benchmarks. This "legal
certainty" is an important aspect of the rule of law. If there is
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vagueness or subjectivity in the said norms it may result in
unequal and discriminatory treatment. It may violate doctrine of
"level playing field".
39. In the case of Reliance Airport Developers (P) Ltd. v. Airports
Authority of India, (2006)10 SCC 1, the Division Bench of this
Court has held that in matters of judicial review the basic test is to
see whether there is any infirmity in the decisionmaking process
and not in the decision itself. This means that the decision-maker
must understand correctly the law that regulates his decision-
making power and he must give effect to it otherwise it may result
in illegality. The principle of "judicialreview" cannot be denied
even in contractual matters or matters in which the Government
exercises its contractual powers, but judicial review is intended to
prevent arbitrariness and it must be exercised in larger public
interest. Expression of different views and opinions in exercise of
contractual powers may be there, however, such difference of
opinion must be based on specified norms. Those norms may be
legal norms or accounting norms. As long as the norms are clear
and properly understood by the decision-maker and the bidders
and other stakeholders, uncertainty and thereby breach of rule of
law will not arise. The grounds upon which administrative action
is subjected to control by judicial review are classifiable broadly
under three heads, namely, illegality, irrationality and procedural
impropriety. In the said judgment it has been held that all errors of
law are jurisdictional errors. One of the important principles laid
down in the aforesaid judgment is that whenever a
norm/benchmark is prescribed in the tender process in order to
provide certainty that norm/standard should be clear. As stated
above "certainty" is an important aspect of rule of law. In the case
of Reliance Airport Developers (supra), the scoring system formed
part of the evaluation process. The object of that system was to
provide identification of factors, allocation of marks of each of the
said factors and giving of marks had different stages. Objectivity
was thus provided.
40. These judgments are still followed up to Subodh Kumar Singh (supra).
41. Illegality, irrationality and procedural impropriety are the broad rounds as
discussed by the Apex Court in the matter of Tata Cellular (supra) but at the
same time, it does not rule out addition of further grounds in course of time.
While discussing the facet of irrationality, it has been mentioned that it is open
to the court to review the decision-maker's evaluation of the facts. The Court
will intervene where the facts taken as a whole could not logically warrant the
conclusion of the decision-maker. Another facet of irrationality is that a
decision would be regarded as unreasonable if it is impartial and unequal in its
operation as between different classes. Therefore, from the present case, it is to
be deciphered where the case suffers from illegality, irrationality and
procedural impropriety."
09. The contention of the petitioner is that as per Clauses 5.4, 5.5 and
5.6 of the Request For Proposal (RFP), upon failure of respondent No.4 to
execute the agreement and in view of the requests having been made by it for
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cancellation of the tender process, the petitioner is entitled to be considered
for allotment being the next highest bidder. For ready reference, the said
clauses are reproduced hereunder:-
"5.4 Award of Contract
AICTSL shall issue a letter of acceptance ("LOA") to the Successful Bidder. The
Successful Bidder would be required to sign and return the copy of the LoA as
acknowledgement within 15 days of the receipt of the LoA by the Successful
Bidder. In the event the duly signed copy of the LoA by the Successful Bidder is not
received within the stipulated 15 days, AICTSL shall have the option to either
extend such time limit for the receipt or deduct from the Bid Security of such
Successful Bidder an amount which at the sole discretion of AICTSL is believed to
be the loss and/ or damages suffered by AICTSL as a result of the delay in providing
the acknowledgement. In the event the Successful Bidder fails to acknowledge the
LoA, and the next eligible bidder may be considered by AICTSL.
5.5 Signing of Contract Agreement ;
The signing of the Advertisement Agreement shall be completed not later than 1
(one) month of the issuance of the LoA to the Successful Bidder or within such
extended time frame as extended by AICTSL in its sole discretion. In the event the
Successful Bidder is unable to execute the Advertisement Agreement within the
time period, AICTSL will have the right to withdraw the offer immediately from the
Successful Bidder and replace it with an appropriate subsequent bidder. Thereafter,
the previously appointed Successful Bidder will have no rights, and its Bid Security
will be forfeited.
5.6 Annulment of Award
Failure of the Successful Bidder to comply with the requirements set for thin this
RFP and/ or the provisions of the Advertisement Agreement shall constitute
sufficient grounds for the annulment of the award of the bid and forfeiture of the Bid
Security. In such case, AICTSL will have the right to replace the Successful Bidder
with the next highest bidder. Thereafter, the previously appointed Successful Bidder
will have no rights."
10. From a perusal of the aforesaid clauses, it is seen that the condition
of considering the next eligible bidder in the event of the successful bidder
failing to acknowledge the Letter of Acceptance (LOA) is discretionary and
not mandatory. The word used is "may" and not "shall". It states that the next
eligible bidder may be considered by respondent No.3. It does not state that
next eligible bidder has to be considered by respondent No.3. The offer can
be withdrawn from the successful bidder and replaced with an appropriate
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subsequent bidder. That is a choice of respondent No.3 and not a duty or an
obligation cast upon it and it cannot be said that after withdrawal of the offer
from the successful bidder, the next highest bidder is bound to be considered
no matter what. Replacement of the next highest bidder is at the discretion of
respondent No.3 which can be exercised either way by it in the available
facts and circumstances of the case. Thus, the contention that in view of
respondent No.4 not executing the agreement and withdrawing from the
tender process, the petitioner is bound to be considered cannot be accepted.
11. Respondent No.3 has relied upon the office memorandum dated
21.04.2022 of the Government of India wherein it has been specified that in
case the lowest evaluated bidder withdraws or if his bid is not accepted, the
procuring entity has to retender the case. Reliance has also been placed on
the manual for procurement of non-consultancy services 2025 Clause 7.4.11
which is also to the same effect. These memorandum/manual have not been
denied by the petitioner. Respondent No.3 is hence bound to comply with the
aforesaid circulars of the Government of India and if, by relying upon the
same, it has decided to retender the case, no illegality in the same can be
found. For ready reference, the aforesaid provisions are reproduced below:-
"If the bidder, who bid has been found to be the lowest evaluated bid
withdraws or whose bid has been accepted, fails to sign the procurement
contract as may be required, or fails to provide the security as may be required
for the performance of the contract or otherwise withdraws from the
procurement process, the Procuring Entity shall re-tender the case."
"If the bidder, whose bid has been found to be the lowest evaluated bid (L1) or
Highest scorer (H-1) withdraws or whose bid has been accepted, fails to sign
the procurement contract as may be required, or fails to provide the security as
may be required for the performance of the contract (Para 7.5.3) or otherwise
withdraws from the procurement process (para 7.2.6), the Procuring Entity
shall deal the case as per para 7.2.6-3)".
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12. In Rajbahdur Yadav (Supra), the Division Bench of this Court by
relying upon the decision of the Apex Court in Haryana Urban Development
Authority and Others versus Orchid Infrastructure Developers Private Ltd
2017 (4) SCC 243 has held that the bidders participating in the tender
process have no other right except the right to equality and fair treatment in
the matter of evaluation of competitive bids offered by interested persons in
response to notice inviting tender in a transparent manner and free from
hidden agenda. The authority has the right not to accept the highest bid and
even to prefer a tenderer other than the highest bidder. Unless there is a
concluded contract with the bidder, no right accrues.
13. In Raju Bokade (Supra) , the Division Bench of this Court has held
that the question of granting a contract to the second or the third highest
bidder is at the discretion of the respondents. Any eligible person is entitled
to bid for the same but does not have a right to be considered for being
awarded the tender only because he is a second highest bidder, third highest
bidder or otherwise. The respondents have the right to cancel the bid and
float a new tender in which the intending bidder can very well participate.
14. In Maa Binda Express Carrier and Another (Supra) , the Apex
Court has held that submission of a bid/tender in response to a notice inviting
tender is only an offer which the State or its agencies are under no obligation
to accept. Bidders participating in the tender process cannot insist that their
bids/tenders should be accepted simply because their bids are lowest or
highest.
15. In CWE - SOMA Consortium (Supra) , it has been held by the
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Apex Court that so long as the bid is not accepted highest bidder does not
acquire any vested right to have the auction concluded in his favour.
16. In the present case, the bid submitted by respondent No.4 has not
been honoured by it and on the contrary, request has been made by it for
withdrawal of the same. Under the relevant clauses of the Request For
Proposal (RFP), it is not mandatory for respondent No.3 to consider the next
highest bidder for allotment. On the contrary, it has the right to cancel the
entire tender process and to initiate a new tender process in which the
petitioner can certainly participate. In the office memorandums relied upon
by respondent No.3, it has been specified that in case of withdrawal or non-
acceptance of bid by the highest bidder, re-tender process has to be resorted
to. The bid of the petitioner has not even been considered and accepted by
respondent No.3 hence at the present stage, no right has accrued in its
favour. There is no concluded contract between the petitioner and respondent
No.3. Thus, if at the present stage, respondent No.3 has decided to cancel the
entire tender process and initiate a fresh process, no interference in the same
can be made.
17. Thus, in view of the aforesaid discussion, I do not find any merit in
this petition, which is consequently dismissed.
(PRANAY VERMA)
JUDGE
Shilpa
