Case Note & Summary
The judgment concerns two writ petitions filed by successful bidders challenging the cancellation of a global tender issued by Western Coalfields Limited (WCL) for the supply, installation, and commissioning of a Mine Slope Stability Monitoring Radar System. The petitioners, M/s Reutech Mining and Sujyoti India (P.) Limited, had been declared successful after technical and commercial evaluation. However, before purchase orders could be issued, WCL cancelled the entire tender process citing administrative reasons. The petitioners sought issuance of purchase orders and challenged the cancellation as arbitrary. The court examined whether a concluded contract existed and whether the petitioners had a legitimate expectation. It held that no contract was concluded until a purchase order was issued, and the employer had the discretion to cancel the tender. The cancellation was not found to be arbitrary or mala fide. The court dismissed both petitions, upholding the cancellation.
Headnote
A) Tender Law - Cancellation of Tender - Employer's Discretion - No Concluded Contract - The employer has the discretion to cancel a tender process at any stage before the issuance of a purchase order, and a successful bidder does not acquire a vested right to the contract until a formal contract is executed. The court held that the cancellation was valid and the petitioners had no enforceable right. (Paras 2-10)
B) Constitutional Law - Legitimate Expectation - Judicial Review - The doctrine of legitimate expectation does not apply where the employer's decision to cancel the tender is based on valid reasons and is not arbitrary or mala fide. The court held that the petitioners' expectation of receiving purchase orders was not legitimate in the absence of a concluded contract. (Paras 11-15)
Issue of Consideration
Whether the cancellation of a tender process by the employer before issuance of purchase order is valid and whether the successful bidders have a right to seek issuance of purchase order.
Final Decision
Both writ petitions are dismissed. The cancellation of the tender process by Western Coalfields Limited is upheld.
Law Points
- Tender cancellation
- concluded contract
- legitimate expectation
- judicial review of tender process
- employer's discretion
Case Details
2023 LawText (BOM) (01) 268
Writ Petition No. 6566/2022 and Writ Petition No. 8247/2022
A. S. Chandurkar, Anil L. Pansare
Shri Vineet Kothari, Senior Advocate with Shri Mehul Kothari and Shri M.A. Vishwarupe for petitioner in WP 6566/2022; Shri M.G. Bhangde, Senior Advocate with Shri R.M. Bhangde for petitioner in WP 8247/2022; Shri N.S. Deshpande, Deputy Solicitor General of India with Shri S.A. Chaudhari and Shri V.A. Bramhe for respondent no.1; Shri A.S. Jaiswal, Senior Advocate with Shri N.G. Moharir and Shri G.E. Moharir for respondent nos.2 and 3
M/s Reutech Mining, A Division of Reutech Pty.Ltd. Through M/s K.K. Alliance India Private Limited (Power of Attorney Holder) and Sujyoti India (P.) Limited
Union of India, Western Coalfields Limited
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petitions challenging cancellation of tender process by Western Coalfields Limited.
Remedy Sought
Issuance of purchase orders and quashing of cancellation decision.
Filing Reason
Western Coalfields Limited cancelled the global tender after petitioners were declared successful bidders.
Issues
Whether the cancellation of the tender process by WCL was valid.
Whether the petitioners have a right to issuance of purchase orders.
Submissions/Arguments
Petitioners argued that they were successful bidders and had a legitimate expectation of receiving purchase orders, and the cancellation was arbitrary.
Respondents argued that no contract was concluded and the employer has discretion to cancel the tender for valid reasons.
Ratio Decidendi
A successful bidder does not acquire a vested right to a contract until a formal contract is executed; the employer has the discretion to cancel a tender before issuance of purchase order, and such cancellation is subject to limited judicial review only if arbitrary or mala fide.
Judgment Excerpts
Cancellation of the tender process initiated by the Western Coalfields Limited has been challenged by two successful bidders.
The employer has the discretion to cancel a tender process at any stage before the issuance of a purchase order.
Procedural History
Writ petitions filed directly before the High Court challenging the cancellation of tender. Heard on December 22, 2022, and judgment pronounced on January 5, 2023.
