Case Note & Summary
The petitioners, who were successful bidders in a tender process conducted by the Latur City Municipal Corporation for construction work, filed writ petitions seeking direction to issue work orders and challenging the subsequent cancellation of the tender and issuance of work order to respondent No. 5. The court examined the facts and found that the petitioners' bids were accepted and they were declared successful, but the corporation cancelled the tender without any valid reason and issued a work order to respondent No. 5. The court held that the cancellation was arbitrary and violative of Article 14 of the Constitution, as the petitioners had a legitimate expectation that the work order would be issued in their favour. The court set aside the cancellation and the work order issued to respondent No. 5, and directed the corporation to issue work orders to the petitioners within a specified period.
Headnote
A) Tender Law - Cancellation of Tender - Legitimate Expectation - Article 14 of the Constitution of India - The petitioners, being successful bidders, had a legitimate expectation that the work order would be issued in their favour. The cancellation of the tender process without any valid reason and the issuance of work order to another bidder was held to be arbitrary and violative of Article 14. (Paras 1-10) B) Tender Law - Judicial Review - Scope - The court can interfere if the decision-making process is arbitrary, irrational, or mala fide. The cancellation of the tender after acceptance of bids without any justification was found to be arbitrary. (Paras 11-15) C) Tender Law - Work Order - Issuance to Another Bidder - The respondent corporation issued work order to respondent No. 5 after cancelling the tender, which was not justified. The court set aside the cancellation and the work order. (Paras 16-20)
Issue of Consideration
Whether the cancellation of the tender process after acceptance of the petitioners' bids and the subsequent issuance of work order to the respondent No. 5 was arbitrary and illegal.
Final Decision
The court allowed the petitions, set aside the cancellation of the tender and the work order dated 22.09.2022 issued to respondent No. 5, and directed the respondent corporation to issue work orders to the petitioners within four weeks.
Law Points
- Tender law
- Article 14
- legitimate expectation
- cancellation of tender
- work order
- judicial review
- proportionality
