Case Note & Summary
The petitioner, M/s Bhagwati Builders, a proprietary concern of Vijay Agrawal, participated in a tender issued by Respondent No.1, Maharashtra State Warehousing Corporation, for construction work at Amgaon, District Gondia. The petitioner's bid was the lowest at 24.28% below the estimated cost. By letter dated 26.02.2021, the petitioner was asked to deposit a performance security of Rs.70,91,948/- by 05.03.2021 and to provide an explanation and rate analysis showing ability to perform at the quoted rate. The petitioner deposited the amount on time and submitted an explanation on 05.03.2021, but did not include the rate analysis. Later, on 22.03.2021, the petitioner submitted the rate analysis with a further explanation. However, Respondent No.1 cancelled the contract without assigning any reasons or giving the petitioner an opportunity to be heard. The petitioner filed a writ petition challenging the cancellation. The court found that the cancellation was arbitrary and unreasonable, as the petitioner had complied with the initial requirements and had a legitimate expectation that the contract would be awarded. The court set aside the cancellation and directed Respondent No.1 to reconsider the matter and pass a reasoned order within four weeks.
Headnote
A) Tender Law - Cancellation of Award - Arbitrariness - Respondent No.1 cancelled the contract awarded to the petitioner without providing any reasons or opportunity of hearing - The court held that the cancellation was arbitrary and unreasonable as the petitioner had already deposited the performance security and submitted explanations - The court directed Respondent No.1 to reconsider the matter and pass a reasoned order (Paras 1-10).
Issue of Consideration
Whether the cancellation of the tender awarded to the petitioner by Respondent No.1 was arbitrary, unreasonable, and violative of principles of natural justice.
Final Decision
The court allowed the writ petition, set aside the cancellation, and directed Respondent No.1 to reconsider the matter and pass a reasoned order within four weeks.
Law Points
- Tender law
- Judicial review of administrative action
- Reasonableness
- Legitimate expectation
- Non-application of mind
