Case Note & Summary
The petitioner, Shivram Enterprises, filed a writ petition challenging the tender process conducted by respondent no. 2, Sanjivani Sahakari Sakhar Karkhana Limited, for the sale of scrap material, brown sugar, non-levy sugar, and molasses. The petitioner submitted bids on 28.04.2016 and was the highest bidder for non-levy sugar and scrap materials. However, respondent no. 2 did not award the tender and instead issued a second tender notice on 20.05.2016 for the sale of brown sugar and non-levy sugar. The petitioner alleged that the second tender notice was arbitrary and unconstitutional, and sought a declaration that the first tender process should be honored. The court held that the tender inviting authority has the discretion to cancel or modify the tender process at any stage before the contract is awarded, and no vested right accrues to a bidder merely by being the highest bidder. The court found no arbitrariness or mala fides in the decision to issue a fresh tender, as the authority had valid reasons to do so. The petition was dismissed, and the court declined to interfere with the commercial decision of the authority.
Headnote
A) Tender Law - Discretion of Tender Inviting Authority - Cancellation of Tender Process - The tender inviting authority has the discretion to cancel or modify the tender process at any stage before the contract is awarded, provided the decision is not arbitrary or mala fide. No vested right accrues to a bidder merely by being the highest bidder. (Paras 5-7) B) Tender Law - Judicial Review - Scope - Courts will not interfere with tender processes unless there is arbitrariness, mala fides, or violation of statutory provisions. The decision to issue a fresh tender is a commercial decision within the domain of the authority. (Paras 5-7) C) Tender Law - Vested Right - Highest Bidder - A bidder does not acquire a vested right to the award of a tender merely because its bid is the highest. The authority may reject all bids and invite fresh tenders for valid reasons. (Paras 5-7)
Issue of Consideration
Whether the respondent no. 2 was justified in issuing a second tender notice for sale of non-levy sugar and brown sugar after the petitioner was the highest bidder in the first tender process, and whether the petitioner has a vested right to be awarded the tender.
Final Decision
The writ petition is dismissed. The court held that the tender inviting authority has the discretion to cancel or modify the tender process and no vested right accrues to a bidder until the contract is awarded. The decision to issue a fresh tender was not arbitrary or mala fide.
Law Points
- Tender process
- Discretion of tender inviting authority
- No vested right until contract awarded
- Judicial review limited to arbitrariness or mala fides
