1 2025:CGHC:18821-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 6436 of 2024 Daya Charan And Company A Proprietorship Firm Through Its Authorized Signatory / Power Of Attorney Holder Namely Shyam Sundar Bajaj S/o Shir Gopikishan Bajaj Aged About 59, Apartment City Light Surat (Gujarat) ... Petitioner(s) versus 1 - State Of Chhattisgarh Through Secretary Urban Administration And Development Department Mantralalya Mahanadi Bhawan Capital Complex Atal Nagar Nawa Raipur District - Raipur (C.G.) 2 - Municipal Corporation Bhilai Supela (Health Department) Through Its Commissioner Municipal Corporation Bhilai District - Durg (C.G.) 3 - Commissioner Municipal Corporation Bhilai District - Durg (C.G.) ... Respondent(s) For Petitioner(s) : Mr. Manoj Paranjape, Advocate For Respondent No.1/State For Respondents 2 & 3 : : Mr. S.S.Bhaghel, Dy. Govt. Advocate Mr. Amrito Das, Advocate Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Arvind Kumar Verma, Judge Order on Board 2 Per Ramesh Sinha , Chief Justice 25/04/2025 Heard Mr. Manoj Paranjape, learned counsel for the petitioner Mr. S.S.Bahel, learned Deputy Government Advocate and Mr. Amrito Das, learned counsel for respondents No. 2 & 3. 2. The instant writ petition has been preferred with the following prayer: “10.1 that this Hon’ble Court may kindly be pleased to issue a writ/writs, order/orders, direction/directions quashing the decision of respondent authorities (Annexure P/1) whereby the Notice Inviting Tender bearing No. 159751 has been cancelled due to committee decision and the respondent authorities may kindly be directed to consider the case of the petitioner for award of contract being the lower one and they may further be directed to proceed further in the matter for award of the contract. 10.2.That this Hon’ble Court may kindly be pleased to issue a issue a writ/writs, order/orders, direction/directions and the Notice Inviting Tender dated 12.12.2024 bearing No. 162812 issued by the Municipal Corporation Bhilai may also kindly be quashed and authorities may kindly be directed not to proceed further in the matter in pursuance of the third Notice Inviting Tender dated 12.12.2024. 10.3 That this Hon’ble Court may kindly be pleased top grant any other relief(s) which is deemed fit and proper in the aforesaid facts and circumstances of the case.” 3. The petitioner firm along with M/s. Shreeji Enterprises had executed the consortium/Joint Venture agreement on 19.10.2024 and 3 under the agreement, the petitioner has been authorized to act as a lead partner. 4. The first notice inviting Tender was issued on 29.08.2024 for Remediation and Management of Unprocessed Water at Bhogda Puliya, Jamul and Bhilai Landfill and 5 participants have participated in the said tender process, but only the petitioner firm was found eligible/qualified and as there was only one participant, the entire tender process was cancelled on 10.12.2024 due to single tender of technical qualification. 5. The second Notice inviting tender was issued on 10.10.2024 and in the said notice inviting tender process the petitioner firm along with one other participant has participated and has been declared as Lowest one. The financial bid was opened on 21.11.2024. The petitioner firm has quoted the price 26% below the price of the contract. After opening of the financial bid till 13.12.2024 the petitioner firm was given an assurance that, the department will soon proceed further in the matter but all of a sudden on 13.12.2024 the Email was sent by E-proc on the registered email of the petitioner firm wherein the petitioner has been informed that the entire tender process has been cancelled due to committee decisions. It is very unfortunate that after opening of the financial bid of the petitioner firm, the entire tender process has been cancelled. No doubt the government or authority inviting the tender may cancel the tender process but only on sufficient and reasonable ground and at appropriate stage. In the case at hand, respondent authority failed to point out any satisfactory ground or reason for cancellation of the entire tender process after declaring the petitioner to be lowest bidder. 4 6. In the case in hand, the first tender process was cancelled because out of 5 participants only the petitioner was found eligible and in the second round two participants/tenderers have participated and the petitioner firm has quoted 26% below the tender price whereas the other participants have quoted higher price. On 13.12.2024 the petitioner firm was informed in respect of the cancellations of the entire tender process wheres the new Notice Inviting Tender was published on 12.12.2024 bearing No.162812. Despite this, the petitioner has been declared as Lower one after opening of the price bid and the entire tender process has been cancelled that too, without there being any cogent, sufficient and reasonable grounds. There was no reason assigned for cancellation of the entire tender process but when the authorized signatory of the petitioner firm approached the higher authorities, it was informed that the Notice Inviting Tender was not published in the widely circulated national newspaper. When the entire tender process has been initiated through E-tender process through online by e-procurement platform publishing the Notice Inviting Tender in the newspaper is not required as the complete tender information is readily accessible on the online portal. 7. Since the financial bid of the petitioner has already been opened therefore, now it will cause great prejudice to the petitioner firm in the third round of tender process. It appears that the entire tender process has been cancelled with some oblique motive and with malafide intention. The third Notice Inviting Tender has been issued on 12.12.2024 and the last date of submission of online bid was 23.12.2024 and technical bid was opened on 27.12.2024. Since the rate 5 quoted by the petitioner has already been opened therefore in the said tender process prejudice will be caused to the petitioner. The petitioner is challenging the said Notice Inviting Tender. Since the petitioner has been declared as lower one the petitioner has also placed the purchase orders for certain machineries which itself shows that the petitioner was interested to execute the said work. 8. Contention of the learned counsel for the petitioner is that at first the Notice Inviting Tender was cancelled due to single tender of technical qualification as there were 5 participants but only the petitioner was found eligible and the documents were physically submitted on 29.10.2024 after pre-bidding meeting and thereafter the documents were submitted and financial bid was opened by the committee and now after about 21 days from opening of the financial bid the entire tender process has been cancelled. It is contended by the learned counsel for the petitioner that the decision making process of the respondent authorities is illegal, arbitrary and unreasonable. The petitioner fulfilled all the terms and conditions of the tender document but with arbitrary and malafide reasons after opening of the financial bid the entire tender process has been cancelled. He submits that in the first round the tender process was cancelled due to single tender of the petitioner firm and in the second NIT the petitioner was found eligible and his financial bid was opened on 21.11.2024 and thereafter on 13.12.2024 the petitioner has been informed that the entire tender process has been cancelled. He submit that no reason has been assigned or communicated to the petitioner for cancellation of tender process except the reason “cancelled due to committee decision” and the petitioner firm 6 was not afforded opportunity before cancellation of the tender process. It is further submitted that the reason for cancellation of the second tender process has been orally informed by the authorities that since the Notice Inviting Tender was not published in the daily circulated national newspaper, the Committee has taken a decision to cancel the entire process. 9. Contention of the learned counsel for the petitioner is that the before taking decision of cancellation, the Committee ought to have appreciated that when the entire tender process has been initiated through e-tender process through online and an e-procurement platform publishing the Notice Inviting Tender in the newspaper is not required as the said information is readily accessible on the online portal. He submits that in absence of cogent and reasonable reasons the entire tender process cannot be cancelled that too, after opening of the financial bid of the petitioner. He has placed his reliance in the matter of M/s. Tirupathi Enterprises (WPC No. 659/2019) dated 25.07.2019 wherein it has been held that after opening of the financial bid unless the authorities point out satisfactory grounds or reasons, the entire process cannot be cancelled. 10. He contended that even if the petitioner participates in the third round of Notice Inviting Tender, the opening of the price bid would materially prejudicial to the petitioner firm. He has further placed his reliance in the matter of State of Punjab Vs. Bandeep Singh and Others reported in (2016) 1 SCC 724 wherein it has been held as under: “7. The same principle was upheld more recently in 7 Ram Kishun Vs. State of UP (2012) 11 SCC 511. However, we must hasten to clarify that the Government does not have a carte blanche to take any decision it chooses to; it cannot take a capricious, arbitrary or prejudiced decision. Its decision must be informed and impregnated with reasons. This has already been discussed threadbare in several decisions of this Court, including in Sterling Computers Ltd. Vs. M & N Publications Ltd. (1993) 1 SCC 445, Tata Cellular Vs. Union of India (1994) 6 SCC 651, Air India Ltd. Vs. Cochin International Aiprort Ltd. (2000) 2 SCC 617, BSB Joshi & sons Ltd. Vs. Nair Coal Services Ltd. (2006) 11 SCC 548, Jagdish Mandal v. State of Orissa (2007) 14 SCC 517.” 11. In the recent judgment of the Apex Court in the matter of Banshidhar Constructions Pvt. Ltd. reported in 2024 (10) SCC 273, the Apex Court has examined the scope of judicial intervention in government contracts and has held as under : “28. There cannot be any disagreement to the legal proposition propounded in catena of decisions of this Court relied upon by the learned counsels for the Respondents to the effect that the Court does not sit as a Court of Appeal in the matter of award of contracts and it merely reviews the manner in which the decision was made; and that the Government and its instrumentalities must have a freedom of entering into the contracts. However, it is equally well settled that the decision of the government/ its instrumentalities must be free from arbitrariness and must not be affected by any bias or actuated by malafides. 29. Government bodies being public authorities are expected to uphold fairness, equality and public interest even while dealing with contractual matters. Right to equality under Article 14 abhors arbitrariness. Public authorities have to ensure that 8 no bias, favouritism or arbitrariness are shown during the bidding process and that the entire bidding process is carried out in absolutely transparent manner.” 12. He has stated that the Apex Court in catena of decisions has held that recording of reasons are the heartbeats of any decision and the communication spells out that no reason has been assigned. He submits that under the solid Waste Management Rule 2016 and the various orders passed by the National Green Tribunal, the tender was issued for Remediation and Management of Unprocessed Waste at Bhogda Puliya, Jamil and Bhilai Landfill and delay in the process of execution of the said work will cause serious environmental and health problems. It is submitted that the Notice Inviting Tender was published in the newspaper on 15.10.2024,16.10.2024 and it was also published on E-portal of the eproc.cgstate.gov.in and after opening of the financial bid the entire process has been cancelled after 20 days from the date of opening of the financial bid ie. on 21.11.2024 for which the petitioner was made to suffer. The complainant who made a complaint dated 21.11.2024 has made complaint after about 41 days from the issuance of the Notice Inviting Tender ie. 10.10.2024 and the said complaint ought not have been entertain only on the ground that it was made after opening of the financial bid. It is theretofore submitted by the learned counsel for the petitioner that for the fault of the respondent authorities, if any, the petitioner firm whose financial bid has already been opened cannot be made to suffer on account of the rates being disclosed to everyone and will suffer financial loss also. 13. Per contra, learned counsel for respondent No.2 & 3 submits that the petition is based upon self serving averments and it is for the reason 9 that it has become incumbent upon the answering respondents to submit a detailed reply to the allegations made in the writ petitioner. The petitioner has not placed on record the complete facts and have simply made allegations which are absolutely misconceived and baseless. He submits that the respondent/corporation issued a notice inviting tender for award of contract for bioremediation and management of unprocessed waste at Bhogda Pulia, Jamul and for Bhilai landfill for an estimated cost of Rs. 14,84,52,0000/- on 29.08.2024. As against the said notice, 6 bidders participated int eh aid bidding process of which only one bidder was found to be eligible and accordingly, the said tender process was cancelled on 10.10.2024 and on the same day a second notice inviting tender was issued inviting the bidders to participate for the said work and two bidders participated as against the said notice. After evaluation, the price bid of the bidder were opened on 21.11.2024 and the petitioner firm was found to be lowest as compared to other bidders. Before any further steps could have been taken, except for opening of the bids, a complaint was made by one Ayushi Hygiene and Care Private Limited before the respondent authorities on 21.11.2024 that the NIT dated 10.10.2024 was not given wide publicity and the same was not published in the national newspaper as a result of which, the complainant could not submit his bid and accordingly the tender process was cancelled. Thereafter the said complaint was placed for consideration before the tender committee and after due consideration of the said complaint on 2.12.2024 the matter was placed before the municipal corporation for examination and decision. The concerned department then considered the relevant circular as has been issued by the State government for publication of notice inviting tender concerning 10 the project based upon the estimated cost. According to the circular dated 17.05.2013 the department of Urban Administration and Development, State of Chhattisgarh has directed that for all the works comprising of an estimated cost of Rs. 1,00,00,000/- and above, the NIT should be published in one national newspaper and in one State newspaper having wide circulation. Based on the said circular, decided that the NIT dated 10.10.2024 comprising of estimated cost of Rs. 14,84,52,000/- and therefore the same requires that the NIT ought to have been published in a national newspaper having wide circulation. However, the NIT dated 10.10.2024 was not published in any national newspaper having wide circulation and it was published only in the local newspapers ie. Haribhoomi and Nai Duniya. Hence it was proposed by the department the said tender process pursuant to the NIT dated 10.10.2024 be cancelled and a third tender process was issued. It was also proposed that for the procedural mistake committed while issuing the NIT dated 10.10.2024, the Executive Engineer namely Shri K.K.Gupta should be issued a show cause notice seeking explanation for the said non-compliance. The decision was placed for consideration before the Commissioner and was approved on 12.12.2024 and a new NIT was published on 13.12.2024 in the national newspaper having its wide circulation. 14. It is submitted by the learned counsel for the respondents that there is no illegality in cancellation of the tender process pursuant to the NIT dated 10.10.2024, if once the same having been committed, came to the knowledge of the respondent authorities. On account of procedural lapse, the said NIT was not published in any of the national 11 newspaper having wide circulation which rendered the entire tender process vitiated. As far as the rights of the petitioner is concerned, the NIT was a notice inviting bids ie. offers were invited from the prospective bidders. There is no prejudice caused to the petitioner on account of the cancellation of the tender process as there was neither any contract entered with the petitioner nor was there any award of work having been issued in favour of the petitioner firm. It is trite law that there is no vested right with the lowest bidder that the work shall be awarded to him. It is the decision to be taken by the State agency as to whom the work is to be awarded after due consideration of the entire fact. Merely because the petitioner was declared as lowest one, there is no accrued or vested right having crystallized in favour fo the petitioner for award of work by the answering respondent. It is in the larger public interest that the rules of procedure as has been prescribed in award of public contracts are followed in strict sense without there being any deviation. The petitioner has failed to demonstrate that the decision dated 12.12.2024 to cancel the tender process dated 10.10.2024 was issued on account of any malafide or bias against the petitioner. He has placed his reliance in the matter of the Apex Court in the matter of Maa Bina Express Carrier and another V. East Frontier Railway and Others, (2014) 3 SCC 760, wherein it has been held as under: “8.The scope of judicial review in matters relating to award of contract by the State and its instrumentalities is settled by a long line of decisions of this Court. While these decisions clearly recognize that power exercised by the Government and its instrumentalities in regard to allotment of contract is subject to judicial review at the instance of an aggrieved party, submission of a tender in response to a notice inviting such tenders is no more than making an offer which the 12 State or its agencies are under no obligation to accept. The bidders participating in the tender process cannot, therefore, insist that their tenders should be accepted simply because a given tender is the highest or lowest depending upon whether the contract is for sale of public property or for execution of works on behalf of the Government. All that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of their tenders.” 15. In yet another decision of the Apex Court in the matter of Kisan Sahakari Chini Mills Ltd. V. Vardan Linker and Others, (2008) 12 SCC 500, held as under: “12…...In exercising writ jurisdiction, if the High Court found that the exercise of power in passing an order of cancellation was not arbitrary and unreasonable, it should normally desist from giving any finding on disputed or complicated questions of fact as to whether there was a contract, and relegate the petitioner to the remedy of a civil suit. Even in cases where the High Court finds that there is a valid contract, if the impugned administrative action by which the contract is cancelled, is not unreasonable or arbitrary, it should still refuse to interfere with the same, leaving the aggrieved party to work out his remedies in a Civil Court….. 16. It is submitted that the order dated 12.12.2024 cancelling the tender process was issued by the respondent authorities in order to ensure fairness, transparency and impartiality in the conduct of the tender process for award of public work so that the credibility of the answering respondent stand restored in conducting the tender process. The fresh tender process after wide circulation and publication of the NIT in the national newspaper is necessary in order to ensure that there is no future blame or public mischief in conducting the tender process. 13 In this regard, it shall be necessary to refer to the observations made by the Apex Court in the matter of M.P.Mathur Vs. DTC and Others, (2006) 13 SCC 706, it has been held as under: “12……..In equity the court has to strike a balance between individual rights on one hand and the larger public interest on the other hand. Freedom to contract is a common law civil liberty enjoyed by all persons. But when the Government is contracting with private parties this common law freedom is circumscribed by the principles of administrative law which requires larger public interest to be taken into account….. 14. …..The discretion which the Court has to exercise is a judicial discretion. That discretion has to be exercised on well-settled principles. Therefore, the Court has to consider - the nature of obligation in respect of which performance is sought, circumstances under which the decision came to be made, the conduct of the parties and the effect of the of the Court granting the decree….. 15…….It was further observed that public interest must override any consideration of private loss or gain……. 17. He contended that in the light of the above submission and denying the allegations contained in the petition, he submits that there is no illegality and arbitrariness in cancellation of tender process. 18. After having heard the learned counsel for the parties, the prayer of learned counsel for the petitioner firm is that now the financial bid was opened on 21.11.2024 and that he participated in first bid, found eligible and in the second bid also, the petitioner firm was found eligible and therefore, the petitioner firm which was one of the contesting participant and the financial bid has been opened. In the present case, bid price of petitioner was opened by the Committee in presence of tenderers and 14 petitioner was found to be lowest one. There was no known reasons for cancellation of the entire tender process. The action of the respondents is prejudicial to the interest of petitioner as his price quotation became known to all interested tenderers and thus, action of respondents in cancelling the entire tender process by Annexure P-1 is illegal and arbitrary. 19. Accordingly, the writ petition is disposed of with costs to be paid/compensated by the respondent No. 2 & 3 quantified at Rs.2 lakhs to the petitioner firm within a period of one month from today. 20. It is needless to state that the petitioner is at liberty to participate in fresh NIT floated by the respondents 2 & 3, if any. Sd/- Sd/- (Arvind Kumar Verma) (Ramesh Sinha) Judge Chief Justice SUGUNA DUBEY Digitally signed by SUGUNA DUBEY Date: 2025.04.30 11:20:12 +0530