Court Dismisses Petition Challenging Tender Cancellation, Emphasizes Limited Judicial Review in Policy-Driven Decisions
In a significant ruling, the Chhattisgarh High Court has dismissed a petition filed by M/s Global Services challenging the cancellation of a tender process by the Municipal Council of Janjgir-Naila. The tender, initially issued through the State e-procurement portal, was annulled following subsequent policy directions mandating procurement through the Government e-Marketplace (GeM) portal, a decision aimed at enhancing transparency and standardization in public procurement.
The Division Bench, comprising Chief Justice Ramesh Sinha and Justice Ravindra Kumar Agrawal, delivered the judgment on April 13, 2026, affirming that the tendering authority retains discretion to cancel the tender process to align with revised procurement policies. The Court emphasized that the legitimate expectation of a bidder does not override public interest or statutory policy.
The petitioner, M/s Global Services, had contended that the cancellation was arbitrary and in violation of Article 14 of the Constitution, as the tender process had been completed and the petitioner declared as the lowest bidder (L-1). They argued that the subsequent administrative instructions could not be applied retrospectively to nullify a concluded tender process.
However, the Court held that the petitioner did not possess a vested right to enforce the issuance of a work order merely by being declared L-1, as no concluded contract had come into existence. The Bench reiterated the settled legal principle that judicial review in tender matters is limited to examining the decision-making process, not the merits of the decision itself.
The judgment noted that the cancellation was a result of a conscious policy decision aimed at ensuring greater transparency, uniformity, accountability, and standardization in public procurement processes. The Court observed that such policy decisions fall within the domain of administrative policy formulation, which is not ordinarily subject to judicial interference unless shown to be mala fide, arbitrary, or in violation of statutory provisions.
The Court also addressed the doctrine of legitimate expectation, stating that it cannot override statutory policy or public interest. The Bench found no evidence of mala fides, arbitrariness, or statutory violation in the respondents' decision to cancel the tender.
Ultimately, the Court concluded that the petitioner's challenge was essentially in the realm of contractual and policy matters, where the scope of judicial review is extremely limited. The petition was dismissed, with the Court finding no merit in the arguments presented by M/s Global Services.
Bottom Line:
Cancellation of tender process due to subsequent policy decisions mandating procurement through GeM portal is valid and cannot be interfered with unless shown to be arbitrary, mala fide, or in violation of statutory provisions. Legitimate expectation of a bidder does not override public interest or statutory policy.
Statutory provision(s):
Article 226 of the Constitution of India, Article 14 of the Constitution of India, Article 243W of the Constitution of India.
M/s Global Services v. State of Chhattisgarh, (Chhattisgarh)(DB) : Law Finder Doc id # 2882999
