Tender Cancellation: - No enforceable right of second lowest bidder

Patna High Court Upholds Tender Cancellation in Basant Kumar v. State of Bihar Court Dismisses Petitioner's Claims, Emphasizes Tendering Authority's Discretion

In a landmark judgment, the Patna High Court has upheld the decision of the Technical Bid Evaluation Committee to cancel and re-advertise a tender process under the Mukhya Mantri Gramin Sadak Unnayan Yojana (MMGSUY), amidst allegations of arbitrariness and non-application of mind. The case, Basant Kumar v. State of Bihar, highlights the limits of judicial intervention in public procurement processes, reaffirming the discretionary powers of tendering authorities.

The petitioner, Basant Kumar, a contractor registered under the Bihar Contractors Registration Rules, 2007, challenged the committee's decision to cancel the tender after declaring M/s Shanti Construction as the lowest bidder (L-1). The petitioner's contention was based on the alleged insufficiency of bid capacity of M/s Shanti Construction and the subsequent breach of confidentiality after the financial bids were opened.

The court scrutinized the sequence of events, noting the Technical Bid Evaluation Committee's initial declaration of M/s Shanti Construction as responsive, despite a contrary report from the jurisdictional Executive Engineer. However, the committee later identified discrepancies in the bid capacity and moved to cancel the tender, citing compromised confidentiality and fairness. The petitioner, who was the second lowest bidder (L-2), expressed willingness to execute the work at L-1's quoted rate, a proposal which the respondents declined.

The High Court, presided by Chief Justice P. B. Bajanthri and Justice Alok Kumar Sinha, emphasized the committee's corrective action in opting for re-tendering as a measure to ensure transparency and integrity in the process. Citing precedents from the Supreme Court, the bench reiterated that judicial review in tender matters is limited to instances of mala fide actions, arbitrariness, or manifest injustice. The court noted the absence of any legal entitlement for the petitioner to claim the contract solely based on being the second lowest bidder.

Ultimately, the court dismissed the writ petition, underscoring the tendering authority's prerogative to cancel tenders in the public interest. The decision reinforces the principle that tendering authorities are best positioned to assess their requirements, with courts exercising restraint in substituting administrative discretion with judicial assessment.

Bottom Line:

Discretion of Technical Bid Evaluation Committee to cancel tender - No enforceable right of second lowest bidder (L-2) to claim award of contract at lowest bidder (L-1) rate - Judicial review limited to cases of mala fide action, arbitrariness, or manifest injustice.

Statutory provision(s): Article 226 of the Constitution of India, Clause 33 of the Notice Inviting Tender (NIT)

Basant Kumar v. State of Bihar, (Patna)(DB) : Law Finder Doc Id # 2791416