Sai Infrastructure Through His Partner Ganesh Atmaram More vs. The Union Of INDIA Through The Secretary And Others

Held

The Court held that the Petitioners had not established sufficient arbitrariness, mala fides, or perversity in the decision-making process to warrant interference under Article 226 of the Constitution. The Respondents had received complaints, constituted an inquiry committee, obtained a report identifying irregularities, and accepted the recommendation for cancellation before issuing a fresh auction notice. The Court found no material to suggest that the report was fabricated, the process defects were imaginary, or the cancellation was a mere pretext unsupported by the record. While acknowledging the Petitioners' grievance of being the highest bidders and having deposited security, the Court distinguished grievance from illegality. Consequently, the challenge to the email dated January 31, 2026, cancelling the e-auction failed. As a sequitur, the challenge to the consequential fresh e-auction notice also did not survive. The Court found that no enforceable right had crystallized in favour of the Petitioners to compel the issuance of a work order under the cancelled auction, thus no mandamus could be issued. The Court clarified that it had not pronounced upon the ultimate merits of the fresh tender conditions or individual bidder entitlements, nor on private disputes with Respondent No. 5. The dismissal was based on the ground that the cancellation of the earlier tender process could not be characterized as unconstitutional, arbitrary, or vitiated by mala fides. The Court also directed the refund or adjustment of amounts deposited by the Petitioners in accordance with law and applicable tender conditions within a reasonable period.

Facts

Two partnership firms, Sai Infrastructure and Krishna Enterprises (Petitioners), filed writ petitions challenging the cancellation of an e-auction for the disposal of Pond Ash from the Bhusawal Thermal Power Station. The Petitioners were declared the highest bidders in an auction held on January 14, 2026, and had deposited the required security amount. However, on January 31, 2026, the Maharashtra State Power Generation Company Limited (Respondent Nos. 3 & 4) cancelled the e-auction without providing reasons. Subsequently, a fresh e-auction notice was issued with allegedly tailored qualifying requirements. The Petitioners contended that the cancellation was arbitrary and designed to benefit Respondent No. 5, which had previously enjoyed an ad hoc arrangement for lifting Pond Ash at a lower rate. The Ash Utilisation Policy, 2025, mandates disposal through open e-tender/e-auction. The Court was also informed of prior litigation concerning the disposal of Pond Ash.

Key Issues

1. Whether the cancellation of the e-auction dated January 14, 2026, by Respondent Nos. 3 and 4 was arbitrary, mala fide, or otherwise illegal, thereby vitiating the subsequent issuance of a fresh e-auction notice. (Question of law and fact, concerning principles of administrative law and tender processes). 2. Whether the Petitioners had acquired any vested or enforceable right to a work order or sale order based on being declared the highest bidder and depositing the security amount in the cancelled e-auction, thereby entitling them to a mandamus directing the issuance of such an order. Contentions of the Petitioners: - The cancellation of the e-auction was arbitrary and lacked valid reasons, as evidenced by the lack of disclosure and the restoration of the earlier ad hoc arrangement before formal cancellation. - The subsequent fresh e-auction notice contained discriminatory and tailored qualifying requirements, suggesting favouritism towards specific entities, potentially Respondent No. 5. - The entire process demonstrated a design to benefit Respondent No. 5 and others at the old rate of Rs. 193 per metric tonne, contrary to the Ash Utilisation Policy, 2025. Contentions of the Respondents: - The Respondents argued that complaints were received regarding irregularities in the e-auction process. An inquiry committee was constituted, which identified multiple irregularities. Based on the committee's report, the decision to cancel the auction was taken in the public interest, followed by the issuance of a fresh auction notice. They contended that the decision-making process was not arbitrary or mala fide, and the Court should not interfere in commercial and technical tender matters unless there is gross arbitrariness. They relied on precedents like Tata Motors, Silppi Constructions, and N.G. Projects.