Surendra Ku.Beura vs. State Of Odisha

Held

The Court held that the cancellation of the tender was justified. Regarding the first issue, the Court found that the clarification sought from the petitioner regarding the re-evaluation of their bid constituted sufficient notice, thus no violation of principles of natural justice occurred. The Court noted that the cancellation was based on the decision of a superior committee (the Review Committee), and the authority was bound by that decision. The Court also referred to the detailed explanation in the counter affidavit, which clearly established the petitioner's ineligibility. Regarding the second issue, the Court held that reducing the EMD would lead to larger competition and benefit the government, and therefore, it was not appropriate to interfere with this tender condition, citing the principle from Tata Cellular that courts should not interfere in award of contracts if the decision is bona fide and in public interest. Both writ petitions were dismissed as devoid of merit.

Facts

The petitioner was awarded a tender for "Repair and Rehabilitation of 4.5 Million Gallon (20 ML) capacity Clear Water Reservoir at Kaliabali." Subsequently, the tender was cancelled by the Superintending Engineer, P.H. Circle, Berhampur. The cancellation followed a review initiated by another bidder, Suvendu Das, whose bid was initially rejected. The review committee re-evaluated the petitioner's bid and found that the work experience value, even with weightage, did not meet the minimum eligibility criteria of Rs.75.40 lakhs, as the petitioner had executed only Rs.52.13 lakhs towards the specified components in 2014-15. The petitioner was informed of this disqualification. A subsequent review meeting decided to cancel the tender and recast the estimate considering post-GST rates. The petitioner challenged the cancellation order and a subsequent change in tender conditions (reduction of EMD).

Key Issues

1. Whether the cancellation of the tender awarded to the petitioner was arbitrary and in violation of principles of natural justice, considering the re-evaluation of the petitioner's bid based on a review initiated by another bidder? (Question of mixed law and fact, concerning administrative law principles and tender evaluation criteria). 2. Whether the reduction in the Earnest Money Deposit (EMD) in the re-tender process was arbitrary and detrimental to the public interest? (Question of mixed law and fact, concerning tender conditions and public interest). Petitioner's arguments: The petitioner contended that the cancellation order was issued without proper reason and that the review committee passed the impugned order without following principles of natural justice. The petitioner also challenged the change in tender conditions regarding EMD reduction. Revenue/State's arguments: The opposite parties argued that the petitioner did not satisfy the minimum eligibility criteria for the tender. They relied on the findings of the review committee and the subsequent decision to cancel the tender. They cited Supreme Court decisions in Tata Cellular v. Union of India and Jagdish Mandal v. State Of Orissa & Ors. to argue that courts should not interfere in tender processes unless there is material irregularity, irrationality, or arbitrariness, and that the decision was bona fide and in public interest. They also argued that reducing the EMD would increase competition and benefit the government.