M/S Sanjay Construction And Another vs. State Of U.P. And 3 Others

Held

The Court declined to entertain the writ petition and dismissed it. The Court noted that there was no document on record to suggest that the petitioner's bid, despite being the lowest, was accepted. While the petitioner's bid was responsive and the lowest, it was higher than the department's estimate. Even the revised bid submitted by the petitioner was 2% above the department's estimate. The Court acknowledged the petitioner's submission that scrapping the tender process before the deadline for revised proposals appeared attractive but emphasized that a writ cannot compel the department to accept a bid merely because it is the lowest, especially when it exceeds the department's estimate. The dismissal was without prejudice to the petitioner's right to participate in any fresh tender process.

Facts

The petitioner, M/s Sanjay Construction and Another, participated in a tender process for the construction of an R.C.C. Minor Bridge. The estimated cost was ₹540 lacs excluding GST. The petitioner's financial bid was 2.50% above the estimated rate, making it the lowest among the two admitted technical bids. On September 26, 2022, the petitioner received a communication requesting a price reduction by September 30, 2022. The petitioner responded on September 27, 2022, lowering its bid to 2% above the estimate. However, on September 29, 2022, the petitioner received a communication dated September 26, 2022, stating that the tender proceedings had been scrapped because the bids were higher than the department's estimates. The petitioner challenged this scrapping order, arguing it was arbitrary and passed without application of mind.

Key Issues

1. Whether the scrapping of the tender proceedings by the respondents vide communication dated 26.09.2022, prior to the deadline for submitting revised bids (30.09.2022), is arbitrary and without application of mind, thereby violating principles of natural justice and fair procedure? (Question of mixed law and fact, turning on principles of administrative law and tender procedures). Petitioner's Arguments: The petitioner argued that the order scrapping the tender on 26.09.2022 was arbitrary because, on the same date, they were asked to submit a revised lower bid by 30.09.2022. This indicated that the respondents were still considering the bids and had not yet made a final decision. The procedure adopted appeared arbitrary on the face of the record and the order was passed without considering the petitioner's letter inviting a revised bid. Respondent's Arguments: The learned Standing Counsel for the respondents did not explicitly present arguments in the judgment. However, the Court's reasoning suggests the State's position was that the bids, even the revised one, were above the department's estimate, and the department is not obligated to accept the lowest bid.