Aroon Aviation Services PVT. LTD Through Pankaj Arora vs. Airport Authroty Of INDIA Through Its Chairman

Held

The Court held that the cancellation of the tender process by the respondent authorities was not arbitrary. The reasoning was based on Clause 4 of the Notice Inviting Tender (NIT), which expressly reserved the right of the respondents to cancel the tender process at any stage without assigning any reason. Furthermore, the Court noted that no Letter of Intent (LOI) was issued to the petitioner pursuant to their declaration as L1 bidder, which would not confer any vested or enforceable right upon the petitioner. The Court also found no merit in the submission of mala fide, as there were no specific pleadings alleging mala fide against any officer, and the file clearly showed the decision was taken by the Chairman with reasons for cancellation and directions for action against local authorities who issued the NIT without following procedure. The Court relied on Supreme Court judgments in State of Jharkhand & Ors. v. M/s. CWE-SOMA Consortium and N.G. Projects Limited v. Vinod Kumar Jain and Ors., emphasizing that a bidder acquires no vested right until the bid is accepted and that High Courts cannot act as appellate authorities in contractual and tender matters. Consequently, the writ petition was dismissed.

Facts

The petitioner, Aroon Aviation Services Pvt. Ltd., filed a writ petition challenging the cancellation of a tender dated July 7, 2025, by the Airport Authority of India (AAI) and others. The petitioner had participated in the tender for "Facility Management Services–Lump Sum Based–Airport Management of 'May I Help You' Desk" at Devi Ahilyabai Holkar Airport, Indore. After disqualifying respondent No. 4 for quoting below minimum wages, the petitioner was declared the L1 bidder. Despite this, the AAI cancelled the tender on April 21, 2026, and issued a fresh tender, which the petitioner contends is arbitrary and illegal. The petitioner sought issuance of a Letter of Intent and award of the contract, and to quash the fresh tender.

Key Issues

1. Whether the cancellation of the tender dated July 7, 2025, by the respondent authorities, after declaring the petitioner as the L1 bidder, is arbitrary, unreasonable, and violative of Article 14 of the Constitution of India? 2. Whether the respondent authorities acted with mala fide intention in the tender process? Petitioner's Arguments: - The petitioner argued that once declared the L1 bidder, a legitimate expectation arose for the contract award, and the unexplained delay and inaction by the respondents demonstrate arbitrariness and non-application of mind. - They contended that the initial tender process was flawed by not being published on the official portal, and the subsequent disqualification of respondent No. 4 was overlooked, vitiating the entire process. - Reliance was placed on previous instances where the next eligible bidder was awarded the contract after L1 disqualification, and on newspaper reports alleging deficient performance by respondent No. 4. Revenue/State's Arguments: - The respondents argued that the tender document explicitly reserved the right to cancel the tender process at any stage without assigning any reason. - They submitted that no Letter of Intent (LOI) was issued to the petitioner, thus conferring no vested or enforceable right. - The court's scope of interference in tender matters is limited, and it cannot act as an appellate authority under Article 226.