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Judgment
The Court made the following order:
The case of the petitioner is that, it is a company engaged in transport logistics, warehousing and allied services in various ports in India including Visakhapatnam Port and in the year 1995, in pursuance of its business operations, the petitioner was granted lease of land measuring 16,191.55 sq.mts equivalent to Ac.4.00 cents (which was later was reduced to Ac.3.33 Cents, as Ac 0.67 cents out of it was taken for laying railway line)for a period of 30 years under Registered Lease Deed No. 2051/1995 dated 07.08.1995 that though the lease operations effectively began in the year 1992. The subject area, leased by the petitioner is more specifically identified as Essemm Zone-Z-1A in the port premises and the petitioner has discharged his obligations as a lessee to the satisfaction of the port trust without a blemish all through the lease period.
The further case of the petitioner is that, immediately after taking possession of the subject property, the petitioner had invested approximately Rs.1.25 Crores and constructed a covered warehouse in an area of 60,000 sq.ft or 5574 sq.mts and the rest of the area is left for cargo handling and other operations incurring more than Rs.2 crores. Thus, with a substantial expenditure of over Rupees 3.25 Crores, the petitioner put the leased land into operational use and has been in occupation of the leased premises over 30 years. It is the further case of the petitioner that, as the lease period was expiring by afflux of time and the petitioner has every intention to continue to be in operation on the said property, the petitioner applied for renewal of lease, requesting an extension vide its letter dated 21.12.2022. While the said request was under consideration by the respondent authorities, in the year 2023, the 3rd respondent issued Notice Inviting Tender (NIT) bearing NIT No.IENG/Estate/Z-IA-ESSEMM/T/2023 dated 01-04-2023 as the 1st call for allotment of "EX ESSEMM Land including existing warehouse and weighbridge on a long-term lease (annual lease rental basis) for a period of 30 years on as-is-where-is basis" in Zone-Z-1A, Plot 13,476 M² at port area for Industrial Purpose which was uploaded online.
It is the further case of the petitioner that, after perusing the said NIT, the petitioner realised that, the existing structures erected by the petitioner in the leased property were all together valued at Rs.53,54,000/- (Rupees fifty three lakhs and fifty four thousand only), a sum over which all the new bidders are expected to deposit an amount equivalent to the 10% of the value of the structure (i.e.,10% x Rs.53.54 lakhs = Rs.5.36 lakhs) in the form of e-Bank Guarantee. Having found that the structures erected by the petitioner and the work done by it are grossly undervalued, the petitioner raised objections against such improper valuation in April 2023 itself. Later, when the 2ndrespondent approached the petitioner asking it to choose a third-party valuer from the list of valuers, the petitioner, in all good faith, left the choice to the 2ndrespondent authorities to pick a fair valuer and have the structures valued. Accordingly, the 2ndrespondent herein appointed one Sundar Associates, Architectural Engineers & Consulting Engineers, Kakinada, Andhra Pradesh as the third-party valuer in compliance of Clause 11.3 (c) of the land Policy.
It is the further case of the petitioner that the third-party valuer had also grossly undervalued the structures without providing cogent reasons for such valuation wherein the petitioner vehemently objected to such undervaluation and raised objection before the 2ndrespondent authority via email dated 19.04.2023. While so, the 2ndrespondent sought clarifications from the third-party valuer with regard to the objections raised by the petitioner vide its email dated 23-04-2023 and the third party valuer had provided its baseless clarifications to the 2nd respondent but the petitioner has also objected those clarifications. It is the further case of the petitioner that, the respondent authorities have asked the petitioner to withdraw the objections raised and let the tender process proceed smoothly and accordingly the petitioner withdrew its objections on 25.04.2023 under assurances by the respondent authorities that the subject tender is likely to be cancelled and that the same valuation will not be used and also to maintain cordial business relations.
While the matter stood thus, the 1stcall dated 01-04-2023 was cancelled and withdrawn by the port authority and no communication was made by the 2nd respondent authority. However, on 13-03-2024, the 3rd respondent issued its 2ndcall for bids vide Notice Inviting Tender No.IENG/ESTATE/Z-1A-ESSEMM-T-2024 for allotment of "EX ESSEMM Land including existing warehouse and weighbridge on a long-term lease (annual lease rental basis) for a period of 30 years on as-is-where-is basis" in Zone-Z-1A, Plot 13,476 Sq.Mts at port area for Industrial Purpose. But in the said tender notification, the same valuation given by the third-party valuer for the 1st call for bids dated 01-04-2023 was incorporated without conducting any new valuation accounting for structural changes over one year. Though the petitioner addressed email dated 18-03-2024 to the 3rd respondent by promptly raising its objections against the incorporation of the same valuation no response was received from the 3rd respondent, as such the petitioner addressed a letter dated 23-03-2024 to the 2nd and 3rdrespondents, requesting for re-valuation of the structures before the pre-bid meeting for the benefit of all the bidders and for a fair valuation of the work done by the petitioner, but the 2nd respondent, vide its email dated 28-03-2024 informed the petitioner that its request for re-valuation could not be considered as of then, however the 2nd respondent did not reject the proposal for re-valuation overall and the matter has been pending consideration till date.
The further case of the petitioner is that, despite disputing the valuation made under 2nd call dated 13.03.2024, the petitioner participated in the bidding process in order to avoid non-consideration as a bidder but the petitioner's bid was rejected on 04.08.2025 via an auto-generated email. Apprehending that the respondents are awarding the tender to a third party, in utter violation of Clause 2.17 of the NIT dated 13-03-2024 and in violation of Clause 11.3(c) of the Policy Guidelines for Land Management by Major Ports, 2015, the petitioner filed W.P.No.20955/2025 before this Court challenging the action of the 3rd respondent in proceeding with the Re-allotment of the land bearing Zone-Z-1A admeasuring 13.476 sq.mts (Ac. 3.33 cents), including the warehouse and weighbridge constructed by the petitioner, under the 2nd Call dated 13.03.2024 without affording the petitioner the "First Right of Refusal. Upon receiving instructions that the 2nd Call dated 13.03.2024 has been cancelled after filing of the writ petition, this Court has closed the said writ petition under its order dated 13.08.2025. Subsequently, the 3rd respondent issued a 3rd Call bearing NIT No.ENG/Estate/Z-1A-ESSEMM/3rdcall/T/2025, dated 02-09-2025 for allotment of "EX ESSEMM Land including existing warehouse and weighbridge on a long-term lease (annual lease rental basis) for a period of 30 years on as-is-where-is basis" in Zone-Z-1A, Plot 13,476 Sq.Mts at port area for Industrial Purpose with the pre-bid meeting scheduled on 11.09.2025.
Challenging the said action of the 3rd respondent in issuing NIT dated 02.09.2025 without conducting revaluation of the existing structures on the land bearing Zone-Z-1A admeasuring Ac.3.33 cents in Port area as on the date of NIT dated 02.09.2025, the present writ petition is filed.
Heard Sri V.V.Saketh Roy, learned counsel for the petitioner and Sri Ravi Teja Padiri, learned counsel for the respondents.
9(a). Learned counsel for the petitioner in elaboration to what has been stated in the affidavit contended that, though the petitioner was continuously making several emails and representations to the respondent authorities regarding the revaluation of the structures intimating the respondents that it has invested considerable amounts for Land filling and Compaction, Pile Foundation and Concrete footings for warehouse and the construction of the weighbridge structure, all of which have been ignored by the initial valuation made by the third-party valuer in 2023, the respondents have issued NIT dated 02.09.2025 with the same initial valuation made by the third party valuer in 2023 and without revaluating the existing structures as on date of issuing the said NIT. He further submitted that, by referring all the email communications made by the petitioner from 2023 to 2026, the 3rdrespondent has given a reply dated 17.02.2026 bearing No.ENG/EstZ-1A-ESSEMM/3rd Call/T/206/113 and thereby rejected the petitioner’s request for re-valuation on the alleged ground that no objections were raised by the petitioner during the pre-bid meetings for the 1st and 2nd calls and that in the alleged absence of such prior disclosure the petitioner cannot claim re-evaluation based on investments made by it.
Learned counsel for the petitioner further submitted that, under Clause 11.3(c) of the Policy Guidelines for Land Management by Major Ports, 2015, the successful bidder is required to compensate the outgoing lessee (petitioner herein) for the value of existing superstructures as determined by valuation, therefore if the existing structures are undervalued, the successful bidder's effective entry cost is artificially reduced and it distorts the competitive equilibrium of the tender process and the petitioner cannot be deprived of the sums due to it, based on unfair, unscientific and improper valuation conducted in the year 2023 which has disregarded multiple factors and has not considered the recent investments to the tune of Rs.90,80,477/-.
Learned counsel for the petitioner further submitted that the petitioner has submitted its bid on 03.10.2025 by remitting Tender fees and Earnest Money Deposit (EMD) despite the same, the online e-tender portal did not reflect the bid submitted by the petitioner due to some technical glitches and inspite of informing the same to the respondent authorities through emails there is no response from them and the petitioner was disqualified from bidding process on the ground that it was not registered by the e-procurement website, without there being any fault of petitioner’s and further the petitioner's earnest money deposit of Rs.4,72,000/- along with the tender fee of Rs.11,800/- have not been refunded yet. He further submitted that the petitioner has no intention to obstruct the tender process but at the same time the respondents cannot deprive the petitioner from its right to participate in the tender due to no fault of its and at the same time deny the petitioner a fair valuation of the structures erected by it and maintained by it over the last 30 years.
He further submitted that, refusing to re-evaluate afresh for the 3rdcall not only violates Clause 11.3(c) of the Policy, Guidelines for Land Management by Major Ports, 2015 but also violates the fundamental principles of natural justice, legitimate expectation, and non-arbitrariness contemplated under Article 14 of the Constitution. He further submitted that the petitioner's grievance is not against the quantum of valuation as a matter of commercial discretion but against the omission of material asset components from the valuation exercise itself. He further submitted that proceeding with an incomplete or outdated valuation, despite repeated objections, affects transparency and introduces arbitrariness into the process. He further submitted that, the petitioner does not seek adjudication of a private monetary claim, but seeks enforcement of a fair and policy-compliant valuation mechanism so that the tender process reflects the actual value of the asset and does not result in transfer of infrastructure at an understated value in a public tender process. Accordingly, prayed to pass appropriate orders in that regard.
10(a). Sri Ravi Teja Padiri, learned counsel for the respondents while reiterating the contents of the counter affidavit contended that, the petitioner has been in occupation of the subject land as a tenant holding over and the lease was expired on 23.04.2023. He further submitted that, only after following due process, the valuation of structures was carried out by an independent third- party valuer (M/s. Sundar Associates) in March 2023 by specifically addressing the claims of land filling, pile foundations, etc., and gave cogent reasons for not considering certain claims (absence of proof of original vs. present levels, poor condition of structures, obsolescence, etc.), therefore the claims of huge investments made by the petitioner (Rs.3.25 Crores initially + Rs.90 Lakhs later) are grossly exaggerated and not supported by contemporaneous documents. He further submitted that, though the petitioner had initially raised objections but voluntarily withdrew the same vide email dated 02.05.2023 to facilitate the tender process, having withdrawn the objections, the petitioner cannot now raise the same issue repeatedly, however, the petitioner's repeated requests for re-valuation after disqualification/rejection in multiple tender calls are afterthoughts intended to delay the tender process. Moreover, the plea raised by the petitioner that the withdrawal was on assurances has no material evidence. He further submitted that the same valuation was carried in every subsequent tender and the petitioner has not raised any objection at the pre-bid stage of the present tender.
He further submitted that, the petitioner's bid in the 3rd call was not received on the portal and as per tender clauses 1.8(a) and 1.8(j), the authority is not liable for technical glitches on the e-procurement portal, therefore the claim of technical glitch is not substantiated with credible evidence acceptable under tender conditions. He further submitted that, the petitioner participated in multiple calls but was disqualified on valid grounds (financial criteria, solvency, power of attorney, undertakings etc.). He further submitted that since the tender is on "as is where is" basis, the successful bidder will pay for the structures as per the existing valuation, which will be passed on to the Petitioner and the respondents have acted in accordance with law, tender conditions, and the Land Management Policy. Hence, the Petitioner's attempt to stall the tender at the penultimate stage after participating (or attempting to participate) is mala fide and deserves to be rejected and there is no violation of Article 14 or 19(1)(g) as alleged by the petitioner.
He further submitted that, the H1 bid in the e-auction conducted on 18.02.2026 at Rs.1720/- per sq.mtr per annum which is substantially higher than reserve wherein seven bidders have competed and Carbon Resources Pvt. Ltd. was notified as H-1. Therefore the process is fair, transparent and in public interest wherein third-party rights have already intervened. He further submitted that the petitioner has participated in three successive tenders carrying the very same valuation and was disqualified in the present tender on technical grounds, as such filed the present writ petition on 23.02.2026, only after the price bids were opened (on 06.02.2026) and the Highest Bidder was finalised (on 18.02.2026) as an afterthought that too without making the highest bidder as a party respondent. He further submitted that, the petitioner having enjoyed the land for over 30 years and is now attempting to create hurdles in the transparent tender process after failing to meet eligibility criteria in multiple attempts.
He further submitted that, since the petitioner's 30-year lease expired on 23.04.2023 with no renewal clause, it is now only a lessee holding over. Mere continued possession or expenditure incurred after expiry, does not elevate a holding-over to the status of a subsisting lessee. The 2015 Land Management Policy itself treats expired leases differently from subsisting leases, therefore, the petitioner cannot claim the benefits of an existing lessee ignoring the conditions of the policy attached to an expired lease. He further submitted that, since the dispute is with regard to the value of compensation for the existing structures, the writ petition itself is not maintainable since Clause 4 of the lease deed provides for valuation and Clause 7 provides for arbitration. Even otherwise, no policy or NIT provision requires a fresh valuation for every tender call. Hence the writ petition is liable to be dismissed also on the ground of availability of alternative remedy to the petitioner and accordingly prayed to dismiss the writ petition.
Perused the record and considered the submissions of both the learned counsel.
The grievance, at its core, is about the value fixed by the respondents for the existing structures in the leased property in their 3rd call bearing NIT No.ENG/Estate/Z-1A-ESSEMM/3rdcall/T/2025, dated 02-09-2025.
It is not in dispute that the petitioner's 30-year lease expired on 23.04.2023 and it was not renewed further. The 3rd respondent issued Notice Inviting Tender (NIT) bearing NIT No.IENG/Estate/Z-IA-ESSEMM/T/2023 dated 01-04-2023 as the 1st call for allotment of “EX ESSEMM Land including existing warehouse and weighbridge on a long-term lease (annual lease rental basis) for a period of 30 years on as-is-where-is basis" in Zone-Z-1A, Plot 13,476 M² at port area for Industrial Purpose. Further, it is not in dispute that, having found that the structures erected by the petitioner in the leased property and the work done by it are grossly undervalued in the said tender notification, the petitioner raised objections against such improper valuation in April 2023 and that the petitioner has also raised objections against the valuation given by the third party valuer. However, the petitioner has withdrew those objections on 02.05.2023.
It is also not in dispute that the 1st call dated 01.04.2023 was cancelled and the 2nd Call dated 13.03.2024 issued by the respondents was also cancelled. Now the 3rd call issued by the 3rd respondent dated 02.09.2025 was in dispute. More particularly, the petitioner is objecting the valuation made for the existing structures that are raised by it in the lease property in the said 3rd call dated 02.09.2025. Furthermore, the petitioner has participated in the said 3rd call and was disqualified on the technical grounds.
The contention of the petitioner is that, it has invested huge amounts in raising the existing structures (Rs.3.25 Crores initially + Rs.90 Lakhs odd later) and inspite of making objections with regard to the valuation made by the respondents in the 1st call itself, the respondents have fixed the same valuation in the 3rd call dated 02.09.2025 without making any revaluation. The petitioner’s further contention is that, under Clause 11.3(c) of the Policy Guidelines for Land Management by Major Ports, 2015, the successful bidder is required to compensate the outgoing lessee (petitioner herein) for the value of existing superstructures as determined by valuation, therefore if the existing structures are undervalued, the petitioner will be deprived of the sums due to it, based on unfair and improper valuation conducted in the year 2023. The other point raised by the petitioner is that, though it has submitted its bid on 03.10.2025 by remitting Tender fees and Earnest Money Deposit (EMD) the online e-tender portal did not reflect the bid submitted by the petitioner due to some technical glitches and inspite of informing the same to the respondent authorities through emails there is no response from them and ultimately the petitioner was disqualified from bidding process on the ground that it was not registered by the e-procurement website, without there being any fault of petitioner’s and tender fees and EMD amount was also not refunded to it.
In the above background, it would be appropriate to refer the relevant clauses in the tender notification dated 02.09.2025 which reads as follows:
1.8.Submission of Bid, Tender fees and EMD:
a. Bidder should log into the site well in advance for bid submission so that they can upload the bid on time i.e., on or before the bid submission time. Bidder will be responsible for any delay due to other issues.
j. The details of Tender Fee, EMD payments and scan of e-Bank Guarantee must be submitted online, including copy of the transaction receipt, UTR (Unique Transaction Reference) Number, date of transfer and any other relevant transfer details.
k. Authority shall not be liable/responsible for any sort of delay or the difficulties faced during the submission of bids online by the bidders due to local issues such as any connectivity/internet problem either with use side/NIC/Bank. It is in the own interest of the bidders; that the bidders may get it verified from bank that the requisite money has been received by Authority for the NIT in which they are participating.
It is germane to extract the relevant clauses from the Policy Guidelines for Land Management by Major Ports, 2015 which reads as follows:
Clarification 11.3 (c) (i):
When the lease has expired and has no renewal clause, then the existing lessee to be eligible for taking part in the bid with ROFR should clear all dues including the value of the lease rental determined as per the SOR rates prevailing from time to time since the period of expiry of the lease and date of tender-cum-auction. When the delay in calling for tender is attributable to the Port authorities no penalty/interest should be charged from the lessee i.e. it should be based on single rate at the prevailing SOR from time to time The reserve price for the tender would anyhow be the latest SOR as per Para 13. In the tender cum auction process the lease period should be reckoned prospectively. If the existing lessee becomes the successful bidder in the tender - cum - auction, then the intervening period should be regularised by the Board. In all such cases even if the lease had expired before 2014, i.e. prior to coming into effect of PGLM 2014, the guidelines prescribed for renewal of existing/earlier leases as per Para 11.3 would apply.
The above clause provides that, where a lease has expired without a renewal clause, the outgoing lessee, to be eligible to bid at all, must first clear all dues including lease rentals at prevailing SOR rates for the whole period from expiry of the lease to the tender-cum-auction. Clause 11.3 (c) of the said Policy Guidelines for Land Management by Major Ports, 2015 provides that the first right of refusal (matching the H-1 bid) extends to expired leases also, and the intervening period can be regularised by the Board only if the outgoing lessee becomes the successful bidder. Here in the present case, the petitioner is disqualified and is not a successful bidder, therefore no benefit accrues upon him.
As rightly contended by the learned counsel for the respondents, since the petitioner's 30-year lease was expired on 23.04.2023 with no renewal clause, it is now only a lessee holding over and mere continued possession or expenditure incurred after expiry, does not elevate a holding-over to the status of a subsisting lessee, therefore, the petitioner cannot claim the benefits of an on an expired lease. Furthermore, the huge claims made by the petitioner are not supported by any documents and also, there was no substantial evidence placed on record to show that the petitioner has withdrew the objections based on the assurances made by the respondents.
As per the clause 1.8 of the tender notification, the bidder alone is responsible for any difficulties faced during submission of the bids online and it was clearly given that the bidder will be responsible for any delay due to other issues. In view of the same, the petitioner cannot take a stand that due to technical glitch which is beyond control, the authorities cannot reject the bid.
Moreover, as rightly contended by the learned counsel for the respondents, though the structure value had been printed in every tender, the petitioner has participated in three successive tenders carrying the very same valuation and was disqualified in all. It can be noticed that the petitioner has filed the present writ petition on 23.02.2026, only after his disqualification and after the price bids were opened on 06.02.2026. As could be seen, seven bidders have competed and the Highest Bidder was already finalised on 18.02.2026 and third party intervention is also made.
Admittedly the petitioner has participated in the 3rd call dated 02.09.2025, which implies that it has read the complete documents and has made itself aware of the terms & conditions, specifications, valuation etc., made in the tender notifications. In the said circumstances, after noticing the valuation made in the tender notification and after being disqualified in the said tender process, the petitioner cannot point out that the structures raised by it is under-valued. If at all the petitioner is really aggrieved by the said valuation for the existing structures raised by it, it has to question the same without participating in the said tender process, at the threshold.
Since the petitioner’s bid was not reflected in the prescribed portal, it was rejected, therefore, the petitioner cannot take stand on technical glitches, for which the respondents are not responsible. Admittedly, the tender process was completed, the Highest bidder was declared and third party intervention came into play. Having participated in the tender, the petitioner cannot question the conditions of the tender after his failure to succeed in the tender. Further, after completion of the entire process, interfering with the same, would affect the Public Exchequer and public interest. Further, it is settled law that in such highly technical matters, especially tender matters, writ courts refrain from interfering and the tender author has absolute discretion to set the tender terms to address the technical needs.
This Court should first consider the limits of judicial review in tender natters. In Tata Cellular Vs Union of India 1 , Air India Ltd Vs Cochin International Airport 2 , Jagdish Mandal Vs State of Orissa 3 , Afcons Infrastructure Ltd Vs Nagpur Metro Rail Corpn Ltd4, Silppi Constructions contractors Vs Union of India5 and M/S N.G. Projects Limited v. M/S Vinod Kumar Jain & Ors. , the Supreme Court consistently recognized that valuation of tenders is primarily a commercial and technical function. The Court does not substitute its assessment for that of the tendering authority and ordinarily defers to the expertise of the authority that framed the tender. At the same time, those decisions preserve judicial review where the decision-making process is arbitrary, irrational, mala fide, perverse, discriminatory or contrary to the governing tender conditions.
The judgment passed by the Apex court in Sterling Computers Ltd. Vs M/s M&N Publications Ltd& others7 explains the boundary with particular clarity: judicial review is concerned principally with the fairness, rationality and legality of the decision-making process Executive latitude in contractual matters does not extend to a process that is inconsistent with Article 14. The present examination must therefore remain confined to whether the prescribed procurement process was actually followed, and not to which bidder offered the better commercial model
In Banshidhar Construction (P) Ltd. V. Bharat Coking Coal Ltd8 the Apex court has reiterated that public authorities retain freedom in contractual matters, but that freedom operates within the requirements of fairness, equality, transparency and absence examining a of arbitrariness Thus, restraint does not prevent the Court from material procedural failure affecting the integrity of the tender process.
The authorities concerning public interest also require the Court to balance competing considerations. In Monarch Infrastructure (Pvt) Ltd. v. Commissioner Uhasnagar Municipal Corporation & others 9 the Apex court has held that public interest is paramount but that State action in awarding contracts must remain free from arbitrariness. Raunaq International Ltd. v. I.V.R. Construction Ltd. 10 , and the principles noticed in Prabha Shukla v, State of U.P. 11 , caution that judicial intervention should not unnecessarily impede projects of public importance and that a real and substantial grievance, rather than a merely technical one, should ordinarily be shown.
In view of foregoing reasons, this court finds no reason to interfere with the 3rd Call bearing NIT No.ENG/Estate/Z-1A-ESSEMM/3rdcall/T/2025, dated 02-09-2025 issued by the 3rd respondent, as such the writ petition is devoid of merits and liable to be dismissed.
Accordingly, the writ petition is dismissed. However, the petitioner is at liberty to take steps before the appropriate forum, if so advised. No costs.
Miscellaneous applications, pending if any, shall stand closed.