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Judgment
The instant writ petition under Article 226 of the Constitution of India has been filed against a communication dated 17.04.2026, whereby a tender has been discharged. The primary ground of challenge is that such discharge has been made without any application of mind and in an unreasonable manner.
As per the facts projected, a Notice Inviting Bid was issued by the Railway authorities on 11.12.2025 pursuant to which, the petitioner, along with 5 (five) others had participated. It was a two-bid system. The petitioner’s bid was found to be technically responsive and in the price bid, the petitioner was adjudged as the L-1 whose bid was 18.20% below. While the petitioner was expecting the work order to be issued in its favour, the impugned communication dated 17.04.2026 has been issued, as per which, the tender had been discharged. It is the legality and validity of such decision, which is the subject matter of challenge in the present petition.
I have heard Shri D. Senapati, learned counsel for the petitioner. I have also heard Shri H. Gupta, learned CGC for the Union of India.
Shri Senapati, learned counsel for the petitioner, has submitted that the tender was a two-bid system and along with 5 (five) other bidders, the bid of the petitioner was found to be technically responsive. In the price bid, the offer made by the petitioner was found to be the lowest (L-1) and accordingly, there was a legitimate expectation for issuance of the work order. He has submitted that as per information received, the Tender Committee of the Railways had recommended in favour of the petitioner. In this connection, he has drawn the attention of the Court to Clause 2.2 of the minutes of communication, as per which, the technical bid was examined by the Tender Committee and a recommendation was submitted to the Tender Accepting Authority. He has also relied upon Clause 2.4, wherein the Tender Committee resolution was accepted with modification by the Tender Accepting Authority on 25.03.2026. Under Clause 7.3, the Tender Committee had made a recommendation to accept the lowest valid offer made by the petitioner, for a total value of Rs.1,07,53,20,857.71. However, the Tender Accepting Authority had taken a decision on 17.04.2026 for a re-tender.
The learned counsel for the petitioner has, however, submitted that there were further clarifications and recommendations made in favour of the petitioner. The said Committee had examined the remarks of the Tender Accepting Authority and had also come to a conclusion that probably the recommendation of the Committee was wrongly read as re-tender. The Tender Committee had accordingly reiterated its recommendation in favour of the petitioner and not for re-tendering.
He has also drawn the attention of the Court to the observations made by the Tender Committee that the lowest valid eligible tenderer, i.e., the petitioner had worked in the mountainous region of the Bairabi-Sairang section in the State of Mizoram under NFR construction. However, the Tender Accepting Authority had reiterated the decision to discharge all items, including the present tender. He has submitted that no reasons have been cited for such discharge.
As regards certain new guidelines which are both dated 13.03.2026, the learned counsel for the petitioner has submitted that those guidelines are prospective in nature and therefore, would not have any application in the present tender process.
In support of his submission, he has relied upon the case of Golden Food Products India v. State of Uttar Pradesh & Ors., reported in 2026 SCC OnLine SC 24, and the following observations are pressed into service, which read as follows:
“28.In our view, there cannot be any imprimatur of the Court to such arbitrary cancellation of auction by an instrumentality or agency of the State in the absence of there being any fraud, collusion, suppression etc. Merely because the smaller plots measuring 123 to 132 square metres were auctioned and sold at a higher price as compared to the subject plot measuring 3150 square metres which is a large sized plot, could not have been the basis for cancelling the auction insofar as the subject plot is concerned. The demand for smaller plots being higher was sold at a higher price per square metre than the subject plot, where there was no demand for the subject plot as only two bidders participated in the auction. The bid of the appellant was above the reserve price. There was no other reason to cancel the auction sale of the subject plot. Therefore, GDA - respondent No. 2 was under an obligation in law having accepted the bid offered by the appellant to issue the allotment letter instead of cancelling the auction on the basis of irrelevant considerations that too behind the back of the appellant. Expectation of a higher bid in a subsequent auction cannot be a reason to cancel an auction held in accordance with law.”
He has also relied upon a case of the Hon’ble Supreme Court, reported in (2024) 15 SCC 461, [Subodh Kumar Singh Rathour Vs. Chief Executive Officer & Ors.].
The learned counsel for the petitioner has accordingly submitted that the impugned communication is arbitrary, unreasonable and unfair and is liable to be interfered with by this Court in exercise of powers under Article 226 of the Constitution of India.
Per contra, Shri Gupta, learned CGC representing the Railways, has strenuously opposed the writ petition. He has submitted that the ultimate authority to decide the matter is the Tender Accepting Authority. He has submitted that the recommendations of the Tender Committee are not binding and the Tender Accepting Authority can apply its mind before taking a decision. He has submitted that the action to go for re-tendering by the Chairman of the Tender Committee is based on relevant considerations. He has submitted that the subject matter involved in the work requires specialized experience in mountainous regions. He has, however submitted that so far as the experience of the petitioner is concerned, those are not sufficient to undertake the present work. He has reiterated that the decision of the Tender Accepting Authority would be binding.
By referring to the minutes which have been recorded regarding the communication, the learned CGC has referred to Clause 2.2, as per which, the matter was returned to the Tender Committee for review. It was also stated that the experience which the petitioner had cited with regard to two works were not fulfilling the requirement of mountainous regions. He has also submitted that there is no allegation of mala fide and, since the decision has been taken in public interest, the same is not liable for interference by this Court.
In support of his submissions, the learned CGC has relied upon the decision of the Hon’ble Supreme Court in Principal Chief Conservator of Forest and Others v. Suresh Mathew & Ors., reported in 2025 SCC OnLine SC 933, wherein it has been laid down that, in matters pertaining to contracts, Courts should be loathe in exercising powers of judicial review.
The rival submissions advanced in the Bar have been duly considered and the materials placed before this Court have been carefully examined.
It is not in dispute that pursuant to the NIT dated 11.12.2025, the petitioner, along with others, had submitted their bids. It is further not in dispute that the same was a two-bid system, which consisted of a technical bid and financial bid. The technical bid of the petitioner was found to be responsive and thereafter, the financial bids were opened. In the financial bids, it is not in dispute that the offer made by the petitioner was found to be the lowest and the petitioner was accordingly, adjudged as L-1.
A perusal of the materials on record, including the communications exchanged, would show that the Technical Committee had recommended that the work to be given in favour of the petitioner. In this regard, Clauses 2.2, 2.4 and 7.3, which have been pressed by the petitioner, would clearly show such recommendation. However, the Tender Accepting Authority had communicated for re-tendering the matter. This Court has also observed that, on such communication, the Tender Committee had come to a conclusion that perhaps, the recommendation in favour of the petitioner was wrongly understood and therefore, further clarification was made. The Tender Committee had come to a specific conclusion and finding that the petitioner had experience in working in mountainous regions of the Bairabi-Sairang section in Mizoram under NFR construction and therefore, had sufficient experience. However, the Tender Accepting Authority had reiterated the decision to discharge, in which no reasons have been assigned.
As regards the experience criteria under paragraph 2(A) of the NIT, “similar nature of work” has been defined, which includes tunnel work or major bridge work or protection work, including slope protection using geosynthetics, etc., in mountainous regions. Though two new guidelines dated 13.03.2026 have been put on record, it is not in dispute that those guidelines would operate prospectively. In the instant case, the NIT is of a prior date namely, 11.12.2025 and, therefore, there would be no application of the new guidelines.
While this Court is of the opinion that the owner would be the best judge to interpret the clauses of the NIT, in the instant case, the facts are not in dispute that the technical bid of the petitioner was not only found responsive, but the Tender Committee had, in fact, recommended that the work to be allotted in favour of the petitioner. The materials would also disclose that the Tender Committee had applied its mind which was entrusted to make recommendation. Such recommendations have been found to be given in favour of the petitioner upon being satisfied that the petitioner fulfills the qualification. This Court is also of the opinion that once the bid of the petitioner was found to be technically responsive, the said aspect could not have been re-opened. Nonetheless, when the Tender Committee had recommended the bid of the petitioner, which was found to be the lowest, the decision to go for re-tendering by the Tender Accepting Authority does not appear to be reasonable or logical. Even assuming that the Tender Accepting Authority was concerned on the aspect as to whether the petitioner had experience in a similar field, this Court has noticed that the nature of the work is for construction of minor bridges in hilly areas from Jiribam – Tupul (Imphal). The Tender Committee had come to a clear finding that the petitioner had worked in mountainous regions in Bairabi-Sairang section in Mizoram under NFR construction and therefore, had sufficient experience.
While it is not in dispute that the final decision would be taken by the Tender Accepting Authority which would be binding, in the considered opinion of this Court, the decision to go for the discharge of the tender and for re-tendering does not appear to be reasonable, fair and transparent.
The Hon’ble Supreme Court, in the case of Golden Food Products India (supra), has laid down certain principles, which have already been extracted hereinabove. Such principles are towards maintaining transparency and fairness and against arbitrary and unreasonable action. Similarly, in the case of Subodh Kumar Singh Rathour (supra), the Hon’ble Supreme Court has reiterated that decisions taken for allotment of a tender has to be free from arbitrariness and unreasonableness.
The decision relied upon by the learned CGC that no judicial review could be exercised on decisions over tender appears to be in conflict with the principles governing the field. The powers of judicial review is a basic feature of the Constitution, which cannot be taken away. Though, in a given case, this Court, in exercise of such powers, would be loath to interfere, there cannot be an absolute embargo regarding the exercise of such powers.
The learned CGC may be correct in contending that there is no allegation of mala fide. However, the present case is one where there is malice in law and, therefore, a case for interference is made out.
In the conspectus of the aforesaid discussions, this Court is of the opinion that the impugned decisions dated 17.04.2026 and 12.05.2026 of the Tender Accepting Authority for re-tender and to discharge the contract are unsustainable in law and accordingly set aside.
The writ petition accordingly succeeds. This Court accordingly directs that consequential action, pursuant to the recommendation in favour of the petitioner given by the Tender Committee be taken and the work be allotted to the petitioner in accordance with law.
No order as to cost(s).