The Rahul Co-operative Labor and Construction Society Limited vs State Of Haryana & Ors.

Suvir Sehgal, J.

Petitioner has invoked the writ jurisdiction of this Court under Article 226/227 of the Constitution of India seeking, inter-alia, quashing of decision dated 31.12.2025, Annexure P-9, whereby a tender floated by Municipal Council, Thanesar has been cancelled by the Directorate of Urban Local Bodies, Haryana.

Brief facts may be noticed. A tender was floated by Municipal Council, Thanesar for day sweeping of streets/roads, drain cleaning, lifting of garbage and bush uprooting etc. in some of the sectors in Thanesar. Seven bidders participated in the tender process. Upon opening, technical and financial bid, the Ratgal Co-operative Labor and Construction Society Limited, emerged as the lowest bidder. Petitioner questioned its eligibility and instituted a writ petition before this Court. Vide order dated 18.10.2024, Annexure P-4, this Court disposed of the writ petition with a direction to the respondents to pass an appropriate order on the representation submitted by petitioner. The representation came to be rejected vide order dated 30.04.2025, Annexure P-5. Petitioner again approached this Court by filing a fresh writ petition and on 02.07.2026, a statement was made by the State counsel that a Committee has been constituted to examine the allegations of forgery and fabrication of documents. After getting a legal opinion in the matter, by virtue of impugned decision, Annexure P-9, respondents decided to cancel the tender and to re-issue a fresh tender in accordance with the new Request for Proposal (RFP) dated 27.08.2025.

Counsel for the petitioner has vehemently argued that the cancellation is arbitrary, vindictive and intended to deprive the petitioner of the benefit of the tender. Placing reliance upon Subodh Kumar Singh Rathour Versus Chief Executive Officer and others, (2024) 15 SCC 461 and Kaushal Kishore Versus The State of Bihar and others, Law Finder Doc ID # 2877209, he has contended that cancellation of the tender by respondent-authorities is amenable to judicial review and cannot be sustained, where it is arbitrary or has been done without assigning any reason.

Although, notice of motion has not been issued to the respondents, but on an advance notice, counsel for respondents have opposed the petition to submit that decision to cancel had been taken as the tender process was entangled in litigation and before the process could be completed, a new RFP had been circulated.

We have heard counsel for the parties and considered their respective submission, besides examining the documents referred to by them.

The scope of judicial review in matters relating to award of contracts by the State or its instrumentalities is settled by a long line of decisions of Hon’ble the Supreme Court. It is not in dispute that power exercised by the Government and its instrumentalities with regard to allotment of contracts is subject to judicial review at the instance of an aggrieved party. Submission of a bid in response to a notice inviting tender is no more than an offer, which the State or its agencies are under no obligation to accept. All participating bidders are entitled to fair, equal and non-discriminatory treatment in the matter of evaluation of tenders. It has been settled by the Apex Court in Maa Binda Express Carrier and another Versus North-east Frontier Railway and others, (2014) 3 SCC 760 that an award of a contract is essentially a commercial transaction, which must be determined on the basis of considerations that are relevant to such commercial decision. A decision cancelling a tender is also open to judicial review where it is shown to be arbitrary, malafide, discriminatory or founded upon considerations having no nexus with the object sought to be achieved. The jurisdiction of a writ Court in such matters is of judicial review of the decision making process, not of an appellate court examining the commercial wisdom of the tendering authority. The State or its agencies are bound to give reasons in their orders. In Kalu Ram Ahuja and another Versus Delhi Development Authority and another, (2008) 10 SCC 696 as well as in Subodh Kumar Singh Rathour's case (supra), Hon’ble the Supreme Court has clarified that it is the bounden duty of the tendering authority to give reasons for the cancellation of the tender. Merely, mentioning that the cancellation has been done on account of administrative reasons would not suffice.

The facts of the present case have to be examined in the light of the above stated legal position. Despite tender having been floated in July, 2024, no work order has been issued to any bidder. Tender process remained embroiled in litigation. In the interregnum, competent authority introduced a new RFP on 27.08.2025. Vide impugned communication, Director, Urban Local Bodies, Haryana, noticed that the tender had been floated under the old RFP and no work order had been issued due to litigation. For this reason, it directed that the existing tender may be cancelled and the work re-tendered in accordance with new RFP. It is, therefore, evident that the cancellation is supported by justifiable reason. The decision is founded upon objective and relevant considerations. The reason assigned by respondents meets the mandate of Subodh Kumar Singh Rathour's case (supra) and Kaushal Kishore's case (supra). This Court does not find any ground to interfere with the impugned decision.

Finding no merit in the petition, it is dismissed with no order as to costs.