IMPORTANT POINT
The principle that the highest bid does not guarantee acceptance in tender processes, and the authority's discretion must be exercised based on relevant commercial considerations and adherence to procedural norms.

JUDGMENT :

DEVENDRA KUMAR UPADHYAYA, C.J.

1. These proceedings, instituted under Article 226 of the Constitution of India, seek to challenge the decision of respondent no. 1-the City and Industrial Development Corporation of Maharashtra Limited [CIDCO] (hereinafter referred to as “the respondent-Corporation”) whereby the bid submitted by the petitioner-firm in respect of plot no. 8, Sector 23, Node CBD Belapur has not been accepted and the said plot has been cancelled from Scheme No. MM/SCH-30/2022-23 and it has further been ordered that the Earnest Money Deposit (EMD) paid by the petitioner-firm be refunded. The said decision was communicated to the petitioner by means of the letter dated 25th November 2022.

2. The facts, which are essential for appropriate adjudication of the issues involved in this petition, need to be noted. The respondent-Corporation issued an advertisement inviting applications through E-tender and E-auction for lease of plots for residential-cum-commercial and star hotel use at various nodes of Navi Mumbai. The advertisement, apart from the details of the plots to be leased, also mentioned the base rate per square meter against each plot along with the area of the plot concerned. The advertisement also depicted the EMD to be paid by the bidder against the plots as also permissible capital FSI for the plot.

3. The petitioners, pursuant to the advertisement, submitted their bid for Plot No. 8 in Sector 23 at Central Business District (CBD), Belapur on 2nd November 2022. The base rate as per the advertisement for the subject plot was Rs. 64,813/- per square meter and accordingly, the petitioner also deposited the requisite amount of EMD. The financial bid offered by the petitioner for the subject plot was Rs. 89,813/- per square meter as against the base rate of Rs. 64,813/-. The bids for the subject plot were opened on 3rd November 2022 and auction result was also displayed by the respondent-Corporation on its website.

4. The auction result, as displayed by the respondent- Corporation, is available at Exhibit ‘D’ appended to the writ petition, according to which, for the said plot, there were four bidders, who had submitted their bids and amongst these four bidders, the petitioners’ bid of Rs. 89,813/- per square meter was the highest. According to the petitioners, thus, the rate quoted by the petitioner-firm was 38.57% above the base price as fixed by the CIDCO and accordingly, the petitioners were waiting for finalization of their bid, however, by means of the impugned letter/communication dated 25th November 2022, it was informed to the petitioners that due to administrative reasons, the respondent-Corporation has decided to cancel the subject plot from the scheme in question and that the EMD amount paid by the petitioner was being refunded in their bank account. The letter dated 25th November 2022 is, thus, communication of the decision taken by the respondent-Corporation cancelling the bid of the petitioners and informing them that the EMD amount was being refunded.

5. It is this decision, as embodied in the communication/ letter dated 25th November 2022, which has been assailed by the petitioners in this writ petition.

6. Mr. Janak Dwarkadas, learned senior advocate appearing on behalf of the petitioner-firm has vehemently argued that the impugned decision cancelling the bid offered by the petitioner is absolutely arbitrary, inasmuch as, though in the letter dated 25th November 2022 the reason indicated by the respondent- Corporation is that the bid of the petitioners has been cancelled for administrative reasons, however, no such reason can be said to be existing to justify such action on the part of the respondent-Corporation. He has further argued that undisputedly, the rate quoted by the petitioner for the subject plot was 38.57% higher than the base price fixed by the respondent-Corporation and also that the petitioners’ bid was the highest and therefore, there cannot be any plausible reason for the r