The court established that the cancellation of the tender was arbitrary and motivated by commercial, political, and populist interests, emphasizing the contractual rights of the parties and the absence of overwhelming public interest.

JUDGMENT :

Sabyasachi Bhattacharyya, J.

1. The writ petitioner participated in a public tender floated on July 10, 2023 by the respondent no.1, the State of Mizoram. The said tender was for sale of a plot of land belonging to the Government of Mizoram situated at 24, Ashutosh Chowdhury Avenue, Ballygunge, Kolkata - 700019.

2. The petitioners came out successful, being declared the highest bidder on July 19, 2023. Its bid was accepted on the very next date, that is on July 20, 2023.

3. A Letter of Intent was issued in favour of the petitioners on August 4, 2023. Subsequently, an unregistered agreement for sale was executed in favour of the petitioners on October 6, 2023.

4. A draft sale-deed was prepared and the petitioner was directed to proceed on October 31, 2023. A Letter of Award was issued on December 1,2023. The petitioners paid the full amount of consideration, along with delay interest in terms of Clause 5.6 of the agreement on December 7, 2023.

5. Subsequently, upon the petitioner making full payment, the respondent no.1, on December 8, 2023, intimated the petitioners that the latter would hear from the respondent no. 1 soon on the execution of sale deed and matters regarding TDS.

6. Thereafter, the Legislative Assembly elections were held in the State of Mizoram and there was a change of regime in the State. After formation of the new Government on December 21,2023, the respondent no.1 informed the petitioners that the process of sale of the property would also be slightly affected and would be carried forward only in the month of January, 2024.

7. Thereafter, by the impugned communication dated January 4, 2024, the respondent no.1 cancelled the bid process, allegedly in the “larger interest of the general public”.

8. Learned counsel for the petitioners argues that the bid process under the tender was closed in July, 2023, the agreement for sale executed on October 6, 2023, draft sale deed approved and finalized on October 31, 2023 and full payment of sale consideration was made by December 7, 2023.

9. Thus, it is argued that a right has accrued in favour of the petitioners to have the approved sale deed executed as per Clause 6.7 of the tender document.

10. It is argued that the petitioner saltered their position on the basis of the representations made by the respondents and cannot now be prejudiced and deprived thereof. The cancellation of the tender is vitiated by the doctrine of promissory estoppel. In support of such contention, the petitioners rely on a judgment reported at 2020 SCC OnLine SC 968 [State of Jharkhand and others Vs. Brahmputra Metallics Limited, Ranchi and another].

11. It is argued that the decision of the respondents is ex facie arbitrary and politically motivated and violative of Article 14 of the Constitution of India. By virtue of a change of regime, a Government cannot undo promises, obligations and actions of the prior Government, since the State is a continuing body in its dealings in the public contractual field.

12. It is alleged that the cancellation is a result of “regime revenge” and abuse of bureaucratic power. The mere use of the ground of alleged public interest cannot undo obligations of the prior regime of the same authority. In support of such contention, the petitioners cite 2021 SCC OnLine SC 1141 [Vice Chairman & Managing Director, City and Industrial Development Corporation of Maharashtra Ltd. and Another Vs. Shishir Realty Private Limited and others].

13. Even after the change in Government, assurance was given to the petitioner to go through the process with the execution of sale deed in January, 2024.

14. Clause 3.1.11 read with Clauses 5.5 and 6.2 of the tender document is relied on by the petitioners. Cogent reasons are essential even when exercising wide and blanket powers of cancellation under the tender terms under Clause 3.1.11, it is contended. In support of the said proposition, the petitioners rely on Mihan India Ltd. Vs. GMR Airports Ltd. And Others, reported