( 1 ) RULE D. B.

( 2 ) WITH the consent of learned counsel for the parties, we proceed to dispose of the matter at this stage itself.

( 3 ) IN this writ petition under Article 226 of the Constitution, the petitioner questions the legality and propriety of the decision taken by the Central Warehousing corporation (for short the CWC), respondent No. 2 herein, to cancel the tender process initiated by issue of a public notice dated 7 December 2002 for dismantling and disposal of 29700 MTC godown at Base Depot, Loni, Delhi. Being the highest bidder, the petitioner seeks a writ of mandamus, commanding the CWC to release the work order in their favour.

( 4 ) BESIDES the CWC, Union of India through the Secretary, Ministry of food and Civil Supplies and the Executive Engineer CWC have been impleaded as respondents 1 and 3 respectively.

( 5 ) THE CWC, through an advertisement dated 7 December 2002, invited tenders for the aforementioned work. The last date for submission of the tenders was 18 December 2002, which were to be opened on the same day. Pursuant to the said advertisement, the petitioner submitted their bid. The tenders were opened on 18 december 2002. The petitioner was declared the highest bidder. Having been declared as the highest bidder, the petitioner was invited by the CWC for negotiations. In the negotiations the petitioner increased its offer from Rs. 28 lakhs to rs. 29. 5 lakhs and it was decided that the bank guarantee to be furnished shall be restricted to ten per cent of the total value. Between the period from February 2002 till August 2004 the CWC wrote several letters to the petitioner asking them to extend the validity of their bid. Being under the reasonable belief that their offer had been accepted, the petitioner consented to extensions of the validity period from time to time and finally upto 31 December 2004.

( 6 ) IT is the case of the petitioner that some time in the months of September and October 2004 they were called to the office of the CWC and were informed by respondent No. 3 that the CWC had taken a decision to cancel the tender and accordingly reject the offer made by the petitioner as far back as on 18 December 2002. It is averred that enquiries made by the petitioner revealed that a fresh notice inviting tender for the same work had been published on 22 October 2004. Hence the present writ petition.

( 7 ) IN their reply affidavit, the CWC has averred that for a considerable time the tender could not be awarded as they were awaiting the approval of the Ministry of railways and as in the meanwhile the entire scenario had changed, particularly the astonishing rise in the price of steel and other building materials, the CWC took a decision in public interest to cancel the NIT. It is pleaded that CWC being a public sector undertaking, commercial consideration was the paramount consideration in arriving at the decision to re-invite the tenders. It is pleaded that the decision to cancel the tender and call for fresh NIT has been taken in public interest to safeguard the loss to the tune of Rs. 24 lakhs. It is asserted that the decision to scrap the tender and re-invite the same does not infringe any legal right of the petitioner, more so, when they will get an equal opportunity to re-bid in the fresh NIT.

( 8 ) MR. RAHUL Gupta, learned counsel appearing for the petitioner, has vehemently submitted that the petitioner was entitled to the award of the contract since admittedly their bid was the highest. Learned counsel contends that the decision taken by the CWC to cancel the bid on the ground that there has been increase in the steel prices is arbitrary and unreasonable. According to the learned counsel, CWC has failed to take into consideration the fact that prices of the other commodities namely, the diesel etc,. as also the wages of the labour had also gone up steeply and, therefore, there would not be any unreasonable profits in the hands of the petitioner on account of increase in