The cancellation of a tender by a public authority is valid if it is based on informed considerations regarding competitive pricing, allowing the authority to reject bids without justification.

JUDGMENT

Vipin Sanghi, J. (ORAL)--The petitioner has preferred the present writ petition being aggrieved by the cancellation of the tender in question vide the Public Notice No. 29/2021-22 dated 29.09.2021.

2. By the said Public Notice, the tender for Assignment-I of RFP No. 01/2021-22 issued by the respondent-Airports Economic Regulatory Authority of India, was cancelled.

3. Vide the RFP No. 01/2021-22 dated 24.06.2021, the respondent had invited proposals for "empanelment of consultants to assist the Airports Economic Regulatory Authority of India (i.e. the respondent) in determination of tariffs for aeronautical services at various major airports for the control period 01.04.2021 to 31.03.2026."

4. The bids were invited under two assignments. We are concerned with Assignment No. 1, which relates to tendering of consultancy services for the Sardar Vallabhbhai Patel International Airport, Ahmedabad. The petitioner had made its bid in respect of the said tender.

5. The case of the petitioner is that apart from the petitioner, one other bidder qualified in the technical assessment. The financial bids were opened by the respondent, and the petitioner emerged as the L-1 bidder. The petitioner claims that, even though, the petitioner was entitled to the Award of the contract straightaway in terms of the tender, the respondent, without any authority, sought to enter into negotiations with the petitioner, and demanded that the petitioner reduce its bid by 20%. However, the petitioner was not agreeable to the same and offered a 5% discount on the tender price. The respondent, rather than awarding the contract to the petitioner, proceeded to cancel the same by issuing the impugned communication. Consequently, the petitioner has preferred the present writ petition.

6. The submission of Mr. Subramanian, learned senior counsel for the petitioner, is primarily founded upon Clause 1.5, which stipulates the Selection Process. So far as it is relevant, the said clause reads as follows:

"1.5 SELECTION PROCESS:

AERA would adopt two Stage Selection process i.e. technical scrutiny and financial (collectively the "Selection Process") as detailed in Clause 3.1 in evaluating the Proposals for each Assignment(s). Accordingly, the Applicant would submit the bid in a sealed envelope containing financial bids along with technical proposal for each Assignment(s) the applicant intends to bid. In the first stage, a technical prerequisite scrutiny shall be carried out as specified in the Clause 3.1. In the second stage, based on the technical scrutiny, a list of short-listed applicants shall be prepared whose financial bids shall be opened for final selection of the Applicant for each assignment(s). The applicant for each Assignment(s) based on the lowest financial quote i.e. total financial quote of each assignment, shall be considered to be selected. If a bidder applies/ quotes for both the Assignment(s) and he becomes Lowest bidder (L-I) in both the Assignments, he will be awarded only one Assignment (consisting of all airports under that assignment) as per the preference opted and L-2 bidder will be required to match the quote of L-1 bidder for award of second Assignment (consisting of all airports under second assignment) or so on. Further, in case, two or more applicants become Lowest Bidders, in that case the preference shall be given to award the assignment to the bidders who have more experience in tariff determination exercise in the airport sector.

However, the decision with respect to the assignment to be allotted to the Applicant shall vest solely with the AERA. "

(emphasis sup