A successful bidder in a tender process does not have a vested right to the contract, and the tendering authority can cancel bids based on commercial prudence.

JUDGMENT

Subramonium Prasad, J.

1. In the instant Writ Petition, this Court will determine whether the decision of the Airports Authority of India ("Respondent No. 1") to cancel of Request for Proposal ("RFP") for inter alia, operating and maintaining the Food & Beverage Outlets at Swami Vivekananda Airport, Raipur, after the Petitioner, i.e Saptagiri Restaurant Private Limited, had emerged as the highest bidder, is sustainable in law.

2. The Petitioner has placed on record the following facts:

a. In 2020 and early 2021, the Respondent No. 1 issued Request for Proposals for inter alia, operating and maintaining the Food & Beverage Outlets at Swami Vivekananda Airport, Raipur bearing requirements for minimum monthly guarantees of Rs. 40,18,888/- and Rs. 31,34,225/-. However, there were no bidders for the RFP.

b. Thereafter, in 2021, the Respondent issued an RFP for inter alia, operating and maintaining the Food & Beverage Outlets at Swami Vivekananda Airport, Raipur. This time the minimum monthly guarantee was of Rs. 28,20,805/-.

c. The Petitioner submitted its technical and financial bid on 15.07.2021 for the RFP. The Petitioner's bid was found to be technically compliant. Thereafter, on 13.08.2021, it emerged that the Petitioner was the highest bidder, having bid a sum of Rs. 29,25,555/-.

d. It is the contention of the Petitioner that Respondent No. 1 issued a Commercial Circular No. 42/2021 bearing F. No. Cl-11041/42/2020-Commercial/224, laying down guidelines for commercial contracts having periodicity of three year or more. The following was laid down in the said circular:

"In such a scenario, if the quote received is more than the MRLF, the same may be processed as per codal procedure. In case of NIL response in such tender, subsequent action for reduction in MRLF may not be taken and interim arrangement may be made for utilisation of space till new tender is finalised and even if reduction of MRLE has been approved by competent authority, same may be brought to earlier level after reconsideration with the approval of Competent Authority and then tender may be invited in Jan, 2022 onwards.

Where tenders have been invited on reduced MRLF:

- In such a scenario, financial bid may be opened:

- if the quote received is equal to or more than the Original MRLF (without reduction), the same may be processed as per codal procedure.

- If the quote received is lesser than the original MRLF (without reduction), the same may be considered on NPV basis and if differences is within 10% with original MRLF then it can be considered or else tender may be cancelled & fresh tender be initiated post 31.12.2021."

(emphasis supplied)

e. Thereafter, to the shock of the Petitioner, the Respondent No. 1 vide Letter dated 24.11.2021, cancelled the RFP in question ("Impugned Letter"), citing the following reason:

"... Your proposal for above RFP has not been considered by Competent Authority as per CHO Commercial Circular No. 42 I 2021 dt.28.09.2021" "Guidelines in respect of tenders for commercial contracts having periodicity of Three Years or more" Hence, the RFP. No. 202l_AAJ_79928_1 is being cancelled due to administrative reason and fresh RFP will be invited as per guideline for CHQ."

f. Aggrieved by the decision of the Respondent No. 1 to cancel the LOAI, and issue the Impugned Letter, the Petitioner has filed the instant Writ Petition.

3. In sum and substance, it is the contention of the Petitioner that the decision of the Respondent No. 1 to cancel the RFP is irrational, illegal and unlawful. Consequently, it has been p