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2025 Supreme(Gau) 600

THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) 
MICHAEL ZOTHANKHUMA, J.
Sri Keshab Kalita, S/o. Late Rajen Kalita - Petitioner
Versus 
The State of Assam represented by the Commissioner and Secretary to the Government of Assam, Municipal Administration Department and Ors. – Respondents
WP(C) No.1801 Of 2025
Decided On : 06-05-2025

Advocates Appeared:
For the Petitioner:Mr. M.K. Choudhury, Sr. Advocate, Mr. K. Kalita, Advocate
For the Respondents:Mr. M. Chetia, Advocate, Mr. B. Chakraborty, Advocate, Mr. K.N. Choudhury, Sr. Advocate, Mr. B. Kaushik, Advocate

The rejection of higher bids in a tender process without proper justification and transparency is arbitrary and unsustainable.

Headnote:(A) Assam Municipal Act, 1956 - Tendering process - Cabinet decision dated 27.06.2024 - The petitioner challenged the settlement of Dhing Bazar with the respondent No.7, arguing that the Cabinet decision restricting bids to 10% above the Government value was not applicable to the Municipal Administration Department. The petitioner contended that the NIT did not specify such a restriction, and the rejection of higher bids was arbitrary. (Paras 2-34)

(B) Tender Evaluation - The court emphasized that the authority is not bound to accept the highest bid but must provide reasons for rejecting it. The absence of transparency and proper documentation in the tender process was highlighted. (Paras 9, 16, 32)

(C) Public Interest - The court noted that accepting higher bids could benefit public revenue, and the reasons for rejecting higher bids were not substantiated. (Paras 29, 30)

Facts of the case:
The petitioner submitted a bid for Dhing Bazar, which was higher than the respondent No.7's bid. The Cabinet decision limiting bids was claimed to be inapplicable to the Municipal Administration Department.

Findings of Court:
The court found the rejection of bids above 10% arbitrary and lacking transparency, ordering the reconsideration of all bids.

Issues: The main issues included the applicability of the Cabinet decision to the Municipal Administration Department and the justification for rejecting higher bids.

Ratio Decidendi: The court ruled that the rejection of bids without proper justification and transparency was arbitrary, emphasizing the need for openness in the tender process.

Result: The writ petition is allowed, and the settlement with the respondent No.7 is set aside.

ORDER :

(MICHAEL ZOTHANKHUMA, J.)

Heard Mr. M.K. Choudhury, learned Sr. Counsel for the petitioner assisted by Mr. K. Kalita. Mr. M. Chetia, learned counsel appears for the respondent Nos.1 & 2; Mr. B. Chakraborty, learned counsel appears for the respondent Nos.3-6, i.e., the Dhing Municipal Board, while Mr. K.N. Choudhury, learned Sr. Counsel assisted by Mr. B. Kaushik, learned counsel appears for the respondent No.7.

2. The petitioner is aggrieved with the settlement of the Dhing Bazar (Athgaon Ghat) with the respondent No.7 for a period of 1(one) year, effective from01.04.2025 to 31.03.2026.

3. The petitioner’s counsel submits that the settlement of the Dhing Bazar with the respondent No.7 by the State respondents has been based on a Cabinet decision dated 27.06.2024, made in respect of markets/bazars/hats/ghats etc. under the Zila Parishads, Anchalik Panchayats and Gaon Panchayats, wherein it has been held that a bidder can quote a maximum of 10% above the Government value/reserve price for the markets/bazars/hats/ghats etc. and any bid above 10% of the Government value would not be accepted.

4. The petitioner’s counsel submits that the petitioner along with others had submitted their bids for the Dhing Bazar, pursuant to the NIT dated 24.01.2025. In the NIT, no condition has been stipulated, which states that a bidder cannot bid higher than 10% of the Government value fixed for the Bazar. Further, the Cabinet decision which restricts submission of a bid beyond 10% of the Government value of a bazar, has been made only with regard to the bazars being run by the Panchayat Department and not in respect of the Dhing Bazar, which is run under the Municipal Administration Department.

5. The learned Sr. Counsel for the petitioner also submits that the Panchayat Department’s decision to incorporate the Cabinet decision, restricting the bids of tenderers to 10% of the Government value of the bazaars, besides not being applicable to the Municipal Administration Department, the same was to be incorporated in the Notice Inviting Tenders of the Panchayat Department only. There is no incorporation of the Cabinet decision in the present NIT dated 24.01.2025. He also submits that the petitioner has not made any written averment in the writ petition with regard to the pre-bid meeting that had been held between the tenderers and the State respondents on 11.03.2025, in relation to the NIT dated 24.01.2025, wherein there was a discussion whether there should be an extension of the last date of submission of tenders in relation to the NIT dated 24.01.2025., as the same was objected by many of the bidders, which resulted in there being no extension of the last date for submission of bids of the tenderers. The petitioner’s counsel submits that there was no discussion in the pre-bid meeting, for restricting the bids of tenderers to 10% of the Government value of the bazar.

6. The petitioner’s counsel submits that though the State respondents have a right not to select the highest bidder, reasons have to be provided for not selecting the highest bidder. In the present case, the petitioner’s bid was the second highest (H2), while the bid of the respondent No.7 was seventh highest (H7). As such, the State respondents should have given justifiable reasons for not awarding the settlement of the bazar to those persons, whose bids were th higher, instead of settling the same with the 7 highest bidder. He submits that though the petitioner’s bid is Rs.1,23,53,000/-, as against the respondent No.7’s bid of Rs.80,93,911/-, the petitioner, if selected, would have been duty bound to collect toll/taxes in terms of the prescribed rates fixed by the Dhing Municipal Board, as provided in Clause 9 of the NIT. He submits that as the reserve price/Government value of the Dhing Bazar was Rs.73,60,000/-, more revenue would flow into the Government coffers if the petitioner or H1 had been selected, which would be in public interest.

7. The petitioner’s counsel also submits t

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