2025 Supreme(Gau) 2356

THE GAUHATI HIGH COURT, (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
DEVASHIS BARUAH, J.
Tapash Lodh Roy, S/o. Late Subodh Lodh Roy – Petitioner 
Versus
The State Of Assam, Represented By The Secretary, Government Of Assam, Department Of Housing And Urban Affairs And Ors. – Respondents 
WP(C) No.1572 of 2025
Decided On : 15-07-2025

Administrative authorities cannot cancel a tender process based on the lowest bid being 'too low' in the absence of a predefined viability range, unless such decision is supported by objective analysis and prior consultation with the bidder to ensure fairness and transparency in public contracting.

Headnote:(A) Constitution of India - Article 14 - Administrative Law - Tender Process - Cancellation of tender - Failure to specify viability range in bid documents - Requirement of objective evaluation and transparency in administrative decision-making.

(B) Judicial Review - Tender matters - Powers of constitutional courts - Courts should refrain from substituting their own opinion for that of the technical authority but must intervene when the decision-making process is vitiated by arbitrariness, irrationality, or perversity - Where tender conditions do not stipulate a viability range, the rejection of the lowest bid solely on the ground of being 'too low' without any objective assessment or discussion with the bidder is unfair, unreasonable, and violative of the principle of legitimate expectations. (Paras 22, 25, 26, 27, 28)

Facts of the case:
A public tender was initiated for construction works. The petitioner participated and emerged as the lowest bidder for several works. The authorities subsequently cancelled the entire tender process and invited fresh bids, citing that the rates quoted by the lowest bidders were too low to maintain the quality of the work. The petitioner challenged the cancellation, arguing that the original tender documents contained no mention of any viability range and that the rejection was an arbitrary attempt to favor other participants.

Findings of Court:
The court observed that the tender documents lacked any provisions regarding a viability range. The authorities failed to provide any objective analysis or records justifying why the quoted rates were insufficient for the required quality of work, nor did they hold any preliminary discussions with the lowest bidder to verify feasibility. The decision was found to be based on an ad-hoc, subjective determination.

Issues: The main issues were whether the tendering authority has the power to cancel a tender process solely based on the lowest bid being 'low' in the absence of a defined viability range, and whether the failure to consult the bidder regarding the feasibility of the work rendered the cancellation arbitrary.

Ratio Decidendi: The court ruled that if a viability range is not prescribed in the tender documents, the authority cannot arbitrarily reject a bid based on subjective notions of 'low rates.' An administrative decision to cancel a tender must be grounded in objective, recorded reasons that demonstrate a failure of feasibility or quality. Absent such transparency, the cancellation constitutes an unreasonable exercise of power.

Result: Writ petition allowed. The cancellation notice and the re-tender process were quashed. The authorities were directed to re-evaluate the lowest bids and hold discussions with the petitioner regarding feasibility before proceeding in accordance with the law.