The cancellation of a Letter of Intent without notice or justification violates principles of natural justice; a fair inquiry is imperative before withdrawing awarded contracts.

JUDGMENT :

Jyotsna Rewal Dua, J.

1. Grievance in this petition is to the cancellation of Letter of Intent eight months after the same was issued to the petitioner-company.

2. Facts

2(i) In July 2021, the respondents invited an Expression of Interest from the eligible and interested agencies for complete solution of e-Point of Sale (ePoS) devices fully equipped with Iris and option of integration of weighing scale. Petitioner alongwith 17 other agencies participated in the meeting of Expression of Interest. 2(ii) For the subject matter, the respondent invited e-tenders for the first time on 20.12.2021. Four Companies, including the petitioner and one M/S Linkwell Telesystems Private Limited (Brand Name Visiontek), participated in the tender process. All the participating Companies failed to qualify the technical standards.

The tender was cancelled on 21.01.2022.

2(iii) The respondents invited 2nd e-tender on 28.01.2022. Five Companies including the petitioner and M/S Linkwell Telesystems Private Limited participated in the bidding process. This tender met the same fate as was of the first tender. It was cancelled on 22.02.2022.

2(iv) The 3rd tender was invited on 23.02.2022. Here again same five Companies which were there in the 2nd tender, participated. The petitioner Company was found to have satisfied the laid down technical specification criteria. However, being single qualified bidder, the Government advised for cancelling the tender for ‘giving equal opportunity amongst the participating bidders’. The tender was accordingly cancelled on 24.03.2022.

2(v) The tender was invited for the 4th time on 25.03.2022. This time four Companies, including the petitioner and M/S Linkwell Telesystems Private Limited participated. The petitioner again qualified the technical bid. The State Government on 24.05.2022 approved for opening petitioner’s financial bid. Petitioner’s financial bid was opened on 7.06.2022 and negotiations followed. Eventually Letter of Intent was issued in favour of the petitioner on 02.09.2022. In terms of the Letter of Intent, petitioner was selected to supply, install, maintain ePoS devices with Iris integration and developing SLA/ePoS monitoring tool, etc. to implement Aadhaar enabled Public Distribution System in the respondents-State for five years subject to fulfillment of pre-requisites and compatibility of proposed devices with the NIC software. In the Letter of Intent the petitioner was requested to ensure compliance to following in co-ordination with NIC, HP:-

“1. Testing/compatibility test, etc. of proposed devices, preferably at Hyderabad, in the office of NICSI, as discussed in the meeting held on 26.07.2022.

2. After completing all codal formality at point No. 1, the live demo of the upgraded ePOS device with the software and application of NIC will be given by your agency at the Directorate of FCS&CS, HP.

3. After the successful demonstration of the upgraded ePOS devices as per the specification mentioned in the tender document, the agreement will be signed with your agency and final award letter will be issued.

4. Also, as mentioned in the tender document, please indicate the MRP/Landing co st of the ePOS device and other major components.”

2(vi) The respondents called up on the petitioner on 19.09.2022 to start providing ‘new ePoS devices equipped with Iris scanners workable in current software on existing rates alongwith necessary training to Fair Price Shop (FPS) holders in a phased manner and to complete the task within extended period of contract so that department may switch to new system after December, 2022 with new/revised rates’. The petitioner responded vide its letter dated 20.09.2022 by stating that it has already scheduled to commence with a pilot batch of deployment of ePoS devices along