Cancellation of tender where L-1 bid within 5% limit, suspecting cartel without evidence, and inconsistent with prior awards exceeding limit, held arbitrary, violative of Article 14 warranting judicial interference.

Judgment :

Jiya Lal Bhardwaj, J.

The challenge in the present Writ petition is to the office order dated 09.07.2025, passed by respondent No.4, who has communicated the decision taken by respondent No.2, whereby the tender process issued for up-gradation of Tikkar Jarol Gahan Nankhari Khamadi Road Km.0.000 to 52.000 has been returned unapproved, though the petitioner was the lowest bidder and L-1 in the financial bid.

2. Shorn of unnecessary details, the key facts for adjudication of the issue in the present petition are that the respondents-State had invited tenders for the aforementioned work vide tender No.PW/RMP/TA/2024-15561-62 dated 25.03.2025. Thereafter, respondent No.2 issued corrigendum(s) and dates were extended to submit the applications till 09.05.2025.

3. The eligible persons as per the conditions of tender document applied for award of the aforementioned work and since the petitioner was eligible, he too applied well before the last date fixed to receive the applications.

4. As many as nine bidders including the present petitioner participated in the bid process and out of them, only five bidders had qualified in the technical bid. Since the petitioner was qualified in the technical bid, he was held responsive. Thereafter, the respondents-State opened the financial bids on 10.06.2025 and the petitioner was found to be the lowest bidder (L-1) and the amount quoted by him was 3.91% above the amount put to the tender.

5. The total amount for execution of the work was Rs.52,40,32,232/- and the petitioner being the lowest bidder had quoted an amount of Rs.54,45,21,892/-, which is 3.91% above the amount put to tender.

6. However, when the petitioner despite being found lowest bidder was not awarded the contract, he made a representation before respondent No.2 on 23.06.2025 to expedite the process of awarding him the tender, which was duly received by the authority concerned, but instead of accepting his request, the entire tender process was cancelled and fresh tenders were ordered to be called vide office order dated 09.07.2025, which is under challenge in the present petition.

7. The grievance of the petitioner as highlighted by Mr.R.K Bawa, learned Senior Advocate, duly assisted by Mr.Nimish Gupta, Advocate, is to the effect that the respondent- State has adopted the CPWD Works Manual, 2019 and other publications of CPWD in Himachal Pradesh Public Works Department. As per revised point No.12 of the salient features of CPWD Works Manual alongwith other publications in HPPWD, adopted by the respondent-State, the tenders will be invited on the basis of working estimates approved on market rates and shall be awarded to the lowest bidder without any negotiation of his quoted rates, if the tendered amount is within 5% of the amount put to tender.

8. The learned Senior Counsel has laid emphasis on the letter dated 07.10.2021 addressed by the Principal Secretary (PW) to the Government of Himachal Pradesh to the Engineer-in-Chief, HPPWD, wherein point No.12 has been incorporated. He contended that since the rates quoted by the petitioner is within the permissible limits of 5% of the amount put to tender, the action of the respondents-State to not approve the tender of the petitioner and cancel the process is arbitrary and unreasonable inasmuch as no cogent reasons have been assigned to recall the fresh tender.

9. The learned Senior Counsel has also drawn attention of this Court on the various contracts having been awarded by