The court clarified that no opportunity of hearing is required for the lowest bidder before cancellation of a tender notice, as no vested right exists until the bid is confirmed.

JUDGMENT :

Savitri Ratho, J.

For an authoritative pronouncement, the following questions had been referred to larger Bench on 18.11.2024 by a Division Bench of this Court in these two writ applications:

“i.) Whether the observations made by the Supreme Court in paragraph-8 of the decision in Mohinder Singh Gill vs The Chief Election Officer: AIR 1978 SC 851 has application to test the correctness of a purely administrative order by an authority, which is State within the meaning of Article-12 of the Constitution of India, cancelling a tender process before acceptance of the bid of a tenderer?

ii.) Whether there is any requirement of giving an opportunity of hearing or prior notice to the highest/lowest bidder, before cancellation of tender notice keeping in mind the settled legal position that such bidder does not acquire any vested right to have the auction confirmed in his favour on that basis alone?

iii.) Whether the Supreme Court decision in case of Sudhir Kumar Singh (supra) on the point of compliance of principles of natural justice is applicable when a tender process is cancelled prior to confirmation of tender/auction in favour of a bidder?

iv.) Whether the Division Bench in case of M/s. Bansal Infraprojects Pvt. Ltd (supra) has correctly applied the Supreme Court’s decision in case of Sudhir Kumar Singh (supra)?

v.) Whether it is permissible for the High Court exercising power of judicial review under Article 226 of the Constitution of India to direct the State or its instrumentalities to accept the bid of the lowest/highest bidder, upon interfering with the order of cancellation of tender on the ground of violation of principles of natural justice or such order not being a reasoned one?”

2. The petitioner in both these writ applications challenged the notice dated 01.03.2024 issued by the opposite party No 2 - Engineer in Chief (Civil) Odisha, cancelling the Invitation for Bids ( in short “IFB”) dated in respect of two works, issued by the opposite party No. 2 on 17.08.2023 for execution of various works and has prayed for a direction that the two works in which the petitioner has been declared as L1 ( lowest ) bidder, be awarded in its favour.

BRIEF FACTS

3. For execution of various works including “improvement such as widening and strengthening of double lane to four lane standard of Bhawanipatna/Khariar road from 3/550 KM to 19/000 KM (except 3/930KM to 4/970KM) in the district of Kalahandi under State Plan”, the petitioner had participated in the Bids and had qualified along with other bidders in the technical qualification. When the financial bids were opened on 09.11.2023, the petitioner was declared L1 bidder in respect of two works. A recommendation was made by the Office of the Engineer-in-Chief (Civil), Odisha on 23.11.2023 to the Financial Advisor-cum-Special Secretary to Government, Works Department, Odisha for consideration of approval by the Government in the Works Department as per the requirement in Note-I of paragraph 6.3.15 of the Odisha Public Works Department Code (in short the ‘OPWD Code’) (Vol-I). But by notice dated01.03.2024, the IFB in respect of both the works were cancelled.

4. The petitioner challenged the cancellation notices dated 01.03.2024, in these two writ applications, primarily on two grounds:

i) Opportunity of hearing was not afforded to it before cancelling the IFB for the two works; and

ii) The grounds of cancellation were not reflected in the order of cancellation the IFB for the two works.

5. While hearing these cases on 17.11.2024, a Division Bench of this Court after perusing the decisions of the Supreme Court relied on by the parties and a few other decisions, had recorded