Back
2025 Supreme(MP) 319
IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
Sanjeev Sachdeva, C.J., Dinesh Kumar Paliwal, J.
Rajbahdur Yadav – Petitioner
Versus
The State Of Madhya Pradesh And Others - Respondents
Writ Petition No. 22902 of 2025
Decided On : 08-08-2025
For the Petitioner:Shri R.K. Gupta and Shri S.S. Yadav, Advocates
For the Respondent:Dr. S.S. Chouhan, Government Advocate, Shri Gaurav Maheshwari, Advocate
The authority in a tender process retains the right to cancel and invite new bids, with no vested rights for the highest bidder until official acceptance occurs.
Headnote:(A) Tender Process - Rights of Bidders - Public Revenue - The authority in a public bidding process retains the power to accept or reject bids and to cancel the tender process without assigning any reason (Paras 6, 8, 10).
(B) Concluded Contract - No bidder has a vested right until their bid is accepted and the allotment letter is issued by the competent authority (Paras 9, 10, 12).
(C) Fairness in Tender Evaluation - Bidders are entitled to equality and fair treatment, but cannot insist on negotiations outside the scope of tender terms (Paras 10, 12).
Facts of the case:
The petitioner challenged the annulment of a tender process by the respondent authority after the highest bidder withdrew their bid. The petitioner, as the second-highest bidder, argued for the contract.
Findings of Court:
The authority acted reasonably in cancelling the tender and issuing fresh bids, as the new bids were higher than the petitioner’s.
Issues: Whether the petitioner had a right to the plot despite the cancellation of the tender process.
Ratio Decidendi: The court held that until there is a concluded contract, bidders have no vested rights and the authority can cancel the tender process as per its discretion.
Result: Petition dismissed.
ORDER :
Sanjeev Sachdeva, C.J.
Petitioner impugns order dated 02.04.2025 whereby the respondent No.2/Jabalpur Development Authority has decided to annul the tender and invite a fresh tender.
2. Respondent/Jabalpur Development Authority had invited public bids for auction of plot situated at Scheme number 5/14, Vijay Nagar Plot No. J- 12 measuring 1500 sq feet. Petitioner had participated in the tender process along with several other bidders. The highest bidder in the said tender process withdrew his bid. Consequently, Petitioner, who was H-2 became the H-1. The respondent/authority instead of proceeding further with the tender process decided to cancel the tender and has once again invited bids. Petitioner admittedly did not participate in the second tender process.
3. Contention of learned counsel for the petitioner is that since the highest bidder was disqualified and had withdrawn his bid, petitioner whose bid was the second highest should have been declared the highest bidder and the plot allotted to the petitioner.
4. Per contra learned counsel for respondents submits that the Tender Inviting Authority had reserved the right to accept or cancel any bid and to revoke the tender process without assigning any reason and the authorities were of the view that the tender process was not fair since the first bidder had withdrawn his bid and consequently, the tender was canceled and a fresh tender invited.
5. Learned counsel for respondent/Jabalpur Development Authority submits that in the second tender process, petitioner failed to participate and the bid now received is higher than the bid of the petitioner submitted in the first tender process.
6. Reference may be had to the advertisement dated 17.01.2025 which in clause 11 categorically stipulates that the authority reserves the right to accept or reject any bid and also revoke the tender process without assigning any reason.
7. In the instant case, the highest bidder who had submitted the bid pursuant to the said bid advertisement was disqualified as having withdrawn his bid on the ground that there was a typographical error in his bid documents. Petitioner was the second highest bidder, however, the authorities by the order dated 02.04.2025 decided to cancel the bid and invite fresh bids.
8. Clause 11 of the bid document conferred an unfettered right on the authority to cancel the tender process without assigning any reason. The authorities issued a fresh advertisement inviting fresh bids and admittedly, the bid now received is higher than the price offered by the petitioner. Petitioner also failed to participate in the said process. Consequently, the decision of the authority in canceling the bid appears to be reasonable as the authority has now got an offer higher than the offer given by the petitioner pursuant to the 1st advertisement.
9. Reference may also be had to the judgment of the Supreme Court in Haryana Urban Development Authority and others vs. Orchid Infrastructure Developers Private Limited , (2017) 4 SCC 243 wherein the Supreme Court considering the cancellation of a bid of the higher bidder has inter alia held as under:
"13. It is a settled law that the highest bidder has no vested right to have the auction concluded in his favour. The Government or its authority could validly retain power to accept or reject the highest bid in the interest of public revenue. We are of the considered opinion that there was no right acquired and no vested right accrued in favour of the plaintiff merely because his bid amount was highest and had deposited 10% of the bid amount. As per Regulation 6(2) of the 1978 Regulations, allotment letter has to be issued on acceptance of the bid by the Chief Administrator and within 30 days thereof, the successful bidder has to deposit another 15% of the bid amount. In the instant case, allotment letter has never been issued to the petitioner as per Regulation 6(2) in view of non-acceptance of the bid. Thus, there was no concluded contract. Regulat
