The cancellation of tenders must be supported by concrete evidence to avoid arbitrariness, ensuring compliance with Article 14's principles of fairness and transparency.

1. The proceedings issued by the 5th Respondent No. SE / SRBC - 3 / Ndl / DB / D1 / F.P. / 12/320 M dated 18-12-1998 rejecting the tender of the petitioner is assailed in this writ petition.

2. The relevant facts leading to the filing of the writ petition are as follows :
The World Bank has released certain funds to the Government of Andhra Pradesh towards the construction of Irrigation Projects. Accordingly, various irrigation projects were notified by the Government for construction. Srisailam Right Bank Canal is one such project, which is constructed with the credit assistance with the World Bank. The 5th respondent invited National competitive Bidding on 16-10-1997 for "work of construction of Owk Reservoir Complex from Km 116.481 to Km. 119.717 of SRBC comprising of Paleru Earth Dam, Gollaleru Earth Dam with Spillway and Thimmaraj Earth Dam with Head Regulator" (hereinafter called Package XII). Number of intending bidders obtained the tender documents and submitted their respective bids to the 5th respondent. It is submitted that the Bids received in pursuance of the tender notification were scrutinized and the bid offered by the petitioner was found to be lowest and therefore the 5th respondent recommended the bid of the petitioner. It is also stated that the Chief Engineer has also recommended the case to the Commissionerate of Tenders, the 3rd respondent herein, who is the final authority in the finalisation of tenders.

3. The grievance of the petitioner is that the 3rd respondent - Commissionerate did not scrutinize the tenders and the matter was transmitted to the State Government on the directions of the State Government, and ultimately the present impugned orders are passed.

4. It is the case of the petitioner that news item was published in Vaartha Telugu Daily on 1-11-1997 that the World Bank did not agree to the request of the Government for rejection of all the bids in respect of package XII. But, however, the Government pursued the matter with the sole idea of depriving the allotment of work to the petitioner, the said action is illegal and contrary to public interest. It is also stated that on account of political rivalry, the Government has adopted such an attitude. Even in the Legislative Assembly, this matter was discussed. It is stated that the Honourable Minister for Major Irrigation reported to the House that there was no cartel and the apprehension was baseless. The petitioner submits that the impugned order is wholly illegal and bereft of reasons and also violative of the Art. 14 of the Constitution of India . It is also stated that it is not in the public interest that the bid should be cancelled. Therefore, the writ petition is laid for quashing the order and for consequential directions.

5. The Government have filed the Counter stating that under Clause 32.1 of the Information for Bidders, the Government reserves the right to accept or reject any bid and to cancel the bidding process. It was denied that on account of political rivalry, the present impugned order has been issued. In fact the sister concerns of the petitioner company was allotted a major work for constructing power project at Kondapally. But, however, it is stated by the Government that on receipt of the credible information that fraudulent practice took place in regard to the tendering process of the package XII. On investigation, it was found that the fraudulent practices had been indulged and in public interest the Government considered it necessary that the entire tendering proce