In public procurement, while courts exercise judicial restraint regarding tender cancellations, an arbitrary decision-making process devoid of transparency and procedural fairness—specifically the lack of a reasoned order and opportunity of hearing—vitiates the action, justifying compensatory relief for the aggrieved bidder.

NAFR

Order on Board

Per Ramesh Sinha, Chief Justice

08-04-2026

1. Heard Mr. Jai Prakash Shukla, learned counsel for the petitioner. Mr. Prasun Bhaduri, learned Deputy Advocate General appears for the State and Mr. Pankaj Agrawal, learned counsel appearing for respondent No.5.

2. The present petition has been filed by the petitioner seeking following relief(s):-

“10.1 That this Hon'ble Court may kindly be pleased to direct the respondent authorities to call the entire records pertaining to this case.

10.2 That the Hon'ble Court may kindly be pleased to issue writ in the nature of certiorari/ prohibition/ mandamus, thereby to quash the impugned cancellation order dated 11-03-2026 of NIT 02-01-2026, fresh NIT dated 20-03-2026, to the extent it relates to questioned work after declaring it unconstitutional, illegal and arbitrary.

10.3 Hon'ble court may kindly further be pleased to direct the respondent authorities to decide pending representation dated 13-03-2026 and 23-03-2026 claiming cancellation of order dated 11-03-2026 and fresh NIT dated 20-03-2026 and further to issue work order to the petitioner pursuant to his declaration as L-1, and further to pass any order which deerns fit including cost of the petition in the interest of Justice.

3. Facts as mentioned in the petition, in brief, are that the Petitioner being an eligible contractor, participated in an e-procurement tender process initiated by the Chief Municipal Officer, Champa, vide Tender Notice dated 02.01.2026 for the work of revamping of Material Recovery Facility (MRF) in Champa, Chhattisgarh, amounting to Rs. 122.03 lakhs. The Petitioner submitted his bid under System Tender No. 182993 and was declared the lowest (L-1) bidder, quoting 5.560 percent below the PAC value. Upon completion of the tender process, only issuance of the work order and execution of agreement remained, and the Petitioner had made all necessary arrangements to commence the work within the stipulated time. However, surprisingly, the said tender was cancelled by the Chief Municipal Officer, Champa, vide order dated 11.03.2026, without issuing any prior notice or affording an opportunity of hearing. It has been further submitted that such cancellation is without jurisdiction, as the authority to cancel the tender vested with the Municipal Council and not with the Chief Municipal Officer. The Petitioner’s representations dated 13.03.2026 and 23.03.2026 seeking reasons for cancellation and appropriate relief remain undecided, while the Respondents have proceeded to issue a fresh tender dated 20.03.2026 for the same work. Being aggrieved by the arbitrary and illegal actions of the Respondents, the Petitioner has approached this Hon’ble Court.

4. Learned counsel for the petitioner submit that that the impugned cancellation order dated 11.03.2026 and the subsequent issuance of fresh NIT dated 20.03.2026 are wholly without jurisdiction, arbitrary, and in gross violation of the principles of natural justice. The Chief Municipal Officer, Champa, had no authority to cancel the tender of such value without prior approval of the Municipal Council, as the financial powers in respect of tenders exceeding the prescribed limit vest with the Municipal Council. Thus, the impugned action is void ab initio and liable to be set aside on this ground alone. It is further submitted that the financial bid was duly opened on 18.02.2026 in the presence of all bidders, wherein the Petitioner was declared the lowest (L-1) bidder, quoting 5.560 percent below the PAC value. Once the Petitioner was declared L