Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Jhk) 551

IN THE HIGH COURT OF JHARKHAND AT RANCHI
M.S. Sonak, C.J., RAJESH SHANKAR, J.

Terracis Technologies Limited (Formerly known as Ecentric Digital Limited), through it's Senior Manager Mr. Sajal Jain, Son of D.P. Jain – Petitioner
Versus
The State of Jharkhand – Respondent
W.P. (C) No. 5235 of 2025
Decided On : 27-04-2026

Advocates Appeared:
For the Petitioner:Mr M. S. Mittal, Sr. Advocate, Mrs Swati Shalini, Advocate
For the Respondent:Mr Ashutosh Anand, AAG-III, Mr Ashutosh Anand, AAG-III, Dr (Mrs) Vandana Singh, Advocate

A Letter of Intent does not constitute a concluded contract. High Courts will not interfere with the cancellation of a tender process for budgetary reasons, provided the decision-making process is transparent and not marked by malafides, irrationality, or suppression of material facts by the petitioner.

Headnote:(A) Constitution of India - Article 226 - Tender process - Cancellation of tender - Invitation to tender constitutes an invitation to offer - Issuance of a Letter of Intent does not create a concluded contract - Administrative authorities possess the obligation to protect public funds - Cancellation of a tender due to budgetary constraints is a valid exercise of administrative discretion. (Paras 43, 49, 53)

(B) Administrative Law - Judicial Review - Scope and ambit - The power of Court is limited to examining the decision-making process and not the merits of the decision - Judicial interference is restricted to instances of malafides, irrationality, or procedural impropriety - Administrative bodies are granted 'free play in the joints' in contractual decision-making. (Paras 45, 46, 67)

(C) Equitable Relief - Suppression of material facts - The non-disclosure of the receipt and acceptance of collected deposits without protest constitutes suppression of material facts, thereby disentitling the petitioner to equitable relief under extraordinary jurisdiction. (Paras 40, 41)

Facts of the case:
The petitioner challenged the cancellation of a tender process after being identified as the lowest bidder. The respondents held that the cancellation was requisite due to significant budgetary constraints, as the lowest bid substantially exceeded the projected project budget. The petitioner argued that the cancellation was arbitrary and asserted that a concluded contract had been established upon the issuance of a Letter of Intent. The respondents contended that the petitioner refused to engage in negotiations and subsequently suppressed the fact that the earnest money deposit had been refunded and accepted without protest.

Findings of Court:
The court concluded that the tender process remained an invitation to offer rather than a concluded contract. The decision to re-tender to ensure fiscal compliance was deemed reasoned and transparent. Furthermore, the petitioner’s failure to disclose the acceptance of the refunded deposit barred the granting of equitable relief.

Issues: Whether the cancellation of the tender process was arbitrary; whether a Letter of Intent constitutes a binding contract; and whether a writ petition is maintainable when there is suppression of material facts and the subject matter involves discretionary administrative decisions in a contractual context.

Ratio Decidendi: An administrative body is entitled to reject bids that exceed budgetary limitations to safeguard public finances, provided the decision-making process is transparent and free from malafides. A Letter of Intent does not confer a vested right for specific performance. Judicial review is inappropriate where the petitioner fails to come to court with clean hands regarding material facts.

Result: Petition dismissed.

Table of Content
1. overview of the petition, jurisdiction under article 226, and specific reliefs sought. (Para 1 , 2 , 3)
2. petitioner's argument regarding arbitrary cancellation of tender in violation of article 14 and legitimate expectation. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10)
3. respondents' defense regarding budgetary constraints, suppression of facts, and scope of judicial review. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23)
4. detailed factual background of the tendering process and the subsequent cancellation due to budget issues. (Para 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37)
5. court's initial observation on petitioner's suppression of material facts and potential acquiescence. (Para 38 , 39 , 40 , 41 , 42)
6. standard of judicial review in administrative contracts and the limitation of state financial discretion. (Para 43 , 44 , 45 , 46 , 47)
7. determination that a letter of intent does not constitute a concluded contract. (Para 48 , 49 , 50 , 51)
8. validation of the tender cancellation process as reasonable due to budgetary constraints. (Para 52 , 53 , 54 , 55 , 56 , 57)
9. application of precedents confirming the necessity of judicial restraint in tender-related matters. (Para 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65)
10. final holding that no grounds for interference existed as the decision-making process was transparent and valid. (Para 66 , 67 , 68)

JUDGMENT :

M.S. Sonak, C.J.

1. Heard Mr M.S. Mittal, learned senior counsel with Mrs Swati Shalini, learned counsel for the petitioner, Mr. Ashutosh Anand, learned AAG-III for the respondent Nos. 1 to 4, as also Dr (Mrs) Vandana Singh, learned counsel for 5th respondent.

2. At the request of and with the consent of the learned counsel for the parties, this petition was heard finally on 23.04.2026 and closed for ‘Orders’.

3. The petitioner, by invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution, has sought for the following substantive reliefs in this petition: -

“a. For issuance of appropriate writ(s)/ order(s)/direction(s), particularly in the nature of certiorari for quashing of the Intimation of Cancellation of Tender dated 21.08.2025 (Annexure-14), along with the Corrigendum for Cancellation, bearing PR Ref. No. 349383, (Annexure- 14/1), issued by the Respondent No. 4, whereby and whereunder, the respondent Authorities in a most mechanical and arbitrary manner, without assigning any cogent reasons have cancelled the NIT bearing Tender Ref.: JAPIT/HIGHCOURT-DMS/01/2025 for "Purchase, Installation, Configuration & Integration of two Server System (Live & Backup) & Other Equipment with 05 Years Comprehensive Warranty along with 24x7 Technical Manpower at Data Center of Hon'ble Jharkhand High Court, Ranchi" And,

b. For further issuance of appropriate writ(s)/ order(s)/direction(s), particularly in the nature of certiorari for quashing of the Letter No. 1719 dated 13.06.2025 (Annexure-10), issued under the sign and seal of the Respondent No. 4, whereby and whereunder despite issuance of LOI in favor of the Petitioner, the Respondent No. 4 in a most arbitrary and whimsical manner, at a belated stage, on the grounds of Budgetary Constraint has directed the Petitioner to reduce the quoted price from Rs. 30,52,16,321/- to Rs. 22,86,027,91.70/-. And,

c. For issuance of further appropriate writ(s)/ order(s)/direction(s) upon the Respondent authorities, directing them to execute the contract in furtherance of NIT bearing Tender Ref.: JAPIT/HIGHCOURT-DMS/01/2025 for "Purchase, Installation, Configuration & Integration of Two Server Systems (Live & Backup) and Other Equipment with 05 Years Comprehensive Warranty along with 24x7 Technical Manpower at the Data Center of the Hon'ble Jharkhand High Court, Ranchi," in favor of the Petitioner, inasmuch as the Petitioner has already been declared as the L-1 bidder and the Respondent authorities have issued the Letter of Intent (LOI) in its favor on 19.05.2025, purs

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2026 Supreme(Jhk) 551

Cases Referred (9)