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2026 Supreme(Jhk) 607

2026 JHHC 9658
IN THE HIGH COURT OF JHARKHAND AT RANCHI
M.S. SONAK, C.J, RAJESH SHANKAR, J.
M/s. G.S. Enterprises - Petitioner
Versus
The State of Jharkhand, through its Secretary, Agriculture, Animal Husbandry and Cooperative Department - Respondent
W.P. (C) No. 2914 of 2025
Decided On : 06-04-2026
Advocates Appeared :
For the Petitioner : Mr Salona Mittal, Advocate, Mr Yashdeep Kanhai, Advocate, Mr Sourav K. Jha, Advocate, Mr Arya Vardhan Singh, Advocate, Ms Divya Chaudhary, Advocate
For the Respondent : Mr. Piyush Chitresh, AC to AG

Advocates:
For the Appellants/Petitioners: Salona Mittal, Yashdeep Kanhai, Sourav K. Jha, Arya Vardhan Singh, Divya Chaudhary
For the Respondents: Piyush Chitresh

Public authorities in tender processes cannot invoke unfettered discretion to ignore contractual obligations. Once a mechanism for matching the lowest bid is established in tender conditions, the authority must apply it consistently and cannot arbitrarily reject participants without reasoned justification.

Headnote:(A) Administrative Law - Tender and Contract - Public Tender - Fairness and Reasonableness - Interpretation of tender clauses providing for empanelment of qualified bidders at the lowest quoted rate - Such clauses must be construed harmoniously and do not vest unfettered or unchanneled discretion in the tendering authority - Once a procedure for matching rates is clearly stipulated in the tender document, the authorities are bound to follow the process consistently and transparently. (Paras 20-23, 26)

(B) Judicial Review - Administrative Action - Arbitrariness - Volte-face by public authorities in contractual matters - A decision to rescind an earlier acceptance of a bid without providing valid, distinct reasons violates the requirement of reasoned decision-making and constitutes an arbitrary use of power. (Paras 25, 28)

Facts of the case:
The petitioner participated in a tender for the supply of equipment, wherein the conditions permitted technically qualified bidders to match the lowest quoted rate for a portion of the supply order. The petitioner expressed willingness to match the lowest rate and was initially notified of its bid acceptance. Subsequently, the authority reversed its position and rejected the bid without stating specific reasons, leading to a challenge in the writ jurisdiction.

Findings of Court:
The court clarified that the discretionary power invoked by the authority was not absolute. The failure to adhere to the tender conditions regarding the empanelment of bidders who matched the lowest rate, coupled with the lack of recorded reasons for deviating from the earlier acceptance, rendered the authority’s action arbitrary.

Issues: Whether the tender conditions granted the authority unfettered discretion to deny the empanelment of participants who matched the lowest quoted rate; and whether the sudden rejection of the petitioner’s bid, after prior signaling of acceptance, was legally sustainable.

Ratio Decidendi: Public authorities are constrained by the rule of law and cannot exercise contractual discretion in a manner that is unchanneled, arbitrary, or devoid of reason. Contracts awarded by the state must demonstrate transparency, and where specific clauses for empanelment exist, those must be applied fairly to all qualified participants.

Result: Petition allowed; the communication rejecting the bid was quashed, and the respondents were directed to comply with the tender provisions.

Table of Content
1. procedural management and final disposal of writ petitions. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. contractual obligations arising from tender conditions and prior court directions. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
3. parties' contentions regarding tender authority discretion. (Para 15 , 16 , 17 , 20)
4. judicial intervention and preservation of status quo via interim orders. (Para 18 , 19)
5. harmonious construction of tender clauses and prohibition of arbitrary administrative reversals. (Para 21 , 22 , 23 , 24 , 25 , 28 , 29)
6. public authorities lack unfettered discretion in contractual awarding processes. (Para 26 , 27 , 30)
7. issuance of writ of mandamus for tender contract compliance. (Para 31 , 32)

JUDGMENT :

1. Heard the learned counsel for the parties.

2. Mr Salona Mittal, learned counsel for the petitioner, states that in terms of this Court’s order dated 17.11.2025, the 3rd respondent has been duly served. An affidavit of service has also been filed. Despite service, however, the 3rd respondent has not chosen to appear in this matter.

3. I.A. No. 14673 of 2025, seeking leave to amend the petition to challenge the e-mail communication dated 10.10.2025 issued by the 1st and 2nd respondents during the pendency of this petition, purporting to reject the petitioner’s bid, is allowed.

4. Necessary amendments to be carried out forthwith.

5. Admit.

6. At the request of and with the consent of the learned counsel for the parties, this petition is taken up for final disposal. Even otherwise, by order dated 17.11.2025, the rule was made returnable in this matter on 25.11.2025.

7. The petitioner, in the original petition, had applied for a writ of mandamus to direct the 1st and 2nd respondents to accept the petitioner’s bid for supply of Paneer and Khowa making units in different districts of Jharkhand State and place proportionate orders for supply especially considering the fact that the petitioner had matched the price bid of the 3rd respondent, who was adjudged as L-I bidder in terms of Clauses 5.8 and 5.9 of the Notice Inviting Tender (NIT).

8. The above relief was claimed by the petitioner, inter alia, based upon e-mail communication dated 20.06.2025 issued on behalf of the 1st and 2nd respondents to the petitioner, intimating that its bid had been accepted during the financial evaluation by the duly constituted Committee. After the institution of this petition, however, on behalf of the 1st and 2nd respondents, yet another e-mail dated 10.10.2025 was issued to the petitioner informing that its bid had not been selected for the award of the contract. Therefore, the petitioner was permitted to amend the petition to challenge the e-mail communication dated 10.10.2025.

9. In the present case, admittedly, the 3rd respondent was adjudged the lowest bidder, or the L-I bidder, by the Tender Evaluation Committee, which met on 27.03.2025. The 3rd respondent had quoted Rs. 94,500/- per unit, and the petitioner had quoted Rs. 95,000/- per unit. There was a 3rd bidder who failed to attend on the appointed date and offer a demonstration of its product. Thus, only the financial bids of the petitioner and the 3rd respondent were opened and evaluated by the Tender Evaluation Committee on 27.03.2025.

10. In support of the relief claimed in this petition, the petitioner relies on Clauses 5.8 and 5.9 of the NIT, which read as follows:-

“5.8 The purchase committee at its sole discretion has the right to empanel one or more technically qualified bidder(s) who agree to supply on the Li rate, to enable the Dairy Directorate to ensure the supply of the required quantity of the said items on time.

5.9 The technically qualified bidder(s) quoting the lowest i.e. Li rate shall be finally selected at the financial bid stage and this Li bidder shall be termed as "Li selected bidder". Other technically qualified bidder(s) shall be given the opportunity to match with L₁ rate. In case other technically qualified bidder(s) give consent to supply the i

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2026 Supreme(Jhk) 607

Cases Referred (1)