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2026 Supreme(Online)(J&K) 833
IN THE HIGH COURT OF JAMMU AND KASHMIR AND LADAKH AT JAMMU
Sanjay Parihar, J
Spbl Energy Pvt. Ltd. – Appellant
Versus
Jammu Power Development Corporation Ltd. – Respondent
WP (C) No. 357/2023 | CCP (S) No. 115/2023
Important Points
Subject
Contract Law - Tender and Procurement
Act Referred
Headnote
Facts of the case:
The petitioner participated in an e-Tender for infrastructure development and was declared the L-1 bidder. Subsequently, complaints were received alleging the petitioner had been blacklisted by various entities for financial irregularities and submission of forged bank guarantees. Despite internal meetings, the respondent cancelled the tender citing legal opinion and public interest, leading to the current writ petition.
Findings of Court:
The court observed that the petitioner indeed remained under the shadow of blacklisting when the tender process occurred and failed to dispel reasonable doubts regarding their eligibility. The cancellation was found to be a bona fide exercise of administrative power to protect the public interest and ensure the integrity of the project.
Issues: Whether the cancellation of the Letter of Intent was arbitrary, in violation of principles of natural justice, and lacked valid reasons.
Ratio Decidendi: Contractual awarding is a commercial function where principles of natural justice remain at a distance. If an administrative decision is bona fide and in public interest, the court will not interfere, even if there is procedural aberration, provided the decision is not palpably unreasonable or manifestly arbitrary.
Result: Writ petition dismissed.
For the Appellants/Petitioners: Sunil Sethi, Ankesh Chandel
For the Respondents: Amit Gupta, Sumit Moza, Khem Chand, Jatinder Choudhary
| Table of Content |
|---|
| 1. brief overview of tender dispute and initial grounds of challenge. (Para 1 , 2 , 3 , 4 , 5) |
| 2. respondent's defense regarding petitioner's disqualifying history (blacklisting and fraud). (Para 6 , 7 , 8 , 9) |
| 3. petitioner's arguments regarding natural justice and doctrine of legitimate expectation. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 4. respondent's reliance on limited scope of judicial review in commercial tender matters. (Para 17 , 18 , 19) |
| 5. application of precedents defining narrow scope of judicial intervention in state procurement. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27) |
| 6. analysis of petitioner's eligibility status and material suppression. (Para 28 , 29 , 30 , 31 , 32) |
| 7. final reasoning confirming legality of tender cancellation for public interest and dismissal of petition. (Para 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43) |
ORDER (ORAL)
1. Respondent No. 1, Jammu Power Development Corporation Limited (JPDCL), issued an e-Tender bearing No. CE/PJ/JPDCL/RDSS/LR/ED KATHUA/07 (PKG-06) dated 27.07.2022 for the Development of Distribution Infrastructure in Electric Division Kathua (ED-Kathua, Sub Divisions Hiranagar and Kathua), Projects JPDCL, Jammu Province, Union Territory of Jammu & Kashmir, under the Revamped Distribution Sector Scheme (RDSS).
2. The petitioner participated in the aforesaid tender process and, as per the pleadings, emerged as the lowest (L-1) bidder. While the process for finalization of the tender was underway, a complaint was submitted by one Mr. Rajeev Talreja, son of Shri Prakash Chandra Talreja, resident of Kanpur, Uttar Pradesh, who is stated to be a former associate of the petitioner. In the complaint, it was alleged that the petitioner-company had already been blacklisted for having indulged in financial irregularities.
3. Pursuant to the said complaint, the respondents convened a meeting in which both the representative of the petitioner and the complainant were afforded an opportunity of being heard. Upon consideration of the matter, the respondents granted clearance in favour of the petitioner and directed it to furnish an affidavit undertaking that, in the event any document submitted by it was subsequently found to be false, forged, or otherwise contrary to the facts, or if any adverse order was passed against it, the Letter of Intent (LoI) issued in its favour would stand cancelled ab initio.
4. According to the petitioner, following the meeting held on 22.11.2022, there remained no impediment to the award of the contract, and the petitioner legitimately expected the issuance of the Letter of Intent as the successful L-1 bidder. However, to the petitioner's surprise, Respondent No. 1, vide communication No. CE/PJ/6870-74 dt. 03.02.2023, cancelled the tender process. The impugned communication states that the cancellation was effected pursuant to the legal opinion rendered by the Department of Law, Justice and Parliamentary Affairs (DLR) and under the directions of the competent higher authorities, without assigning any further reasons.
5. The petitioner has thrown a challenge to the said cancellation order by this writ petition, inter alia on the ground that the order of cancellation is totally illegal, arbitrary and in flagrant violation of principles of natural justice as no adequate opportunity of being heard was ever provided to him following the meeting dated 22.11.2022. The order sans any reason. Since, the reasons are not there, as such, the order suffers from mala fide exercise of power. The process adopted by the respondent in ordering cancellation of the tender is arbitrary, irrational and the decision is such which no responsible authority, acting reasonably and in accordance with law could have arrived at. The petitioner, therefore, has through the medium of the writ petition seeks writ of certiorari for quashing the cancellation order and with writ of mandamus calling upon the respondents to issue Letter of Allotment (LoA) in his favour.
6. Th
