The cancellation of a tender by an authority is valid if based on reasonable grounds related to competition and transparency, despite claims of contract formation post-offer acceptance.

JUDGMENT

Hima Kohli, J. Both the petitioners are aggrieved by the communications dated 19.06.2020, issued by the respondent/South Delhi Municipal Corporation (in short, 'SDMC'), informing them that the Competent Authority had decided to recall the entire e-auction tendering process in respect of NIT No.1176 dated 16.03.2020, for e-auctioning six multilevel parking sites within the SDMC jurisdiction. As a result thereof, the offers communicated to the petitioners on 15.05.2020, declaring them as H1 bidders in respect of two multilevel parking sites each, were withdrawn and the advance monthly licence fee and security deposit/performance guarantee deposited by them were directed to be returned.

2. As the factual matrix in both the cases is almost similar, for the sake of convenience, we shall be referring to the facts narrated in W.P.(C) 3811/2020.

3. On 16.03.2020, the respondent/SDMC took steps to invite bids from eligible bidders for regular allotment of six authorized multilevel parking sites in its jurisdiction. In response to the NIT, the petitioner submitted his bids and on 28.04.2020, he was declared as the successful bidder in respect of two multilevel parking sites namely, Hauz Khas (with surrounding surface parking) multilevel underground parking and Kalkaji multilevel parking. On 15.05.2020, the respondent/SDMC issued Offer letters to the petitioner informing him that the Tender Evaluation Committee had found him to be the H1 bidder, eligible to be offered the aforesaid sites for a period of five years (3 years + 2 years) and that he was required to submit the documents mentioned in the said letter along with the requisite fee. Vide email dated 18.05.2020, the petitioner accepted the terms of the Offer letters and proceeded to make requisite compliances, as directed. On 29.05.2020, the petitioner also furnished bank guarantees to the respondent/SDMC in respect of both the sites.

4. Upon failing to hear from the respondent/SDMC thereafter, the petitioner submitted a representation dated 22.06.2020 to the respondent/SDMC, requesting that possession of the parking sites be handed over to him. However, on the very same day, at 11:30 PM, the petitioner received two emails from the respondent/SDMC informing him that it had decided to withdraw the communications dated 15.05.2020 and refund the licence fees and security deposits. For purposes of ready reference, the content of one of the communications dated 19.06.2020 is reproduced hereinbelow:

"This has reference to the bid process bearing NIT No. 1176 dated 16.03.2020 regarding e-auction of parking sites at Kalkaji Multilevel underground parking. In terms of clause 12 of tender document, the Competent Authority has decided to recall the entire e-auction tendering process by cancellation of the above-mentioned bid process.

In view of above, the offer communicated vide this office letter No.AC/RP Cell/SDMC/2020/D-29 dated 15.05.2020 is hereby withdrawn & the advance MLF amounting to Rs.9,03,681/- & the Security deposit/performance guarantee equal to Rs.25 Lakh are returned herewith.

Please acknowledge the same.

This issues with the prior approval of the Competent Authority."

5. It is not in dispute that though the aforesaid communication bears the date of 19.06.2020, the same was received by the petitioner as an enclosure to the email dated 22.06.2020, timed as 11:30 PM, addressed by the Assistant Commissioner, (RP Cell), SDMC. Aggrieved by the impugned cancellation letters issued in respect of both the parking sites, the petitioner has approached this court, seeking directions to the respondent/SDMC to hand over possession of the two parking sites in respect whereof he was declared as H1 in terms of the Offer letter dated 18.5.2020.

6. Mr. Chandhiok, learned Senior Advocate appearing for the petitioner commenced his submissions by narrating the following sequence of events. Seven bids were received by the respondent/SDMC in terms of the NIT issued on 16.03.2020.