The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 12717 of 2024 RAPS Infratech Pvt. Ltd. & Another …. Petitioners State of Odisha and others …. Opposite parties -Versus- Advocates appeared in this case: For Petitioners : Mr. Goutam Mukherjee, Senior Advocate Mr. A. Mukherjee, Advocate For Opposite Parties : Mr. Debasis Tripathy, Additional Government Advocate CORAM: HON’ BLE THE CHIEF JUSTICE AND HON’BLE MR. JUSTICE MURAHARI SRI RAMAN J U D G M E N T ---------------------------------------------------------------------------------- Date of Hearing : 9th July, 2025 Date of Judgment : 26th September, 2025 ---------------------------------------------------------------------------------- HARISH TANDON, CJ. 1. The writ petition was initially filed for writ of mandamus alleging inaction on the part of the authorities in issuing the work order despite having declared the petitioner (s) as the successful W.P.(C) No. 12717 of 2024 Page 1 of 17 bidder in a tender call notice issued by the Works Department, Government of Odisha for widening and strengthening of Bhawanipatna-Gunupur-Kasipur road (SH-44) from 2/500 to 13/095 in the district of Kalahandi under State Plan. Subsequently, the writ petition was amended as the relief claimed therein becomes inappropriate because of the subsequent events and the challenge was made to an order of cancellation of the tender dated 29th November, 2024. 2.
Decision
The facts emanating from the writ petition are adumbrated hereinafter. 2.1 The petitioner no.1, being a special class contractor, participated in the said tender and emerged successful on 2nd February, 2024. Subsequently the decision of the tender committee was sent to the Government for its approval, which was kept in abeyance, which constrained the petitioners to move before this Court by filing the instant writ petition. It is pleaded that the reason for deferment in granting the approval was founded upon the fact that a Special Leave Petition was preferred by the State Government assailing the order dated 22nd August, 2023 passed in W.P.(C) No. 19439 of 2023 by this Court. W.P.(C) No. 12717 of 2024 Page 2 of 17 2.2 Before we proceed further, it would be relevant to narrate the facts for initiation of the said writ petition. The petitioner No.1 participated in Deobanda Chandahandi Road tender in the district of Nabarangpur under NABARD Assistance in response to Bid Identification dated 22nd December, 2021 and was declared successful therein. The petitioner No.2 who was not taking an active participation in the affairs of the firm because of his medical incapacitation, the verification of the documents could not be done within the time stipulated therein, which resulted into the cancellation of the bid and imposition of a blacklisting order. The said order was challenged in the said writ petition [W.P.(C) No. 19439 of 2023] before this Court which was decided in favour of the petitioner, as the order of blacklisting dated 16th June, 2023 was quashed on the ground of violation of principle of natural justice. Despite the blacklisting order having quashed and set aside by this Court, the portal remained blocked for a considerable period, which was subsequently withdrawn in terms of the order of this Court passed at a later point of time. 2.3 According to the writ petitioners, the reason for keeping abeyance of the approval in relation to the tender involved in the W.P.(C) No. 12717 of 2024 Page 3 of 17 instant writ petition was the pendency of the Special Leave Petition filed against the order passed in the earlier writ petition, wherein the blacklisting order was quashed and set aside, which would be evident from the discussions made in the consecutive meetings dated 13th February, 2024 and 14th March, 2024. It is further stated that though the notices were issued in the said Special Leave Petition, but there was no order of stay passed therein by the apex Court, the decision to keep the approval in abeyance is illegal, unjustified and unreasonable. Several orders were passed in the writ petition, yet the decision was not taken by the Government until 29th November, 2024 by which the said tender in question was cancelled. 2.4 An application for amendment was taken out as the initial prayer for issuance of the work order becomes inappropriate because of the cancellation order passed by the authority and sought to incorporate the factum relating to the cancellation order and the relief was also moulded to the effect that the said cancellation order is illegal, arbitrary and unsustainable in law. The said amendment application was allowed having necessitated by a subsequent event not only permitting the necessary averments W.P.(C) No. 12717 of 2024 Page 4 of 17 to be incorporated in the pleading, but also the relief claimed therein. 2.5 Undeniably the counter affidavits were invited from the contesting opposite parties on various occasions and it is the specific stand taken by the contesting opposite parties that since the petitioner was blacklisted and the order of the Division Bench quashing and setting aside the blacklisting order being the subject matter of the Special Leave Petition filed before the Apex Court, which is in seisin thereof, the competent authority ultimately decided to cancel the tender. However, in course of the hearing of the instant writ petition, it has been brought on record that the Special Leave Petition filed by the State stood dismissed on 23rd April, 2025 by the Apex Court. 3. On the conspectus of the aforesaid facts, the point involved in the instant writ petition is whether the action of the authorities in cancelling the tender on the ground that it has been awarded to a blacklisted contractor is sustainable in law. 4. Mr. Mukherjee, learned Senior Advocate appearing on behalf of the petitioners, vehemently submits that the authorities W.P.(C) No. 12717 of 2024 Page 5 of 17 have arbitrarily cancelled the tender after declaring the petitioner no.1 as successful bidder solely on the ground that the petitioner no.1 was a blacklisted contractor despite the fact that the order blacklisting the petitioner no.1 was quashed and set aside, which is not tenable and/or sustainable in law. He strenuously argued that mere pendency of a Special Leave Petition before the Supreme Court against the order of the Division Bench of this Court wherein the blacklisting order was quashed and set aside is unjustified, arbitrary and mala fide. He further submits that mere pendency of the Special Leave Petition without any interim order of stay operation of the order impugned therein cannot be a basis for cancelling the tender. He arduously submits that said Special Leave Petition was subsequently dismissed by the Supreme Court, resulted into an affirmation of the Division Bench order of this Court and, therefore, the cancellation on the ground that the said tender was awarded to a blacklisted contractor is unjust, illegal and liable to be quashed and set aside. 4.1 Mr. Mukherjee, relies upon a recent judgment of the Apex Court delivered in the case of Subodh Kumar Singh Rathour v. The Chief Executive Officer and others reported in AIR 2024 SC W.P.(C) No. 12717 of 2024 Page 6 of 17 3784 in support of his contention that there is no fetter on the part of the writ court in quashing and setting aside the decision of the authority in cancelling the tender being an act of arbitrariness, unfairness and violative of Article 14 of the Constitution of India. 5. Per contra, Mr. Debasish Tripathy, Additional Government Advocate submits that mere declaring a person a successful bidder does not confer any vested right in awarding works contract and, therefore, the decision of the authority in cancelling the tender is not amenable to be interfered under Article 226 of the Constitution of India. He further submits that while the Special Leave Petition was pending before the Apex Court, the authorities decided to cancel the contract as the blacklisting order even though quashed by the Division Bench of this Court was sub judice. He lastly submits that the writ court should refuse to entertain a writ petition against the decision of the authority to cancel the tender as it is within the domain of the said authority to take a decision in this regard. 6. The facts succinctly jotted down hereinbefore are explicit that the petitioner no.1 was permitted to participate in the tender floated by the authority for the aforementioned work and emerged W.P.(C) No. 12717 of 2024 Page 7 of 17 successful therefrom. Though there is no stipulation in the tender call notice for approval of the Government, the same was sent by the tender committee and was taken into consideration on several occasions, but was deferred as the Government decided to challenge the order passed by this Court quashing and setting aside the blacklisting order imposed upon the petitioner. Undeniably, the notice was issued by the Apex Court, but no interim order suspending the operation of the judgment and/or order passed by this Court in the said writ petition was passed. Amidst pendency of the Special Leave Petition, the impugned order of cancelling the tender was passed, but during pendency of the instant writ petition, the said Special Leave Petition stood dismissed, thereby affirming the Division Bench order of this Court. The resultant effect of the dismissal of the Special Leave Petition leads to an inescapable conclusion that the blacklisting order after having quashed and set aside does not remain operative and the petitioner no.1 cannot be regarded as a blacklisted contractor. 7. We could have safely proceeded to decide the initial relief claimed in the writ petition after the dismissal of the Special Leave Petition, had not an order of cancelling the tender was passed by W.P.(C) No. 12717 of 2024 Page 8 of 17 the competent authority and, therefore, we feel it prudent to determine as to what extent the writ jurisdiction against the cancellation order could be invoked. 7.1 Over a period of time there is paradigm shift in the approach of the Courts of the country in relation to the contracts and disputes arising and/or emanating therefrom. Traditionally, the dispute relating to the violation of the terms and conditions of a contract given by a State or its instrumentalities can be adjudicated by the Civil Court. It was consistent stand taken by the apex Court in the judgement rendered in C.K. Achuthan v. State of Kerala reported in AIR 1959 SC 490 and in the era of Bareilly Development Authority & Anr. v. Ajai Pal Singh & Ors reported in (1989) 2 SCC 116. During such period, it was the consistent views expressed in a catena of decisions that even if in relation to a public contract any grievance of a contracting party that the same is broken and/or violated, it is desirable that the party should approach the Civil Court. Though few judgments of the Apex Court in the interregnum highlighted the importance of exercise of writ jurisdiction as a pressing need on the fast changing society and the economic development taking place rapidly, to evolve the W.P.(C) No. 12717 of 2024 Page 9 of 17 new principles and new norms are laid down to tackle such problems. However in Mahabir Auto Stores & Ors v. Indian Oil Corporation reported in (1990) 3 SCC 752, the Apex Court held that even if the relation between the parties are governed by a contract, the decision of the Government shall be subject to the judicial review on the ground of reasonableness, fair play, natural justice, equality and above all non-discrimination. 7.2 In LIC v Consumer Education & Research Centre reported in (1995) 5 SCC 482, the apex Court succinctly highlighted the scope of interference in exercise of the power of judicial review in relation to a contract which should foremost be decided upon whether it bears insignia of public element which requires a duty to act fairly as envisaged under Articles 14 and 21 of the Constitution of India. It was unequivocally held that the exercise of jurisdiction should not be hindered by technical rules or the procedure and, therefore, the Court should examine the case on the basis of the factual matrix in the following: “29. [...] The arms of the High Court are not shackled with technical rules or procedure. The actions of the State, its instrumentality, any public authority or person whose actions bear insignia of law element or public character are public W.P.(C) No. 12717 of 2024 Page 10 of 17 amenable to judicial review and the validity of such an action would be tested on the anvil of Article 14. While exercising the power under Article 226 the Court would be circumspect to adjudicate the disputes arising out of the contract depending on the facts and circumstances in a given case. The distinction between the public law remedy and private field cannot be demarcated with precision. Each case has to be examined on its own facts and circumstances to find out the nature of the activity or scope and nature of the controversy. The distinction between public law and private law remedy is now narrowed down. [...]” law 7.3 The significant development in interference with the contractual obligations flowing from the contract can be noticeably seen from the judgment of the apex Court rendered in ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. reported in (2004) 3 SCC 553 in the following: “23. It is clear from the above observations of this Court, once the State or an instrumentality of the State is a party of the contract, it has an obligation in law to act fairly, justly and reasonably which is the requirement of Article 14 of the Constitution of India. Therefore, if by the impugned repudiation of the claim of the appellants the first respondent as an instrumentality of in contravention of requirement of Article 14, then we have no hesitation in holding that a writ court can issue suitable directions to set right the arbitrary actions of the first respondent. the State has acted the abovesaid xxx xxx xxx W.P.(C) No. 12717 of 2024 Page 11 of 17 27. From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition: (a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. (b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. (c) A writ petition involving a consequential relief of monetary claim is also maintainable.” 7.4 It can be reasonably gathered from the development of law relating to the exercise of jurisdiction by the High Court under Article 226 of the Constitution of India in the contractual field that the interference is inevitable if the action of the State is assailed on the ground of arbitrariness, unfairness and/or unreasonableness and above all offending the core object of Article 14 of the Constitution of India. 7.5 In Subodh Kumar Singh Rathour (supra), the apex Court highlighted what would be termed as arbitrary and what would not in the following: “69. To ascertain whether an act is arbitrary or not, the court must carefully attend to the facts and the circumstances of the case. It should find out whether the impugned decision is based on any principle. If not, it may unerringly point to arbitrariness. If the W.P.(C) No. 12717 of 2024 Page 12 of 17 in rationale which act betrays caprice or the mere exhibition of the whim of the authority it would sufficiently bear the insignia of arbitrariness. In this regard supporting the an order with a circumstances is found to be reasonable will go a long way to repel a challenge to State action. No doubt the reasons need not in every case be part of the order as such. If there is absence of good faith and the action is actuated with an oblique motive, it could be characterised as being arbitrary. A total non-application of mind without due regard to the rights of the parties and public interest may be a clear indicator of arbitrary action. formed part of 70. One another way, to assess whether an action complained of could be termed as arbitrary is by way of scrutinizing the reasons that have been assigned to such an action. It involves overseeing whether the reasons which have been cited if at all genuinely the decision-making process or whether they are merely a ruse. All decisions that are taken must earnestly be in lieu of the reasons and considerations that have been assigned to it. The Court must be mindful of the fact that it is not supposed to delve into every minute details of the reasoning assigned, it need not to go into a detailed exercise of assessing the pros and cons of the reasons itself, but should only see whether the reasons were earnest, genuine and had a rationale with the ultimate decision. What is under scrutiny in judicial review of an action is the decision-making process and whether there is any element of arbitrariness or mala fide. 71. Thus, the question to be answered in such situations is whether the decision was based on valid considerations. This is undertaken to ensure that the reasons assigned were the true motivations behind the action and it involves checking for the presence of any ulterior motives or irrelevant W.P.(C) No. 12717 of 2024 Page 13 of 17 the expertise influenced the that might have considerations decision. The approach of the court must be to respect of administrative authorities while still protecting against arbitrary and capricious actions. Thus, now the only question that remains to be considered is whether the action of the respondent to cancel the tender could be termed as arbitrary? discretion and 7.6 The above noted report can further be gainfully applied in relation to cancellation of a contract or a tender. It has been held that the public tenders are cornerstone of Government procurement process in order to ensure transparency, competition and fairness in the public action emanating from the doctrine of public trust. It is further held that the public tenders are intended to provide a level playing field for all potential bidders in order to foster a competitive environment and the best utilisation of the public funds. It is held that arbitrary termination of a contract which brings uncertainty and unpredictability would invite the discouragement in public participation in the following: “128. Cancellation of a contract deprives a person of his very valuable rights and is a very drastic step, often due to significant investments having already been made by the parties involved during the subsistence of the contract. Failure on the part of the courts to zealously protect the binding nature of a lawful and valid tender, would erode public faith in contracts and tenders. Arbitrary terminations of W.P.(C) No. 12717 of 2024 Page 14 of 17 the State, contract create uncertainty and unpredictability, thereby discouraging public participation in the tendering process. When private parties perceive that their contractual rights can be easily trampled by from participating in public procurement processes which may have a negative impact on such other public- private partnership ventures and ultimately it is the public who would have to bear the brunt thereby frustrating the very object of public interest.” they would be dissuaded 7.7 On the touchstone of the law enunciated in the above reports, let us examine the action of the authority in cancelling the tender whether be termed as arbitrary, unfair, unjust and violative of the equality principles. 7.8 Admittedly, the petitioner no.1 was permitted to participate in the tender, but the work order was not issued despite having emerged as the successful bidder therefrom. The basis of cancellation of tender is founded upon the fact that the petitioner no.1 is a blacklisted contractor and, therefore, no contract can be awarded to him. Undeniably the order blacklisting the petitioner no.1 was quashed and set aside by this Court in another writ petition and even if the challenge was made to the said order in the Special Leave Petition filed before the Apex Court, but no interim order suspending the operation of the said order was passed. Mere W.P.(C) No. 12717 of 2024 Page 15 of 17 challenge to an order cannot be a ground to treat a contractor as a blacklisted contractor when the said order blacklisting the contractor was quashed and set aside by the Court, which was not stayed by the Apex Court in a pending Special Leave Petition. Subsequently, the Special Leave Petition stood dismissed and, therefore, the foundation of the order of cancellation is removed and, therefore, the order of blacklisting can be reasonably said to be unjustified. It is inconceivable that the moment an order blacklisting the petitioner no.1 was quashed and set aside by the Court, he would still be regarded as “blacklisted contractor”. If such notion is accepted, it percolate a sense that the authorities have no respect to the sanctity of the order of the Court and have chosen to act whimsically, jealously and with the sense of supremacy in the public contract. If such act does not come within the purview of arbitrariness, it is dismay that the law laid down by the Apex Court would be rendered otiose. 8. We, thus, find substance in the stand of the petitioners and hereby quash and set aside the order of cancellation dated 29th November, 2024. The appropriate authorities are directed to take W.P.(C) No. 12717 of 2024 Page 16 of 17 steps in proceeding with the tender and it is expected that the entire exercise shall be completed within one month from date. 9. The writ petition is, thus, allowed. No order as to costs. I agree. (M.S. Raman) Judge (Harish Tandon) Chief Justice Arun Mishra Signature Not Verified Digitally Signed Signed by: ARUN KUMAR MISHRA Designation: ADR-cum-Addl. Principal Secretary Reason: Authentication Location: High Court of Orissa, Cuttack. Date: 29-Sep-2025 15:27:46 W.P.(C) No. 12717 of 2024 Page 17 of 17