High Court · 2026

1/9 901-WP-2305-2026 Corrected Judgment.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH, NAGPUR . WRIT PETITION NO. 2305 OF 2026 1.RSV Group (LLP)through its AuthorizedRepresentative – Mr. NetajiChandradas Gulankwar, Office atShop No. 1, Kabra Complex,Chamorshi Road, Gadchiroli-442605.PETITIONER// V E R S U S //1.The State of Maharashtra,Through SecretaryRevenue and Forest Department,Mantralaya, Mumbai-4400322.The Collector, Gadchiroli.RESPONDENTS__________________________________________________________________________-------------------------------------------------------------------------------------------------------------Mr. Akshay Naik, Senior Advocate a/b Mr. Madhur Deo, Advocate for the Petitioners.Mr. Devendra Chauhan, GP, Senior Advocate, a/b Mr. N. S. Rao, AGP a/w Mr. C. J. Dhruv, for the Respondent-State. -------------------------------------------------------------------------------------------------------------CORAM : ANIL S. KILOR AND RAJ D. WAKODE, JJ. DATE : 16 th APRIL, 2026. ORAL JUDGMENT (PER : ANIL S. KILOR, J.):-1.Heard.MJ JadhavCorrected as per order dated 12.06.2026. 2/9 901-WP-2305-2026 Corrected Judgment.odt 2.Rule. Rule made returnable forthwith. Heard finally with the consent oflearned Counsel appearing for the parties.3.The petitioner- Limited Liability Partnership by way of this petitionseeking to quash and set aside the communication/order dated 11.03.2026,issued by the respondent No.2, cancelling the e-auction conducted for sandghats situated at Gadchiroli Sub-Division. 4.The brief facts of the present case are as under:5.The respondents issued auction notice for conducting auction for sandghats situated at five different sub-divisions including Gadchiroli Sub-Divisionwhich has 17 sand ghats. The auction was conducted on 4th March 2026. 6.The petitioner was found to be the highest bidder and eligible for sandghats situated at Gadchiroli Sub-Division. Accordingly, the respondents issuedLetter of Intent asking the petitioner to deposit the bid amount and to payother amounts as specified therein. 7.The petitioner thereupon, deposited the bid amount and other amountsexcept amount which were to be deposited on issuance of challans by therespondents for non issuance of such challans.8.However, on 11.03.2026, the petitioner received the impugnedcommunication informing cancellation of auction. Hence, this petition.9.We have heard the learned counsel for the respective parties. MJ Jadhav 3/9 901-WP-2305-2026 Corrected Judgment.odt 10.Shri Naik, learned Senior Advocate for the petitioner argues that sincethe Letter of Intent in fact is a Letter of Acceptance, it is a concluded contract,therefore, cancelling it unilaterally is illegal. 11.It is submitted that even if it is presumed that it is not a concludedcontract, still it cannot be cancelled under the pretext that on re-auctionhigher price can be fetched as it will be a matter of chance. For this purpose,reliance is placed on the judgment of the Hon’ble Supreme Court of India inthe case of Golden Food Products India Versus State of Uttar Pradesh andOthers reported in 2026 SCC OnLine SC 24.12.It is further argued that the complaints made by third party are baselessand cannot be the ground for cancellation. It is submitted that the complaints,which are relied upon are manufactured one. To substantiate argument areliance has placed on the judgment of the Hon’ble Supreme Court of India inthe case of Sushil Kamalnayan Bharuka and others versus State ofMaharashtra and others, reported in 2026 SCC OnLine SC 259.13.On the other hand, Shri Chauhan, learned Senior Advocate andGovernment Pleader argues that the respondents have not committed anyillegality in cancelling the auction. It is submitted that conditions mentionedin LOI for execution of a registered agreement clearly show that it is a LOI andnot LOA. MJ Jadhav 4/9 901-WP-2305-2026 Corrected Judgment.odt 14.It is argued that respondent-State being the custodian of the naturalresources, it is the bounden duty of the respondents to see that highest priceshould be received. In the said process, cancellation of the auction andconducting fresh auction is just and proper. 15.It is further submitted that there were complaints of cartelization. Since,the complaints are of serious nature the enquiry has been initiated. It isfurther submitted that dispute involved in this petition is of commercial natureand therefore, the scope of judicial review is limited. In support of hissubmission, he has placed reliance upon the judgments of the Hon’bleSupreme Court of India in the case of Shanti Construction Pvt. Ltd. VersusState of Odisha and Others, reported in 2025 SCC OnLine SC 2368, and Stateof Himachal Pradesh and Another Versus OASYS Cybernatics Pvt. Ltd.,reported in 2025 SCC OnLine SC 2536.16.Shri Chauhan, learned Government Pleader has lastly drawn attentionof us to the letter dated 27.03.2026 issued by the petitioner, withdrawing theamounts deposited by the petitioner towards bid amount and other amountson issuance of LOI by the respondent. He therefore, submits that suchwithdrawal of the amount is nothing but giving up of a challenge raised in thispetition.17.Having heard the learned counsel for the parties and considering theMJ Jadhav 5/9 901-WP-2305-2026 Corrected Judgment.odt rival submissions, we have perused the record. 18.The record shows that the auction process held by the respondents forsand ghats of Gadchiroli Sub-Division, five bidders including the petitionerparticipated. The petitioner was found to be the highest one and accordinglythe Letter of Intent was issued to him on 05.03.2026. 19.According to the petitioner, though letter dated 05.03.2026 is styled asLetter of Intent it is a Letter of Acceptance and hence, this is a concludedcontract. 20.In the case of State of Himachal Pradesh and Another Versus OASYSCybernatics Pvt. Ltd., reported in 2025 SCC OnLine SC 2536. the Hon’bleSupreme Court has held thus :14.In Dresser Rand (supra), it was re-stated with claritythat “a letter of intent merely indicates a party’s intention to enterinto a contract with the other party in future. A letter of intent isnot intended to bind either party ultimately to enter into anycontract.” The same principle animated Rajasthan CooperativeDairy Federation (supra), where this Court observed that until theoffer is accepted unconditionally and the preconditions aresatisfied, “no binding legal relationship” comes into existence. Therationale is thus simple but fundamental: the law of contractdistinguishes between a promise to make a promise and a promiseperformed. The former is not legally binding until its contingenciesare fulfilled.15.These authorities collectively articulate a coherentdoctrine: and LOI creates no vested right until it passes thethreshold of final and unconditional acceptance. It is but a“promise in embryo,”capable of maturing into a contract only uponMJ Jadhav 6/9 901-WP-2305-2026 Corrected Judgment.odt the satisfaction of stipulated preconditions or upon the issue of anLOA. A bidder’s expectation that such a contract will follow may becommercially genuine, but it is not a juridical entitlement. To holdotherwise would be to bind the State in contract before it hasconsciously chosen to be bound-a proposition foreign to bothcontract law and public administration.17.Each requirement was framed as a condition precedent;the LOI itself stated that a “final award letter” would issue onlyafter the successful completion of these tasks. This languageadmits of no ambiguity. The tender architecture was sequential:testing, demonstration, acceptance, then execution. It was nevercontemplated that the LOI would operate as the contract itself.”21.From the above referred observations it is evident that the Letter ofIntent merely indicates the party’s intention to enter into a contract with otherparty in future. The Letter of Intent is not intended to bind either partyultimately to enter into any contract. The law of contract distinguishesbetween a promise, to make a promise and a promise performed. The formeris not legally binding until its contingencies are fulfilled. Thus, it is held thatLOI creates no vested right until it passes the threshold of final andunconditional acceptance. It is but a “promise in embryo,” capable of maturinginto a contract only upon the satisfaction of stipulated preconditions or uponthe issuance of Letter of Acceptance (LOA).22.By applying the above referred principles if the conditions at the bottomof the Letter of Intent are considered, which say that the petitioner has tocomply with all the conditions within 15 days and on such compliances aMJ Jadhav 7/9 901-WP-2305-2026 Corrected Judgment.odt registered agreement shall be registered, it is evident that the language of theLetter of Intent with no ambiguity makes it clear that it is not a Letter ofAcceptance, but it merely indicates the respondent’s intention to enter into acontract with the petitioner in future. 23.Thus, it cannot be said that the aforesaid LOI intends to bind other partyultimately to enter into any contract. 24.In the circumstances, we reject the submission of the learned counsel forthe petitioner, that the Letter of Intent in the present matter is not the LOI but,it is a Letter of Acceptance. 25.Once it is held that it is not the Letter of Acceptance, no right is vestedin favour of the petitioner in the present matter. 26.As regards the respondent’s right to cancel the auction in an attempt tosecure the higher price. The respondents are the custodian of the naturalresources and they are duty bound to make attempt to fetch maximum price.27.It will be helpful at this stage to refer to the judgment of the Hon’bleSupreme Court of India in the case of Shanti Construction Pvt. Ltd. (supra)and Principal Chief Conservator of Forest (supra), wherein it is held thus: 16.Now, we advert to the relief which may be granted tothe unsuccessful bidder. It is well settled that tenders and publicauctions, specially for natural resources, are not mere commercialtransactions, but an exercise in public trust. The State as custodianof natural wealth is obligated to secure the best value for publicresources consistent with the principles of fairness andtransparency [(See : Natural Resources Allocation, In Re, SpecialMJ Jadhav 8/9 901-WP-2305-2026 Corrected Judgment.odt Reference No. 1 of 2012 and Subodh Kumar Singh Rathour(supra)].28.Similarly, in the case of Principal Chief Conservator of Forest (Supra),the Hon’ble Supreme Court of India has held thus:22. The Division Bench of the High Court, which upheld thejudgment of the Ld. Single Judge, was of the opinion that merelybecause there was a likelihood of the rates being lowered ifsuccessive tenders are invited, the same cannot be a justifiableground at all for cancellation of the contract since it would lead to asituation of an unending tender inviting procedure. However, weare of the opinion that the said observations by the High Court arecontrary to the settled principles of law laid down by the SupremeCourt that the Government is the protector of financial resources ofthe state and thus, it has every right to cancel and call for freshtender if it is in the nature of protecting the financial interests of theState.29.By applying the above referred principles, we do not find any errorcommitted by the respondents in cancelling the auction on the ground that theprice received is not the just price and to hold re-auction to secure more price. 30.As far as the judgment cited by the learned counsel for the petitioner inthe case of Golden Food Products India (supra), the same is distinguishable onfacts and considering the law laid down in the case of Shanti Construction Pvt.Ltd. (supra) and Principal Chief Conservator of Forest (supra), which relate tothe natural resources, judgment in the case of Golden Food Products India(supra) is of no assistance to the petitioner.MJ Jadhav 9/9 901-WP-2305-2026 Corrected Judgment.odt 31.Having held so we are of the opinion that, this petition lacks merit anddeserves to be dismissed.32.Further considering that the petitioner on its own applied forwithdrawal of the amounts deposited by the petitioner in compliance of theconditions of LOI, amounts to withdrawal of the petitioner from the process ofauction. Therefore, on this ground also the petition deserves to be dismissed.33.Accordingly, the Petition is dismissed. Rule stands discharged. (RAJ D. WAKODE, J.) (ANIL S. KILOR, J.) MJ Jadhav