J.K. Enterprises & Anr. v. State of Uttarakhand & Ors.

the writ petition regarding malice. The authority, which took the impugned decision, is also not before this Court in personal capacity. Thus, the decision to cancel the tender process cannot be interfered with.

7. Hon’ble Supreme Court in the case of Meerut Development Authority v. Association of Management Studies and another, reported as (2009) 6 SCC 171, has made the following observation regarding the rights of a bidder who participates in the tender process:- “26. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process. fair treatment

27. The bidders participating in the tender process have no other right except the right to equality and in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the abovestated ground, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms 4 and conditions of notice so provided for such negotiations.

28. It is so well settled in law and needs no restatement at our hands that disposal of the public property by the State or instrumentalities partakes the character of a trust. The methods to be adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons to participate in the process.

29. The Authority has the right not to accept the highest bid and even to prefer a tender other than the highest bidder, if there exist good and sufficient reasons, such as, the highest bid not representing the market price but there cannot be any doubt that the Authority's action in accepting or refusing the bid must be free from arbitrariness or (emphasis supplied)” favouritism.

8. Learned counsel for the Municipal Corporation submits that under the applicable Rules, Municipal Commissioner is entitled to cancel all or any of the bids, received pursuant to a tender notice. He submits that in the tender notice dated 18.9.2025 itself, there was a stipulation that the competent authority can reject all or any of the bids, without assigning any reason. He further submits that merely because the rates quoted by the bidder are found to be the lowest will not create any right in his favour, and the offer made by a bidder do not turn into a binding contract till its acceptance by the competent authority.

9. He points out that pursuant to tender notice dated 18.9.2025, eight bids were received, out of which one was found to be technically non-responsive. He submits that out of remaining seven bidders, who were found eligible, as many as six quoted the same rates. Thus, he submits that the bidders appear to have formed a cartel to defraud the public exchequer, as 5 such the competent authority was justified in exercising power available to him, by cancelling the tender process. He submits that pursuant to the tender notice issued subsequently, 196 bids were received, however, because of the interim order passed in this writ petition, bids could not be opened.

10. In view of the legal position, as discussed above, petitioner does not have any indefeasible right to award of contract. The competent authority has exercised the power available to him, by cancelling the tender process initiated on 18.9.2025. Explanation offered by learned counsel appearing for Municipal Corporation, for the decision taken by the competent authority, cannot be faulted. The authority inviting bids, if has reasons to believe that the bidders have formed a cartel to defraud public exchequer, then the authority inviting bids is justified in cancelling the tender process. The purpose of inviting bids is lost if bidders form cartel, therefore, the decision to cancel the earlier tender process by the competent authority cannot be said to be arbitrary or actuated by malice.

11. Learned senior counsel appearing for the petitioner then submitted that the conditions mentioned in clause nos. 34, 35 & 36 of the re-tender notice issued on 15.12.2025 are unsustainable. As per clause 34 of the re-tender notice, a bidder would be eligible for participating in the tender process, only if in the last three years he has successfully executed three contracts for supply of manpower to Municipal Corporation/Development Authority and value of each 6 such contract is minimum `5 crores. Clause no. 35 of the re-tender notice requires every bidder to submit a No Dues Certificate from GST authorities that he has no pending dues till October, 2025. Clause 36 requires the bidder to submit ECR challans for Employees Provident Fund and Employees State Insurance Corporation in respect of minimum 2000 employees for the last three months.

12. Learned counsel for the Municipal Corporation points out that upon award of contract, successful bidder would be required to supply manpower to the extent of not less than 2000 for maintaining sanitation, hygiene and other services within the limits of Municipal Corporation, therefore, the condition of executing three contracts during last three years of the value of `5 crores each, cannot be said to be unreasonable. He submits that the said condition is necessary to ensure that bidders with sufficient means and experience alone participate in the tender process inexperienced bidders, who cannot provide manpower to the extent required, are not able to vitiate the bidding process.

13. Learned counsel for the Municipal Corporation submits that condition no. 35 regarding No Dues Certificate from GST authorities also cannot be faulted, as a bidder who has defaulted in payment of Goods and Service Tax, thereby violated relevant tax laws cannot be permitted to participate in the bidding process. He submits that Clause 35 has been added in deference to the relevant tax legislation. He submits that similarly 7 clause 36 of the re-tender notice, which requires every bidder to submit ECR challans for 2000 personnel for Employees Provident Fund and Employees State Insurance Corporation for the past three months is meant to ensure that the applicable labour welfare legislations are duly complied with by the persons to whom contract may be awarded by the Nagar Nigam. Thus, he submits that condition mentioned in the clause 36 also cannot be faulted.

14. This Count finds substance in the submission made by learned counsel for the Municipal Corporation. Hon’ble Supreme Court in the case of Directorate of Education & others Vs. Educomp Datamatics Ltd. & others reported as (2004) 4 SCC 19 has held that terms of the invitation to tender are not open to judicial scrutiny, as the same are in the realm of contract. Para 12 of the said judgment is reproduced below:- for an administrative body “12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender. It must have joints as a necessary reasonable play concomitant in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide.”

15. In the case of Michigan Rubber (India) Ltd. v. State of Karnataka, reported as (2012) 8 SCC 216, Hon’ble Supreme Court summarised the law regarding 8 Government contracts in paragraph nos. 23, 24 & 35 of the judgment, which are extracted below:-

23. From the above decisions, the following principles emerge: (a) The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) Fixation of a value of the tender is entirely within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited; (c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; (d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government.

24. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the 9 court can say: “the decision is such that no responsible authority acting reasonably and accordance with relevant law could have reached”? (ii) Whether the public interest is affected? If the answers to the above questions are in the negative, then there should be no interference under Article 226. thought that only

35. As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. In view of the above, the appellant has failed to establish that the same was contrary to public interest and beyond the pale of discrimination or unreasonable. We are satisfied that to have the best of the equipment for the vehicles, which ply on road carrying passengers, the 2nd respondent thought it fit that the criteria for applying for tender for procuring tyres should be at a high standard and manufacturers who satisfy the eligibility criteria should be permitted to participate in the tender. As noted in various decisions, the Government and their undertakings must have a free hand in setting terms is arbitrary, discriminatory, mala fide or actuated by bias, the courts would interfere. The courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. In the case on hand, we have already noted that taking into account various aspects including the safety of the passengers and public interest, CMG consisting of experienced persons, revised the tender conditions. We are satisfied that the said Committee had discussed the subject in detail and for specifying these two conditions regarding pre-qualification criteria and the evaluation criteria. On perusal of all the materials, we are satisfied that the impugned conditions do not, in any way, could be classified as arbitrary, discriminatory or mala fide.” tender and only

16. In view of the settled law on the point, challenge thrown by the petitioner to conditions in the tender notice cannot be entertained. The conditions cannot be said to be tailor made to suit some rival bidder. Since every bidder would have to meet the 10 requirement of those conditions, therefore, there is no scope for interference.

17. Learned counsel for Municipal Corporation points out that in the relief clause of the writ petition, petitioner has not thrown challenge to any of the conditions mentioned in the re-tender notice. In such view of the matter also, there is no scope for interference with the conditions mentioned in the clause nos. 34, 35 & 36 of the re-tender notice. The writ petition thus fails and is dismissed. (Subhash Upadhyay, J.) (Manoj Kumar Tiwari, J.) 08.01.2026 Navin 11