Court finds substantial justification for tender cancellation despite cryptic order; petitioner's technical bid rejection affirmed due to lack of requisite experience in township development works
In a significant ruling dated October 8, 2026, the Allahabad High Court (Division Bench comprising Justices Siddhartha Varma and Kunal Ravi Singh) dismissed the writ petition filed by M/s Balaji Construction challenging the cancellation of tenders floated by the Agra Development Authority (ADA) for internal development works in two townships under the Greater Agra scheme.
The petitioner, M/s Balaji Construction, had participated in tenders for Sindhupuram (Township-1) and Yamunapuram (Township-4) and claimed to have been declared technically qualified and the lowest bidder. However, the ADA cancelled the tender process citing "unforeseen circumstances" without assigning detailed reasons, leading the petitioner to allege arbitrariness, mala fide intentions, and favoritism towards other contractors.
The petitioner sought quashing of the tender cancellation order dated April 25, 2026, and a show cause notice dated May 15, 2026, besides mandamus directing restoration of the original tender process and independent investigation into alleged tender manipulations.
The Court acknowledged that the cancellation order was cryptic and lacked explicit reasons, which prima facie rendered the cancellation arbitrary and legally unsustainable. The conditions of the tender empowered the Vice Chairman of ADA to accept or reject tenders but did not authorize rejection without reasons. The Court reiterated that State authorities must act fairly, transparently, and non-arbitrarily in public procurement to ensure healthy competition and prevent corruption.
However, on examining the original tender records, the Court found that the petitioner was incorrectly shown as technically qualified despite lacking essential experience in internal township development works such as RCC construction, laying sewerage pipes, and drainage infrastructure. The petitioner's submitted experience certificate only demonstrated road widening and strengthening works, which did not satisfy the tender's essential eligibility criteria.
The Court held that since an ineligible bidder was wrongly declared qualified, the tender process was tainted, justifying its cancellation. The tender committee's evaluation and subsequent cancellation were found to be neither discriminatory nor mala fide. Additionally, the fresh tender process was conducted fairly, culminating in issuance of letters of intent to new bidders, making interference with the fresh tender unnecessary.
Regarding the show cause notice issued to the petitioner alleging interference with the tender evaluation process, the Court observed that the petitioner had responded and no final order had been passed. There was no evidence of mala fide intention or jurisdictional defect, and the Court declined to quash the notice at this preliminary stage.
In conclusion, the Court dismissed the writ petition, affirming that although the cancellation order lacked explicit reasoning, the underlying justification based on the petitioner's ineligibility warranted cancellation. The petitioner's technical bid rejection was upheld, and the fresh tender process was validated.
This judgment emphasizes the necessity for State authorities to maintain transparency and reasoned decision-making in public procurement while recognizing the importance of upholding essential eligibility criteria to ensure quality and integrity in public works contracts.
Bottom Line:
Tender matters - Though cancellation order of tender merely stating "due to unforeseen circumstances" without reasons is arbitrary and reasons cannot be supplemented by affidavit, yet on examination of original records Court found substantial justification for cancellation as an ineligible bidder was wrongly shown technically qualified - Petitioner lacked essential experience for internal township development works including sewerage and drainage - Fresh tender having culminated in issuance of letters of intent, no interference warranted - Show cause notice not liable to be quashed at nascent stage.
Statutory provision(s): Article 14, Article 226 of the Constitution of India
M/s Balaji Construction v. State of U.P., (All)(DB) : Law Finder Doc Id # 2993250
