BREDA's authority to cancel EOI without assigning reasons affirmed; no enforceable rights accrued to petitioner without specific work order.
In a significant ruling, the Patna High Court has dismissed the writ petition filed by M/s Energy United India Private Limited, challenging the Bihar Renewable Energy Development Agency's (BREDA) decision to cancel an Expression of Interest (EOI) for the installation of Grid-Connected Rooftop Solar Power Plants. The judgment was delivered by a Division Bench comprising Mr. Sudhir Singh and Mr. Ranjan Kumar Jha on June 17, 2026.
The petitioner argued that BREDA's cancellation of the tender was arbitrary, especially after the execution of the contract and commencement of preparatory activities. They claimed that once the Letter of Intent was issued and the agreement executed, BREDA was denuded of the authority to cancel the EOI, asserting that the action violated principles of natural justice due to lack of disclosure of reasons and denial of a hearing.
However, the court upheld BREDA's decision, emphasizing clauses 3.15 and 3.15.1 of the EOI which empowered BREDA to cancel the tender at any stage without assigning reasons. The judgment highlighted that the petitioner participated in the tender process with full knowledge of these terms, precluding any challenge to the cancellation.
The court noted that the cancellation was not arbitrary but a policy decision taken in larger public interest due to the absence of requisite administrative and financial approvals. BREDA had repeatedly sought budget approval from the Energy Department, but the necessary sanction was not obtained, leading to the cancellation of the EOI.
The judgment further clarified that no enforceable rights accrued to the petitioner without issuance of a specific work order, which was the triggering event for commencement of the project's execution phase according to Article 7.0 of the agreement. The court also addressed the doctrine of legitimate expectation, stating it cannot override express tender terms or compel the State to proceed with an unapproved project.
While dismissing the petition, the court provided the petitioner liberty to pursue reimbursement claims for expenditures incurred during preparatory activities before a competent civil court.
This ruling reinforces the principle that participation in tender processes binds parties to its terms, and administrative decisions rooted in public interest hold significant legal ground, even in the face of contractual agreements.
Bottom line:-
Tender cancellation - BREDA's cancellation of an EOI after agreement execution and commencement of preparatory activities upheld. No enforceable right accrues to the petitioner in absence of a specific work order. Clauses 3.15 and 3.15.1 of the EOI empowered BREDA to cancel the tender at any stage without assigning reasons.
Statutory provision(s): Clauses 3.15 and 3.15.1 of the EOI, Doctrine of legitimate expectation, Article 7.0 of the agreement, Principles of natural justice.
M/s Energy United India Private Limited v. State of Bihar, (Patna)(DB) : Law Finder Doc id # 2936421
