Summary
The High Court could not revive a cancelled public tender merely by accepting the authority’s and favoured bidder’s statements, disregarding an independent inquiry and earlier judicial findings of irregularities and technical ineligibility. The earlier successful challengers also required a hearing. The withdrawn letter of intent conferred no contractual right in this case. Finding mala fide collusion, the Supreme Court set aside the order, imposed Rs.5 lakh costs on HIMUDA and permitted a lawful fresh tender process.
Issues
- Whether consensual statements justified reviving the discredited tender.
- Whether the earlier challengers had to be joined and heard.
- Whether the withdrawn letter of intent created an enforceable right.
- What corrective relief and costs were warranted.
Provisions considered
- Article 12 and public-authority fairness, Constitution of IndiaHIMUDA’s status as State required lawful, fair conduct; its collusive revival of a tender despite accepted irregularity findings justified setting aside the order and substantial costs. (¶¶ 8, 9, 11, 12, 13, 14)
Held
- The independent inquiry had found both the appellant and Vasu technically ineligible and recommended cancellation. HIMUDA accepted the operative findings, cancelled the tender and issued a fresh invitation. The High Court could not disregard that history and permit the original project award solely on the authority’s and Vasu’s later statements. (¶¶ 5, 6, 7, 8, 11, 12, 13)
- The two parties whose earlier writ challenges led to the inquiry and cancellation had to be impleaded in Vasu’s subsequent petition and afforded a hearing before revival of the original tender. Failure to do so compounded the defect. (¶ 9)
- The original letter of intent had been withdrawn and did not create a binding contractual entitlement for Vasu. In the circumstances, a formal agreement was still required, and the authority could not treat the earlier letter as a right to revive the award. (¶¶ 10, 11)
- The stated public-interest and cost-saving justification did not excuse dealing only with the technically ineligible favoured bidder. If HIMUDA pursued that negotiated route, the Court held the other original participants also required an opportunity. Its conduct with Vasu was found mala fide and collusive misuse of judicial process. This did not establish an entitlement to award the contract to the appellant. (¶¶ 6, 11, 12, 13)
- The appeal was allowed and the High Court order set aside. HIMUDA must deposit Rs.5 lakh with the Supreme Court Advocates-on-Record Association within two weeks. It remained free to initiate a fresh tender through due process according to law. (¶ 14)
Result
Appeal allowed; High Court order set aside. HIMUDA to deposit Rs.5 lakh costs with the Supreme Court Advocates-on-Record Association within two weeks; lawful fresh tender process permitted.