DEEPA RAY vs STATE OF ODISHA

WP(C)/35287/2026
ODHC010844042026
2026:OHC:271-DB

IN THE HIGH COURT OF ORISSA AT CUTTACK
WP(C) No.35287 of 2026

CNR No. ODHC010844042026



Deepa Ray Petitioner
….
Mr. Prabodha Chandra Nayak, Advocate

-Versus-

State of Odisha and Others Opp. Parties
….
Mr. Saswat Das, AGA



CORAM:
HON BLE THE CHIEF JUSTICE
’
AND
HON BLE MR. JUSTICE CHITTARANJAN DASH
’

Date of Hearing & Date of Judgment: 03.11.2026
C HITTARANJAN D ASH , J.
1. Heard learned counsel for the parties.
2. The challenge in the present Writ Petition is to the cancellation
of the tender in respect of Work Sl. No. 05, published on 13.10.2026
pursuant to the proceedings of the Project Level Tender Committee
(PLTC) dated 12.10.2026, and the consequential fresh E-Procurement
Notice No. CCE-PIP-BML-13/2026-27 dated 15.10.2026, insofar as it
relates to the same work.
3. The Petitioner assails the impugned cancellation primarily on
the ground that, although she was adjudged as the L-1 bidder, having
quoted a rate 31.17% below the estimated cost of the tender, the
authority cancelled the tender without properly examining her
quotation and her capacity to execute the work and without affording
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him an opportunity to explain the viability of the quoted rate in terms
of the applicable tender conditions.
4. It is alleged that the authority cancelled the tender solely on the
ground of “ administrative reasons ” , purportedly in exercise of the
power conferred under Clause 26 of the Detailed Tender Call Notice
(DTCN).
5. The background facts of the case are that the Petitioner
participated in E-Procurement Notice No. CCE-PIP-BML-08/2026-27
in respect of Work Sl. No. 05, relating to the work of providing trough
wall lining, renovation of structures, desilting and re-sectioning of the
canal between RD 0.000 km and RD 3.980 km of Mangipalli Minor,
RD 0.000 km and RD 1.065 km of Mangipalli S/M-4, and RD 0.000
km and RD 1.045 km of Mangipalli S/M-V. The Petitioner submitted
her bid on 10.09.2026. Upon evaluation of the bids on 01.10.2026, the
Petitioner was found to be the L-1 bidder, having quoted a rate
31.17% below the estimated cost of the tender.
6. It is the Petitioner ’ s case that the authority thereafter undertook
an analysis and scrutiny of the quoted rates through the Project Level
Tender Committee constituted for the purpose. At its meeting held on
12.10.2026, the Committee considered various factors, including site
accessibility, movement of construction equipment, transportation of
materials, quality requirements and the nature of the irrigation works.
The Committee recommended cancellation of the existing tenders in
respect of all seven works, including the work in question, on the
ground that the quoted rates were abnormally low and commercially
unviable.
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7. Learned counsel appearing for the Petitioner submits that the
impugned cancellation is founded on an erroneous and unfounded
assumption regarding the viability of the quoted rate. It is further
contended that the Petitioner was not afforded any opportunity to
explain how he could execute the work at the quoted rate or to
demonstrate her financial and technical capability to do so. Instead,
the authority unilaterally concluded that the quoted rate was
abnormally low and rendered the execution of the work unviable.
Learned counsel further submits that the mere fact that the Petitioner
had quoted a rate substantially below the estimated cost could not, by
itself, constitute a valid ground for cancellation of the tender,
particularly in the absence of a reasoned decision arrived at after
affording the Petitioner an opportunity to explain the basis of her
quotation.
8. Per contra, learned Additional Government Advocate submits
that the impugned decision was preceded by detailed scrutiny by the
duly constituted Departmental Technical Committee, which found that
the rate quoted by the Petitioner for execution of the work under Sl.
No. 05 was not practically viable. It is further contended that Clause
26 of the DTCN does not fetter the authority s power to cancel the
’
tender without assigning reasons. Accordingly, the Opposite Parties
seek dismissal of the Writ Petition, contending that the decision was
taken in accordance with the Office Memorandum dated 03.01.2026
and falls within the domain of the tendering authority.
9. Before proceeding to examine the rival submissions on the merits,
it would be apposite to bear in mind the settled principles governing
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judicial review in matters relating to tenders and award of contracts.
In Tata Motors Limited vs. The Brihan Mumbai Electric Supply &
Transport Undertaking (BEST) and Others , reported in 2023 SCC
OnLine SC 671 , the Hon ’ ble Supreme Court has reiterated that a writ
Court should ordinarily refrain from substituting its own decision for
that of the Tendering Authority unless something gross or palpable is
shown. The relevant paragraphs are reproduced below:
52. Ordinarily, a writ court should refrain itself from
“
imposing its decision over the decision of the employer as to
whether or not to accept the bid of a tenderer unless
something very gross or palpable is pointed out. The court
ordinarily should not interfere in matters relating to tender or
contract. To set at naught the entire tender process at the
stage when the contract is well underway, would not be in
public interest. Initiating a fresh tender process at this stage
may consume lot of time and also loss to the public
exchequer to the tune of crores of rupees. The financial
burden/implications on the public exchequer that the State
may have to meet with if the Court directs issue of a fresh
tender notice, should be one of the guiding factors that the
Court should keep in mind. This is evident from a three-
Judge Bench decision of this Court in Association of
Registration Plates v. Union of India and Others , reported
in (2005) 1 SCC 679.
53. The law relating to award of contract by the State and
public sector corporations was reviewed in Air India Ltd. v.
Cochin International Airport Ltd ., reported in (2000) 2 SCC
617 and it was held that the award of a contract, whether by a
private party or by a State, is essentially a commercial
transaction. It can choose its own method to arrive at a
decision and it is free to grant any relaxation for bona fide
reasons, if the tender conditions permit such a relaxation. It
was further held that the State, its corporations,
instrumentalities and agencies have the public duty to be fair
to all concerned. Even when some defect is found in the
decision-making process, the court must exercise its
discretionary powers under Article 226 with great caution
and should exercise it only in furtherance of public interest
and not merely on the making out of a legal point. The court
should always keep the larger public interest in mind in order
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to decide whether its intervention is called for or not. Only
when it comes to a conclusion that overwhelming public
interest requires interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v. State of
Orissa and Others, reported in (2007) 14 SCC 517, that while
invoking power of judicial review in matters as to tenders or
award of contracts, certain special features should be borne in
mind that evaluations of tenders and awarding of contracts
are essentially commercial functions and principles of equity
and natural justice stay at a distance in such matters. If the
decision relating to award of contract is bona fide and is in
public interest, courts will not interfere by exercising powers
of judicial review even if a procedural aberration or error in
assessment or prejudice to a tenderer, is made out. Power of
judicial review will not be invoked to protect private interest
at the cost of public interest, or to decide contractual
disputes. ”
10. Keeping the aforesaid parameters in view, we may first advert
to Office Memorandum No. 07764600022025/173/W dated
03.01.2026, issued by the Works Department, Government of Odisha,
which governs the scrutiny of low bids in the present case. The said
Office Memorandum is significant inasmuch as it consciously
dispensed with the earlier provision prescribing a threshold negative-
bid cap of 14.99% under Appendix IX, Clause 36 of the OPWD Code,
Volume II. In its place, a graded mechanism for imposing Additional
Performance Security in respect of low bids was introduced. The
Office Memorandum further clarifies that it would not be advisable to
prescribe any normative percentage below the estimated cost which,
by itself, would result in a bid being treated as abnormally low.
11. The significance of the aforesaid amendment cannot be lost
sight of. Under the revised mechanism, a bid does not become liable
for rejection or cancellation merely because the quoted rate falls
below a particular percentage of the estimated cost. The Office
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Memorandum defines an abnormally low bid as one in which the bid
price, “ in combination with other elements of the Bid ” , appears so low
as to raise material concerns regarding the bidder ’ s capability to
perform the contract at the offered price. In such a situation, the
Procuring Entity may seek written clarification from the bidder,
including a detailed price analysis in relation to the scope of work, the
schedule, resource mobilisation, allocation of risks and
responsibilities, and other requirements of the bid document.
12. More importantly, the Office Memorandum does not
contemplate rejection merely upon the formation of an initial
apprehension regarding the viability of a bid. It provides that, after
evaluating the price analysis, if the Procuring Entity determines that
the bidder has substantially failed to demonstrate her capability to
deliver the contract at the offered price, the bid may be rejected. Thus,
the scheme envisages a sequential exercise: a low quotation may
trigger scrutiny; the bidder may thereafter be required to substantiate
the basis of the quotation; and the explanation and price analysis
furnished by the bidder are required to be evaluated before a
conclusion is reached as to whether the bidder has substantially failed
to establish her capability to perform the contract at the quoted price.
13. In the present case, therefore, the mere fact that the Petitioner
had quoted a rate 31.17% below the estimated cost could not, by itself,
furnish a valid basis for cancellation of the tender and initiation of a
fresh tender process. The record does not disclose that the Petitioner
was afforded an opportunity to explain the basis of her quotation or to
demonstrate her capability to execute the work at the quoted rate. It is
in the context of the specific requirement under the Office
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Memorandum that the reasons recorded by the Departmental
Technical Committee and the consequential decision to cancel the
tender are required to be examined.
14. We are conscious of the fact that the tendering authority is not
necessarily required to seek clarification from a bidder in every case.
However, where the decision to reject a bid is founded on the bidder s
’
alleged inability to execute the work at the quoted rate, the authority
must undertake an objective assessment in accordance with the
applicable tender conditions and the governing instructions. In the
present case, the proceedings of the PLTC do not disclose that the
Petitioner was called upon to explain how he proposed to execute the
work at the quoted rate. Nor do they disclose any adequate assessment
demonstrating why the quoted rate would render the execution of the
work unviable, particularly when no explanation had been sought
from the Petitioner in that regard. The conclusion regarding the
viability of the quoted rate, therefore, appears to have been reached
without the requisite examination contemplated under the Office
Memorandum.
15. Needless to mention, even where Clause 26 of the DTCN
reserves the authority s power to reject or cancel a tender without
’
assigning reasons, such a provision does not confer an unrestricted
power to act arbitrarily or without reference to relevant material. The
Petitioner challenges the decision on the basis of the reasons
underlying the impugned cancellation, including those recorded in the
proceedings of the Departmental Technical Committee, and not
merely on the ground that the published cancellation notice does not
contain detailed reasons. Where the recorded basis for cancellation is
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the alleged unviability of the quoted rate, Clause 26 must be applied
consistently with Clauses 25(f) and 25(9)(vi) of the DTCN, as
applicable, and the relevant instructions issued by the Works
Department.
16. The tendering authority subsequently issued E-Procurement
Notice No. CCE-PIP-BML-13/2026-27 dated 15.10.2026, inviting
fresh bids for the same work relating to Mangipalli Minor under Sl.
No. 05, at the same approximate estimated cost of ₹244.39 lakh. In the
absence of a demonstrable evaluation of the Petitioner s capability in
’
accordance with the applicable procedure, the consequential decision
to initiate a fresh tender process is not sustainable. We fail to
understand how the Departmental Technical Committee could,
without seeking an explanation from the Petitioner, arrive at a
unilateral conclusion that the rate quoted by him was abnormally low
and rendered the execution of the work unviable, particularly when
the DTCN does not prescribe any minimum percentage below the
estimated cost as the threshold for acceptance of a bid. The impugned
decision does not disclose adequate consideration of the Petitioner s
’
potential and capability to execute the work at the offered price. The
conclusion that the Petitioner lacked such capability, without the
requisite evaluation, is arbitrary and cannot be sustained in the eye of
law.
17. What, therefore, emerges from the aforesaid discussion is that
the concern expressed by the Department regarding the substantially
low quotation was not, in itself, misplaced. The infirmity lies in the
manner in which that concern was converted into a conclusion
regarding the non-viability of the bid. Clause VI of the Office
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Memorandum dated 03.01.2026 requires an evaluation of the price
analysis furnished by the bidder and contemplates rejection only
where, upon such evaluation, the bidder has substantially failed to
demonstrate her capability to perform the contract at the offered price.
18. We make it clear that this Court is not undertaking its own
commercial assessment of the Petitioner s quotation. Whether the
’
price offered by a bidder is commercially viable and whether the
tendering authority should ultimately accept the bid are matters within
the domain of the competent authority. Our interference is warranted
only because the material on record does not disclose a sufficiently
reasoned evaluation of the Petitioner ’ s capability in terms of the
specific test prescribed under Clause VI of the Office Memorandum.
The decision, therefore, cannot be sustained merely on the ground that
the Petitioner ’ s quotation was substantially below the departmental
estimate.
19. For the reasons aforesaid, we are of the considered view that the
decision to cancel the tender in respect of the work in question cannot
be sustained. The decision does not demonstrate the requisite
evaluation contemplated under Clause VI of the Office Memorandum
dated 03.01.2026 and, consequently, the conclusion that the Petitioner
had failed to establish her capability to execute the work at the quoted
price is not borne out by the material on record. We, however, make it
clear that merely because the Petitioner was found to be the L-1
bidder, he does not acquire an indefeasible right to the award of the
contract. The competent authority is required to take a decision in
accordance with the governing tender conditions and the Office
Memorandum dated 03.01.2026. Our conclusion is confined to the
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Signature Not Verified
Digitally Signed
Signed by: ANANTA KUMAR PRADHAN
Designation: Senior Stenographer
Reason: Authentication
Location: HIGH COURT OF ORISSA
Date: 05-Nov-2026 17:54:57
legality of the decision-making process leading to the cancellation of
the tender.
20. Accordingly, the decision dated 13.10.2026 cancelling the
tender in respect of Work Sl. No. 05 is hereby quashed. Consequently,
the subsequent E-Procurement Notice No. CCE-PIP-BML-13/2026-27
dated 15.10.2026, insofar as it relates to the same work, is also set
aside. The matter is remitted to the competent authority for fresh
consideration of the Petitioner s bid in accordance with Clause VI of
’
the Office Memorandum dated 03.01.2026 and the applicable tender
conditions, after affording the Petitioner an opportunity to furnish her
explanation and supporting price analysis. Such exercise shall be
undertaken by an authority or committee other than one chaired by
Opposite Party No. 3 and shall be completed as expeditiously as
possible, preferably within four weeks from the date of
communication of this order.
21. It is clarified that we have expressed no opinion on the ultimate
commercial viability of the Petitioner ’ s bid. The competent authority
shall be at liberty to take an appropriate decision in accordance with
law, the applicable tender conditions and the Office Memorandum
dated 03.01.2026.

22. The Writ Petition is accordingly allowed.


(Harish Tandon) (Chittaranjan Dash)


Chief Justice Judge





AKPradhan
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