A lowest bidder acquires no vested right to contract after tender cancellation.

In brief

The question

Whether a writ of mandamus could be issued directing finalisation of tenders and issuance of a work order after the tender processes had already been cancelled.

The court held

The Court held that the cancelled tenders could not be revived or finalised by issuing a writ of mandamus, and that the petitioner’s position as L1 did not confer an indefeasible right to the contract.

It also directed

The writ petition seeking finalisation of the tenders and issuance of work orders was dismissed.

The dismissal was without any order as to costs.

01Facts

The petitioner participated in tender processes bearing Tender ID Nos. 2025_DLG_134039_3 and 2025_DLG_134039_4 and claimed to have emerged as the lowest bidder (L1). He sought a writ of mandamus directing the respondents to finalise the tenders and issue consequential work orders in his favour.

¶ 1

After the financial bids were opened, a complaint was lodged on the Chief Minister’s Portal alleging irregularities in the rates quoted by another bidder and impropriety by officials. The Vigilance Bureau initiated an inquiry, during which the tender processes were kept in abeyance.

¶ 4

Subsequently, the Municipal Council, Nangal, resolved to cancel both tenders in view of the larger public interest and the need to ensure uninterrupted water supply. The cancellation was uploaded on the e-tendering portal on 7 April 2026 through a corrigendum stating “administrative reason” as the ground.

¶ 4, 6

Although the petitioner was aware that the tender status had been reflected as cancelled, he sought finalisation of the tender rather than specifically challenging the cancellation.

¶ 7

02Issues

i.Whether a writ of mandamus could be issued directing finalisation of tenders and issuance of a work order after the tender processes had already been cancelled.

¶ 7

ii.Whether the petitioner, merely by being the lowest bidder (L1), acquired an enforceable or indefeasible right to the award of the contract.

¶ 8

iii.Whether the respondents were entitled to cancel the tender processes pending a vigilance inquiry and in furtherance of public interest.

¶ 4, 6

03Law Applied

The Court exercised its jurisdiction under Articles 226 and 227 of the Constitution of India.

¶ 1

A writ of mandamus cannot be issued to compel finalisation of a tender process that no longer subsists because it has been cancelled.

¶ 7

The lowest bidder does not acquire a vested or indefeasible right to the award or execution of a contract merely by emerging as L1; the State or its instrumentalities are not thereby bound to enter into a contract.

¶ 8

The Court relied on Indore Vikas Praadhikaran (IDA) v. Shri Humud Jain Samaj Trust, 2024 SCC OnLine SC 3511, for this principle.

¶ 8

Clause 17 of the DNIT authorised the Administrator/President and Executive Officer of the Municipal Council to cancel or reject the work without assigning reasons at any time.

¶ 4

04Reasoning

The Court found that the respondents had not merely kept the tenders pending but had subsequently cancelled them by resolution and uploaded the cancellation on the e-tendering portal.

¶ 4, 6

Consequently, no live tender process remained capable of being finalised through mandamus.

¶ 7

The petitioner’s status as L1 did not create a contractual or vested right, particularly since no work order had been issued and the tenders had been cancelled in the context of a vigilance inquiry and considerations of transparency, accountability, and uninterrupted water supply.

¶ 4, 8

If the petitioner was aggrieved by the cancellation, he ought to have candidly disclosed it and specifically challenged that decision rather than seeking finalisation of a cancelled tender.

¶ 7

The Court also disapproved of the petitioner’s failure to disclose the material cancellation decision, though it ultimately refrained from imposing costs.

¶ 9