A lowest bidder has no vested right where the authority cancels tender for cogent public-interest reasons.

Respondent No. 3 issued e-NIT No. CEJ/PMGSY/792 of 2025–26 dated 30 July 2025 for construction and maintenance of a 21.300-kilometre PMGSY road in District Reasi.

The petitioner submitted its technical and financial bids and was declared technically responsive. Another bidder, Vikesh Kumar, was declared non-responsive for failing to upload the requisite Income Tax Return for the financial year 2023–24, contrary to the Standard Bidding Document.

Vikesh Kumar challenged his disqualification and obtained interim relief, following which his financial bid was opened and he was shown as L-1. His writ petition was subsequently withdrawn on 29 May 2026, after which the petitioner became the effective L-1 bidder.

However, the Contract Committee later noted a price difference of ₹6,05,12,020 between the bids of Vikesh Kumar and the petitioner and resolved to cancel the original tender and invite fresh bids in the public interest.

1. Whether the respondents could rely upon the financial bid of a technically non-responsive bidder for assessing the substantial price difference and cancelling the tender process.

2. Whether the petitioner, after becoming the effective L-1 bidder, possessed an enforceable or vested right to the award of the contract.

3. Whether the communication dated 16 March 2026 created an obligation upon the respondents to finalise the earlier tender in favour of the petitioner.

4. Whether cancellation of the earlier tender and issuance of a fresh e-NIT were arbitrary, mala fide, discriminatory or violative of Article 14.

Under Clauses 27 and 28 of the Standard Bidding Document, although the employer may award the contract to the substantially responsive bidder offering the lowest evaluated price, Clause 28 expressly reserves the power to reject any bid, cancel the bidding process and reject all bids before award of the contract.

The Court relied on Haryana Urban Development Authority v. Orchid Infrastructure Developers (P) Ltd., AIR 2017 SC 882, for the rule that even the highest bidder has no vested right to have the bid accepted; Jagdish Mandal v. State of Orissa, AIR Online 2006 SC 645, for the principle that judicial review examines the legality of the decision-making process—not the commercial soundness of the decision—and permits interference only in cases of mala fides, arbitrariness, irrationality or affected public interest; and Air India Ltd. v. Cochin International Airport Ltd., AIR 2000 SC 801, for the proposition that the State is free to determine its commercial method and may reject even the lowest bid, provided it acts fairly and does not depart arbitrarily from prescribed norms.

The Court also recognised that the employer may consider a substantial price disparity as a legitimate ground for scrapping a tender, particularly where the lower bid was that of a technically non-responsive bidder whose financial bid had been opened pursuant to judicial directions.

The Court held that the Contract Committee had considered the tender history, prolonged litigation, bid rankings and the substantial difference of ₹6,05,12,020 between the competing bids.

Although Vikesh Kumar was technically non-responsive and could not claim the contract, his financial bid had been opened pursuant to court orders and the Committee was entitled to consider the resulting price disparity while deciding whether continuation of the tender served the public interest.

The petitioner’s emergence as L-1 did not create an indefeasible right to award of the contract. Clause 28 operated notwithstanding Clause 27 and permitted cancellation at any time before award.

The communication dated 16 March 2026 was treated as merely clarificatory: it removed the legal impediment arising from the pending litigation but did not bind the competent authority to award the contract.

The allegation of discrimination based on award of other works also failed because the petitioner did not establish that those tenders involved a comparable price disparity or identical circumstances.

Consequently, the decision was supported by recorded reasons, was not shown to be mala fide or irrational, and did not warrant interference under Article 226.

The petitioner’s status as effective L-1 and the communication dated 16 March 2026 did not confer any vested or enforceable right to allotment.

The challenge to the corrigendum dated 16 July 2026 and fresh e-NIT dated 20 July 2026 was rejected, and WP(C) No. 2355/2026 was dismissed.

In view of the identical issues, WP(C) No. 2426/2026 was also dismissed.