Absence of adequate route coverage permits cancellation of school transportation tenders in larger public interest.

The Government of M.P. introduced "C.M. Rise Schools" to provide high-quality education and student transportation.

An NIT was issued on 14.03.2024 to engage buses, specifically aiming to provide employment to local youth.

Out of 70 applicants, 58 were found technically and financially valid, including the petitioners.

However, the Joint Director recommended cancellation because applicants only covered 98 out of 533 earmarked routes in the Gwalior and Chambal Divisions, leaving 435 routes unallocated as vendors preferred shorter, profitable routes.

The respondents cancelled the first tender and issued a second NIT on 20.02.2025, introducing stringent conditions: applicants must be incorporated companies/firms and possess three years of experience in school bus transportation.

The petitioners challenged the cancellation and the new restrictive conditions as arbitrary and biased.

Whether the decision of the State to cancel the initial tender process due to inadequate route coverage was arbitrary or contrary to Article 14 of the Constitution.

Whether the incorporation of stringent eligibility criteria (three years’ experience and mandatory company/firm registration) in the second NIT is legally sustainable and justified by public interest.

The Court primarily applied the principles of judicial review in contractual matters established in Tata Cellular v. Union of India, which mandates that while the Government has freedom of contract, its decisions must be free from arbitrariness, bias, or mala fides.

It relied on Jagdish Mandal v. State of Orissa, holding that if a decision is bona fide and in public interest, courts should not interfere even if there is a procedural error, as private interests cannot override public interest.

Furthermore, it applied the doctrine of "legal certainty" from Reliance Energy Ltd. v. Maharashtra State Road Development Corpn. Ltd., emphasizing that norms in tenders must be clear to ensure a "level playing field".

The Court reasoned that the cancellation of the first NIT was a "holistic approach" necessitated by the failure of the initial process to cover 435 out of 533 routes, which would have left thousands of students without transportation.

The Court found that the initial tender allowed vendors to cherry-pick profitable routes, defeating the inclusive purpose of the C.M. Rise School scheme.

Regarding the new stringent conditions, the Court held that the requirement for three years of experience and formal incorporation was not arbitrary but aligned with the Motor Vehicles Act, 1988, and State RTO Regulations.

These criteria ensure "maturity in handling logistics," "financial stability," and "safety and security of students," which are paramount in a state-sponsored education initiative.

The Court concluded that the decision-making process followed the Wednesbury principle of reasonableness and was intended to prevent the exclusion of students in remote areas.

The petitions were dismissed, the interim orders were vacated, and the respondents were permitted to proceed with the second NIT dated 20.02.2025.

The Court affirmed that judicial restraint is necessary in tender matters unless the process is proved to be malicious or intended to favour specific individuals, which was not established here.