Concealment of Blacklisting Status and Breach of Integrity Code Justifies Summary Cancellation of Tender Process

The Petitioner, a successful bidder in two tenders issued by the Delhi Development Authority (DDA) for providing lifeguards and medical attendants at Hari Nagar and Yamuna Sports Complexes, challenged the cancellation of these tenders via communications dated 17.06.2026 and 18.06.2026.

The Respondent cancelled the tenders after discovering that the Petitioner had submitted false undertakings declaring it had never been blacklisted.

In reality, the Petitioner had been blacklisted by the Municipal Corporation of Delhi (MCD) on 04.07.2025 following a child's drowning incident at a facility it managed.

Although the Petitioner had obtained a clarification in a separate writ [W.P.(C) 832/2026] that the MCD blacklisting technically applied to MCD tenders, the DDA argued the Petitioner’s concealment of this fact violated tender conditions and the code of integrity.

1. Whether the Respondent’s cancellation of the tenders was arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution due to lack of notice or valid justification.

2. Whether the Petitioner’s failure to disclose the MCD blacklisting order in its tender undertaking constituted a material breach justifying disqualification despite the pending challenge to said blacklisting.

3. Whether a Letter of Intent (LOI) creates a vested contractual right if the bidder fails to meet subsequent conditions like the submission of a Performance Guarantee.

The Court primarily applied the principle that judicial review in tender matters is limited and administrative decisions to cancel tenders are shielded if taken in public interest or due to concealment of material facts.

It relied on State of Himachal Pradesh v. OASYS Cybernetics (P) Ltd., which establishes that a Letter of Intent (LOI) does not confer a vested contractual right until all preconditions are fulfilled.

The Court invoked the "Duty of Care" doctrine from Vadodara Municipal Corporation v. Purshottam V. Murjani & Ors., holding that public authorities must exercise the highest degree of care in hazardous activities (like swimming pool management) to protect the life and liberty of citizens under Article 21 of the Constitution.

The Court reasoned that the Petitioner’s undertakings dated 18.01.2026 and 02.03.2026 were "ex-facie false" as they suppressed the subsisting MCD blacklisting order.

The Court rejected the "bona fide omission" plea, noting that the Petitioner filed a legal challenge against the blacklisting on the same day as the tender submission, proving conscious concealment.

Regarding the Hari Nagar tender, the Court found no vested rights existed because the Petitioner failed to deposit the Performance Guarantee as required by the LOI.

The Court held that the safety concerns leading to the MCD blacklisting (drowning of a child) were "directly and materially relevant" to the DDA's tender for lifeguards.

The Respondent had a public law obligation to prevent an agency with a poor safety record from operating hazardous public facilities to avoid future tortious liability and protect public safety.

The Court dismissed the writ petition, holding that the Respondent's decision to cancel the tenders and issue fresh NITs was legal, valid, and necessitated by public interest, while also disposing of all pending applications.