Government Retains Express Power to Cancel Tender Process Post-Agreement Absent Issuance of Specific Work Orders

The Petitioner, an empanelled agency, participated in an Expression of Interest (EOI) issued by the Bihar Renewable Energy Development Agency (BREDA) for the installation of Grid Connected Rooftop Solar Power Plants

Following a Letter of Intent dated 10.02.2025 and an agreement signed on 17.02.2025, the Petitioner was allotted specific districts and directed to conduct site surveys

However, on 18.09.2025, BREDA issued a cancellation notice for the entire EOI citing "unavoidable circumstances"

The Petitioner challenged this cancellation, alleging it was arbitrary, violated principles of natural justice, and that a concluded contract had already been formed

The Respondents contended that the cancellation was a policy decision necessitated by the lack of administrative approval for enhanced project capacity and the absence of sanctioned funds

1. Whether the cancellation of the EOI was legally sustainable under the reserved powers of the tender document after the execution of an agreement

2. Whether the Petitioner acquired a vested or indefeasible right to execute the work in the absence of a specific work order

The Court primarily applied the principle that a bidder in a tender process has a right to fair treatment but no vested right to the award or completion of a contract

It relied on the precedent of Maa Binda Express Carrier & Anr. v. North-East Frontier Railway & Ors. (2014) 3 SCC 760, which establishes that a tender is merely an offer and judicial review is limited unless the process is found to be "tailor-made" or arbitrary

Furthermore, the court applied the principle of contractual autonomy, whereby parties are bound by the specific terms of the EOI, including clauses that allow for cancellation without assigning reasons

The Court reasoned that Clauses 3.15 and 3.15.1 of the EOI explicitly empowered BREDA to cancel the process at any stage without liability; since the Petitioner participated with full knowledge of these terms, they were bound by them

The Court found that although an agreement was signed, Article 7.0 stipulated that the work was only triggered by a "particular work order," which was never issued

Regarding the allegation of arbitrariness, the Court observed that the Respondents provided a rational basis for the cancellation—namely, the failure to obtain financial sanction from the Energy Department—and noted that the decision was applied uniformly to all agencies, not just the Petitioner

Consequently, the doctrine of legitimate expectation could not override express contractual stipulations or the State's administrative exigencies

The writ application was dismissed. However, the Court granted the Petitioner liberty to pursue claims for expenditures incurred during site surveys before a competent civil court