Tender cancellation withstands judicial review when justified by objective, relevant commercial considerations.

The Municipal Council, Thanesar floated a tender for day sweeping of streets and roads, drain cleaning, garbage lifting, bush uprooting and related works in certain sectors of Thanesar.

Seven bidders participated, and Ratgal Co-operative Labor and Construction Society Limited emerged as the lowest bidder.

The petitioner challenged Ratgal’s eligibility and alleged forgery and fabrication of documents.

In earlier proceedings, the High Court directed consideration of the petitioner’s representation, which was rejected on 30 April 2025.

In subsequent proceedings, the State informed the Court that a committee had been constituted to examine the allegations.

Before any work order was issued, the tender process remained embroiled in litigation and a new Request for Proposal dated 27 August 2025 was introduced.

The Director, Urban Local Bodies, Haryana thereafter directed cancellation of the existing tender and re-tendering under the new RFP through decision dated 31 December 2025, which was challenged in the present petition.

Whether the cancellation of the tender by the respondent-authorities was arbitrary, mala fide, discriminatory, or unsupported by relevant reasons and was therefore amenable to interference under Articles 226/227 of the Constitution.

Whether the respondents had assigned sufficient and legally justifiable reasons for cancelling the earlier tender and directing re-tendering under the new RFP dated 27 August 2025.

The Court applied the principles governing judicial review of State contracts under Articles 226/227 of the Constitution.

Although submission of a tender constitutes only an offer and does not oblige the State to accept it, all bidders are entitled to fair, equal and non-discriminatory treatment.

Relying on Maa Binda Express Carrier v. North East Frontier Railway, (2014) 3 SCC 760, the Court held that award of a contract is essentially a commercial decision based on relevant considerations, and that cancellation of a tender may be reviewed if it is arbitrary, mala fide, discriminatory, or founded on considerations having no nexus with the intended objective.

The Court further relied on Kalu Ram Ahuja v. Delhi Development Authority, (2008) 10 SCC 696, and Subodh Kumar Singh Rathour v. Chief Executive Officer, (2024) 15 SCC 461, for the principle that the tendering authority must disclose reasons for cancellation; a vague reference to “administrative reasons” is insufficient.

The Court also considered Kaushal Kishore v. State of Bihar, as cited by the petitioner, on the reviewability of arbitrary tender cancellation.

The Court distinguished between impermissible judicial review of the commercial merits of a tender decision and permissible review of the decision-making process.

It found that the tender, although floated in July 2024, had not resulted in issuance of any work order and had remained entangled in litigation.

In the meantime, the competent authority had introduced a new RFP on 27 August 2025.

The impugned decision expressly recorded these circumstances and directed cancellation of the tender floated under the old RFP so that the work could be re-tendered under the new framework.

These were objective, relevant considerations connected with the procurement process, rather than arbitrary or extraneous grounds.

Since the authority had provided a specific justification and the Court found no mala fide or discriminatory purpose, the threshold for judicial interference was not met.

The Court declined to interfere with the decision dated 31 December 2025 cancelling the tender and permitting re-tendering under the new RFP.

The writ petition was dismissed, with no order as to costs.