Legitimate Expectation Can't Override Tender Terms Or Compel State To Proceed With Unsanctioned Project: Patna High Court
The Patna High Court has held that the doctrine of legitimate expectation cannot override the express terms of a tender or compel the State to proceed with a project that lacks the requisite administrative approval and financial sanction.A Division Bench of Justice Sudhir Singh and Justice Ranjan Kumar Jha was hearing a writ petition filed by M/s Energy United India Private Limited...
The Patna High Court has held that the doctrine of legitimate expectation cannot override the express terms of a tender or compel the State to proceed with a project that lacks the requisite administrative approval and financial sanction.
A Division Bench of Justice Sudhir Singh and Justice Ranjan Kumar Jha was hearing a writ petition filed by M/s Energy United India Private Limited challenging BREDA's decision to cancel an Expression of Interest (EOI) for empanelment of agencies to design, supply, erect, test and commission grid-connected rooftop solar power plants on government buildings across Bihar.
The petitioner participated in the bidding process, matched the L-1 rate, and received a Letter of Intent on February 10, 2025. An agreement was executed between the parties on February 17, 2025, following which the petitioner was allotted Purnia, Jehanabad and Madhubani districts and directed to undertake site surveys and other preparatory work. However, before any work order was issued, BREDA cancelled the EOI through a notice dated September 18, 2025.
The petitioner argued that the tender process had culminated in a concluded contract and that, after execution of the agreement and completion of preparatory activities at BREDA's direction, the respondents were estopped from cancelling the tender. It also invoked the doctrine of legitimate expectation, contending that the cancellation was arbitrary.
The State and BREDA submitted that implementation of the project depended upon approval for enhancement of project capacity and corresponding financial sanction from the competent authority. Since those approvals were not received, no work order could be issued to any empanelled agency, necessitating cancellation of the EOI.
Examining the tender conditions, the Court noted that Clauses 3.15 and 3.15.1 expressly reserved BREDA's power to withdraw, modify or cancel the EOI at any stage without assigning reasons. The Bench observed that the petitioner had participated in the tender process with full knowledge of these conditions and was bound by them.
The Court further noted that the materials on record showed the cancellation was prompted by the inability to secure the necessary administrative approval and financial sanction, and that the decision applied uniformly to all empanelled agencies rather than targeting the petitioner.
Rejecting the plea of legitimate expectation, the Bench held that the doctrine cannot be invoked to override express contractual terms or compel the State to continue with a project that could not proceed due to lack of approvals. The Court observed:
“Legitimate expectation may entitle a party to fairness in decision-making; however, it cannot override the express terms governing the tender process nor can it compel the State to proceed with a project which, according to the record, lacked the requisite approval and financial sanction.”
Finding no arbitrariness, mala fides or favouritism in the decision-making process, the High Court dismissed the writ petition.
Case Title: M/s Energy United India Private Limited v. State of Bihar and Ors.
Case Number: Civil Writ Jurisdiction Case No. 16154 of 2025.
Appearance: Mr. Nikhil Kumar Agrawal, Ms. Aditi Hansaria and Mr. Keshav Bhardwaj for the Petitioner. Mr. Advocate General and Mr. Yogendra Pd. Sinha for the State. Mr. Kunal Tiwary for BREDA.