Govt Has Every Right To Cancel & Call Fresh Tender; Scope Of Judicial Review Limited : Supreme Court

The Supreme Court today (April 25) reiterated that the judicial interference in tender matters should be minimal and only permitted in cases of mala fide or blatant arbitrariness. Holding thus, the bench comprising Justices Bela M Trivedi and Prasanna B Varale set aside the Kerala High Court's decision which had interfered with the tendering process.The dispute arose after the Kerala Forest Department cancelled an e-tender (dated May 25, 2020) for tree felling works in Konni Forest Division and issued a fresh tender (October 31, 2020). The cancellation was based on complaints from contractors who could not participate due to COVID-19 restrictions. Several aggrieved bidders challenged the cancellation before the Kerala High Court, arguing it was arbitrary and deprived them of a fair chance. The Single Judge and later the Division Bench ruled in their favor, ordering the department to proceed with the original tender. The High Court also noted that a fresh tendering process cannot be ordered just because it would fetch the best price for the government. Terming the High Court's interference with the tender and contracts matter to be erroneous, the judgment authored by Justice Varale placing reliance on Jagdish Mandal vs. State of Orissa and Others, (2007) 14 SCC 517 observed that the interference would be permissible only if the decision was mala fide, irrational or intended to favor someone. Since the Appellant cancelled the tender to provide an opportunity to contractors who were unable to participate due to COVID-19 restrictions, a fresh tender was issued; therefore, the Court held that the Appellant's decision to issue a fresh tender could not be interfered with.The Court rejected the High Court's reasoning to rule against the fresh tendering process. “we are of the opinion that the said observations by the High Court are contrary to the settled principles of law laid down by the Supreme Court that the Government is the protector of financial resources of the state and thus, it has every right to cancel and call for fresh tender if it is in the nature of protecting the financial interests of the State.”, the court observed. “At the cost of repetition, we may state that the decision of the authority is giving a fresh opportunity to all interested bidders to compete with each other in the process of the fresh selection. In our opinion, the decision taken by the authority is not affecting the public interest, on the contrary it furthers the cause of the public interest and fair play.”, the court added. Resultantly, the appeal was allowed. Case Title: The Principal Chief Conservator of Forest & Ors. VERSUS Suresh Mathew & Ors.Citation : 2025 LiveLaw (SC) 482Click here to read/download the judgment

Govt Has Every Right To Cancel & Call Fresh Tender; Scope Of Judicial Review Limited : Supreme Court

Yash Mittal

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