2016 (5) TMI 1617 - HC - Indian Laws

Violation of principles of natural justice - cryptic order, assigning no reasons - HELD THAT - On perusal of the impugned order in Annexure-4 dated 5.2.2016, it appears that by a cryptic order without assigning any reasons, the tender has been cancelled and more so, it appears that the said cancellation has not been communicated to the petitioner. It is admitted fact that the petitioner has qualified in both the technical and financial bid pursuant to the invitation bid in Annexure-1. It appears that since no reasons have been assigned in the order impugned in Annexure-4 and subsequently by filing affidavit, the opposite parties have tried to justify their action by giving explanation, this Court is inclined to interfere with the same. Thus, the order impugned in Annexure-4 dated 5.2.2016 and the consequential invitation of bid in Annexure-5 also cannot sustain and accordingly, the same are hereby quashed. Petition allowed.

Summary

Issues:
1. Cancellation of tender without giving an opportunity of hearing.
2. Compliance with due provisions of law in tender cancellation.
3. Justification of tender cancellation based on technical evaluation.
4. Principles of natural justice in tender cancellation.
5. Validity of reasons given for tender cancellation.
6. Judicial review of the decision-making process in tender cancellation.
7. Applicability of judgments in the present context.

Issue 1: Cancellation of tender without giving an opportunity of hearing:
The petition sought to quash the order canceling the tender for a drainage system project, alleging that no hearing opportunity was provided before the cancellation. The petitioner argued that being found suitable in both technical and financial bids, the cancellation without due process was unlawful.

Issue 2: Compliance with due provisions of law in tender cancellation:
The State contended that the cancellation was justified due to discrepancies in the partner's credentials, rendering the bid non-responsive. The petitioner's bid was canceled based on technical evaluation issues, and the State argued that no irregularities occurred in the cancellation process.

Issue 3: Justification of tender cancellation based on technical evaluation:
The court examined the reasons provided for the tender cancellation, which were not initially communicated to the petitioner. The technical evaluation highlighted discrepancies in the partner's credentials and lack of necessary documentation, leading to the conclusion that the firm was technically unqualified for the project.

Issue 4: Principles of natural justice in tender cancellation:
The court emphasized the importance of adhering to the principles of natural justice in administrative decisions. It cited precedents stating that reasons for an order must be clear and cannot be supplemented later, underscoring the need for transparency and fairness in cancellation decisions.

Issue 5: Validity of reasons given for tender cancellation:
The court found that the reasons provided in the subsequent affidavit to justify the cancellation were not present in the original cancellation order. This discrepancy led the court to conclude that the cancellation lacked proper justification and did not comply with legal standards.

Issue 6: Judicial review of the decision-making process in tender cancellation:
The court discussed the limits of judicial review in interfering with administrative decisions, emphasizing that decisions should not be arbitrary or unreasonable. It highlighted the need for caution in exercising discretionary powers, especially in cases involving public interest.

Issue 7: Applicability of judgments in the present context:
The court determined that the judgments cited by the State were not relevant to the specific circumstances of the case. It held that the cancellation lacked proper reasoning and transparency, leading to the quashing of the tender cancellation order and the subsequent bid invitation.

In conclusion, the court allowed the writ petition, quashed the tender cancellation order, and invalidated the consequential bid invitation due to lack of proper justification and non-compliance with legal standards, emphasizing the importance of transparency and adherence to natural justice principles in administrative decisions.