High court of Calcutta: Right to refuse lowest tender in any final bid is always available to Government and Public Authorities
In the case of Renesco India private Limited vs Eastern Coalfields Limited and Others the Calcutta High Court said that “State has power to reject the tender-lowest or highest bid”.
Two questions that came up and framed by the Bench were:
1) Whether or not the rejection of the Appellant’s bid by the ECL Authority is sustainable.
2) Whither or not the learned Single Judge was Justified in permitting the ECL Authorities to cancel , withdraw their earlier tender and float a new tender
The High Court held the following as Order and Directions:
1) The decision of the ECL Authorities rejecting the technical bid does not suffer from the vice of arbitrariness.
2) The learned Single Judge did not commit any error by permitting the ECL Authorities to withdraw their earlier tender and providing afresh by issuing a fresh tender.
It is well settled that so long as the bid has not been accepted, the highest or lowest bidder as the case maybe, acquires no vested right to have the tender concluded in his favour. In case of a tender there is no obligation on the part of the person issuing the tender notice to accept any of the tender or the lowest or highest tender as the case may be.
In the case of a State which floats the tender Article 298 of the Constitution provides the power to the State and accordingly the State has the right to decide to enter into a contract with the bidder or not AND this power of the State is subject only to the requirement of reasonableness under Article 14 of the Constitution.
The Government has freedom of contract. The right to refuse lowest or any other tender is always available to the Government and Public Authorities Accordingly, the High Court dismissed the Appeal.
Dr.Gubbi S Subba Rao
Counselor & Advocate