Supreme Court bench having Justice Satish Chandra Sharma and Justice Bela M Trivedi heard a civil appeal filed by Indore Development Authority (“Appellant”) where it challenged the High Court’s Division Bench order.
High Court Division Bank was in favour of giving Contract to highest bidder in the Notice Inviting Tender (NIT) with reserve price of ₹21,120 per square meter for leasing out of land, where respondent no.1 submitted the highest bid of ₹25,671.90 per square meter. Later, Tender Evaluation Committee found an outstanding property tax of ₹1.25 crores which was not factored into the base price. Therefore, it cancelled the initial tender process and issued a second tendering process with a revised reserve price of Rs. 26,000/- per square meter. And appellant contended that Tendering Committee has the right to reject or cancel the process on certain valid bases.
However, the Division Bench of the High Court set aside the Single Bench order and directed the Appellant to award contract to the respondent No. 1, considering that its bid was the highest. Following this, the appeal was presented before the Supreme Court by the appellant.
Supreme Court set aside the Division Bench’s order, with observation that the High Court committed an error while sitting over an appeal and fixing the base price/modifying the offer made by respondent no.1. A similar case reference was given- HUDA (Haryana Urban Development Authority) Vs. Orchid Infrastructure Developers Pvt. Ltd (2017), where the Court reiterated that the highest bidder has no vested right to have the auction concluded in his favor. The Government or its authority could validly retain the power to accept or reject the highest bid in the interest of public revenue.
Further, the Court reasoned that since there was no allotment letter granted by the appellant to respondent no.1, therefore, “in the absence of allotment letter and acceptance of highest bid, no relief could have been granted in favour of respondent No.1 as there was no concluded contract in the matter and the decision taken by the Tender Evaluation Committee to generate more revenues could not have been interfered with in the manner and method as has been done by the Division Bench of the High Court of Madhya Pradesh at Indore Bench.”
“The bidder has no right in the matter of bid except of fair treatment and cannot insist on further negotiation as has been done in the present case. The terms and conditions of NIT, particularly condition No. 6, empower the IDA to accept or reject any or all bids. In the present case, the bid was rejected for valid and cogent reasons and, therefore, the order passed by the Division Bench of the High Court of Madhya Pradesh is set aside.”, the court held.
Advocate Pritam Saini, Hisar Court