Tender cancellation order quashed for violating natural justice principles and lacking proper reasoning

The Orissa HC quashed a tender cancellation order dated 5.2.2016 for violating principles of natural justice. The court found the cancellation order was cryptic, provided no reasons, and was not communicated to the petitioner who had qualified in both technical and financial bids. The court noted that authorities attempted to justify their action through subsequent affidavit explanations rather than proper reasoning at the time of cancellation. The impugned order and consequential fresh bid invitation were both quashed, and the petition was allowed.

---

---

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.

---