Authorities Not Bound To Choose Highest Bidder In Tender Process, Bidder's Right Always Provisional: Rajasthan High Court

The Rajasthan High Court has rejected a plea against an order of the State Government by which an application of the petitioner for allotment of a plot in the Special Economic Zone (“SEZ”) to set up a Gems and Jewelry industry was rejected.  

A bench of Justice Avneesh Jhingan held that the scope of court interference in tender matters was very limited since it was not a case of discrimination or irrationality. It was stated that since all the applications were rejected uniformly to re-advertise the plots on revised rates, it would not be plausible to interfere with the decision.

The Court also observed that even the right of the highest bidder was always provisional and the authorities were not bound to accept the highest bidder. In this case, the bidding stage had not begun and only applications were invited. Hence it was held that merely by filing an application for allotment, no vested right was created in the favour of the petitioner.

Background

The government had invited applications for the allotment of plots to set up the gem and jewellery industry in SEZ. However, it was found that the reserve price of the plot was set up for less than what it should have been.

Consequently, all the applications were rejected by the government, refunding the deposit amount submitted by the applicants, and the advertisement was published again with revised rates. Aggrieved by the rejected application, the petition was filed by the petitioner.

The Court referred to the Supreme Court case of State of Punjab and Ors. v Mehar Din in which it was held that the authority that could be held as 'State' under Article 12 of the Constitution was not bound to accept the highest bid and the right of the highest bidder was always provisional.

In this light, it was held that the High Court could not interfere with the opinion of the executive, under Article 226, unless the decision was totally arbitrary or unreasonable, since the competent authority floating the tender was the best judge of its requirements.

In this background, the Court dismissed the petition since in the present matter, as no bidding stage was reached and the applications were rejected in a non-discriminatory manner.

“The scope of interference in the tender matters is well defined over the years. A plausible decision is not to be interfered. It is not a case of discrimination or irrationality as all the applications were rejected with a decision to re-advertise the plot after revising the price. The petitioner would be at liberty to participate as and when the allotment of the plots is advertised. Another aspect is that by filing an application for allotment, no vested right was created in favour of the petitioner…It cannot be lost sight of that in the present case even the bidding stage had not come.”

Title: M/S Sant International Jewellers v the State of Rajasthan & Anr.

Citation: 2024 LiveLaw (Raj) 188

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