BHAGWATI AKSHAR EMPIRE LLP FORMERLY KNOWN AS BHAGWATI EMPIRE LLP v. CITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD AND ORS
Tender Cancellation Justified: High Court Upholds CIDCO's Decision, Citing Public Interest, CRZ Violations, and Absence of Concluded Contract.
Court: Bombay High Court
Citation: 2025:BHC-AS:57128-DB
Decision Date: 22-12-2025
List of Laws
Article 226 of the Constitution of India; The Companies Act, 1956; The Limited Liability Partnership Act, 2008; Navi Mumbai Disposal of Lands (Amendment) Regulations, 2008; Maharashtra Regional & Town Planning Act, 1966; New Bombay Disposal of Land Regulations, 1975; Environmental Impact Assessment Notification 2006; Coastal Regulation Zone (CRZ) Regulations; Law of Contract; Tender Law; Judicial Review
- Facts: Bhagwati Akshar Empire LLP, formerly Bhagwati Empire LLP, participated in an e-auction for a plot in Navi Mumbai. It was declared the highest bidder on August 22, 2022, and paid the Earnest Money Deposit (EMD). However, the City and Industrial Development Corporation (CIDCO) cancelled the tender on May 17, 2024, citing that the bid was below the prevailing market rate and to avoid loss to the public exchequer. Meanwhile, the National Green Tribunal (NGT) had passed an order restraining CIDCO from proceeding with the tender process due to CRZ violations.
- Procedural Posture: Bhagwati Akshar Empire LLP filed a writ petition in the Bombay High Court challenging the cancellation of the tender and seeking a direction for the issuance of an allotment letter.
- Issue: Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution of India, should set aside the cancellation of a tender at the instance of the highest bidder, especially when the tender process was subject to legal challenges and no allotment letter was issued?
- Holding: No, the High Court should not interfere with the cancellation of the tender. The writ petition is dismissed.
- Reasoning: The Court reasoned that the scope of judicial review in tender matters is limited and interference is warranted only if there is arbitrariness, mala fides, or perversity in the State action. The Court noted that CIDCO, as an instrumentality of the State, is duty-bound to ensure no loss is caused to the public exchequer and has the right to cancel the tender if the bid is substantially below market potential. The Court also emphasized that no vested right accrues to the highest bidder until an allotment letter is issued and all conditions are fulfilled. The Court further stated that the pendency of proceedings before the NGT, which restrained CIDCO from proceeding with the tender due to CRZ violations, justified the delay in issuing the cancellation letter. The court cited several Supreme Court judgments to support the principle that the government has the freedom to contract and can refuse the lowest or any other tender in the public interest.
🔒 For Members Only