Tender – Notice inviting tender – Issuance of letter of intent in favour of the successful bidder by the tenderee – Challenge to, by the unsuccessful bidder – Cancellation of initial tender process by the tenderee and withdrawal of the letter of intent issued in favour of the successful bidder on account of pending litigations in the High Court – Thereafter, issuance of fresh NIT by tenderee – Challenge to – High Court disposed of the writ petition by merely accepting the statement of the tenderee that it had no objection to go ahead with the initial tendering process and the statement of the initial successful bidder that it was ready to execute the project on the same terms and conditions as initially agreed, though the said tender was already withdrawn by the tenderee in view of the irregularities and illegalities committed by it, as recorded by an independent committee appointed by the High Court in earlier writ petitions – Correctness:
Held: No right whatsoever created in favour of the respondent no. 2-successful bidder, and the respondent no. 1 HIMUDA-tenderee cancelled the tender and issued fresh NIT, as such the respondent no. 1 could not have agreed to allow the respondent no. 2, who was found to be not technically qualified, to go ahead with the execution of the project in question and that too without giving the other two parties any opportunity to negotiate – Respondent no. 1 in collusion with the respondent no. 2, took the High Court for a ride and misused the process of law for covering up the irregularities and illegalities committed in the tender process by the officers of the respondent no. 1 – High Court also could not notice the ill-intention of the respondent nos. 1 and 2 and disposed of the petition, permitting them to go ahead with the original tender – Thus, the impugned order having been passed without proper application of mind and without assigning any cogent reason for brushing aside the findings recorded by the Independent Committee and the observations made by the Single Bench, is quashed and set aside – Also, the respondent no.1, though ‘State’ within the meaning of Art. 12, acted malafide and in collusion with the respondent no.2, and took the High Court for a ride, heavy cost of Rs. 5,00,000/- imposed on the respondent no. 1 – Constitution of India – Art. 12. [Paras 11-14]
Tender – Notice inviting tender – Letter of Intent – Nature of: Held: Letter of Intent is merely an expression of intention to enter into a contract – It does not create any right in favour of the party to whom it is issued – There is no binding legal relationship between the party issuing the LOI and the party to whom such LOI is issued – Detailed agreement/contract is required to be drawn up between the parties after the LOI is received by the other party. [Para10]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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