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Service & Administrative LawSupreme Court of India

South Delhi Municipal Corporation v. Ravinder Kumar & Anr.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 8314 of 2015)Decided 7 Oct 2015
Civil Appeal No. 8314 of 2015
Justice T.S. Thakur · Justice V. Gopala Gowda

Background

The Corporation invited tenders for 26 works in November 2012. Two contractors were the lowest bidders for 16 of them. The Corporation then cancelled the entire tender, citing administrative reasons, and issued a fresh tender notice in December 2012. The contractors challenged the cancellation and the new tender in the Delhi High Court, which quashed both.

Decision Breakdown

The Supreme Court allowed the Corporation's appeal and set aside the High Court's judgment. The Court held that the Corporation, as custodian of public money, had acted fairly and transparently in cancelling the first tender and inviting fresh bids, and that the High Court had found no mala fides or intention to favour anyone. It said the High Court had failed to appreciate the Corporation's reasons, including comparisons with lower rates for similar works, when exercising judicial review. The re-tender notice was restored, and both contractors were allowed to submit bids, to be evaluated without further delay.

Lesson Learnt

Government bodies have room to cancel and re-tender a contract when they consider it in the public interest. Courts step in mainly when a decision is arbitrary, unfair or tainted by bad faith. A lowest bidder does not automatically get the contract, but is entitled to a fair process.

South Delhi Municipal Corporation v. Ravinder Kumar & Anr. – Legal Case Shots | LegalAware