State of U.P. v. M/s Al Faheem Meetex Pvt. Ltd.
Background
Following earlier Supreme Court directions to modernise slaughterhouses, Uttar Pradesh invited tenders to build one on a public-private-partnership basis in Meerut. A Bid Evaluation Committee (BEC) initially found the respondent's bid suitable, but on realising that only two valid bids had been received (fewer than the three required by Financial Rules for genuine competition), the BEC recalled its own recommendation and decided to invite fresh tenders. The respondent challenged this reversal in the Allahabad High Court, which quashed the BEC's decision and ordered the matter be reconsidered from the earlier acceptance stage; the State then appealed to the Supreme Court.
Decision Breakdown
The Supreme Court held that the BEC was only a recommendatory body, not the final decision-making authority, and since no Competent Authority had ever actually approved or accepted the respondent's bid, no enforceable right had accrued to the respondent that would require a hearing before the BEC revisited its own recommendation. The Court found the BEC's decision to recall its recommendation, made because too few valid bids existed to ensure competitive bidding, was neither unfair nor mala fide, and noted that the tender guidelines expressly gave the authority power to reject bids and annul the process. It also observed that since nearly six years had passed since the original tender notice, fresh, widely-publicised bidding was in any event appropriate. The appeal was allowed and the High Court's order was set aside, with no order as to costs.
Lesson Learnt
A bidder does not acquire an enforceable legal right merely because a recommendatory committee initially favoured their bid: until the competent approving authority actually accepts it, the process can be revisited and restarted (including for sound reasons like insufficient competitive bidding) without giving the earlier frontrunner a hearing.