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The Principal Chief Conservator of Forest v. Suresh Mathew

Civil Appeal · 2025 INSC 569Decided 25 Apr 2025
Civil Appeal Nos. 5542-5544 of 2025 (arising from SLP (C) Nos. 12353-12355 of 2021), marked "Non-Reportable"
Justice Bela M. Trivedi · Justice Prasanna B. Varale

Background

Kerala's forest department invited an e-tender for tree-felling work, but the Divisional Forest Officer later cancelled it after some contractors complained they couldn't participate due to Covid-19 transportation restrictions, and floated a fresh tender instead. Contractors who had participated in the original tender challenged the cancellation in the Kerala High Court, and both the Single Judge and the Division Bench ruled in their favour, finding the cancellation arbitrary and ordering the department to proceed with the original tender.

Decision Breakdown

The Supreme Court held that government tender decisions are commercial and administrative in nature, and courts must show restraint: interference is only warranted if a decision is shown to be mala fide (in bad faith), intended to favour someone, or so irrational that no reasonable authority could have made it, relying on its own settled precedents (Jagdish Mandal, Tata Cellular, Michigan Rubber). Since the tender documents expressly reserved the department's right to cancel or modify bids without giving reasons, and the cancellation was aimed at giving a fair opportunity to contractors who genuinely couldn't participate because of pandemic restrictions (not to favour any particular bidder), the Court found no arbitrariness or bad faith. It held that the High Court had wrongly second-guessed a legitimate commercial decision meant to protect the government's financial interests, set aside both High Court rulings, and allowed the department's appeal.

Lesson Learnt

Courts will generally not interfere with a government's decision to cancel a public tender if it acted within its stated contractual rights and in good faith to ensure fairness: an aggrieved bidder must show actual bad faith or irrationality, not just that a different outcome was possible.

Official source (sci.gov.in)View Judgment (PDF)

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