Judicial Interference in Tender Matters to be Limited

In a significant ruling, the Hon’ble High Court of Rajasthan reinforced the principle of limited judicial interference in tender matters, especially when no discrimination or irrationality is involved. The case M/s Sant International Jewellers v The State of Rajasthan and Ors., (2024:RJ-JP:32617), dated August 1, 2024, concerned the rejection of M/s Sant International Jewellers’ application for a plot in the Special Economic Zone (SEZ) in Sitapura, Jaipur, as part of a tender process for setting up a Gems & Jewelry industry by the Rajasthan State Industrial Development and Investment Corporation Ltd., (RIICO).

The petitioner applied for a plot in the SEZ, in response to a June 2008 advertisement, depositing 25% of the reserve price and 1% security. Upon discovering that the reserve price was outdated, the government rejected all applications, refunded deposits, and decided to re-advertise the plots at revised rates. The petitioner challenged this decision, arguing that the reserve price could not be revised after applications were invited.

The Court, however, rejected the petition, emphasizing that the scope of interference in tender matters is very limited. Further, the rejection of all applications was not discriminatory or irrational, as it applied uniformly to all applicants, and the decision to re-advertise the plots at revised rates was a plausible decision. Additionally, the court noted that no vested right was created in favor of the petitioner merely by filing an application for allotment, particularly since the bidding stage had not even been reached.

Reference was made to the Hon’ble Supreme Court of India’s rulings in State of Punjab and Ors. v. Mehar Din (AIR 2022 SC 1413), dated March 2, 2022, and Haryana Urban Development Authority and Ors. v. Orchid Infrastructure Developers P. Ltd. (AIR 2017 SC 882), dated January 27, 2027. These cases established that the highest bidder has no vested right to have the auction concluded in their favor, and the authorities are not bound to accept the highest bid.