HC dismisses plea challenging cancel order of tender for CIDCO plots

The Bombay High Court ruled that tendering authorities need not provide reasons for cancelling tenders, dismissing Infinity Infra's challenge to CIDCO's decision.

MUMBAI: Tendering authority is not required to give reasons while cancelling a tender as these decisions are neither judicial nor quasi-judicial, the Bombay high court said on Monday, while dismissing a petition challenging the cancellation of a CIDCO tender for lease of 11 residential and commercial plots in Kharghar. The court said if reasons were required to be given at every stage, then commercial activities of the state would come to a grinding halt.

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A division bench comprising chief justice Alok Aradhe and justice Bharati Dangre dismissed a plea by M/s. Infinity Infra, which challenged the cancellation of the tender process on the grounds that CIDCO unilaterally removed certain plots from the auction for vague reasons after the entire tender process was completed, despite submission of the highest bid by the real estate firm.

The order records that the bids for the auctioned plots were opened on November 25, 2021, and as per the real estate firm, the offer given by them for both the plots was highest, much more than the prevalent market price in the area. Therefore, the firm expected the lease of the plots in its favour and in anticipation of the allotment, it mobilised funds for payment of lease premium and building infrastructure necessary for developing the plot.

However, via a communication dated May 19, 2022, the two plots were removed from the auction scheme, citing “administrative reason”.

Advocates Chetan Kapadia and Soham Bhalerao, who appeared on behalf of CIDCO, submitted that the real estate firm gained no inherent right to claim allotment in their favour despite being the highest bidders.

While dismissing the plea, the court held that “the state must be given sufficient leeway in this regard... neither any right is created in favour of the petitioners (Infiniti Infra) to have the plots allotted to them nor is there any arbitrariness on part of CIDCO in cancelling the tender process.”