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Public interest or change in policy may be sufficient to negate concept of legitimate expectation

In Quippo Oil and Gas Infrastructure Ltd. v. Oil and Natural Gas Corporation Limited and Ors., the Delhi High Court said that in Ram Parvesh Singh & Ors v. State of Bihar and Ors. it was held that, legitimate expectation is not a legal right. It is an expectation of a benefit, relief or remedy, that may ordinarily flow from a promise or established practice. Term 'established practice' refers to a regular, consistent predictable and certain conduct, process or activity of decision-making authority. Expectation should be legitimate, that is, reasonable, logical and valid. Any expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid cannot be a legitimate expectation. Not being a right, it is not enforceable as such.

Public interest or change in policy may be sufficient to negate concept of legitimate expectation. Thus, if ONGC had decided that, a subsidiary company applying for tender should have a positive networth, it rather safeguarded compliance of project and hence, acted in public interest. Employer's interest is always in completion of its project rather than to secure financial guarantees for such project.

In present case, condition that, a bidder should have positive net worth was not imposed mid course; it always existed. That Petitioner's bids were accepted and evaluated in past, ignoring such a condition, does not in any manner make it inessential for present tender. As to its premise, Court is not equipped to discern the rationale. Perhaps, it is not enough for public agency to be satisfied that, any possible default can be financially addressed through a guarantee issued by principal or holding company and that alone may not be sufficient. It may wish to safeguard against insolvent contractors, whose lack of lines of credit may imperil smooth performance of contract, or worse - such as seizure or attachment of movable assets onsite. Therefore, insistence on such conditions cannot be belittled, nor can legitimate expectation be pressed into service as an actionable ground.

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