Right to refuse lowest or any other tender is always available to Government and public authorities

In Renesco India Pvt. Ltd. Vs. Eastern Coalfields Limited and Ors, the Calcutta High Court was to decide on the challenge by the Appellants to the tender process of ECL claiming that its technical bid was wrongfully rejected by the ECL Authorities.

It is well settled that so long as the bid has not been accepted, the highest or lowest bidder as the case may be, acquires no vested right to have the tender concluded in his favour. In case of a tender there is no obligation on the part of the person issuing the tender notice to accept any of the tenders or even the lowest/highest tender as the case may be. The Government must have freedom of contract. Fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision should be tested by the application of Wednesbury principles of reasonableness, must be free from arbitrariness and must not be affected by bias or actuated by mala fides. The right to refuse the lowest or any other tender is always available to the Government and public authorities. If a decision has been taken by a public authority in a bona fide manner although not strictly following the norms laid down by the Courts, such decision is upheld on the principle that the Courts, while judging the constitutional validity of executive decisions, must grant certain measure of freedom of 'play in the joints' to the executive.