Telangana High Court
M/S Readers Stores vs Telangana State Trade Promotion ... on 21 April, 2026
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH
AND
THE HON'BLE SRI JUSTICE G.M.MOHIUDDIN
WRIT APPEAL No.262 of 2026
DATE:21.04.2026
Between:
M/s Readers Store and 2 others
....Appellants
And
Telangana State Trade Promotion
Corporation Limited, Hyderabad (TGTPC)
Rep. by its Chairman and another
....Respondents
JUDGMENT
Heard Sri N.Naveen Kumar, learned counsel for the appellants and Sri Tera Rajinikanth Reddy, learned Additional Advocate General appearing for respondent No.1-Corporation and respondent No.2- General Manager of the Corporation and perused the record.
2. This writ appeal is preferred, under Clause 15 of the Letters Patent, aggrieved by the order dated 09.01.2026 passed by the learned Single Judge in W.P.No.33804 of 2024. By the said order, the learned Single Judge dismissed the underlying writ petition filed by the appellants, wherein they sought a writ of mandamus against the respondent authorities to compel the execution of an Operation & Management (O&M) Contract in their favour pursuant to a Letter of Award (LOA) dated 08.05.2023.
2Factual matrix (in brief)
3. Respondent No.1, Telangana State Trade Promotion Corporation Limited (TGTPC), a State instrumentality, issued a Request for Proposal (RFP) dated 13.09.2022 inviting bids for selection of an Operations & Maintenance (O&M) Operator for the Container Freight Station (CFS) situated at Mamidipally, near Rajiv Gandhi International Airport (RGIA), Hyderabad. Pursuant thereto, appellant No.1 participated in the tender process, qualified in the technical bid, submitted its financial bid and upon negotiations, furnished a revised financial bid. Upon evaluation, the appellants emerged as the successful bidders.
4. Consequent upon approval by the Board of respondent No.1, a LOA, dated 08.05.2023 was issued in favour of the appellants awarding the O&M rights of the subject CFS facility. The said LOA specifically stipulated that the award was subject to fulfilment of certain conditions precedent, such as incorporation of a Special Purpose Vehicle (SPV), furnishing of a Performance Bank Guarantee (PBG), and execution of a formal O&M Contract within the stipulated period. The LOA also contained operational conditions, including restriction of use of the premises for CFS-related activities.
5. The appellants, by communication dated 24.05.2023, accepted the LOA. Simultaneously, appellants sought certain modifications/clarifications contending that the LOA conditions 3 ought to be aligned with the broader uses contemplated under the RFP, including use as an Air Freight Station/Logistics Facility/Bonded Warehouse, which were according to the appellants, only to bring the LOA in conformity with the tender conditions and not by way of repudiation or renegotiation.
6. In compliance with the post-award requirements, the appellants incorporated the requisite SPV on 25.06.2023 and subsequently furnished a PGB for Rs.19,50,000/- on 20.09.2023. However, the said Bank Guarantee was valid only till 19.09.2024 and was admittedly not renewed thereafter.
7. Further, representations were made by the appellants on 14.07.2023, 21.08.2023, 19.09.2023 and 24.11.2023, particularly with respect to (i) use of the facility for multiple purposes,
(ii) moratorium period, and (iii) handing over of the 17,000 Sq. Ft. exim warehouse, which was stated to be under use by respondent No.1 for its paper products division. Certain requests were considered and partly accommodated in the 34th Board Meeting dated 11.08.2023, and again deliberated upon in the 36th Board Meeting dated 30.12.2023.
8. Despite exchange of communications, compliance with certain conditions by the appellants and deliberations at Board level, the contemplated formal O&M Contract was never executed between the parties. The respondents' consistent stand was that several material 4 conditions had not attained finality and that no concluded contract had come into existence.
9. Aggrieved by the inaction of respondent No.1 in not executing the O&M Contract, the appellants filed W.P.No.33804 of 2024 seeking a writ of mandamus directing the respondents to act in accordance with the RFP and LOA and execute the O&M Contract in their favour. By interim order, dated 10.12.2024, this Court directed the respondents to consider taking steps in furtherance of the LOA including execution of the agreement.
10. Subsequently, respondent No.1 placed the matter before its Board. In the 39th Board Meeting, dated 03.09.2024, and in the 40th Board Meeting dated 07.01.2025, a decision was taken to cancel/drop the tender process and to utilise the CFS premises for the respondent's own requirements. The reasons recorded included increased storage needs due to expansion of business activities, establishment of a notebooks conversion center, proposed Irradiation plant, E-commerce Export Hub, and other strategic institutional requirements. The said decision was communicated to the appellants by proceedings dated 31.05.2025.
11. Upon final hearing, the learned Single Judge, by order dated 09.01.2026, dismissed the said writ petition holding that no concluded contract had come into existence, the matter involved contractual and disputed issues, and the respondent's decision to 5 cancel the tender did not warrant interference in exercise of jurisdiction under Article 226 of the Constitution of India.
12. Aggrieved by the said order, the appellants have preferred the present writ appeal.
Submissions on behalf of the appellants
13. Learned counsel for the appellants, assailed the impugned order and has advanced his submissions as under:
i) That the issuance of the LOA dated 08.05.2023, followed by its unequivocal acceptance by the appellants on 24.05.2023, coupled with subsequent compliance of all material post-award conditions, namely incorporation of the SPV and furnishing of the PBG, resulted in a concluded and binding contract between the parties. It was argued that execution of the formal O&M Agreement was only a consequential and ministerial step and respondent No.1 could not resile from the concluded contractual arrangement.
ii) That the subsequent decision of the respondents to cancel/drop the tender process was arbitrary, mala fide, unreasonable, and actuated by extraneous considerations and such decision was taken pendente lite, during the pendency of the writ petition, only with a view to frustrate the legitimate rights of the appellants and to render nugatory the interim protection granted by this Court.6
iii) That the appellants had a legitimate expectation, arising from the terms of the RFP, the issuance of the LOA, and the conduct of the respondents in insisting upon compliance with post-
award conditions, that the O&M Contract would be executed in due course. Acting upon such representation, the appellants altered their position by constituting the SPV, arranging financial security, preparing business plans, and mobilising resources. It was urged that such legitimate expectation could not be defeated in the absence of any demonstrable overriding public interest or fair procedure.
iv) That the learned Single Judge erred in treating the dispute as a purely contractual matter. That the respondent No.1 is State instrumentality within the meaning of Article 12 of the Constitution and, thus, all its actions, even in the contractual sphere, must satisfy the mandate of Article 14, such as fairness, reasonableness, transparency, and non-arbitrariness.
v) That this Court, by interim order dated 10.12.2024, directed the respondents to consider the matter in accordance with the LOA, including taking steps towards execution of the O&M Contract. Instead of complying with the spirit and tenor of the said order, the respondents proceeded to cancel the tender itself, which amounts to deliberate circumvention of the interim directions of this Court.
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14. The appellants in support of his case relied on the following decisions:
i. Subodh Kumar Singh Rathour v. The Chief Executive Officer and others 1 ii. Oravel Stays Private Limited and others v. Zostel Hospitality Private Limited 2 iii. Rickmers Verwaltung GMBH v. The Indian Oil Corporation Limited 3 iv. Kollipara Sriramulu v. T. Aswathanarayana and others 4 Submissions on behalf of the respondents
15. Learned for respondents has supported the impugned order and advanced his submissions as under:
i) That both the RFP and the LOA expressly contemplated execution of a separate and comprehensive O&M Contract as a condition precedent to creation of enforceable rights and obligations. The LOA was merely an expression of intent to award, subject to fulfilment of stipulated conditions, and did not by itself constitute the final contract. It was further argued that the appellants themselves sought repeated modifications in respect of material terms such as permitted usage, investment commitments, moratorium period, and handover of warehouse space, which clearly demonstrates absence of consensus ad idem and that the parties were still at the stage of negotiations.
1 2024 SCC OnLine SC 1682 2 2025 SCC OnLine Del 3377 3 (1999) 1 SCC 1 4 1968 SCC OnLine SC 87 8
ii) By placing reliance upon Clause 2.7.1 of the RFP, which expressly reserves to respondent No.1 the right to annul the bidding process at any stage without assigning reasons and without incurring liability, it was submitted that the said clause is binding on all bidders, including the appellants. The decision to cancel the tender was taken bona fide and in public interest owing to genuine administrative exigencies, including the Corporation's increased storage requirements and expansion of institutional activities.
iii) That the appellants failed to satisfy material preconditions under the tender documents. In particular, the PGB expired on 19.09.2024 and was not renewed prior to filing of the writ petition on 29.11.2024, which constitutes a fundamental breach. It was also contended that the SPV was not incorporated within the originally stipulated period. Therefore, the Appellants, being themselves in default, cannot seek equitable relief.
iv) That the controversy involves complex and disputed questions of fact, including the nature of the modifications sought by the appellants, interpretation of various clauses of the RFP (particularly Clause 1.1.9 concerning the Exim warehouse), delay attributable to the parties, and surrounding commercial circumstances. Such issues, requiring evidentiary 9 adjudication, are not amenable to summary determination in writ proceedings under Article 226.
v) That the decision whether to continue or cancel a tender process is essentially a commercial and administrative decision of the competent authority. The Court, in exercise of writ jurisdiction, cannot sit in appeal over the commercial wisdom of the respondent's Board, unless the decision is shown to be patently arbitrary, mala fide, irrational, or perverse, which is not the case here, and as such, no interference is called for.
vi) By placing reliance on State of Jharkhand and others v.
Cwe-Soma Consortium 5, it is submitted that the respondent No.1, being a State instrumentality, was fully competent to cancel/drop the tender process and decline execution of the formal O&M Contract, particularly when no concluded contract had come into existence, the PBG furnished by the appellants had admittedly expired and was not renewed, and the decision to cancel was taken by the competent Board on bona fide considerations, including increased storage requirements and business expansion.
16. We have taken note of the respective contentions urged and perused the material on record.
5 (2016) 14 SCC 172 10 Consideration by this Court
17. It is the case of the appellants that the LOA dated 08.05.2023, upon its acceptance, developed into a binding and concluded contract enforceable in law. The said LOA is extracted hereunder for ready reference:
Ref:APTPC/CFS/M.Pally/O&M/LOA/2023 Date: 08.05.2023 To Sri G.Jagan Reddy, Director, M/s Readers Stores India Pvt. Ltd C-16, IDA Uppal Hyderabad - 500039.
Sir, Sub: APTPC - CFS Mamidipally - O&M Operations -
Issue of Letter of Award to M/s Readers Stores India Pvt. Ltd. - Reg.
Ref: 1. TSTPC RFP published on 13.09.2022 in Times of India and Deccan Chronicle.
2. Bid dt.26.09.2022 of M/s Readers Stores India Pvt. Ltd. (M/s RSIPL)
3. Financial bid dt. 27.09.2022 of M/s RSIPL
4. Lr. dt.27.03.2023 along with preliminary business plan of M/s RSIPL
5. Minutes of the 33rd Board Meeting held on 25.04.2023.
**** In response to the RFP floated by TSTPC inviting proposals from reputed logistics operators for O&M operations of Container Freight Station (CFS) at Mamidipally, on Srisailam highway, near RGI Airport, Hyderabad, M/s Readers Stores India Pvt. Ltd. (M/s RSIPL) has submitted its bid dt.26.09.2022 vide reference 2nd cited. As M/s RSIPL qualified in technical bid evaluation, its financial bid dt. 27.09.2022 was opened. Subsequent to the negotiations M/s RSIPL has submitted its revised financial bid along with preliminary business plan vide reference 4th cited.
The Board of Directors of TSTPC Ltd., at its 33rd meeting held on 25.04.2023, considered the bid and revised financial bid along with the preliminary business plan submitted by M/s RSIPL, accepted the revised offer and approved awarding the O&M Contract of CFS, Mamidipally to it subject to the following conditions:
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1) The facility should be operated only as Contained Freight Station and related logistics activities.
2) The investment of Rs.25 Cr., as per the preliminary business plan of M/s RSIPL, shall be made in CFS within a period of (five) years from the date of awarding of O&M Contract. They will submit audited statements on investment made every year, failing which the contract will be terminated.
3) Conditions relating to exit of the O&M Operator during the currency of the O&M contract be clearly mentioned in the agreement. If the contractor exits on his own at any point of time during the contract period, he shall forfeit all the investments made in CFS till that date.
4) No other commercial activity, other than CFS and CFS related logistics activities, shall be permitted in the premises of CFS.
5) The property of CFS should not be mortgaged for raising any loan/advances etc., with any financial institutions/banks.
In view of the above the Authority (Joint Managing Director, TSTPC Ltd.) hereby Award the project (O&M operations of CFS, Mamidipally) to M/s RSIPL. M/s RSIPL is advised to comply with all the terms and conditions of RFP vide reference 1st cited, including incorporation of an SPV and submission of Performance Bank guarantee. The award of the Project is subject to the fulfilment of the conditions of RFP by M/s RSIPL.
You are, therefore, requested to confirm your acceptance to undertake the O&M of CFS Facility of Mamidipally, near RGI Airport, Shamshabad, Hyderabad so that the O&M contract with reference to the Project may be entered into between the Authority and the SPV to be incorporated by M/s. Readers Stores India Pvt. Ltd. (Lead Member) jointly with M/s Shift Logistics (consortium member). The SPV will have to enter into O&M Contract Agreement within 30 days after acceptance of the Letter of Award.
You are further requested to kindly sign and return the duplicate copy of this Letter to the Award as an acceptance and acknowledgement of the contents hereof, within seven (7) days from the date of receipt of the letter.
Please note that in case of the duplicate copy of this letter duly signed by the authorized signatory of M/s. Readers Stores India Pvt. Ltd. is not received by the Authority within the time stipulated herein, the Authority may, unless it consents for extension of time for submission thereof, appropriate the bid security as per the terms of the RFP conditions, cancel the LOA and the RFP. This issues with the approval of the Joint Managing Director, TSTPC Ltd.
Thanking you, Sd/-
GENERAL MANAGER (A&L) 12 Upon due consideration of the record, it is to be noted that a conjoint and purposive reading of the RFP and the LOA leaves little room for ambiguity as the LOA was not intended to be the final contract in itself, but only a step in the process culminating in execution of a formal O&M Agreement.
18. Before adverting to the issues, it is necessary to look into Clause 1.1.14, Clause 4.8.1 of the RFP, which is extracted hereunder:
1.1.14. The O&M contract sets forth the detailed terms and conditions to the Contractor, including the scope of the Contractor's services and obligations for operations of the Facility. ******* 4.8.1. The Contractor shall, within 30 days of receipt of the Letter of Acceptance from the Authority, the Successful Bidder, execute the O&M Contract with the Authority. The execution of the O&M Contract shall be subject to the following pre-conditions having been fulfilled by the Contractor:
4.8.1.1. Special Purpose Company: The Selected Bidder will form a Special Purpose Company which shall sign O&M Contract with Authority.
4.8.1.2. Performance Security: The Contractor shall submit a Performance Security as prescribed in relevant clause of the RFP.
19. Clause 1.1.14 of the RFP makes it clear that the O&M Contract would contain the detailed rights, obligations, responsibilities, risk allocation and operational framework governing the parties. Likewise, Clause 4.8.1 stipulates that the successful bidder shall, within 30 days of receipt of the LOA, execute the O&M Contract, subject to fulfilment of specified preconditions. The language employed in the LOA is equally significant. The appellants were called upon to confirm their acceptance so that the O&M Contract may be entered 13 into. The requirement to sign and return a duplicate copy of the LOA as token of acceptance, coupled with the stipulation regarding further compliance and execution of the definitive agreement, indicates that the LOA was evidentiary of selection of the successful bidder and not the final embodiment of all contractual terms. Thus, the structure of the tender documents clearly contemplates a two- stage process, i.e., identification of the successful bidder through the LOA; and creation of binding contractual rights through execution of the formal O&M Contract.
20. It is to be noted that the conduct of the appellants subsequent to acceptance of the LOA furnishes clear indication that even the appellants did not treat the LOA as a concluded and immutable contract.
21. Though the LOA was accepted on 24.05.2023, the appellants simultaneously sought modifications and clarifications in respect of material conditions. It is pertinent to summarise the modifications sought by the appellants:
Status of the Nature of Accepted or Date Modification RFP Clause Modification as per RFP Rejected 24.05.2023 Letter of Intent In consonance Clause 1.1.12. The Board of TGTPC (LOI) has with the RFP - Selected Bidder, if he in its 34th restrictions limiting specifically so desires may as Air meeting dt.
the facility's use with Clause Freight Station or the 11.08.2023, solely for CFS 1.1.12 of RFP Logistic Facility or purposes. Sought bonded warehouse accommodated for modification after obtaining prior the request and according to clause written permission accepted to 1.1.12 of the RFP, from TSTPC and amend the which states that Customs Authorities conditions of the bidder may and subject to usage of CES utilize the facility as compliance with the permitting RSIPL 14 Status of the Nature of Accepted or Date Modification RFP Clause Modification as per RFP Rejected an Air Freight Customs procedures, to use the CES Station, Logistic regulations and facility as Facility, or bonded taking approvals CFS/Air Freight warehouse. Cited wherever and from station /Logistics non-viability of the whomever required.
business if the
Facility/ Bonded
facility is solely warehouse.
used for CFS
purpose.
14.07.2023 3 Modifications (a) In Clause 1.1.12. The Board of TGTPC
were sought: consonance Selected Bidder, if he in its 34th
(a) LOA mentioned with the RFP - so desires may as Air meeting dt.
that no other specifically Freight Station or the 11.08.2023,
commercial activity, with Clause Logistic Facility or
1.1.12 of RFP bonded warehouse
accommodated
other than CFS and the request and
CFS-related after obtaining prior
written permission accepted to
logistics activities,
from TSTPC and amend the
shall be permitted
on the CFS Customs Authorities conditions of
premises. and subject to usage of CES
compliance with the permitting RSIPL
Customs procedures, to use the CES
regulations and
facility as
taking approvals
wherever and from
CFS/Air Freight
whomever required. station /Logistics
/Bonded
warehouse.
(b) Preliminary (b) Preliminary
Business Plan business plan
submitted by RSIPL was given for
specified the management
investment of Rs.25 review not a
Cr. shall be made in binding
CFS within a period statement.
of five (5) years from
the date of
awarding of O&M
Contract and
audited every year,
failing which the
contract will be
terminated.
Sought for
modification that
the final
approximate
investment amount
should be based on
the final business
plan submitted by
M/S RSIPL.
(c) LOA mandated (c) Clause Clause 1.1.9. The Board of TGTPC
moratorium period 1.1.9 of the Exim warehouse in its 36th
of six months is RFP states that admeasuring about meeting dt.
mandated; handover of 17000 sft located in
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Status of the
Nature of Accepted or
Date Modification RFP Clause
Modification
as per RFP Rejected
Petitioners sought the godown the CFS will be 30.12.2023
modification that space was utilised by the Paper accommodate the
the commencement conditional Products Division modification
of the moratorium upon TGTPC (PPD) of the sought and stated
period should start being able to Corporation for
from the actual find an storage of its paper
that the
date of warehouse alternate site products including moratorium
handover at CFS for its paper note books, plain period as per the
premises and not products copper paper, raw RFP condition
upon signing of the division materials etc., till shall be six
agreement. storage. adequate godown months. And,
space is made that TSTPC shall
available to the Paper try to construct
Products Corporation the Godown
by the Corporation.
The Corporation will
required for its
make all efforts to paper products
provide additional operations within
storage space a period of 9
required by its Paper months. On
Products Division at construction of
the earliest and Godown TSTPC to
handover the said handover the
warehouse to the
possession of
O&M Operator.
Godown to M/s
RSPL. And
Modified the LoA
dt. 8.05.2023
issued to M/s
RSIPL.
21.08.2023 Petitioner sought to Section 3.12.5 Clause 3.12.5. The hand over the of the RFP Payment of Annual vacant Exim stated that concession fee shall warehouse as in the lease be made on a event of TSTPC not rentals/conces monthly basis. There securing godown sion fee shall shall be a space required be paid from moratorium of 6 (six) within the the months. The amount moratorium. TSTPC moratorium of lease has to pay the period in 12 rentals/concession rentals to the Exim equal monthly fee pertaining to the warehouse at the installments, moratorium period prevailing market alongside the shall be paid by the rate to the O&M payment of the O&M Contractor. Annual contractor/Operator Concession in 12 equated Fee from the monthly installments seventh month along with the post-handover payment of Annual of the Exim concession fee warehouse. payable from the 7th month from the date of signing the O&M Contract.
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22. It is pertinent to note that a party who considers the contract to be complete and binding ordinarily seeks enforcement of its terms; it does not continue negotiations on substantial commercial stipulations. The repeated requests for modification of core conditions demonstrate that material aspects had not attained finality and that the parties continued to remain in the negotiating sphere. Therefore, the absence of consensus ad idem on essential terms is apparent on the record.
23. It is to be noted that the submission that all post-award conditions stood fully complied with, is factually incorrect, as the furnishing and maintenance of a valid PBG was an essential precondition under the tender conditions for execution and continuance of the contractual arrangement. Though the appellants furnished a PBG on 20.09.2023, the same remained valid only up to 19.09.2024, as admittedly the said guarantee was not renewed thereafter, and also the underlying writ petition came to be instituted on 29.11.2024, by which date no subsisting PBG was in force.
24. Moreover, where the tender conditions required continuity of performance security and renewal prior to expiry, failure to maintain the same cannot be treated as a trivial or technical lapse. The PBG constitutes the financial safeguard available to the procuring entity. Non-renewal thereof strikes at a material condition of the tender framework. Likewise, the timeline prescribed for incorporation of the 17 SPV was also not adhered to, the SPV was not incorporated strictly within the original stipulated period. Therefore, the LOA, by itself, did not crystallise into a concluded and enforceable contract, and that the relationship between the parties never progressed beyond the stage of conditional award subject to fulfilment of preconditions and execution of a formal agreement.
25. In the present case, the tender process was governed by the terms and conditions of the RFP, to which every participating bidder, including the appellants, consciously submitted itself. Clause 2.7.1 is extracted hereunder for ready reference:
2.7.1. Notwithstanding anything contained in this RFP, the Authority reserves the right to accept or reject any Bid and to annul the bidding process and reject all Bids, at any time without any liability or any obligation for such acceptance; rejection or annulment, without assigning any reasons whatsoever, at any stage of the Bidding Process.
The said clause of the RFP expressly reserves to the authority the right to accept or reject any bid and to annul the bidding process at any stage, without incurring liability and without assigning reasons, which are neither unusual nor impermissible in matters of public procurement. Such clauses are incorporated to preserve administrative flexibility and to protect public interest where circumstances so warrant. Once the appellants elected to participate in the tender process with full knowledge of the said conditions, they are bound by the same and cannot selectively repudiate it after having been unsuccessful in securing final 18 contractual execution. Further, the expression "at any stage" in the clause is of wide amplitude and cannot be simply restricted to the pre-award stage. Thus, where no concluded contract had come into existence and the definitive O&M Agreement remained unexecuted, invocation of the said power cannot be said to be dehors the tender conditions.
26. Though Clause 2.7.1 did not obligate respondent No.1 to assign reasons, the record discloses that reasons were in fact considered and recorded in the meetings of the Board. The minutes of the 39th Board Meeting dated 03.09.2024 and the 40th Board Meeting dated 07.01.2025 indicate that respondent No.1 reviewed its operational requirements and took a conscious decision that the CFS premises were required for its own expanding institutional activities. The considerations recorded included the following:
a) Providing additional storage space for accommodating increased volumes of notebooks and raw material due to increased business operations year on year,
b) Proposal for establishment of notebooks conversion center as approved by the Board at its 31st meeting held on 28.09.2022, and
c) Proposal for establishment of Irradiation Plant under the Government of India scheme
d) Proposal to establish an E-Commencer Export Hub under Export Policy of the Government of India and 19
e) Take up any other activity in terms of the objectives of the Corporation.
The above are plainly relevant and germane considerations. A public sector trade promotion corporation is entitled to periodically reassess utilisation of its assets and infrastructure in accordance with evolving business, commercial, and policy requirements. The impugned decision cannot be characterised as whimsical or capricious merely because the appellants were expecting award finalisation. Further there is also no allegation that the cancellation was designed to favour any third party or to confer private benefit. The cancellation related to the tender process as a whole.
27. Further, the decisions relied upon by the appellants do not advance their case for the following reasons:
i) In Subodh Kumar Singh Rathour (supra 1), the Court was dealing with a case where the authority had acted arbitrarily despite the petitioner having acquired enforceable rights under the governing framework and where the impugned action lacked justifiable basis. In the present case, no concluded contract ever came into existence, the LOA itself being subject to fulfilment of conditions precedent and execution of a formal O&M Agreement. Further, respondent No.1 acted under an express power reserved under Clause 2.7.1 of the RFP, and the decision to cancel the tender was founded upon recorded administrative and operational requirements. Therefore, the 20 ratio of the said decision is not applicable to the facts and circumstances of the present case.
ii) In Oravel Stays Private Limited (supra 2) the issue arose in the context of private commercial dealings and the question whether correspondence and subsequent conduct resulted in a binding arrangement between private parties. The principles governing private commercial contracts cannot be mechanically applied to a public procurement process governed by tender conditions reserving an express right of cancellation. More importantly, in the present case, repeated requests by the appellants for alteration of material terms clearly demonstrate absence of consensus ad idem and continuing negotiations. Hence, the said decision does not assist the case of the appellants.
iii) In Rickmers Verwaltung GMBH (supra 3), the Court was concerned with contractual obligations arising out of a concluded commercial arrangement where the rights and liabilities of the parties had crystallised. In the instant case, by contrast, the contemplated definitive O&M Contract was never executed material conditions remained unresolved, and even the PBG admittedly expired without renewal. Thus, the foundational premise of an existing enforceable contract, which formed the basis of said judgment, is absent in the present case.21
iv) In Kollipara Sriramulu (supra 4), the principle laid down was that mere absence of a formal document may not always defeat an otherwise complete agreement, if the parties are ad idem on essential terms and intend to be bound by it. The said proposition is unexceptionable. However, it has no application to the facts of the present case, where the tender documents themselves contemplated a future formal agreement as a condition precedent, and the subsequent conduct of the appellants in seeking repeated modifications on material aspects negatives any final consensus. Therefore, the parties never reached the stage of a complete and enforceable bargain.
28. It is relevant to note, that much emphasis was placed by the appellants on the fact that the final decision was communicated during pendency of the underlying writ petition. In this regard, the material on record indicates that the issue regarding internal requirement and future utilisation of the premises was under
consideration of the respondent from September, 2024, i.e., even prior to institution of the writ petition. The interim order dated 10.12.2024 required the respondents to consider the request of the petitioners in accordance with law. The matter was accordingly placed before the competent Board, which deliberated upon the same and took a decision on 07.01.2025. Therefore, the respondent acted in compliance with the interim direction by considering the matter through the competent decision-making body and as a tendering 22 authority, its role becomes functus officio which disables it from taking any further administrative decision concerning the subject matter. Merely because the outcome of such consideration did not favour the appellants, it does not render the decision mala fide.
29. It is to be noted that the parameters of judicial review in contractual and tender matters are well settled. As laid down in Raunaq International Limited v. I.V.R Construction Limited 6, the Court does not sit in appeal and do not have expertise to correct the administrative decision of the tendering authority unless substantial public interest involved or the transaction was mala fide and unreasonable.
30. Moreover, respondent No.1 had discretion vested in it, to annul the tender process at any stage, exercised it for rational reasons related to its own administrative exigencies, and followed a fair, board-approved process. To compel respondent No.1 to enter into a 30-year contract for the use of its own asset against its own considered assessment of its future needs would be an unprecedented and illegal encroachment on its managerial and commercial autonomy.
31. It will not be out of the context to note that the doctrine of legitimate expectation does not create an absolute or enforceable right, particularly where the governing tender conditions expressly reserve a power to cancel the process. In the present case, 6 (1999) 1 SCC 492 23 expectation of the appellants arose subject to Clause 2.7.1 of the RFP, which entitled respondent No.1 to annul the tender at any stage. Once the respondent, for bona fide reasons relating to its operational expansion, storage requirements, and institutional needs, decided to utilise the premises for its own purposes, such expectation stood lawfully defeated. The appellants' expectation cannot override the respondent's lawful discretion to manage its own property and affairs.
Conclusion
32. For the foregoing reasons, this Court is of the considered view that no concluded contract came into existence between the parties, the Letter of Award being only an intermediate step in the tender process subject to fulfilment of preconditions and execution of a formal agreement. The appellants' repeated requests for modification of material terms further negate their plea of a binding contract. Respondent No.1 was expressly empowered under Clause 2.7.1 of the RFP to annul the bidding process at any stage, and its decision to cancel the tender was a bona fide administrative and commercial decision founded on genuine operational requirements. This Court find no arbitrariness or mala fides therein, nor any error in the judgment of the learned Single Judge warranting interference in appeal.
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33. Accordingly, this Writ Appeal is dismissed. The order dated 09.01.2026 passed by the learned Single Judge in W.P.No.33804 of 2024 is affirmed.
As a sequel, miscellaneous petitions, pending if any, stand closed. No costs.
_______________________________ APARESH KUMAR SINGH, CJ ______________________________ G.M.MOHIUDDIN,J Date: 21.04.2026 ssp