Madhya Pradesh High Court
M/S Paras Agency vs The State Of Madhya Pradesh on 20 August, 2025
Author: Vishal Mishra
Bench: Vishal Mishra
NEUTRAL CITATION NO. 2025:MPHC-JBP:67840
1 WP-21706-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VISHAL MISHRA
ON THE 20th OF AUGUST, 2025
WRIT PETITION No. 21706 of 2025
M/S PARAS AGENCY
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Yash Lodha - Advocate for petitioner.
Shri Gajendra Parashar - Panel Lawyer for respondents/State.
Shri Rohit Jain - Advocate for respondent No.3.
ORDER
Assailing the resolution dated 08.04.2025 and a letter dated 30.05.2025 passed by the Krishi Upaj Mandi Samiti, Gairatganj, District Raisen whereby the tender issued has been cancelled on the ground of lack of healthy competition as well as on the ground of quorum incomplete.
2. It is the case of the petitioner that the respondent No.3 Krishi Upaj Mandi Samiti Gairatganj issued a notification for online tender for establishment of a 50 metric ton capacity weighing scale on BOT basis within its Mandi premises at Gairatganj. The petitioner along with four others participated in the same. A technical committee was constituted for purpose of opening and scrutinizing the tenders and a meeting was convened on 28.02.2025. All five online tenders were opened. Upon meticulous scrutiny by the technical committee, it was found that four out of five tenders Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22 NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 2 WP-21706-2025 submitted by Gagan Gaur, Jayesh Enterprises, Soyash Enterprises and Giriraj Maheshwari were not complying with the stipulated guidelines and contained technical errors. Therefore, the four bids submitted by the aforesaid were declared ineligible and were cancelled by the committee. The petitioner i.e. Paras Agency emerged as the only agency having complete compliance and fulfilling all the required criteria as per the tender document.
3. It is pointed out that the petitioner has quoted an annual premium of Rs.61,108/- over and above the minimum annual premium of Rs.25,000 as prescribed by the tender document. He was the highest bidder. Therefore, his tender was accepted by the technical committee vide summary report dated 28.02.2025. However, the committee instead of recommending and approving the tender for execution of the work order and contract, took an untenable decision directing for cancellation of the tender and for initiation of re-tender process by communication dated 30.05.2025 taking note of the committee resolution/note sheet dated 08.04.2025. The committee resolution dated 08.04.2025 shows two reasons for cancellation of the tender document; first lack of healthy competition; and second prescribed quorum of constituted committee was not complete which is in direct contravention of the Madhya Pradesh Store Purchase Rules and Service Procurement Rules, 2015. The petitioner preferred a detailed representation highlighting the instant issue but the same has not been responded by the authorities. It is argued that in terms of Rule 49 of the Madhya Pradesh Store Purchase Rules and Service Procurement Rules, 2015, tenders should have been invited and the number of tenderers should not be less than three. In the instant case, Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22 NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 3 WP-21706-2025 there were five participants who submitted their bids, although during the technical evaluation four were declared unqualified and their tenders were rejected due to deficiencies. Therefore, it cannot be construed that there was unhealthy competition. Cancellation of the tender is after 40 days of effective acceptance of the petitioner's tender by the evaluation committee.
4. It is the case of the petitioner that the Rule 10 of the relevant rules provide it's responsibility for ensuring full presence of all the members of the constituted committee before commencing the proceeding and if the full members were not present, the proceeding of the meeting should not commence. The deficiency in quorum is an internal procedure lapsed on part of the respondent No.3 and its committee and the same cannot be attributed to the petitioner. The same cannot be taken as a ground for cancellation of the tender process and is in violation of Article 14 of the Constitution of India as well as the law laid by the Hon'ble Supreme Court in the case of Michigan Rubber (India) Limited v. State of Karnataka and others reported in (2012) 8 SCC 216 as well as in the case of Jagdish Mandal vs. State of Orissa and others reported in (2007) 14 SCC 517. After cancellation of the tender proceedings, the authorities have initiated the procedure for fresh tender and, therefore, the petition is filed.
5. It is also pointed out that by an order dated 30.06.2025 by way of an interim measure, this Court had directed not to finalize the re-tendering process till a final decision of the petition.
6. On notice being issued, a reply has been filed by the respondent No. 3 i.e. contesting respondent. They have denied the petition's averments.
Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 4 WP-21706-2025 It is contended that there is no illegality or infirmity in the decision of the respondents/authorities. A preliminary objection is taken regarding availability of an alternative remedy to the petitioner as there is a provision of appeal in terms of Rule 19 of Krishi Upaj Mandi (Allotment of Land and Structures) Rules, 2009 (hereinafter referred to as 'the Rules of 2009') wherein a person aggrieved by the order of Krishi Upaj Mandi Samiti may prefer an appeal to the Managing Director. Without availing the said remedy, this petition directly before the Court is not maintainable.
7. As far as merits, it is contended by the respondents that out of five tenderers, four were declared disqualified and only the petitioner remains for consideration. Therefore, it cannot be said that it was a healthy competition. Second reason for cancellation of the tender process was that the auction committee is to be constituted for consideration of bids. The committee shall comprise of one chairperson who would be the chairperson of the committee of Krishi Upaj Mandi Samiti and the other four members will be the Collector or its representatives not below the rank of Deputy Collector. The quorum of the committee was not complete at the time of evaluation of the bids and, therefore, a final decision to proceed with the tender process could not be taken. The committee has resolved for cancellation of the entire tender process and for re-initiation of tender proceedings. It is submitted that the scope of judicial review in case of contract and tender matters is limited and cannot be interfered by the Court in a petition under Article 226 of the Constitution of India. By issuance of a re-tender, no prejudice will be caused to the petitioner as the petitioner is having right to participate in the tender Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22 NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 5 WP-21706-2025 proceedings. Placing reliance upon the judgments in the cases of Prestige Lights Ltd. vs. State Bank of India (2007) 8 SCC 449; K.D. Sharma vs. Steel Authority of India Limited and others (2008) 12 SCC 481 and Tata Cellular vs. Union of India reported in (1994) 6 SCC 651, he has prayed for dismissal of the writ petition.
8. Learned counsel for the petitioner has drawn attention of this Court to Rule 20 of the Rules, 2009 which deals with exemptions and points out that the instant tender was issued for a structure to be constructed under the BOT i.e., Build, Operate and Transfer Scheme. Rule 20 of the Rules of 2009 gives an exemption that the Rules of 2009 are not applicable to the structure to be constructed under BOT. Therefore, the ground taken by the respondent that there is a remedy of appeal against the decision taken by the Krishi Upaj Mandi Samiti and the Committee is not available to them, as the same could not be challenged by the petitioner by filing an appeal under Rule 19 of the Rules of 2009.
9. Heard learned counsel for the parties and perused the record.
10. From the perusal of the records, it is not disputed that a NIT was issued by the respondent No.3 for establishment of 50 metric ton capacity weighing scale on BOT basis within the Mandi premises at Gairatganj. There were 5 participants including the petitioner i.e. (1) Paras Agency (the Petitioner) (2) Gagan Gour (3) Soyash Enterprises (4) Jayesh Enterprises & (5) Giriraj Maheshwa. At the time of scrutiny of tender documents by the technical committee, except the petitioner, four others were declared disqualified. The petitioner has quoted an annual premium at the rate of Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22 NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 6 WP-21706-2025 Rs.61,108/- over and above the minimum annual premium quoted in the tender document i.e. Rs.25,000/-.
11. The preliminary objection taken by the respondent regarding availability of an alternative efficacious remedy in terms of Rule 19 of the Rules of 2009 will not be available to the petitioner in view of the fact that Rule 20 of the Rules of 2009 provides for an exemption, which reads as under:
"20. Exemption.-(1) Notwithstanding anything contained in these rules, these rules shall not apply to:--
(i) Structure to be constructed under B.O.T. (Build, Operate and Transfer) Scheme. For such structures, the terms and conditions of licence and agreement shall be determined by the market committee separately, with the prior approval of the Managing Director.
(ii) Assignment of operation of certain facilities like canteen or electronic weigh bridge on contract, canteen, electronic weight bridge, agri-clinic, public utility toilet, farmer's rest house and STD/PCO, however the decision of the Managing Director shall be final in regard to deciding this category."
From the perusal of the aforesaid, it is clear that the Rules of 2009 will not be applicable to the structure to be constructed under the BOT scheme. Admittedly, in the present case, the notification was issued for establishment of a 50 metric ton capacity weighing scale on BOT basis in Mandi premises at Gairatganj. Therefore, in terms of Rule 20 of the Rules of 2009 i.e. exceptions, the Rule 19 of the Rules of 2009 will not be applicable to the petitioner. Therefore, the ground taken by the respondent regarding availability of alternative remedy is not applicable to the case of the petitioner.
12. The reasons for cancellation of the entire tender process and direction for re-issuance of a tender is of two folds as reflected from the Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22 NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 7 WP-21706-2025 resolution of the committee dated 08.04.2025 pointing out the fact that the quorum for technical evaluation committee was incomplete and there was no healthy competition. Therefore, direction was issued for cancellation and re- tendering the entire process.
13. The Hon'ble Supreme Court had an occasion to deal with the scope of judicial review in cases of contracts and tenders. In the case of Jagdish Mandal (supra), the Hon'ble Supreme Court after taking note of series of judgments passed in the cases i.e. Sterling Computers Ltd vs. M & N Publications Ltd [1993 (1) SCC 445]; Tata Cellular v. Union of India [AIR 1996 SC 11];Raunaq International Ltd., vs. I.V.R. Construction Ltd. [1999 (1) SCC 492];Air India Ltd. vs. Cochin International Airport Ltd [2000 (2) SCC 617];In Association of Registration Plates vs. Union of India [2005 (1) SCC 679]; and B.S.N. Joshi v. Nair Coal Services Ltd. [2006 (11) SCALE 526] had arrived at following conclusion observing as under:
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22 NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 8 WP-21706-2025 delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions :
i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone.
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say : 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached.
ii) Whether public interest is affected."
14. Further, in the case of Michigan Rubber (India) Limited (supra), the Hon'ble Supreme Court considering the judgments pointed out hereinabove and also the judgment passed in the case of Tejas Constructions and Infrastructure (P) Ltd. vs. Municipal Council, Sendhwa reported in (2012) 6 SCC 464 has laid down the following principles:-
"23. From the above decisions, the following principles emerge:
(a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by Courts is very limited;
(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government."Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22
NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 9 WP-21706-2025
15. The Hon'ble Supreme Court has categorically held that evaluating tenders and awarding tenders are essentially commercial functions. The principles of equity and natural justice are not applicable to the said procedure. If the decision relating to award of contract is bona fide and is in public interest, then the courts while exercising the powers under Article 226 of the Constitution of India will not interfere. The powers of judicial review will not be permitted to be invoked to protect the private interest at the cost of public interest or to decide a contractual dispute. At the most, a tenderer has a grievance to approach the civil court. However, if the reasons assigned for cancellation of the tender process are totally untenable and smells malafide on part of the authorities, then the interference under Article 226 of the Constitution of India can be made.
16. In the present case, there is a specific resolution passed by the Secretary, Krishi Upaj Mandi Samiti, Gairatganj, District Raisen pointing out the fact that the quorum of technical evaluation committee was not complete. Once they arrived at a conclusion that the quorum of technical evaluation committee was not complete, then the committee could not have opened the bids and could not have evaluated the documents. They could not have even declared the other four participants to be disqualified on the basis of documents. Secondly, the decision taken by the Secretary for re-tendering and cancelling the entire tender process is causing great prejudice to the petitioner as the rates quoted by the petitioner are opened and disclosed, which were much above the minimum which was quoted in the tender document. There is no document placed on record by the Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22 NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 10 WP-21706-2025 respondents/authorities to show that who are the members who were present at the time of technical evaluation. It is only mentioned that the quorum was incomplete. Even the impugned order does not reflect that how many members were present in the committee.
17. The Rule 8 of the Rules of 2009 specifically points out constitution of Auction Committee and conduct of Auction. The same reads as under:
"Rule - 8. Constitution of auction committee and conduct of auction.
(1) Conduct of auction or scrutiny of the offers received, as the case may be, shall be done by an auction committee, which will have following members, namely:
(i) Chairperson/Officer-in-charge of the market committee - Chairperson
(ii) Collector or his representative, who shall not be below the rank of Deputy Collector -
Member
(iii) Deputy Director of the concerned regional office of the Board or his representative, who shall not be below the rank of Assistant Director - Member
(iv) Executive Engineer of the concerned regional office of the Board or his representative, who shall not be below the rank of Assistant Engineer. - Member
(v) Secretary of the concerned market committee. - Member-
Secretary.
In the absence of the Chairperson/Officer-in-charge of the market committee, the auction committee shall be presided over by the Collector or his representative and in case he is also absent, the Deputy Director of the regional office of the Board or his representative shall preside over the meeting. (2) Notices shall be sent to the members of the auction committee at least 7 days prior to the date fixed for auction/scrutiny of offers. (3) Presence of at least three members as specified in sub-rule (1), shall be necessary at the time of auction/scrutiny of offers otherwise the proceedings shall be adjourned.
(4) If no person belonging to a scheduled caste or scheduled tribe comes forward for allotment of reserved plots/structures, then such plots/structures shall be treated as unreserved and disposed of accordingly. (5) The member-secretary of the auction committee shall prepare minutes of the proceedings, immediately after the conclusion of auction/scrutiny of offers, which shall be signed by all the members present.
(6) On the basis of minutes, earnest money deposited by all the participants, Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22 NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 11 WP-21706-2025 except the first two highest bidders, shall be refunded to them expeditiously."
17(A). Rule 9 of the Rules of 2009 reads as under:
"Rule - 9. Acceptance of bid/offer:-
(1) A meeting of the market committee shall be called within 10 days of the conclusion of auction/scrutiny of offers, for taking a decision in the matter.
(2) The market committee shall give sanction for the highest bid/offer only if the same is not below the 'upset price' otherwise it shall be rejected."
18. The Rule 8 of the Rules of 2009 provides that presence of at least three members as specified in Sub-rule (3) shall be necessary at the time of scrutiny of the offers, otherwise, the proceeding shall be adjourned. Rule 9 provides that within 10 days from the scrutiny of offers, a meeting of market committee shall be called and the market committee shall give the sanction to the highest bid offer if it is not below the upset price. Admittedly, in the present case, the documents placed before the support do not reflect that how many members were present in the committee and who all were present. It is simply mentioned that the quorum was incomplete. In absence of any material to substantiate that the quorum was incomplete, the impugned order cannot be sustained. The authorities are required to give reasons that why the quorum was considered to be incomplete. Second ground taken was that it is an unhealthy competition as four bids were rejected on technical grounds. The same cannot be said to be unhealthy competition as there were five participants in the tender process. It is only after their bid documents were opened, they were declared disqualified on technical basis. Therefore, the reasons assigned by the authorities as well as the resolution passed by the authorities for cancellation of the entire tender process are per se legal. They are hereby quashed.
Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22NEUTRAL CITATION NO. 2025:MPHC-JBP:67840 12 WP-21706-2025
19. The petitioner has already submitted a detailed representation to the authorities which is not dealt with by them and is pending consideration till date. Therefore, the matter is remanded back to the authorities for consideration of the representation submitted by the petitioner and to take a final decision on the representation within a period of 30 days from the date of receipt of the certified copy of the this order.
20. Till a decision is taken by the authorities, there will not be any finalization of the re-tender process issued by the authorities.
21. With the aforesaid observations, the writ petition stands allowed and disposed off. No order as to costs.
(VISHAL MISHRA) JUDGE sj Signature Not Verified Signed by: SUSHEEL KUMAR JHARIYA Signing time: 17-12-2025 18:01:22