Subodh Kumar Singh Rathour Vs Chief Executive Officer & Ors. (Supreme Court of India)
The Supreme Court examined the validity of the cancellation of a tender awarded for the maintenance of two underpasses on the Eastern Metropolitan Bypass under a Public-Private Partnership model. The appellant had emerged as the highest bidder and was awarded the contract. Subsequently, following a government order transferring certain maintenance functions of the E.M. Bypass from KMDA to KMC, the respondent directed the appellant to stop work and later cancelled the tender, citing technical faults, ambiguity in the tender, and financial loss.
The Court closely examined the internal file notings and found that the proposal to cancel the tender originated from the concerned Minister-In-Charge after the policy change. The officials repeatedly sought legal opinion before cancelling the tender, expressing reservations about the legality of such action. However, before legal advice was received, the tender cancellation proceeded following the minister’s specific instructions. The Court observed that the cancellation notice was issued at the minister’s behest rather than on an independent assessment by the authority.
The Court noted that the government order transferring maintenance functions to KMC expressly allowed KMDA to retain control over the underpasses and continue collecting advertisement revenue. It held that the tender awarded to the appellant related to maintenance activities such as cleaning, upkeep of gardens and electrical fixtures, together with advertisement rights, and was distinct from the maintenance functions transferred to KMC. It also observed that KMDA itself later floated a fresh tender for the same work, indicating that the earlier policy change did not necessitate cancellation of the existing contract. The subsequent transfer of both maintenance and advertisement rights to KMC occurred only on 16 September 2023, well after the cancellation.
