The Madhya Pradesh High Court, Gwalior Bench, has quashed the cancellation of a ₹65.73 crore construction tender issued by the MP Housing and Infrastructure Development Board (MPHIDB), holding that the decision was unprofessional, doubtful and beyond jurisdiction.
The case arose from a tender floated by the Madhya Pradesh Housing and Infrastructure Development Board (MPHIDB) for the construction of a ₹65.73 crore residential-cum-commercial complex, “Atal Kunj Tower” at Deen Dayal Nagar, Gwalior.
The petitioner, M/s Pragmatic Infrastructure Pvt. Ltd., emerged as the lowest bidder with a quote of 9.11% below the Schedule of Rates (SOR). However, after the financial bids were opened, the Additional Housing Commissioner abruptly annulled the tender on 18 March 2025, citing irregularities and confusion caused by corrigenda. The petitioner challenged this decision before the High Court under Article 226, alleging mala fide, arbitrariness, and procedural impropriety.
The Court found that the Additional Housing Commissioner should not have cancelled the tender since, under Section 23 of the M.P. Grah Nirman Mandal Adhiniyam, 1972 and Regulation 11 of the Conduct of Business and Delegation of Powers Regulations, 2015, tenders exceeding ₹50 crores could only be decided by the Business Committee and confirmed by the Board.
Referring to Tata Cellular v. Union of India, Reliance Energy Ltd. v. MSRDC, and Krsnaa Diagnostics v. State of M.P., the Court reiterated that tendering authorities must adhere to fairness, transparency, and reasoned decision-making. The Bench warned that frequent annulment of concluded bids shakes public confidence, fosters nepotism, and discourages entrepreneurship.
Addressing the argument that Clause 19.5 of the tender permitted annulment without assigning reasons, the Court clarified that even when a tender condition appears to allow administrative discretion, it cannot be used as a shield for arbitrary or unreasoned decisions.
Setting aside the cancellation order, the Court directed that the matter be placed before the Business Committee for fresh consideration of Pragmatic Infrastructure’s bid and issuance of a reasoned decision within two months. The Bench also directed that the Additional Commissioner be excluded from the reconsideration process to ensure impartiality.
Appearances
Petitioner- Shri Harish Dixit, Senior Advocate with Shri Nimish Hardeniya.
Respondents- Shri Vivek Khedkar, Senior Advocate with Shri Nakul Khedkar.
