In Meerut Development Authority v. Association of Management Studies, (2009) 6 SCC 171, the Hon’ble Apex Court held that tender is an offer. It is an invitation to seek communication to convey acceptance. It was further held as under:
“A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated it must be unconditional; must be in the proper form, the person by whom tender is made must be able to and willing to perform its obligations. The terms of the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process.
The bidders participating in the tender process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the aforesaid ground, the reason being the terms of the invitation to tender are in the realm of contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.” Bihar State Housing Board v. Radha Ballabh Health Care and Research Institute Private Ltd., (2019) 10 SCC 483.
In Laxmikant v. Satyawan, (1996) 4 SCC 208, it was held as under:
“The person making the highest bid shall have no right to take back his bid. The decision of the Chairman of the Board of Trustees regarding acceptance or rejection of the bid shall be binding on the said person. The acceptance of the highest bid shall depend on the Board of Trustees. The trust shall reserve to itself the right to reject the highest or any bid.”
In State of U.P. v. Vijay Bahadur Singh, (1982) 2 SCC 365 it was laid down that there is no obligation to accept the highest bid. The Government is entitled even to change its policy from time to time according to the demands of the time.
Thus, it is apparent and explicit that even if the public auction had been completed and the respondent was the highest bidder, no right had accrued to him till the confirmation letter had been issued to him. HUDA v. Orchid Infrastructure Developers (P) Ltd., (2017) 4 SCC 243.
In espousing the equitable notion of exacting fairness in Governmental dealings the Court in Food Corporation of India v. Kamdhenu Cattle Feed Industries, (1993) 1 SCC 71 proclaimed that there was no unfettered discretion in public law and that a sovereign authority possessed powers only to use them for public good. Observing that the investiture of such power imposes with it, the duty to act fairly and to adopt a procedure which is “fair play in action”, it was underlined that it also raises a reasonable or legitimate expectation in every citizen to be treated fairly in his dealings with the State and its instrumentalities.
The observance of this obligation as a part of good administration, is obligated by the requirement of non-arbitrariness in a State action, which as a corollary, makes it incumbent on the State to consider and give due weight to the reasonable or legitimate expectations of the persons, likely to be affected by the decision, so much so that any failure to do so would proclaim unfairness in the exercise of power, thus vitiating the decision by its abuse or lack of bona fides. The besieged decision would then be exposed to the challenge on the ground of arbitrariness. It was propounded that mere reasonable or legitimate expectation of a citizen, may not by itself be a distinct enforceable right in all circumstances, but the failure to consider and give due weight to it, may render the decision arbitrary. It was thus, set down that the requirement of due consideration of legitimate expectation formed a part of the principle of non-arbitrariness, a necessary concomitant of the rule of law. Lalaram and Others v. Jaipur Development Authority, (2016) 11 SCC 31.