Background: The case concerned a government scheme in Puducherry for the free distribution of motorized tricycles to differently abled persons. The petitioner, a registered company and authorized TVS dealer, had a history of successful supply under previous tenders. In August 2025, the Social Welfare Department issued an e-tender for supply of adaptive vehicles. The petitioner faced technical issues submitting its bid online and raised concerns about potential influence by other manufacturers during the pre-bid meeting. Subsequently, a re-tender was issued with altered engine specifications, prompting the petitioner to challenge the process in court. That challenge was dismissed as premature.
After technical evaluation, the petitioner was the sole qualified bidder and was asked to submit a sample vehicle. Despite compliance and a voluntary price reduction in response to an oral request regarding GST changes, the tender was abruptly cancelled by the authorities in December 2025. The petitioner challenged this cancellation before the Madras High Court.
Court’s Analysis: The respondents argued that the cancellation was recommended by the Finance Department due to the single tender situation and discrepancies in price arising from GST reforms. They contended that a fresh tender was necessary to protect the State exchequer. The Court examined the minutes of the relevant meeting, which revealed that the Minister for Social Welfare had raised concerns about the tender being notified prior to GST implementation and the resulting price implications. However, the Directorate of Social Welfare clarified that, under Clause 6(ii) of the Notice Inviting Re-Tender, the contract price was fixed and insulated from any tax changes during the delivery schedule. The single tender situation arose because the other bidder was disqualified.
The Court found that these circumstances did not justify cancellation. The petitioner had a proven track record, had complied with all requirements, and had even reduced the price at the respondents’ request. The contract terms expressly provided that price would not be affected by tax changes, undermining the rationale for cancellation based on GST discrepancies. The Court emphasized that the existence of a single qualified bidder, by itself, is not a valid ground for cancellation when the process is otherwise fair and competitive.
Decision: The Madras High Court quashed the tender cancellation notice dated 18.12.2025, holding it unsustainable in law. The Court directed the authorities to proceed with the tender process as per the original Notice Inviting Tender dated 29.08.2025 and to award the contract to the petitioner if all eligibility conditions are met, within four weeks. The writ petition was allowed, and connected miscellaneous petitions were closed.
This decision clarifies that government authorities cannot arbitrarily cancel tenders on the basis of a single qualified bidder or post-tender tax changes when the contract terms protect against such fluctuations and the process remains transparent and competitive.
Case Reported at:
Case Name: Rajvijay Associate Pvt. Ltd. v. Government of Puducherry and Anr.
Case Citation: (2026) taxcode.in 734 HC
