THE PRINCIPAL CHIEF CONSERVATOR OF FOREST & ORS. V. SURESH MATHEW & ORS 2025 INSC 569:

DATE: 25/04/2025

COURT: Supreme Court of India

BENCH: Justice Bela M Trivedi and Justice Prasanna B Varale

FACTS:

In this case, the appellants, the Divisional Forest Officer (DFO) and the Kerala Forest Department, cancelled an earlier e-tender notification dated 25.05.2020 for the final tree felling works of 1954 Nellidappara in South Kumaramperoor Forest Station. The cancellation of the tender was followed by a fresh tender being floated on 31.10.2020. The writ petitioners had participated in the initial tender and argued that the decision to retender the work was arbitrary and illegal. Additionally, the petitioners were affected by a circular issued by the Principal Conservator of Forests on 29.02.2020, which stipulated that A-class registered contractors who had not participated in any of the department’s tenders during the last financial year were ineligible for registration renewal. The petitioners had their registration renewed, but they challenged the circular’s application, and sought to participate in the e-tender of 25.05.2020, leading them to approach the Kerala High Court.

The High Court’s Single Judge ruled in favor of the petitioners, setting aside the circular and ordering the authorities to reconsider the renewal of the petitioners' registration on merits, without considering the provisions of the circular. The Court also observed that the authorities could not impose new conditions after the last date for application submissions, as it would violate Article 14 of the Constitution. The DFO’s decision to cancel the initial e-tender and float a fresh one was challenged in a subsequent writ petition, and the Single Judge again ruled in favor of the petitioners, stating that the earlier tender proceedings should proceed as initially planned. The DFO’s decision to re-tender was found to be unjustified, and the Court ordered the authorities to award the contract based on the original e-tender. This order was upheld by the Kerala High Court in a writ appeal, leading the appellants to file an appeal before the Supreme Court.

ISSUES:

The key issues presented in this case were whether the Divisional Forest Officer’s decision to cancel the earlier e-tender and float a fresh one was arbitrary, and whether the Principal Conservator of Forest's circular affecting the renewal of A-class contractors’ registrations was valid. The case also addressed whether the authorities could impose new conditions after the application deadline, violating principles of fairness under Article 14 of the Constitution. Additionally, it questioned the justification for disregarding the previous tender process and initiating a re-tender without valid reasons, potentially causing delays and inefficiencies.

JUDGEMENT WITH REASONING:

The Court allowed the appeals, set aside the judgment and order dated 19.01.2021 passed by the High Court of Kerala in Writ Appeals Nos. 1568 of 2020, 1577 of 2020, and 1589 of 2020. The Court concluded that the decision of the Divisional Forest Officer (DFO) to cancel the e-tender and retender the work was valid and not arbitrary. The High Court’s findings were overturned as it was held that the DFO acted within the scope of his authority to ensure a fair and transparent process, taking into account the challenges posed by the COVID-19 pandemic.

The Court reasoned that the DFO’s decision to cancel the original e-tender was justified because some contractors were unable to participate in the tender due to transportation restrictions arising from the COVID-19 pandemic. The DFO's action was not arbitrary but aimed at ensuring fairness by giving all contractors an equal opportunity to participate. The Court emphasized that the right of the tendering authority to modify or cancel the tender, as outlined in the tender notice, was a valid exercise of administrative discretion, particularly when it served public interest. It was also noted that the cancellation of the tender did not violate any legal principles, nor was it motivated by mala fide intentions or any unfair advantage to any party.

Furthermore, the Court highlighted that the financial interests of the state were a valid concern, and the government had the right to cancel tenders if it deemed it necessary for safeguarding public funds. It was stated that the possibility of lowering rates through successive tenders was a legitimate consideration for the tendering authority, and such decisions should be upheld as long as they were made in public interest and not with any malice or bias. The Court also referred to established principles of judicial review in tender matters, emphasizing that courts should not interfere with administrative decisions unless they were arbitrary or irrational. Based on these principles, the Court found no basis to interfere with the DFO’s decision and thus allowed the appeals.

ANALYSIS:

The case revolves around the decision of the Divisional Forest Officer (DFO) and the Kerala Forest Department to cancel an earlier e-tender for the tree felling works in the South Kumaramperoor Forest Station, and subsequently issue a fresh tender. The petitioners, who had participated in the original e-tender, argued that the cancellation was arbitrary and illegal, citing the impact of a circular by the Principal Conservator of Forests on contractor registration renewals. The key issues included whether the DFO’s decision to retender was justified, whether new conditions imposed after the application deadline violated fairness principles under Article 14, and the validity of the circular. The Court found that the DFO acted within his authority, particularly in light of the COVID-19 pandemic, which had restricted some contractors’ ability to participate due to transportation issues. The decision to retender was seen as a valid exercise of discretion to ensure fairness and provide equal opportunity to all contractors.

The Supreme Court allowed the appeals and set aside the High Court’s decision, emphasizing that the DFO’s decision to cancel the tender and retender the work was not arbitrary. The Court held that the cancellation was not only within the DFO’s powers but also a necessary step to ensure a fair, transparent, and competitive process. It highlighted that the government had the right to cancel tenders to protect public interest and financial interests, especially when contractors were unable to participate due to external factors like the pandemic. The Court affirmed the principle of judicial restraint in reviewing administrative decisions and concluded that the DFO’s actions were legitimate, serving the public interest without any bias or irrationality.