JUDGMENT : Tarlok Singh Chauhan, J. Aggrieved by the cancellation of the tender that was awarded in his favour, the petitioner has filed the instant petition for grant of the following substantive reliefs:- i) Issue a writ of certiorari to quash annexure P-1 i.e. impugned letter dated 05.09.2023 issued by respondent No.4. ii) Issue a writ of mandamus directing the respondent authority to allow the petitioner to complete the tender work issued to the petitioner vide award letter dated 20.06.2023. iii) Call for the records pertaining to the case at hand. iv) Direct the respondent authorities to pay the cost of the petition. 2 The undisputed facts of the case are that the respondents had invited bids through e-procurement on 24.04.2023 for the construction of link road from Dhatehar Mahrana Duhak km 0/0 to 6/310 (SH: formation cutting, passing places, retaining walls, cross drainage works, GSB, WBM G-II, WBM G-III) tarring work, interlocking paver block, cement concrete pavement, road side drain and parapets, P/F road furniture including five years routine maintenance of above mentioned road which falls under NABARD RIDF- XXVIII. The estimated cost of work as per tender notice was fixed at Rs.327.51 lacs towards construction of road and Rs.36.16 lacs towards maintenance for five years. 3. After completion of codal formalities, the tender was eventually awarded to the petitioner being L-1 vide award letter dated 20.06.2023. Shortly, within a period of 2 ½ months, the respondents withdrew the tender vide letter dated 05.09.2023 “due to administrative reasons” and aggrieved thereby, the petitioner has filed the instant petition for the reliefs as quoted above. 4. The respondents have filed reply, wherein the factual aspect of the matter has been admitted and the only ground for justifying the cancellation of the tender was that the process of technical evaluation of work in question had been assailed by one Rajinder Singh Rana by filing CWP No.4125 of 2023 before this Court, wherein the petitioner was also party as one of the respondents and such petition was disposed of on 12.09.2023 because the tender in question had been withdrawn and nothing more thereafter has been added to this ground. 5. It has further been averred that even though the work was awarded to the petitioner vide letter dated 20.06.2023 but the petitioner did not sign the agreement, as stipulated, within 07 days and did not proceed to start work within 15 days. 5. It has further been averred that even though the work was awarded to the petitioner vide letter dated 20.06.2023 but the petitioner did not sign the agreement, as stipulated, within 07 days and did not proceed to start work within 15 days. This also led to the withdrawal of the tender. 6. We have heard the learned counsels for the parties and have also gone through the records of the case carefully. 7. Before adverting to the respective case of the parties, it needs to be noticed that the person in favour of whom the contract has now been awarded was fully-aware of the pendency of this petition and at one stage had instructed Mr. Nitin Thakur, Advocate of this court to put in appearance on his behalf and file an appropriate application for his impleadment, but no such application was filed till date. This fact has duly been verified by Mr. Nitin Thakur, Advocate in the open court during the course of hearing. 8. It also needs to be noticed that at the time when the instant petition was filed, the work in question had not been awarded in anyone’s favour and therefore, this court did not find it fit enough and any occasion for grant of interim relief, as would be evident from the order dated 27.10.2023. 9. In order to satisfy ourselves regarding the work in progress, we had called upon Mr. Munish Sehgal, Executive Engineer, H.P. P.W.D, Jawalaji Division, District Kangra, H.P who informed the court that overall 20% of work has been executed. 10. Be that as it may, as per the respondents, the tender in question was withdrawn due to pendency of CWP No.4125 of 2023, but admittedly then there is no order passed in that writ petition calling upon the official respondents to withdraw the tender in question. 11. This assumes importance because there is no reason whatsoever mentioned in the letter dated 5.9.2023 as to why the tender has been withdrawn and it is only mentioned “due to administrative reasons”. This would be evident from letter dated 05.09.2023, which is reproduced here-in-below, in its entirety:- “HIMACHAL PRADESH PUBLIC WORKS DEPARTMENT No.SEIX/WX-II/Dhatehar Mahrana/2023-3164 Dated:- 05.09.2023. To The Executive Engineer, Dehra Division, HPPWD, Dehra. This would be evident from letter dated 05.09.2023, which is reproduced here-in-below, in its entirety:- “HIMACHAL PRADESH PUBLIC WORKS DEPARTMENT No.SEIX/WX-II/Dhatehar Mahrana/2023-3164 Dated:- 05.09.2023. To The Executive Engineer, Dehra Division, HPPWD, Dehra. Subject:- Construction of Link road from Dhatehar Mahrana Duhak Km.0/0 to 6/310(SH: Formation Cutting, Passing Places, Retaining walls, Cross Drainage works, GSB, WBM G-II, WBM G-III, Tarring work, Interlocking Paver Block, Cement Concrete Pavement, Road side Rain and Paraphets, P/F road furniture including Five Years Routine Maintenance in Km. 0/0 to 6/310) under NABARD RIDF-XXVIII. The approval of tender case for the subject cited work issued vide this office letter No.SEIX/WA/Dhatehar Marhana Duhak-NABARD/2023-1610-11 dated 20.06.2023 is hereby withdrawn due to administrative reasons. The process for fresh tender may be initiated. You are therefore asked to take further necessary action in the matter accordingly under intimation to this office. DA/Nil. Superintending Engineer, 9th Circle, HPPWD, Nurpur.” 12 Since there is no reason accorded in the letter dated 5.9.2023, obviously, withdrawal of tender on this sole ground is not tenable. 13 Confronted with this, learned Advocate General would argue that it is because the petitioner neither signed the agreement within 07 days nor commenced the work within 15 days that the tender was withdrawn. However, such plea is not open to the respondents as this is not the ground of withdrawal of tender, as set out in the letter dated 05.09.2023 and it is well settled principle of law that if the order does not speak of the reasons, the same cannot be done subsequently by filing an affidavit to that extent 14 The reliance can conveniently be placed on the judgment passed by Constitution Bench of the Hon’ble Supreme Court in Mohinder Singh Gill and another versus The Chief Election Commissioner, New Delhi and others, (1978) 1 Supreme Court Cases 405, wherein it has been held that reasons have to be mentioned in the order itself. It shall be apt to reproduce para No.8 of the judgment, which reads as under:- The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. It shall be apt to reproduce para No.8 of the judgment, which reads as under:- The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. 15 It is no longer res integra that where a breach of contract involves the decision-making authority exceeding its power or violating the principles of natural justice or its decision being borne out of perversity, then such cancellation of contract can certainly be scrutinized under the writ jurisdiction. 16 It needs to be remembered that cancellation of a contract deprives a person of his valuable rights and is a very drastic step, often due to significant investments having already been made by the parties involved during the subsistence of the contract. Failure on the part of the courts to zealously protect the binding nature of a lawful and valid tender, would erode public faith in contracts and tenders. Arbitrary terminations of contract create uncertainty and unpredictability, thereby discouraging public participation in the tendering process. When private parties perceive that their contractual rights can easily be trampled by the State, they would be dissuaded from participating in public procurement processes, which may have a negative impact on such other public-private partnership ventures and ultimately it is the public who would have to bear the brunt thereby frustrating the very object of public interest. 17 As a matter of fact, the Hon’ble Supreme Court in Subodh Kumar Singh Rathour versus Chief Executive Officer and others, AIR 2024 SC 3784 , had cautioned the public authorities to be circumspect in disturbing or wriggling out of its contractual obligations through means beyond the terms of the contract in exercise of their executive powers. It shall be apt to reproduce para No.129 of the judgment, which reads as under:- 129. We caution the public authorities to be circumspect in disturbing or wriggling out of its contractual obligations through means beyond the terms of the contract in exercise of their executive powers. It shall be apt to reproduce para No.129 of the judgment, which reads as under:- 129. We caution the public authorities to be circumspect in disturbing or wriggling out of its contractual obligations through means beyond the terms of the contract in exercise of their executive powers. We do not say for a moment that the State has no power to alter or cancel a contract that it has entered into. However, if the State deems it necessary to alter or cancel a contract on the ground of public interest or change in policy then such considerations must be bona-fide and should be earnestly reflected in the decision-making process and also in the final decision itself. We say so because otherwise, it would have a very chilling effect as participating and winning a tender would tend to be viewed as a situation worse than losing one at the threshold. 18 The Hon’ble Supreme Court while dealing with sanctity of public tenders in the earlier part of the judgment observed as under: 124. Public tenders are a cornerstone of governmental procurement processes, ensuring transparency, competition, and fairness in the allocation of public resources. It emanates from the Doctrine of Public Trust which lays down that all natural resources and public use amenities & structures are intended for the benefit and enjoyment of the public. The State is not the absolute owner of such resources and rather owns it in trust and as such it cannot utilize these resources as it pleases. As a trustee of the public resources, the State owes i) a duty to ensure that community resources are put to fair and proper use that enures to the benefit of the public as-well as ii) an obligation to not indulge in any favouritism or discrimination with these resources. The State with whatever free play it has in its joints decides to award a contract, to hold up the matter or to interfere with the same should be accompanied by a careful consideration of the harm to public interest. 125. Public tenders are designed to provide a level playing field for all potential bidders, fostering an environment where competition thrives, and the best value is obtained for public funds. The integrity of this process ensures that public projects and services are delivered efficiently and effectively, benefiting society at large. 125. Public tenders are designed to provide a level playing field for all potential bidders, fostering an environment where competition thrives, and the best value is obtained for public funds. The integrity of this process ensures that public projects and services are delivered efficiently and effectively, benefiting society at large. The principles of transparency and fairness embedded in public tender processes also help to prevent corruption and misuse of public resources. In this regard we may refer to the observations made by this Court in Nagar Nigam v. Al. Farheem Meat Exporters Pvt. Ltd. reported in (2006) 13 SCC 382, which reads as under: - “16. The law is well settled that contracts by the State, its corporations, instrumentalities and agencies must be normally granted through public auction/public tender by inviting tenders from eligible persons and the notification of the public auction or inviting tenders should be advertised in well-known dailies having wide circulation in the locality with all relevant details such as date, time and place of auction, subject- matter of auction, technical specifications, estimated cost, earnest money deposit, etc. The award of government contracts through public auction/public tender is to ensure transparency in the public procurement, to maximise economy and efficiency in government procurement, to promote healthy competition among the tenderers, to provide for fair and equitable treatment of all tenderers, and to eliminate irregularities, interference and corrupt practices by the authorities concerned. This is required by Article 14 of the Constitution.” (Emphasis supplied) 126. The sanctity of public tenders lies in their role in upholding the principles of equal opportunity and fairness. Once a contract has come into existence through a valid tendering process, its termination must adhere strictly to the terms of the contract, with the executive powers to be exercised only in exceptional cases by the public authorities and that too in loathe. The courts are duty bound to zealously protect the sanctity of any tender that has been duly conducted and concluded by ensuring that the larger public interest of upholding bindingness of contracts are not sidelined by a capricious or arbitrary exercise of power by the State. It is the duty of the courts to interfere in contractual matters that have fallen prey to an arbitrary action of the authorities in the guise of technical faults, policy change or public interest etc. 127. It is the duty of the courts to interfere in contractual matters that have fallen prey to an arbitrary action of the authorities in the guise of technical faults, policy change or public interest etc. 127. The sanctity of contracts is a fundamental principle that underpins the stability and predictability of legal and commercial relationships. When public authorities enter into contracts, they create legitimate expectations that the State will honour its obligations. Arbitrary or unreasonable terminations undermine these expectations and erode the trust of private players from the public procurement processes and tenders. Once a contract is entered, there is a legitimate expectation, that the obligations arising from the contract will be honoured and that the rights arising from it will not be arbitrarily divested except for a breach or non-compliance of the terms agreed thereunder. In this regard we may make a reference to the decision of this Court in Sivanandan C.T. v. High Court of Kerala reported in (2024) 3 SCC 799 wherein it was held that a promise made by a public authority will give rise to a legitimate expectation that it will adhere to its assurances. The relevant portion reads as under: - “18. The basis of the doctrine of legitimate expectation in public law is founded on the principles of fairness and non- arbitrariness in Government dealings with individuals. It recognises that a public authority's promise or past conduct will give rise to a legitimate expectation. The doctrine is premised on the notion that public authorities, while performing their public duties, ought to honour their promises or past practices. The legitimacy of an expectation can be inferred if it is rooted in law, custom, or established procedure xxx xxx xxx 45. The underlying basis for the application of the doctrine of legitimate expectation has expanded and evolved to include the principles of good administration. Since citizens repose their trust in the State, the actions and policies of the State give rise to legitimate expectations that the State will adhere to its assurance or past practice by acting in a consistent, transparent, and predictable manner. Since citizens repose their trust in the State, the actions and policies of the State give rise to legitimate expectations that the State will adhere to its assurance or past practice by acting in a consistent, transparent, and predictable manner. The principles of good administration require that the decisions of public authorities must withstand the test of consistency, transparency, and predictability to avoid being regarded as arbitrary and therefore violative of Article 14.” (Emphasis supplied) 19 Since there are no legal or valid grounds forthcoming, which could have justified withdrawal of the tender awarded in favour of the petitioner, we find no hesitation to conclude that the instant case is a classic case of exercise of arbitrary powers by the official respondents in withdrawing the tender that was awarded in favour of the petitioner. 20 Thus, for the aforesaid forgoing reasons, we find merit in this petition and the same is accordingly allowed. Consequently, the impugned letter dated 5.9.2023, whereby the respondents had withdrawn the award from the petitioner, is quashed and set aside. The respondents are directed to award the work in favour of the petitioner and thereafter permit him to complete the same. The official respondents shall be at liberty to work out settlement with the petitioner given the fact that merely 20% of the work in question stands completed by another party. 21 The petition stands disposed of in the aforesaid terms, so also the pending application(s), if any, leaving the parties to bear their own costs.