No Work Order Issued, No Vested Right Crystallised: Patna HC Upholds BREDA's Cancellation of Rooftop Solar EOI

The Patna High Court dismissed a challenge to BREDA’s cancellation of a rooftop solar tender, holding that without a specific work order, no enforceable right had accrued to the petitioner-agency despite a signed agreement and district allocation.

A Division Bench of the Patna High Court, comprising Justice Sudhir Singh and Justice Ranjan Kumar Jha, has dismissed a writ petition filed by M/s Energy United India Private Limited challenging the Bihar Renewable Energy Development Agency’s (BREDA) abrupt cancellation of an Expression of Interest (EOI) for the installation of grid-connected rooftop solar power plants across government buildings in Bihar. The bench, in a judgment authored by Justice Sudhir Singh, held that the cancellation was squarely within BREDA’s contractually reserved powers, that no work order had ever been issued triggering the execution phase, and that absent such an order, no vested or accrued right had crystallised in the petitioner’s favour. The decision reinforces settled principles on judicial review of tender cancellations and the limited effect of a signed contract where performance has not yet commenced.

The Dispute: Agreement Signed, Districts Allotted, Then Tender Cancelled

BREDA issued EOI No. BREDA/Tender/SPV/GCRTPV/01kWp-500kWp/08/2023-24 on 24 April 2024, inviting agencies for the design, supply, erection, testing, and commissioning of rooftop solar plants at government buildings across Bihar. M/s Energy United India Private Limited, a Patna-based company represented through its Director Prateek Chaurasia, participated in the bidding process.

When the financial bids were opened, the petitioner was asked to match the L-1 rate. It did so, and a Letter of Intent bearing Letter No. 320 was issued on 10 February 2025. The parties then executed a formal agreement on 17 February 2025, designating the petitioner as an executing agency. On 11 April 2025, the petitioner participated in BREDA’s district distribution exercise and was allotted the districts of Purnia, Jehanabad, and Madhubani. BREDA directed it to carry out site assessments and preparatory work for those districts, which the petitioner claims to have completed.

Despite this, no specific work order was ever issued to the petitioner. On 18 September 2025, BREDA issued E-Tender Cancellation Notice vide Letter No. 2263, cancelling the EOI with immediate effect. The petitioner received the notice by email on 22 September 2025. The cancellation notice cited only “unavoidable circumstances” without specifying any reason.

The petitioner moved the Patna High Court seeking certiorari to quash the cancellation notice, a mandamus directing BREDA to produce the departmental file notings underlying the decision, and restoration of the contract with issuance of particular work orders for the allocated districts.

The Petitioner’s Case: Concluded Contract, Estoppel, and Natural Justice

Counsel for the petitioner argued that the tender process had run its full course: a Letter of Intent had been issued, a formal agreement had been signed, districts had been allocated, and preparatory work had been directed and completed. The contract, in the petitioner’s submission, was concluded well before the cancellation notice arrived.

It was contended that once a binding contractual relationship had been created, BREDA could not step back to cancel the EOI itself. Having directed the petitioner to undertake surveys and preparatory activities, the respondents were estopped from cancelling the tender in a summary fashion.

On procedural fairness, it was argued that no show-cause notice was issued and no opportunity of hearing was afforded before the cancellation. The notice itself contained no reasons beyond a vague reference to unavoidable circumstances, making the action contrary to the principles of natural justice. The doctrine of legitimate expectation was also pressed: the petitioner had acted on the reasonable expectation that work orders would follow the agreement and district allocation.

BREDA’s Defence: No Approval, No Funds, No Obligation

Counsel for the respondents contested each of these submissions. They relied on paragraphs 10 and 11 of their counter affidavit, which disclosed that BREDA had sent repeated formal requests to the Energy Department for budget approval — vide Letters No. 781 dated 8 May 2024, No. 1817 dated 21 October 2024, No. 487 dated 25 February 2025, and a detailed proposal vide Letter No. 1079 dated 21 April 2025 — seeking enhancement of sanctioned capacity and corresponding financial sanction. None of these requests had yielded the requisite approval from the competent authority. Without approval and funds, BREDA contended, it could not proceed and no work order could lawfully be issued to any empanelled agency.

More significantly, the respondents pointed to Clauses 3.15 and 3.15.1 of the EOI, which expressly reserved to BREDA the right to withdraw, modify, annul, or cancel the EOI at any time without assigning any reason and without incurring any liability to participating bidders. Since the petitioner had participated with full knowledge of these terms, it could not impugn the exercise of a power it had accepted as part of the contract.

The respondents also emphasised that the cancellation applied uniformly to all empanelled agencies — not to the petitioner alone — and that the decision was taken in larger public interest owing to the absence of sanctioned funds.

How the Bench Reasoned: Contractual Reservation, No Work Order, No Mala Fides

The bench identified the principal issue as whether the cancellation of the EOI was sustainable in law given the powers reserved under Clauses 3.15 and 3.15.1.

The court began with the contractual text. Clauses 3.15 and 3.15.1 stated plainly that the EOI “may be withdrawn or cancelled by the BREDA at any time without assigning any reasons thereof” and that BREDA reserved the right to reject any or all bids “without incurring any liability on any account.” The petitioner had participated with full knowledge of these stipulations and had not protested them. A bidder who consciously enters a tender process, the bench held, is bound by the terms governing that process and cannot later seek to avoid their consequences.

The court acknowledged, however, that the analysis did not end with the contractual text. Although BREDA was not contractually obligated to assign reasons, the counter affidavit had itself disclosed the circumstances. The repeated unsuccessful attempts to secure budget approval and financial sanction from the Energy Department constituted a rational, bona fide basis for the decision to cancel. The court found no evidence of mala fides, favouritism, colourable exercise of power, or any attempt to confer a benefit on a third party.

On the question of whether a vested right had accrued, the bench turned to Article 7.0 of the agreement itself. That clause stipulated that the contractor was to organise its resources and complete the work within 150 days from the date of issuance of a “particular work order.” The work order was, therefore, the contractual trigger for the commencement of execution. Since no such work order had been issued, the execution phase had never commenced. District allocation and site surveys, however substantial in effort, did not constitute the contractual trigger. Without a work order, no accrued or vested right had crystallised compelling continuation of the project.

The bench relied on the Supreme Court’s judgment in Maa Binda Express Carrier & Anr. v. North-East Frontier Railway & Ors., (2014) 3 SCC 760, which affirmed that participating bidders are entitled only to fair, equal, and non-discriminatory treatment in evaluation of their tenders. Submission of a tender is no more than making an offer, and the State is under no obligation to accept it. Award of a contract is essentially a commercial transaction and its terms are not ordinarily open to judicial scrutiny unless tailor-made to benefit a particular tenderer.

On legitimate expectation, the court was equally direct. Legitimate expectation may entitle a party to fairness in decision-making, but it cannot override the express terms of the tender process, nor can it compel the State to proceed with a project which lacks requisite approval and financial sanction. The bench found no breach of fair dealing: the uniform application of the cancellation to all empanelled agencies underscored that this was an administrative decision about the project, not a punitive measure targeting the petitioner.

The Question of Expenditure on Preparatory Work

The petitioner had also placed on record Annexures P/10 and P/11, which it said reflected expenditure incurred in connection with site surveys and preparatory activities directed by BREDA before the cancellation. The bench did not express any view on the merits or quantum of such a claim, but noted that if so advised, the petitioner would be at liberty to pursue any such claim before a court of competent civil jurisdiction in accordance with law.

Outcome

The Division Bench dismissed CWJC No. 16154 of 2025 filed by M/s Energy United India Private Limited. The cancellation of EOI No. BREDA/Tender/SPV/GCRTPV/01kWp-500kWp/08/2023-24 vide Letter No. 2263 dated 18 September 2025 was held to be within BREDA’s contractually reserved powers under Clauses 3.15 and 3.15.1, founded on rational administrative and financial grounds, and not vitiated by arbitrariness or breach of natural justice. All pending applications were disposed of. The petitioner was left to pursue any claim for reimbursement of preparatory expenditure before a civil court.