LEVEL 9 BIZ PVT. LTD. versus HIMACHAL PRADESH HOUSING AND URBAN DEVELOPMENT AUTHORITY & ANOTHER
[2024] 4 S.C.R. 1, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Issues
* Author
[2024] 4 S.C.R. 1 : 2024 INSC 257
Level 9 Biz Pvt. Ltd. 
v. 
Himachal Pradesh Housing and Urban  
Development Authority & Another
(Civil Appeal No. 4626 of 2024)
02 April 2024
[Bela M. Trivedi* and Pankaj Mithal, JJ.]
Issue for Consideration
Matter pertains to the correctness of the order passed by 
the High Court disposing the writ petition by accepting the 
statements of the respondent no. 1-tenderee and respondent 
no. 2-successful bidder, permitting the respondent no.1 to 
withdraw the cancellation of initial tendering process order and 
permitting the respondent no. 2 to execute the project on the 
same terms and conditions as in the initial tender, though the 
said tender was already withdrawn by the respondent no.1 in 
view of the report of the independent Committee confirming 
gross irregularities and illegalities committed by the officers of 
the respondent no.1.
Headnotes
Tender – Notice inviting tender – Issuance of letter of intent in 
favour of the successful bidder by the tenderee – Challenge 
to, by the unsuccessful bidder – Cancellation of initial tender 
process by the tenderee and withdrawal of the letter of intent 
issued in favour of the successful bidder on account of 
pending litigations in the High Court – Thereafter, issuance of 
fresh NIT by tenderee – Challenge to – High Court disposed 
of the writ petition by merely accepting the statement of the 
tenderee that it had no objection to go ahead with the initial 
tendering process and the
statement of the initial successful 
bidder that it was ready to execute the project on the same 
terms and conditions as initially agreed, though the said 
tender was already withdrawn by the tenderee in view of the 
irregularities and illegalities committed by it, as recorded by 
an independent committee appointed by the High Court in 
earlier writ petitions – Correctness:
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Held: No right whatsoever created in favour of the respondent no. 
2-successful bidder, and the respondent no. 1 HIMUDA-tenderee 
cancelled the tender and issued fresh NIT, as such the respondent 
no. 1 could not have agreed to allow the respondent no. 2, who 
was found to be not technically qualified, to go ahead with the 
execution of the project in question and that too without giving 
the other two parties any opportunity to negotiate – Respondent 
no. 1 in collusion with the respondent no. 2, took the High Court 
for a ride and misused the process of law for covering up the 
irregularities and illegalities committed in the tender process by the 
officers of the respondent no. 1 – High Court also could not notice 
the ill-intention of the respondent nos. 1 and 2 and disposed of 
the petition, permitting them to go ahead with the original tender 
– Thus, the impugned order having been passed without proper 
application of mind and without assigning any cogent reason for 
brushing aside the findings recorded by the Independent Committee 
and the observations made by the Single Bench, is quashed 
and set aside – Also, the respondent no.1, though ‘State’ within 
the meaning of Art. 12, acted malafide and in collusion with the 
respondent no.2, and took the High Court for a ride, heavy  cost 
of Rs. 5,00,000/- imposed on the respondent no. 1 – Constitution 
of India – Art. 12. [Paras 11-14]
Tender – Notice inviting tender –
Letter of Intent – Nature of:
Held: Letter of Intent is merely an expression of intention to enter 
into a contract – It does not create any right in favour of the 
party to whom it is issued – There is no binding legal relationship 
between the party issuing the LOI and the party to whom such 
LOI is issued – Detailed agreement/contract is required to be 
drawn up between the parties after the LOI is received by the 
other party. [Para10]
List of Acts
Constitution of India.
List of Keywords
Cancellation of initial tendering process; Tender; Irregularities 
and illegalities; Notice inviting tender; Letter of intent; Burden on 
the public exchequer; Misuse process of law; Cost; Fresh tender 
process; Agreement/contract.
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Level 9 Biz Pvt. Ltd. v. Himachal Pradesh Housing and Urban 
Development Authority & Another
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4626 of 2024
From the Judgment and Order dated 18.10.2022 of the High Court of 
Himachal Pradesh at Shimla in CWP No. 1481 of 2021
Appearances for Parties
P.S. Patwalia, Sr. Adv., Ritesh Khatri, Ms. Deveshi Chand, Advs. for 
the Appellant.
Anoop G. Chaudhari, Navin Pahwa, Sr. Advs., Shankar Divate, J. P. 
Mishra, D. K. Thakur, Rajeev Kumar Gupta, Tavleen Singh, Joginder 
Mann, Ms. Vallabhi Shukla, Divyansh Thakur, Bimlesh Kumar Singh, 
Kanwal Chaudhary, Neeraj Agarwal, Santosh Kumar Yadav, Ms. 
Niharika, Nishant Anand, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
Bela M. Trivedi, J.
1.	
Leave granted.
2.	
The Appellant – Level 9 BIZ Pvt. Ltd., who was not a party to the 
proceedings, being Civil Writ Petition No. 1481 of 2021, filed by 
the Respondent No.2 – M/s. Vasu Constructions in the High Court 
of Himachal Pradesh at Shimla, has challenged the impugned 
order dated 18.10.2022 passed by the High Court in the said 
proceedings. The High Court passed the impugned order disposing 
of the said CWP by merely accepting the statement made on behalf 
of the Respondent No.1 – Himachal Pradesh Housing and Urban 
Development Authority (HIMUDA) that it wanted to withdraw the 
cancellation of initial tendering process order dated 05.02.2021, 
and the statement made on behalf of
the Respondent No. 2 that it 
was ready to execute the project on the same terms and conditions 
and the rates as per the initial tender dated 15.11.2018, though 
the said tender was already withdrawn by the Respondent no. 1 
HIMUDA in view of the irregularities and illegalities committed by it, 
as recorded by an independent committee appointed by the High 
Court in earlier writ petitions filed by the present appellant and one 
Dalip S. Rathore.
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3.	
The broad facts giving rise to the present appeal may be stated 
as under: -
DATES
EVENTS
15/16.11.2018
Notice Inviting Tender (NIT) was issued by 
HIMUDA (R-1) for the construction of proposed 
commercial complex of Vikas Nagar, Shimla, at 
estimated cost of Rs.45,05,62,074/-
15.12.2018
Technical Bids were opened and on the same 
day Financial Bids were also opened. (Appellant 
& R-2 were the only found to be qualified – But 
the Appellant was L2)
17.12.2018
LOI was issued by the R-1 in favour of R-2.
24.12.2018 
One Unsuccessful bidder Dalip S Rathore 
filed Writ Petition being CWP 3021 of 2018 
challenging the technical specifications & 
ineligibility of Respondent No.2, also seeking 
cancellation of the Tender. The High Court 
issued notice. 
02.01.2019
R-1 HIMUDA withdrew the LOI dated 17.12.2018 
of R-2 M/S Vasu Constructions stating that the 
case is pending in the High Court and the work 
will be awarded only as per the decision of the 
High Court.
05.01.2019
R-1 HIMUDA constituted a committee, which 
reviewed the tender process and concluded that 
there were many lapses which warranted actions 
against the erring officials.
07.01.2019
Another Committee constituted by R-1 
submitted a report that Shri Dalip Singh was 
not qualified and M/s. Vasu Constructions was 
qualified. 
23.02.2019
Appellant – Level 9 BIZ Pvt. Ltd. filed a writ 
petition CWP 363 of 2019, praying for rejection 
of Technical Bid and Financial
Bid of the R-2 M/s. 
Vasu Constructions
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Level 9 Biz Pvt. Ltd. v. Himachal Pradesh Housing and Urban 
Development Authority & Another
25.11.2020
High Court passed a detailed order on 25.11.2020 
in CWP No. 3021/2018 and 363/2019.
In Para 29 High Court observed-
“[..] this Court is prima facie of the 
view that some of the officers manning 
high positions in HIMUDA have not 
acted responsibly and in the interest 
of organization, rather have attempted, 
directly or indirectly, to give undue 
benefit to some of the contractors. 
Having seen the record, this Court is 
compelled to draw a conclusion that the 
officers responsible for evaluation of the 
tender in question, did not scrutinize the 
documents submitted by the tenderers 
along with their bids properly and, with 
a view to ensure ouster of some eligible 
contractors and awarding the same to 
their favourites, have made an attempt 
to justify their action by giving totally 
implausible reasoning.”
In para 31, High Court observed-
“But, for the reasons, best known 
to the authority, it still proceeded to 
award the tender in favour of M/s. Vasu 
Construction Company.”
The High Court therefore to instill confidence in 
the general public and to ensure transparency in 
the system, constituted an independent committee 
to enquire into the tender process in question, and 
directed the committee to submit its report in a 
sealed cover to the Court.
02.01.2021
Committee constituted by High Court filed its report. 
08.01.2021
High Court disposed
of both Petitions being Nos. 
3021/2018 and 363/19 and directed registry 
to initiate separate proceedings against erring 
officials, observing as under: -
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14. Since the committee, after having 
perused the records, has arrived at 
a definite conclusion that on account 
of shortcomings/irregularities, tender 
in question requires to be cancelled, 
nothing much is left for this court to 
adjudicate in these matters. Leaving 
everything aside, learned counsel for the 
petitioners in both the petitions, being 
satisfied with the findings of enquiry 
committee as well as suggestions made 
therein, are not willing to prosecute 
the cases further and have prayed to 
dispose of the same as having been 
rendered infructuous.
15. In view of aforesaid, both the 
petitions are disposed of as infructuous 
alongwith all pending applications. 
Interim directions, if any, stand vacated. 
However, liberty is reserved to the 
parties to file fresh petition(s), if any, if 
they still remain aggrieved. 
16. However, this court, having taken 
note of the fact that the enquiry committee 
despite having found officers lacking in 
discharge of their duties, has failed 
to fix responsibility and recommend 
action, criminal or departmental, deems 
it necessary to direct the Registry 
of this Court to register separate 
proceedings, enabling this Court to pass 
appropriate orders so as to ensure strict 
compliance of recommendations given 
in the report of enquiry committee and 
pass appropriate orders with regard 
to initiation of criminal/ departmental 
proceedings against the erring officials.
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Level 9 Biz Pvt. Ltd. v. Himachal Pradesh Housing and Urban 
Development Authority & Another
Registry is directed to register separate 
proceedings and list the same on 
17.3.2021. The order dated 25.9.2020, 
this judgment and the enquiry report 
submitted by the committee constituted 
by this Court, shall form part of the fresh 
proceedings.
05.02.2021
Respondent No.1 cancelled the Tender in view 
of the Order dated 08.01.2021 passed by the 
High Court. 
03.03.2021
Respondent No.2 filed a new Writ Petition against 
Respondent No.1, i.e., CWP 1481 of 2021 
challenging order dated 05.02.2021. 
Respondent no. 2 also filed separate two LPAs 
being LPA No. 6/2021 and 12/2021 against the 
common order dated 08.01.2021 passed in CWP 
No. 3021/2018 and CWP No. 363/2019 by the 
Single Bench.
17.11.2021
R-1 HIMUDA issued fresh NIT for the same work.
01.12.2021
The Division Bench of High Court passed an 
interim order in LPA No. 6/2021, 12/2021 and CWP 
No. 1481/2021 staying the NIT dated 17.11.2021 
till further orders.
18.10.2022
The Division Bench disposed of the Writ Petition 
No. 1481/2021 upon statement of the Executive 
Engineer of Respondent No.1 observing as under:
7. Learned counsel for the respondent on 
instructions of Mr. Rajesh Thakur, Executive 
Engineer, HIMUDA, Division, Shimla-9, has 
submitted that the competent authority wants 
to withdraw the cancellation of initial tendering 
process order dated 5th February, 2021, bearing 
No. 5806-11, as the
public is deprived from the 
facilities, which would have been available to them 
after completion of the project. The project cost is 
going to be enhanced due to delay in execution 
of the project, which will cause additional burden
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on the public exchequer. The various Government 
departments/PSUs are facing acute shortage of 
office accommodation, therefore, in larger public 
interest, the authority has no objection to go ahead 
with initial tendering process, in case the petitioner 
is ready to execute the work at the same rate and 
terms and conditions as were agreed at the time 
of finalization of the initial NIT dated 15.11.2018 
(Annexure P-2). The time period for execution 
of work will start from date of fresh award letter 
which will be issued in favour of the petitioner 
within 15 days.
8.Learned Senior counsel for the petitioner, on 
instructions from the petitioner, has submitted 
that offer made by the respondent is acceptable 
to the petitioner and petitioner is ready to execute 
the project on the same terms and conditions 
and rates as per initial tender dated 15.11.2018 
(Annexure P-2).
Nov. 2022
Contract Agreement was signed between 
Respondent 1 & 2. Work started.
12.12.2022
The Appellant filed the SLP challenging the 
impugned order dated 18.10.2022 and the Court 
while issuing notice, granted stay of operation of 
the impugned order dated 18.10.2022.
4.	
The question that has been posed before us in the instant appeal 
is, whether the High Court could have disposed of the CWP filed 
by the respondent no. 2 by simply accepting the statements 
made on behalf of the learned advocates for the respondent no. 
1 and respondent no. 2,
virtually permitting the respondent no.1 
HIMUDA to withdraw the cancellation of initial tendering process 
order dated 05.02.2021 and permitting the respondent no. 2 M/s 
Vasu Constructions to execute the project on the same terms 
and conditions and at the rates as per the initial tender dated 
15.11.2018, though the said tender was already withdrawn by 
the Respondent No.1 HIMUDA in view of the report made by the 
independent Committee constituted by the High Court confirming 
gross irregularities and illegalities committed by the officers of
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Level 9 Biz Pvt. Ltd. v. Himachal Pradesh Housing and Urban 
Development Authority & Another
HIMUDA and in view of the order dated 08.01.2021 passed by 
the Single Bench?
5.	
As could be seen from the chronology of events, the appellant and 
the respondent No. 2 were declared qualified in the Technical Bids 
opened on 15.12.2018 and on the same day, the financial bid of the 
said two parties were also opened. The respondent no.2 being L-1, 
the Letter of Intent dated 17.12.2018 was issued by the Respondent 
No.1 in favour of the respondent no.2. Subsequently, an unsuccessful 
bidder M/s Dalip Singh Rathore filed a writ petition being No. 
3021/2018 in the High Court, alleging irregularities and illegalities in 
the tender process and challenging the eligibility of the respondent 
no. 2, also seeking cancellation of the Tender. The appellant also 
filed CWP No. 363/2019 praying for the rejection of the Technical 
and Financial Bids of the respondent no.2. The respondent no.1 
HIMUDA in the meantime appointed a committee on 01.01.2019 to 
review the tender process. The respondent no.1 also vide the letter 
dated 02.01.2019 withdrew the Letter of Intent issued in favour of 
the respondent no.2. Subsequently, the High Court also appointed 
an Independent Committee to look into the alleged illegalities and 
irregularities vide the order dated 25.11.2020, in order to instill 
confidence in the general public and to ensure transparency in the 
system. 
6.	
As
transpiring from the order dated 08.01.2021, the said Independent 
Committee submitted the report, arriving at a definite conclusion that 
the officers responsible for evaluation of the tender had not acted 
responsibly and fairly, as a consequence of which both M/s Vasu 
Constructions Company (respondent no.2 herein) and M/s Level 9 
Biz Pvt. Ltd. (the appellant herein) were wrongly declared eligible in 
the Technical Bid. The Committee had concluded that since both the 
bidders were not technically qualified as per the terms and conditions 
of the NIT, the tender needed to be cancelled. The recommendations 
made by the said Committee, except the recommendation for deletion 
of condition with regard to NPA, were stated to have been accepted 
by the Enquiry Committee of the respondent no. 1 HIMUDA. The High 
Court recorded the statements of the concerned counsels for the 
parties and disposed of the petitions being CWP Nos. 3021/2018 and 
363/2019 vide Order dated 08.01.2021 observing that the petitions 
had been rendered infructuous, however reserved a liberty for the 
parties to file fresh petition(s), if any, if they still remained aggrieved.
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7.	
Subsequently, the respondent no.1 HIMUDA cancelled the tender 
on 05.02.2021 in view of the said order dated 08.01.2021 passed 
by the High Court. The said action of the respondent no.1 came to 
be challenged by the Respondent No.2 M/s Vasu Constructions by 
filing a petition being CWP No. 1481/2021. The respondent no. 2 
also filed two LPAs being 6/2021 and 12/2021 being aggrieved by 
the common Order dated 08.01.2021 passed by the Single Bench. 
The Division Bench of the High Court disposed of the CWP No. 
1481/2021 vide the impugned order dated 18.10.2022 accepting the 
statements made by the learned counsels for the respondent nos. 
1 and 2 as stated hereinabove.
8.	
We are at loss to understand as to how the said petition filed by 
the respondent no.2 could have been disposed of by the Division 
Bench by merely recording and accepting the statements of the 
learned counsels for the respondent nos. 1 and 2, when the tender 
in respect of NIT dated 15.11.2018 was cancelled by the respondent 
no.1 HIMUDA on account of the gross irregularities and illegalities in 
the tender process found by the Independent Committee constituted 
by the High Court and on account of the order passed by the High 
Court on 08.01.2021? We are also at loss to understand as to how 
the Executive Engineer of HIMUDA, could have made the statements 
before the Division Bench that the competent authority of the 
respondent no.1 wanted to withdraw
the cancellation of the initial 
tendering process order dated 05.02.2021 and that the respondent 
no. 1 had no objection to go ahead with the initial tendering process, 
in case the respondent no.2 was ready to execute the work on 
the same terms and conditions as were agreed at the time of 
finalization of NIT dated 15.11.2018, when the respondent no. 1 
itself had decided to cancel and in fact cancelled the initial tendering 
process vide its order dated 05.02.2021 accepting the findings of 
the committee constituted by the High Court to the effect that there 
were irregularities and illegalities committed by the officers of the 
HIMUDA in processing the tender and that the respondent no. 2 was 
not technically qualified? 
9.	
When the common order dated 08.01.2021 was passed in the Writ 
Petition No. 3021 of 2018 filed by the petitioner Dalip Singh and Writ 
Petition No.363 of 2019 filed by the present appellant, recording the 
said findings of the committee appointed by it, pursuant to which 
order, the respondent no.1 had cancelled the tender on 05.02.2021,
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Level 9 Biz Pvt. Ltd. v. Himachal Pradesh Housing and Urban 
Development Authority & Another
and had issued a fresh NIT on 17.11.2021, it was incumbent on the 
part of the respondent no. 2 to implead the said two petitioners as 
the party respondents in the new petition filed by it i.e. 1481/2021, 
and it was also incumbent on the part of the High Court to give 
opportunity of hearing to the said petitioners before passing the 
impugned order disposing of the said petition merely recording the 
statements of the learned counsels for the respondent nos. 1 and 
2, and permitting the respondent nos. 1 and 2 to go ahead with 
execution of the work as per the initial tender which was already 
cancelled by the respondent no.1.
10.	 Though it is true that initially an LOI was issued by the respondent 
no. 1 in favour of the respondent no. 2 on 17.12.2018, but the same 
was withdrawn by the respondent no. 1 as per the letter dated 
02.01.2019 on account of pending litigations in the High Court. In 
any case, it hardly needs to be reiterated that the Letter of Intent is 
merely an expression of intention to enter into a contract. It does not 
create any right in favour of the party to whom it is issued. There 
is no binding legal relationship between the party issuing the LOI 
and the party to whom such LOI is issued. A detailed agreement/
contract is required to be drawn up between the parties after the LOI 
is received by the other party more particularly in
case of contract 
of such a mega scale.
11.	 Since, there was no right whatsoever created in favour of the 
respondent no. 2, and since the respondent no. 1 HIMUDA had 
already accepted the recommendations of the Committee appointed 
by the High Court and the order dated 08.01.2021 passed by the 
High Court, and had cancelled the tender and issued fresh NIT on 
17.11.2021, the respondent no. 1 could not have agreed to allow the 
respondent no. 2, who was found to be not technically qualified, to 
go ahead with the execution of the project in question and that too 
without giving the other two parties any opportunity to negotiate. If the 
respondent no. 1 was so keen to provide the facilities to the public 
without causing any additional burden on the public exchequer, all 
the three parties who had participated in the original tender should 
have been given the opportunity to negotiate with it.
12.	 Having regard to the entire chain of events, and the conduct of 
the respondent nos. 1 and 2, we have no hesitation in holding that 
the respondent no. 1 in collusion with the respondent no. 2, had
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taken the High Court for a ride and misused the process of law for 
covering up the irregularities and illegalities committed in the tender 
process by the officers of the respondent no. 1, and for anyhow 
awarding the contract to the respondent no. 2 under the guise of 
the court’s order. It is a matter of surprise for us that the High Court 
also could not notice the ill-intention of the respondent nos. 1 and 2 
and disposed of the petition, permitting them to go ahead with the 
original tender, ignoring the reports of the independent committee 
and the observations made by the Single Bench in the Order dated 
08.01.2021 with regard to the irregularities and illegalities committed 
by the officers of the respondent no. 1 HIMUDA.
13.	 The impugned order having been passed without proper application of 
mind and without assigning any cogent reason for brushing aside the 
findings recorded by the Independent Committee and the observations 
made by the Single Bench in the order dated 08.01.2021, the same 
deserves to be quashed and set aside. Since, we have found that 
the respondent no.1 HIMUDA, though ‘State’ within the meaning 
of Article 12 of the Constitution of India, had acted malafide and in 
collusion with the respondent no.2, and had taken the High Court for 
a ride, the present appeal deserves to be allowed with heavy cost.
14.	 In that view of the matter, the impugned order passed by the High 
Court is set aside.
The appeal is allowed with cost of Rs. 5,00,000/- 
to be deposited by the respondent no. 1 HIMUDA with the Supreme 
Court Advocates-on-Record Association, within two weeks from today. 
However, it is clarified that the respondent no.1 shall be at liberty 
to initiate a fresh tender process in accordance with law and after 
following the due process of law.
Headnotes prepared by: Nidhi Jain
Result of the case: 
Appeal allowed.