Orissa High Court Strikes Down OMC's Mining Tender Cancellation
The Orissa High Court has delivered a significant judgment, setting aside the decision of the Odisha Mining Corporation (OMC) to cancel a mining tender for the Kodingamali Bauxite Mine. The court declared the move arbitrary and legally unsustainable, directing the state public sector undertaking to complete the tender process as originally initiated.
Background of the Legal Dispute
The high court ruling emerged from a writ petition filed by a private bidder who had emerged as the successful candidate in the auction. The case centers on a tender floated by OMC on November 3, 2025, for selecting a mine operator for the Kodingamali Bauxite Mine, which spans the Koraput and Rayagada districts.
The mining project targeted an annual production of 35 lakh metric tonnes over a five-year period, with an option to extend for an additional three years. The petitioner company argued that the bidding process had been fully completed, encompassing technical evaluation, financial bid opening, and final auction procedures.
Complete Tender Process and Sudden Cancellation
The petitioner company successfully emerged as the lowest bidder among nine qualified bidders who met both technical and financial criteria. However, before OMC could issue a formal work order, the corporation unexpectedly uploaded a Tender Cancellation Notice dated January 5, 2026, on its official portal.
The aggrieved company challenged this cancellation, alleging that the decision lacked transparency and was fundamentally arbitrary in nature. They contended that after completing the entire tender process, they were legally entitled to receive the work order from OMC.
Court's Scathing Observations
In a judgment delivered on March 31, a division bench comprising Chief Justice Harish Tandon and Justice M.S. Raman made several critical observations about OMC's actions. The bench noted that "the entire tender process got concluded after the exploration and finalization of the lowest bidding price among the techno commercially qualified bidders."
The judges further emphasized that "after having completed the entire tender process, the petitioner company was entitled to be issued with a work order by the OMC." They came down heavily on the corporation's handling of the matter.
Flawed Decision-Making Process
The bench described the Tender Cancellation Notice dated January 5, 2026, as "bald, cryptic and bereft of reason." They observed that it was "demonstrably manifest that the Chairman, OMC has disbelieved the noting of his own officials justifying the eligibility criteria."
The court also rejected OMC's justification that re-tendering with removed restrictions on sub-contracting could attract wider participation, calling this reasoning "unfounded." The bench pointed out that any restrictive conditions in the original Request for Proposal had already been addressed through a corrigendum issued during the pre-bid stage after expert consideration.
Court's Final Ruling and Directions
In its conclusive remarks, the bench ruled that "from whatever angle the matter is looked at, this Court does not find any legality in the order and justification of the Chairman, OMC to override the views/opinions of the technical experts."
The judges declared that "the decision-making process leading the Chairman to cancel the tender in entirety is flawed." Consequently, they ordered that "the Tender Cancellation Notice dated 05.01.2026 cannot be countenanced and hence, the same is quashed and set aside."
The court directed OMC's managing director and chief general manager (mining) to proceed with completing all formalities related to the original Request for Proposal dated November 3, 2025. This judgment represents a significant legal victory for transparency in government tender processes and reinforces the principle that completed bidding procedures cannot be arbitrarily cancelled without substantial justification.
