Case Background
This case arose from a government tender for construction and maintenance of rural roads in Madhubani district under the MMGSY scheme.
The Executive Engineer, Rural Works Department, Works Division, Madhubani issued a short notice inviting re-tender bearing no. RWD/MMGSY/19/ET/2020-21. The notice covered construction and maintenance of nine different roads.
The petitioner, a contracting firm, submitted its bid in response to this notice. According to the petitioner, it was the sole bidder for the works mentioned at serial numbers 4, 5 and 6 of the tender notice.
The petitioner claimed that its technical bid was accepted and that the next step, as per the tender process, should have been to open its financial bid and consider it for award of the contract.
However, instead of opening the financial bid, the Technical Bid Committee held a meeting on 18.05.2021 and decided to cancel the tender itself. This triggered the writ petition before the Patna High Court.
Through the writ, the petitioner challenged the decision of the Technical Bid Committee dated 18.05.2021 and sought two main reliefs: quashing of the decision cancelling the tender, and a direction to open its financial bid and award the work to it.
What the Court Examined and Decided
The Division Bench of the Patna High Court, comprising Hon’ble Mr. Justice Rajan Gupta and Hon’ble Mr. Justice Mohit Kumar Shah, examined both the petitioner’s challenge and the State’s defence.
The petitioner’s stand was that the cancellation of the tender was arbitrary and unfair. It argued that no notice or information was given to it before cancelling the tender, even though its technical bid had allegedly been accepted. On this basis, it asked the Court to compel the authorities to open its financial bid and grant it the contract.
The State, on the other hand, gave a detailed explanation of how and why the tender was cancelled.
According to the State, the short notice inviting re-tender (RWD/MMGSY/19/ET/2020-21) covered nine road works. The petitioner had submitted bids for the works at serial numbers 2, 4, 5 and 6, and acknowledgments had been issued for these submissions.
A Technical Bid Committee meeting was then convened on 18.05.2021 to carry out the technical evaluation of all bids. During this meeting, the Committee noticed a serious defect in the tender notice itself.
Specifically, the tender document did not contain a clause requiring bidders to submit a character certificate. The State pointed out that such a clause was mandatory in light of departmental letter no. 489 dated 28.01.2021. Since this requirement had been omitted from the terms and conditions of the tender, the Committee felt that proceeding further could lead to disputes at the stage of execution of the works.
To avoid future litigation and complications, the Technical Bid Committee decided to cancel the entire tender, exercising its powers under Clause 16 of the NIT. The Committee’s minutes dated 18.05.2021, produced as Annexure-B series to the counter affidavit, recorded this decision.
The State also clarified that, in that meeting, the Technical Bid Evaluation Committee neither evaluated any bids nor accepted or rejected any bidder. According to the State, the petitioner was not declared qualified in the meeting of 18.05.2021.
The petitioner had relied on some details uploaded on the website, annexed as Annexure-5 series to the writ petition, to suggest it was successful in the technical bid. However, the State argued that those uploaded details did not show that the petitioner had been accepted in the technical evaluation.
After the cancellation of the first tender, the authorities issued a fresh short notice inviting re-tender for the same works on 16.07.2021, bearing no. RWD/MMGSY/05/ET/2021-22. Bids were submitted in response to this new tender, and the process was completed.
The State informed the Court that the works had already been allotted to successful contractors through various agreements, all executed prior to the interim order dated 22.02.2022 in the writ petition.
Details of the agreements were placed before the Court. The work of construction and maintenance of the Bramotra to Ghaupari Ghat road was allotted under Agreement No. 16 SBD/2021-22 to Uuvaan Rinsing Pvt. Ltd. The work relating to Ranti Rajnagar road (Md. Aziz house) to Chhota Sonwari Road was allotted under Agreement No. 75 SBD/2021-22 to Prashant and Raj Construction Pvt. Ltd. The work of TOI Ranti Rajnagar to Dakshinari tola Bharia road was allotted under Agreement No. 57 SBD/2021-22 to the same agency. Lastly, the work on Hanuman Mandir Pandit tola to Sugauna South tola road was allotted under Agreement No. 72 SBD/2021-22 to Sri Avinash Kumar Singh.
The State further stated that construction work on these roads was already going on in full swing.
The Court had earlier passed an interim order on 22.02.2022 that any future allotment of the tender in question would be subject to the outcome of the writ petition. However, the State clarified that the agreements had been executed even before this interim order.
It was also brought to the notice of the Court that the petitioner did not participate in the fresh re-tender dated 16.07.2021, and therefore, according to the State, had no locus to object to the new allotments.
After hearing both sides, the Bench posed specific queries to the petitioner’s counsel. The Court asked him to show any document or proceedings of the Technical Bid Committee to prove that the petitioner’s technical bid had been accepted. The Court also asked whether the petitioner had participated in the fresh re-tender dated 16.07.2021, whether it had challenged the subsequent agreements with successful bidders, and whether those successful bidders had been made parties to the case.
The answers were all negative. No order or proceeding showing acceptance of the petitioner’s technical bid was produced. The petitioner had not participated in the fresh tender, had not challenged the agreements, and had not impleaded the successful bidders.
On this basis, the Court held that the Technical Bid Committee had good reasons to cancel the initial tender. It accepted the State’s stand that the cancellation was to avoid future disputes linked to the missing character certificate clause mandated by departmental letter no. 489 dated 28.01.2021. The Court noted that the cancellation had been recommended in the proceedings dated 18.05.2021 and found this recommendation justified.
The Court then examined whether the State’s decision to invite a fresh tender could be termed mala fide or arbitrary. Relying on the Supreme Court judgment in State of Jharkhand & Ors. v. CWE-SOMA Consortium, (2016) 14 SCC 172, the Bench reiterated that courts should not lightly interfere with government decisions on tendering unless there is clear mala fide, arbitrariness or unreasonableness in the decision-making process.
The judgment quoted at length from paragraphs 20 to 23 of the Supreme Court decision, which emphasise that:
- Government has freedom of contract and may cancel a tender and invite fresh tenders to ensure adequate competition and protect financial interests.
- The right to refuse even the lowest tender is always available to the Government, provided Article 14 principles are observed.
- Courts, in judicial review of government contracts, do not sit as appellate bodies to substitute their view for that of the tender committee; they only examine the legality and fairness of the process.
Applying these principles, the Patna High Court found no mala fides or arbitrariness in the decision to cancel the first tender and float a new one. The omission of a mandatory clause was a legitimate and cogent reason for cancellation.
The Bench also observed that the petitioner had failed to challenge the agreements with the successful bidders or even to implead those bidders as respondents. In such circumstances, the Court held that the writ petition had, in any event, become “insipid”, meaning ineffective and without real substance.
Considering all these aspects, the Court concluded that there was no merit in the writ petition. It dismissed the petition without any order as to costs.
Why This Judgment Matters
This judgment is important for contractors and government departments dealing with public works tenders in Bihar.
First, it shows that if a tender document misses a mandatory condition, such as the requirement of a character certificate, the department is justified in cancelling the tender to avoid disputes later. Contractors cannot insist that the process must continue simply because they have already filed a bid.
Second, the decision underlines that the Patna High Court will not interfere with tender cancellations unless there is clear proof of bad faith or arbitrariness. Government bodies retain wide freedom to correct their own mistakes in tender documents and to protect public interest.
Third, it highlights that a bidder must take all necessary procedural steps if they wish to challenge a tender outcome. This includes participating in subsequent tenders, challenging later agreements if needed, and making successful bidders parties to the case. Failure to do so can make the case weak or even pointless.
For small and medium contractors, the judgment is a reminder to carefully track all tender notices, participate in fresh tenders when old ones are cancelled, and maintain proper documentation to prove any claim that their bids were accepted.
Legal Issues and Answers
- Issue: Whether the cancellation of the original MMGSY road tender and the decision to invite fresh tenders was arbitrary or mala fide, especially when the petitioner claimed its technical bid had been accepted.
Answer: No. The Court held that the cancellation was justified because a mandatory clause requiring submission of character certificates was missing from the tender, and there was no material to show that the petitioner’s technical bid had been accepted. - Issue: Whether the Court should direct the State to open the petitioner’s financial bid and award the contract in its favour.
Answer: No. Since the tender had been validly cancelled, no bids were accepted or rejected, fresh tenders were issued and finalised, and the petitioner neither participated in the fresh tender nor challenged the resulting agreements or impleaded successful bidders, the Court refused to grant any such direction.
Cases Cited by the Court
- State of Jharkhand & Ors. v. CWE-SOMA Consortium, (2016) 14 SCC 172.
- Within that judgment, reference is made to earlier Supreme Court decisions in Tata Cellular v. Union of India, (1994) 6 SCC 651; Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC 138; and Laxmikant v. Satyawan, (1996) 4 SCC 208, as quoted in the Patna High Court judgment.
Case Details
Case Number: Civil Writ Jurisdiction Case No. 12215 of 2021
Case Title: Gomati Infratech Proprietor Minnat Kumari through attorney Rajesh Kumar Jha v. The State of Bihar & Ors.
Coram: Hon’ble Mr. Justice Rajan Gupta and Hon’ble Mr. Justice Mohit Kumar Shah
Date of Judgment: 28.03.2022
Citation: 2022 (2) PLJR 473
Advocates:
- For the petitioner: Mr. Ranjeet Kumar Pandey, Advocate
- For the respondents (State): Smt. Archana Meenakshee, Government Pleader 6 (GP 6)
Nature of the Case: Writ petition under civil writ jurisdiction challenging cancellation of tender and seeking directions for opening of financial bid and award of contract.
Link to Judgment: https://patnahighcourt.gov.in/viewjudgment/M
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