Case Background
The case arose from a government tender issued by the Rural Works Department, Government of Bihar, for road works under the Mukhya Mantri Gramin Sadak Unnayan Yojana (MMGSUY).
Notice Inviting Tender (NIT) No. RRRSMP-15/2024-25 dated 27.02.2025 was issued for “Initial Rectification, Minor Improvement, Surface Renewal, Construction of Bridge/Drainage/Protection Work including Operation and Management” under the Rural Road Strengthening and Management Program, with special reference to Package No. RRRSMP/24-25 Sasaram-1/11. The total contract value was Rs. 3520.452 lakhs.
The petitioner, a Class-I registered contractor under the Bihar Contractors Registration Rules, 2007, participated as one of the bidders. In all, ten bidders submitted bids.
A five-member Technical Bid Evaluation Committee, chaired by the Engineer-in-Chief of the department, met on 06.05.2025 to scrutinize technical bids. Through Memo No. 1643 dated 08.05.2025, the Committee declared several bidders, including M/s Shanti Construction, technically responsive and some as non-responsive. Bidders were given five working days to file objections.
The petitioner filed objections on 16.05.2025 against three technically qualified bidders, especially pointing out alleged insufficient bid capacity of M/s Shanti Construction. Despite this, the Committee, after reconvening and issuing Memos dated 12.06.2025 and 30.06.2025, kept treating M/s Shanti Construction as technically responsive.
Meanwhile, on the basis of the petitioner’s objections, a report was called from the jurisdictional Executive Engineer, who clearly reported that M/s Shanti Construction did not have sufficient bid capacity as required under the NIT.
Despite the adverse report, the Technical Bid Evaluation Committee, via Memo No. 2469 dated 30.06.2025, still declared the technical bid of M/s Shanti Construction responsive, without recording reasons for disagreeing with the Executive Engineer. A further decision on 01.07.2025 (Memo No. 2477) reiterated this position.
On 05.07.2025, financial bids were opened. M/s Shanti Construction was found to be the lowest bidder (L1), quoting 5.77% below the estimate, and the petitioner was the second lowest bidder (L2), quoting 5.05% below.
Subsequently, on further scrutiny of bid capacity, the Committee realised that M/s Shanti Construction did not in fact have the required capacity when its already allotted works were properly accounted for. In a meeting held on 12.07.2025, and communicated through Memo No. 2611 dated 14.07.2025, the Committee recommended cancellation of the entire tender and re-advertisement, citing both insufficient bid capacity of L1 and breach of confidentiality since financial bids had already been opened.
The petitioner then wrote on 16.07.2025 expressing willingness to execute the work at the rate quoted by L1. The department did not accept this request, deciding instead to proceed with cancellation and issue a fresh short NIT (RRRSMP-15/2025-26 dated 22.07.2025).
Feeling aggrieved, the petitioner approached the Patna High Court under Article 226, challenging the decisions of the Technical Bid Evaluation Committee and the subsequent re-tendering.
What the Court Examined and Decided
The Patna High Court, through a Division Bench comprising Hon’ble the Chief Justice and Hon’ble Mr. Justice Alok Kumar Sinha, analysed the entire sequence of events. The judgment records that the petitioner sought multiple reliefs: quashing the technical evaluation decisions, quashing the cancellation of the tender and re-tender notice, and a direction to award him the work at the rate quoted by L1 or at least consider his representation.
On the petitioner’s side, it was argued that the Committee’s decisions dated 30.06.2025 (Memo No. 2469) and 01.07.2025 (Memo No. 2477) were arbitrary and non-speaking, because they went against the clear report of the Executive Engineer about insufficient bid capacity of M/s Shanti Construction and did not record reasons for discarding that report.
The petitioner also submitted that the 01.07.2025 decision was taken in undue haste, on the same day the earlier decision was uploaded, without waiting for the objection period and allegedly without full quorum of the Committee. It was further urged that after opening the financial bids and declaring L1, there was no legal provision for re-evaluation of technical bids; hence, the Committee’s later action and cancellation were claimed to be coram non judice and without jurisdiction.
A crucial plank of the petitioner’s case was that once L1 was found ineligible due to insufficient bid capacity, he, as L2, had a “right” or at least a legitimate expectation to be called and offered the work at the L1 rate, especially since he had expressly agreed to do so in his representation dated 16.07.2025. The petitioner relied on departmental precedents to say that the usual practice was to offer the work to L2 at L1 rates instead of cancelling the whole tender.
On the other hand, the State and department, through a detailed counter affidavit, defended their actions. They pointed out that the technical evaluation was done in phases; objections from bidders, including the petitioner, were repeatedly considered; reports from the Executive Engineer were obtained; and the Committee reconvened multiple times on 10.06.2025, 27.06.2025, 01.07.2025 and 12.07.2025.
The respondents emphasised that once the error in bid capacity calculation of M/s Shanti Construction came to light and it was confirmed that L1 did not have the required capacity, the only proper course, especially after opening of financial bids, was to cancel the tender and re-advertise. This, they argued, was expressly permitted by Clause 33 of the NIT, which authorises the Engineer-in-Chief to accept or reject any bid and cancel the bidding process at any time prior to award without assigning reasons.
They also argued that there was no provision in the NIT or Standard Bidding Document that entitled L2 to the contract if L1 failed. Therefore, the petitioner had no enforceable right to demand that the work be awarded to him. They relied on Supreme Court decisions emphasising the limited scope of judicial review in tender matters and the freedom of the government to cancel tenders in public interest.
The Court carefully examined each framed issue. On the first issue, regarding declaring M/s Shanti Construction technically responsive despite the Executive Engineer’s contrary report, the Court accepted that the Committee’s action on 30.06.2025 lacked proper reasoning and reflected a degree of arbitrariness and non-application of mind.
However, the Bench noted that the later conduct of the respondents was important. After further scrutiny, the Committee accepted that M/s Shanti Construction did not have sufficient bid capacity and, to correct the earlier lapse and because the financial bids had already been opened (thereby compromising confidentiality), they cancelled the entire tender and opted for a fresh tender. The Court characterised this as a corrective step rather than mala fide conduct.
On the second issue, about the reiteration on 01.07.2025 without new material, the Court held that this reiteration was procedurally weak and not a fully reasoned administrative action. But again, since the department later rectified the situation by cancelling the tender and moving to re-tender, any prejudice that might have arisen from that step was effectively neutralised. The lapse was therefore treated as harmless in the final analysis.
On the crucial third issue, the Court upheld the cancellation decision dated 14.07.2025 under Clause 33 of the NIT. The Committee had relied on two valid grounds: (i) L1’s bid capacity was insufficient once all existing allocations were considered; and (ii) confidentiality of the tender process had been breached as the financial bids were already open and all bidders knew the quoted rates. Both reasons, the Court held, fall squarely within the scope of Clause 33 and legal principles that allow the State to cancel tenders to preserve integrity and transparency.
The Bench referred to Supreme Court precedents such as Michigan Rubber (India) Ltd. v. State of Karnataka, Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., Montecarlo Ltd. v. NTPC Ltd., and others. These decisions underline that tendering authorities are “best judges” of their requirements, and judicial interference is justified only when the process is mala fide, perverse or patently arbitrary.
On the fourth issue—whether the petitioner as L2 had a right to the contract—the Court answered in the negative. It stressed that no bidder gets a legal right to the contract merely by being L1 or L2. The NIT’s Clause 33 allowed cancellation and did not mandate offering the work to L2 upon L1’s disqualification. The Court cited W.B. State Electricity Board v. Patel Engineering Co. Ltd., where it was clearly held that a public authority is not obliged to award the contract to any bidder just because the bids have been opened.
The Bench also referred to the Supreme Court’s decision in Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises & Others (Civil Appeal No. 11418 of 2025), which reiterated that public tenders must maintain their sanctity and financial bids cannot be altered or “adjusted” after submission. The petitioner’s offer to work at L1’s rate was treated as an impermissible post-bid alteration, even if it could have saved money for the exchequer.
Moreover, the Court noted that the petitioner had not specifically framed a prayer seeking a positive direction to award the contract to him, but had mainly challenged the cancellation and re-tender. In writ jurisdiction, reliefs must generally be confined to what is clearly prayed for.
On the fifth issue, the Court reaffirmed the limited scope of interference in tender matters under Article 226. Relying on Jagdish Mandal v. State of Orissa, Tata Cellular v. Union of India and Michigan Rubber (India) Ltd., the Bench held that courts will not interfere in tender or contractual matters unless the process is mala fide, so arbitrary that no reasonable authority could have taken such a decision, or against public interest.
After reviewing the repeated scrutiny of bid capacity, the seeking of reports, re-evaluation, and final cancellation followed by re-tendering, the Court held that the respondents’ conduct showed application of mind and pursuit of fairness rather than mala fide or favouritism. There was thus no justification for judicial interference.
In conclusion, the Patna High Court held that while there were procedural lapses in earlier technical decisions, the final step of cancelling the tender and going for a fresh process was lawful, within Clause 33, and in public interest. The petitioner, being only L2 and without any legal right to the contract, could not compel the State to award him the work.
Accordingly, the writ petition was dismissed. All interim applications were deemed disposed, and the respondents were left free to proceed with the re-tender process in accordance with law. No order as to costs was made.
Why This Judgment Matters
This judgment is important for contractors and government departments across Bihar and beyond. It makes clear that even if a bidder is L2 and willing to match L1’s rate, he cannot force the department to give him the work when the tender itself has been cancelled.
The Patna High Court strongly reaffirmed that government authorities have legal power to cancel a tender at any stage before award, especially where there are mistakes in technical evaluation or the confidentiality of bids is compromised. That power flows from the tender conditions, in this case Clause 33 of the NIT.
For contractors, the ruling is a reminder that participating in a public tender does not create an automatic right to a contract. Even being L1 or L2 only gives a chance, not a guarantee. Courts will not step in to “re-award” tenders just because a bidder feels unfairly treated, unless there is strong evidence of mala fides or clear illegality.
For departments, the decision validates the use of cancellation and re-tendering as a legitimate corrective tool, provided it is done in a transparent manner and for proper reasons, not to favour someone. It also stresses that any attempt to change bid prices after opening, even to benefit the public exchequer, can damage the sanctity of the process.
Legal Issues and Answers
-
Issue: Was declaring M/s Shanti Construction technically responsive despite the Executive Engineer’s adverse report arbitrary?
Answer: The Court held this action was not properly reasoned and reflected non-application of mind, but the later cancellation of the tender corrected the error and removed any prejudice. -
Issue: Was the cancellation of the tender on 14.07.2025 lawful under Clause 33 of the NIT?
Answer: Yes. Cancellation due to insufficient bid capacity of L1 and breach of confidentiality after opening financial bids was held to be a valid exercise of power under Clause 33. -
Issue: Did the petitioner as L2, willing to work at L1 rates, have a right to the contract or to court intervention?
Answer: No. The petitioner had no enforceable right to the contract. Courts will not order award of work to L2 in such circumstances, and judicial review in tender matters is very limited.
Cases Cited by the Court
- Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216
- Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818
- Montecarlo Ltd. v. NTPC Ltd., (2016) 15 SCC 272
- W.B. State Electricity Board v. Patel Engineering Co. Ltd. & Others, (2001) 2 SCC 451
- Prakash Asphaltings and Toll Highways (India) Ltd. v. Mandeepa Enterprises & Others, Civil Appeal No. 11418 of 2025
- Jagdish Mandal v. State of Orissa & Others, (2007) 14 SCC 517
- Tata Cellular v. Union of India, (1994) 6 SCC 651
Case Details
Case Number: Civil Writ Jurisdiction Case No. 11886 of 2025
Case Title: Basant Kumar v. The State of Bihar & Others
Citation: 2025 (4) PLJR 653
Coram: Hon’ble the Chief Justice; Hon’ble Mr. Justice Alok Kumar Sinha
Date of Judgment: 09.10.2025
Nature of the Case: Writ petition under Article 226 of the Constitution challenging tender evaluation, cancellation and re-tendering decisions
Advocates:
- For the Petitioner: Mr. Prabhat Ranjan, Advocate; Mr. Ansh Prasad, Advocate; Mr. Shubham Prakash, Advocate
- For the Respondents: Mr. P.K. Shahi, Advocate General; Mr. Vikas Kumar, Advocate
Link to Judgment: MTUjMTE4ODYjMjAyNSMxI04=-grnflBTmIGY=
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