The Court held there was no concluded three-year contract in favour of the petitioner firm.
It found no arbitrariness in issuing new tenders and limited scope for interference in such contractual matters.
The writ petition and related applications were dismissed.
Case Background
The matter arose from government work relating to preparation and updating of electoral rolls in Sitamarhi district, Bihar.
On 23.08.2023, the District Election Officer-cum-District Magistrate, Sitamarhi (respondent no. 5) issued a Notice Inviting Tender (NIT) bearing PR No.007685 (Election) 2023-24. The work included data entry, scanning, uploading, checklist printing, printing of electoral lists and other activities relating to preparation and revision of photo voter lists through ERO-NET for all eight Vidhan Sabha constituencies of Sitamarhi.
The petitioner, M/s R K Tech, a proprietorship firm, submitted its bid. The District Purchase Committee later declared the petitioner as L-1 in the financial bid. On 18.09.2023, a direction was issued to the Deputy Election Officer, Sitamarhi, to enter into an agreement with the petitioner as per tender terms.
Even before the formal agreement was signed, a work order dated 25.10.2023 was issued in favour of the petitioner by the Deputy Election Officer. According to the petitioner, it was then called to the office of the Deputy Election Officer to execute an agreement, and an agreement dated 20th December, 2023 was given to it, which the petitioner signed and returned.
The petitioner’s case is that the Deputy Election Officer did not sign this agreement, but assured that it would be signed and a signed copy would be delivered later. The petitioner maintains that Clause 17 of this draft agreement fixed the term for three years up to 19.12.2026, with possible extension by one year based on satisfactory work.
The petitioner furnished a performance bank guarantee of Rs. 2,00,000/- on 15.03.2024, valid up to 17.03.2027. According to the petitioner, work orders were issued from time to time in 2024, the petitioner carried out the work, and completion certificates were issued by the authorities. A further work order was issued on 01.01.2025.
On 02.07.2025, the District Election Officer-cum-District Magistrate, Sitamarhi issued a short-term tender notice (PR No. 007741 (Election) 2025-26) for the same type of work. This was done without any notice to the petitioner and during what the petitioner claimed to be the subsistence of a three-year agreement dated 20th December, 2023.
Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India, seeking quashing of the 02.07.2025 tender notice and a direction to continue the “agreement” till 19.12.2026, as well as a direction to produce a signed copy of the alleged agreement dated 20.10.2023 (also referred to in submissions as 20th December, 2023).
After filing of the writ petition, the respondents cancelled the 02.07.2025 tender but issued another short-term tender on 18.07.2025 and, thereafter, a “very short term” tender on 19.07.2025. The petitioner filed I.A. No. 1/2025 and I.A. No. 2/2025 to challenge these subsequent tenders.
What the Court Examined and Decided
The Division Bench of the Patna High Court, comprising Hon’ble the Chief Justice Vipul M. Pancholi and Hon’ble Mr. Justice Partha Sarthy, heard the matter. The judgment is an oral judgment delivered by the Chief Justice on 04.08.2025.
The petitioner argued that, under the NIT and the alleged agreement dated 20th December, 2023, the contract was for three years, up to 19.12.2026, and that the authorities were bound to continue assigning work until then. It relied heavily on the conduct of the authorities: acceptance of a three-year performance bank guarantee, issuance of repeated work orders including one on 01.01.2025, and issuance of completion/satisfactory work certificates.
The petitioner contended that by issuing fresh tenders for the same work without notice and without assigning reasons, the respondents had effectively and unilaterally terminated a subsisting three-year contract. This, it argued, was arbitrary, violative of Article 14, and hit by doctrines of estoppel and waiver.
To support its stand, the petitioner cited Supreme Court decisions including:
- Provash Chandra Dalui & Anr. v. Biswanath Banerjee & Anr., 1989 Supp (1) SCC 487;
- Bharat Sanchar Nigam Limited & Anr. v. BPL Mobile Cellular Limited & Ors., (2008) 13 SCC 597;
- Subodh Kumar Singh Rathour v. Chief Executive Officer & Ors., 2024 SCC OnLine SC 1682.
On the other side, the Advocate General, appearing for the State and respondent nos. 5 and 6, opposed the petition. He pointed to the counter affidavit and asserted that the petitioner had merely submitted a draft agreement dated 20th December, 2023, which contained clauses (notably Clause 13 and Clause 17) providing for a three-year term, contrary to Clause 7 of the NIT.
Clause 7 of the NIT clearly stated that the work order would be for one year, which could be extended by one year plus one year (maximum three years) if performance was found satisfactory each year. The State’s stand was that since the draft agreement conflicted with the NIT, the competent authority never signed it. Thus, there was no concluded contract for a fixed three-year period.
The State further contended that although the petitioner was allowed to work in 2024 and a work order was issued on 01.01.2025, this did not by itself establish a fixed three-year contract. The bank guarantee valid for three years was explained as a performance security for the maximum possible contract period (one year + two possible extensions) under Clause 7, not as proof of a three-year firm allotment.
The Advocate General also emphasized that a fresh very short term tender dated 02.07.2025 had been issued for work in all eight Assembly constituencies of Sitamarhi, later cancelled, and then another similar tender was issued on 19.07.2025 with the last date for submission as 28.07.2025. He relied on Supreme Court precedent in The Principal Chief Conservator of Forest & Ors. v. Suresh Mathew & Ors. (SLP(C) No. 12353-12355 of 2021) to stress the limited scope of judicial review in tender/contract matters.
The Court recorded that, at the request of the petitioner, the respondents filed a counter affidavit on urgency. The Court asked the petitioner whether it wanted to file a rejoinder. The petitioner’s senior counsel expressly declined to file any reply to the counter affidavit. The Court then proceeded to decide the matter on the available material.
In its discussion, the Court first examined the NIT dated 23.08.2023 (Annexure-P/1). From this document, it found that the work order would be for one year, extendable up to a maximum of three years if the bidder’s performance was satisfactory.
It then examined the so-called agreement dated 20th December, 2023 placed at page 40 of the petition compilation. The Court noted that the document was signed only by the petitioner; there was no signature of any respondent authority. Paragraph 8 of the writ petition itself, as well as the petitioner’s own case, showed that the authorities had not signed the agreement and that the petitioner had requested a signed copy, which was never given.
The respondents’ counter affidavit specifically stated that the petitioner had only submitted a draft agreement; as it was contrary to Clause 7 of the NIT, it was never signed by the competent authority. On these materials, the Court concluded that there was no concluded contract for three years between the parties.
The Court accepted that work orders were given in 2024 and again on 01.01.2025, and that the petitioner had executed work under those orders. However, it rejected the argument that such conduct meant the respondents had accepted all terms of the unsigned draft agreement, or that they were bound to continue work orders till December 2026.
The Court held that the petitioner had failed to produce any document proving that an agreement, duly executed by both sides, existed for a fixed three-year term. It also accepted the State’s explanation that the three-year validity bank guarantee was required because, under Clause 7 of the NIT, the maximum potential period of work allotment (subject to yearly extension on performance) was three years.
Turning to the Supreme Court decisions cited by both sides, the Court reproduced large portions from Subodh Kumar Singh Rathour, which discuss:
- Expansion of writ jurisdiction in contractual matters where the State’s action is arbitrary or unfair;
- Scope of judicial review before award of contracts, during subsistence of contracts, and after termination or breach;
- The doctrines of legitimate expectation, fairness, and public interest in public contracts;
- When courts may interfere under Article 226 despite existence of alternative remedies.
However, after analysing these principles, the Patna High Court held that those rulings did not assist the petitioner on the facts of this case, because the basic premise of a concluded three-year contract was missing.
The Court then relied on further Supreme Court precedent to emphasise judicial restraint in tender matters, including:
- Bharat Coking Coal Limited & Ors. v. AMR Dev Prabha & Ors., (2020) 16 SCC 759, which cautions against litigation being used as a commercial tool and stresses substantive, not hyper-technical, scrutiny;
- Tata Motors Limited v. Brihan Mumbai Electric Supply and Transport Undertaking (BEST) & Ors., (2023) 19 SCC 1, which reiterates that courts should interfere in contractual/commercial decisions only where clear arbitrariness, mala fides, bias or irrationality is shown, and should not act as appellate courts over technical and commercial decisions.
Summarising these authorities, the Bench stated that in contractual or commercial matters, the court must exercise a great deal of restraint while using its powers of judicial review. It noted that courts are “normally loathe to interfere” unless there is a clear case of arbitrariness, mala fides, bias or irrationality, and that in reviewing the decision-making process, the court should not function as a court of appeal.
Applying these principles, the Court held that the decision of the respondents to issue a fresh very short term tender notice could not be characterised as arbitrary or violative of Article 14. Since there was no concluded three-year contract and no clear illegality or mala fides in going for fresh tender, the limited scope of judicial review did not permit interference.
Consequently, the writ petition was dismissed. All interlocutory applications, including those challenging subsequent tender notices, were also disposed of.
Why This Judgment Matters
This judgment is important for contractors and vendors who work with government departments, especially in Bihar.
First, it clearly shows that an unsigned draft agreement, even if prepared by one side and acted upon for some time, does not automatically become a binding long-term contract. To claim a fixed multi-year right, a contractor must show a properly executed agreement signed by the competent government authority.
Second, it reinforces that work orders given from time to time, or the acceptance of a long-validity bank guarantee, do not by themselves prove that the government has agreed to lock itself into a fixed multi-year term beyond what the tender conditions allow.
Third, the decision reaffirms that in tender and contract matters, the Patna High Court will interfere under Article 226 only when there is clear arbitrariness, mala fide intention, bias, or irrationality. Mere disagreement with the authority’s choice to issue a new tender, or the desire to continue an arrangement, is not enough.
For small firms and suppliers, the judgment is a reminder to insist on obtaining duly signed agreements and to keep their expectations within the exact written scope of the NIT and the signed contract, rather than relying solely on conduct or assurances.
Legal Issues and Answers
- Issue: Whether there existed a concluded three-year contract between the petitioner and the Election Department authorities based on the draft agreement dated 20th December, 2023 and subsequent conduct.
Answer: No. The Court held that the draft agreement was signed only by the petitioner, never signed by the competent authority, and was contrary to Clause 7 of the NIT. Therefore, there was no concluded three-year contract. - Issue: Whether issuance of fresh short-term and very short-term tender notices for the same electoral roll work was arbitrary or violative of Article 14 so as to justify interference under Article 226.
Answer: No. In the absence of a proved fixed-term contract and any material showing arbitrariness, mala fides, bias or irrationality, the Court held that issuing fresh tenders fell within the authority’s discretion and did not warrant judicial interference. - Issue: Whether the conduct of issuing work orders in 2024 and on 01.01.2025 and accepting a three-year performance bank guarantee created an estoppel or legitimate expectation of three years’ continuous work.
Answer: No. The Court held that these acts, read with Clause 7 of the NIT, only reflected the possibility of extension up to three years subject to yearly satisfaction, and did not give the petitioner a vested right to three years of uninterrupted work.
Cases Cited by the Court
- Provash Chandra Dalui & Anr. v. Biswanath Banerjee & Anr., 1989 Supp (1) SCC 487.
- Bharat Sanchar Nigam Limited & Anr. v. BPL Mobile Cellular Limited & Ors., (2008) 13 SCC 597.
- Subodh Kumar Singh Rathour v. Chief Executive Officer & Ors., 2024 SCC OnLine SC 1682.
- The Principal Chief Conservator of Forest & Ors. v. Suresh Mathew & Ors., SLP(C) No(s). 12353-12355 of 2021.
- Bharat Coking Coal Limited & Ors. v. AMR Dev Prabha & Ors., (2020) 16 SCC 759.
- Tata Motors Limited v. Brihan Mumbai Electric Supply and Transport Undertaking (BEST) & Ors., (2023) 19 SCC 1.
Case Details
Case Number: Civil Writ Jurisdiction Case No. 11165 of 2025
Case Title: M/S R K Tech v. The State of Bihar & Ors.
Coram: Hon’ble the Chief Justice Vipul M. Pancholi; Hon’ble Mr. Justice Partha Sarthy
Date of Judgment: 04.08.2025
Citation: 2025(3) PLJR 831
Advocates:
- For the petitioner: Mr. Ashish Giri, Sr. Advocate; Ms. Riya Giri, Advocate; Mr. Sumit Kumar Jha, Advocate; Mr. Pratik Raj, Advocate.
- For the State: Mr. P.K. Shahi, Advocate General; Mr. Vikas Kumar, AC to AG.
- For respondent nos. 3 and 4: Mr. Siddhartha Prasad, Advocate.
Nature of the Case: Writ petition under Article 226 of the Constitution challenging short-term tender notices and seeking continuation of alleged contract for electoral roll related work.
Link to Judgment: Patna High Court Judgment in CWJC No. 11165 of 2025
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