Case Background
The Bihar State Power Transmission Company Limited issued a Notice Inviting Tenders (NIT) for providing security services at its establishments. The NIT prescribed a detailed marking system to choose the best tenderer, including marks for years of experience, presence in Bihar, ISO certification and employment of ex-servicemen.
Two entities, M/s Intelligence Security of India and M/s Jai Shankar Industrial Security Services Pvt. Ltd., participated in the tender. A third entity, Rakshak Securitas Private Limited, emerged as the highest scorer and was selected as the successful bidder.
Unhappy with this result, the two unsuccessful tenderers filed separate writ petitions before the Patna High Court. In both petitions, the State of Bihar and the power transmission company were made respondents, along with the successful bidder as private respondent.
Earlier, on 10.04.2023, another Division Bench of the Patna High Court had passed an interim order directing the respondent power company to re-evaluate the marks awarded, particularly on two heads: experience of the firm in security services business and presence in Bihar. After this re-evaluation by technical officers, the successful bidder again emerged on top.
The present oral judgment dated 02.04.2024, delivered by a Division Bench headed by the Hon’ble Chief Justice, considers the challenges to the re-evaluated marks and the legality of the contract award.
What the Court Examined and Decided
The core dispute in the first writ petition (CWJC No. 2621 of 2023) was over two heads of marking: experience and registered/corporate office in Bihar.
The petitioner argued that the successful bidder had been wrongly given 18 marks for experience and had also been wrongly favoured on the “presence in Bihar” criterion.
On experience, the NIT provided a graded system: more than 5 and up to 10 years of experience would earn 10 marks; 10–15 years, 15 marks; 15–20 years, 18 marks; and above 20 years, 20 marks. Initially, both petitioners had been given 10 marks, and the successful bidder 18 marks. After the Court-ordered re-evaluation, the successful bidder again received 18 marks.
The petitioners accepted that they were entitled only to 10 marks based on their own experience. Their challenge was only to the 18 marks granted to the successful bidder. They argued that some of the experience considered for the successful bidder was not with “governmental establishments/autonomous institutions/corporations” or reputed PSUs, as required by the NIT.
The experience relied on for the successful bidder included work with DSM Sugar Mansurpur (Uttar Pradesh), South Asian University (New Delhi), IGNOU Headquarters, and the North Campus of the University of Delhi. The petitioners did not dispute the last three years of experience in governmental organisations; their objection was limited to experience with DSM Sugar Mills and South Asian University.
Through the supplementary affidavit dated 03.05.2023, the petitioner itself produced documents showing that DSM Sugar Mills is a private limited company. The agreement for establishment of South Asian University, annexed as Annexure-25, described the University as a “non-state, non-profit self-governing international educational institution” that receives support from member States of SAARC, including India.
On this basis, the petitioners argued that neither DSM Sugar Mills nor South Asian University qualified as “governmental organizations/autonomous bodies/corporations/reputed PSUs” under the NIT, and their experience should not count for higher marks. According to them, the 18 marks should be reduced to 10.
The power company and the successful bidder presented a different reading of the NIT. They contended that the eligibility criteria had two parts. First, there must be minimum continuous experience in the last three financial years (2018–21) in governmental organisations or reputed PSUs. Secondly, for awarding higher marks on overall experience, experience with private entities could also be counted, as that second limb did not require the employer to be a governmental body.
The Court carefully examined paragraph 29(8) of the NIT, which required scanned copies of proofs of “minimum last three financial year’s i.e. 2018–21 continuous experience of the firm in the field of providing such service in Central Govt./State Govt./Semi Govt./establishments/autonomous bodies/corporations/reputed PSU” and also required proof of satisfactory service for each of the last three or more financial years.
Applying the principle of ejusdem generis, the Court held that the bodies listed (Central Government, State Government, Semi-Government, autonomous bodies, corporations and reputed PSUs) should all have some “pervasive control” by the State. On a reading of the agreement establishing South Asian University, the Bench concluded that it was a non-profit partnership that only “seeks support” from member governments and does not amount to a governmental organisation under that clause.
However, the Bench accepted the respondents’ broader reading that the NIT contained two limbs. The first limb, requiring minimum three years’ continuous experience in governmental organisations, applied only to the last three financial years before the tender. That part was admittedly satisfied by the successful bidder.
The second limb concerned overall satisfactory services for each of the last three or more financial years. The Court found that this part did not repeat the requirement that experience must be with governmental organisations. Therefore, the experience of the successful bidder with DSM Sugar Mills (a private limited company) and South Asian University (a non-profit international institution) could be added for the purpose of calculating total years of experience beyond the minimum three governmental years.
Viewed in this manner, the successful bidder’s total experience exceeded 15 years, justifying the award of 18 marks under the NIT. The Bench therefore upheld the 18 marks originally and on re-evaluation.
The second issue in CWJC No. 2621 of 2023 concerned the “presence in Bihar” criterion. The NIT provided differential marks for “registered/corporate office in Bihar” (10 marks) and “registered/corporate office outside Bihar” (5 marks). Both a proprietorship concern, a partnership firm and a corporate entity were eligible to submit a tender.
The petitioner was a proprietary concern registered under the Bihar Shops and Commercial Establishments Act, 1953. The successful bidder was a corporate entity with corporate registration in Delhi but also registered under the same Bihar Act.
Initially, the successful bidder had received 10 marks on this head. After the earlier interim order and the single judge’s interpretation focusing on corporate office, the successful bidder was given only 5 marks, while the petitioner received none as a proprietary concern without corporate registration.
In the final hearing, the Bench read the phrase “registered/corporate office” together with “presence in Bihar” and held that registration in Bihar under the Bihar Shops and Commercial Establishments Act, 1953 amounted to the kind of presence the NIT wanted to reward. The purpose was to ensure that the tenderer was subject to local regulatory control.
Since both the petitioner and the successful bidder had registration under that Act in Bihar, the Court held that each was entitled to 10 marks for this criterion as initially awarded. On this reasoning, the petitioner’s challenge to the marks on presence in Bihar also failed, and CWJC No. 2621 of 2023 was held to be without merit.
In the second writ petition (CWJC No. 4529 of 2023), the petitioner had submitted its tender as part of a joint venture with another entity. However, the writ petition was filed only by one partner of the joint venture, claiming to be the lead partner.
The respondents objected to the maintainability of the writ on this ground, relying on the Supreme Court decision in New Horizons Ltd. v. Union of India, (1995) 1 SCC 478. They argued that a joint venture is a distinct legal entity separate from its constituents, and therefore only the joint venture, not just one partner, could maintain a writ petition. There was also no authorization from the other constituent partner allowing the petitioner to sue on behalf of the joint venture.
The Court reproduced paragraph 24 of New Horizons Ltd., explaining that a joint venture is an association of persons or companies undertaking a commercial enterprise with shared risks, profits and losses, and may itself take a corporate form. Based on this, the Bench held that the joint venture enjoyed a separate legal status distinct from its partners.
Accordingly, the lead partner alone could not file a writ petition when it was the joint venture that had submitted the tender. In absence of any authorization from the other partner, the Court ruled that the writ petition was not maintainable.
Even on merits, the petitioner in CWJC No. 4529 of 2023 complained that it had not been granted marks for ISO certification and for employing more than 100 ex-servicemen. The power company pointed out that ISO certificates were not annexed with the tender and no proof had been produced about the number of ex-servicemen employed.
The Court observed that the petitioner claimed to hold ISO certification for 15 years, which under the NIT would earn 15 marks. Even if those 15 marks were generously added to the marks already obtained by the joint venture, its total would reach only 85, still far below the 98 marks scored by the successful bidder. As for ex-servicemen, the records contained no evidence that over 100 ex-servicemen were employed.
Thus, even assuming some error in marking, it would not change the ultimate position of the parties in the ranking, and the writ would fail on merits as well.
The petitioner also relied on Rule 126(v) and Rule 131R of the Bihar Financial Rules, contending that its tender had not been rejected by a reasoned order and that procurement principles had been violated. The Bench clarified that Rule 126(v) only requires the procuring authority to record the considerations that guided its decision at every stage, including tender award. On the material placed before the Court during the challenge, it was evident that the respondent authority had valid and recorded reasons for its decisions.
The Court found Rule 131R inapplicable, noting that there was no specific allegation or ground of lack of transparency, competition, fairness or arbitrariness in the tender process. The dispute was essentially about marking, which had been revisited by technical officials following the Court’s earlier interim directions.
In the result, both writ petitions were dismissed. The contract awarded to the successful bidder, Rakshak Securitas Private Limited, remained undisturbed, and the parties were directed to bear their own costs.
Why This Judgment Matters
This judgment is important for businesses that participate in government tenders, especially in Bihar.
First, it clarifies that where a tender prescribes minimum experience in government organisations for a fixed look-back period, additional years of experience with private or international bodies can still count towards higher marks, if the tender language allows it.
Second, it explains that “presence in Bihar” can be satisfied by registration under the Bihar Shops and Commercial Establishments Act, 1953, not only by having a corporate head office in the State. Proprietorships and other non-corporate entities can rely on such registration.
Third, the ruling reinforces that a joint venture is a separate legal person for tender purposes. When a joint venture submits a bid, one partner alone cannot challenge the outcome unless duly authorized. This affects how contractors should structure litigation strategy after a tender.
Lastly, the Court signalled that minor marking disputes which do not change the overall ranking, especially where there is a big gap in marks, will not be enough to overturn a public contract. Tenderers must provide complete documents and strong grounds, not just hope to scrape extra marks through litigation.
Legal Issues and Answers
- Issue: Could the successful bidder’s experience with a private company and an international university be counted for higher marks under the NIT experience criterion?
Answer: Yes. The Patna High Court held that while minimum three years of experience had to be with governmental bodies, additional years of experience for higher marks could include services rendered to private and non-governmental institutions. - Issue: How should “registered/corporate office in Bihar” be interpreted for awarding marks on “presence in Bihar”?
Answer: The Court held that the phrase covers entities registered in Bihar under the Bihar Shops and Commercial Establishments Act, 1953, not just those having their corporate head office in Bihar. Both the petitioner and successful bidder were eligible for full marks on this head. - Issue: Can a lead partner of a joint venture alone maintain a writ petition challenging a tender result where the bid was submitted by the joint venture?
Answer: No. Relying on New Horizons Ltd., the Court held that a joint venture is a distinct legal entity. Without authorization from the joint venture or the other partner, a single constituent cannot maintain such a writ petition.
Cases Cited by the Court
- New Horizons Ltd. v. Union of India, (1995) 1 SCC 478.
Case Details
Case Numbers: Civil Writ Jurisdiction Case No. 2621 of 2023; Civil Writ Jurisdiction Case No. 4529 of 2023
Case Titles: M/s Intelligence Security of India v. The State of Bihar & Ors.; M/s Jai Shankar Industrial Security Services Pvt. Ltd. v. The State of Bihar & Ors.
Citation: 2024 (2) PLJR 384
Coram: Hon’ble the Chief Justice K. Vinod Chandran; Hon’ble Mr. Justice Harish Kumar
Advocates in CWJC No. 2621 of 2023: Mr. Mrigank Mauli, Senior Advocate; Mr. Avinash Shekhar, Advocate; Mr. Deo Prakash Singh, Advocate for the petitioner. Mr. Umesh Prasad Singh, Senior Advocate; Mr. Vaibhav Veer Shankar, Advocate for Bihar State Power Transmission Company Limited. Mr. Raju Giri, Advocate for private respondent. Mr. Yogendra Pd. Sinha, AAG-7 for the State.
Advocates in CWJC No. 4529 of 2023: Mr. Deo Prakash Singh, Advocate for the petitioner. Mr. Umesh Prasad Singh, Senior Advocate; Mr. Vaibhav Veer Shankar, Advocate for respondent nos. 2 to 4. Mr. Raju Giri, Advocate; Mr. Harsh Vardhan, Advocate for private respondent. Mr. Abbas Haider, SC-6 and Mr. Wasi Mohammad, AC to SC-6 for the State.
Nature of the Case: Writ petitions under civil writ jurisdiction challenging award of security services contract pursuant to Notice Inviting Tenders.
Date of Judgment: 02.04.2024
Link to Judgment: Click here to access the full judgment of the Patna High Court
If you found this explanation helpful and wish to stay informed about
how legal developments may affect your rights in Bihar,
you may consider following Samvida Law Associates for more updates.
