Case Background
The Building Construction Department, Government of Bihar, issued Notice Inviting Tender (NIT) No. 13/2018-19 dated 27.11.2018. The tender was for construction of an Officers Enclave comprising 752 units on 13.16 acres under the Gardanibagh Housing Development project at Patna.
The petitioner, a government undertaking from another State, claimed to be eligible and participated in the e-tender process. On 05.02.2019, the Tender Evaluation Committee (TEC), headed by the Principal Secretary of the Department, opened the bids online and evaluated the technical bids.
On that date, the TEC disqualified the petitioner at the technical stage. Its decision was put on the website as Annexure 3 to the writ petition. The TEC cited three reasons: use of a solvency certificate dated before the NIT, non-submission of the company’s Memorandum and Articles of Association, and non-fulfilment of the requirement to submit evidence of access to lines of credit and other financial resource facilities equal to 10% of the cost of the work, supported by a banker’s certificate not more than three months old.
The petitioner first filed this civil writ application (CWJC No. 3406 of 2019) before the Patna High Court challenging the TEC’s decision dated 05.02.2019. Later, during the pendency of the writ, developments occurred: the Department proceeded to open the financial bids, rejected objections raised by the petitioner, and issued a Letter of Acceptance and allotment in favour of respondent no. 5, a private construction company.
To challenge these later steps, the petitioner filed Interlocutory Application No. 2 of 2019. Through this, it sought to quash the TEC proceedings dated 13.02.2019 and 18.02.2019, the rejection of its objection, the Letter of Acceptance, the letter of allotment, and to seek allotment of the work to itself on the ground that its quoted rate (Plus 4.89%) was lower than that of respondent no. 5 (Plus 7.75%).
Subsequently, through I.A. No. 4 of 2019, the petitioner further amended the prayers to also challenge Letter of Acceptance bearing no. 267 dated 21.02.2019 issued by the Executive Engineer, Construction Division No. 1, Building Construction Department, Patna, and the Agreement No. SBD No. 16/2018-19 executed between the Executive Engineer and respondent no. 5. Both interlocutory applications were allowed by the High Court on 08.04.2019, so all consequential orders also came under challenge.
What the Court Examined and Decided
The core dispute was whether the petitioner’s bid had been wrongly rejected at the technical stage, and whether the High Court should set aside the TEC decisions and subsequent contract in favour of respondent no. 5.
The petitioner argued that it had complied with all essential eligibility criteria under clauses 7.1, 7.2 and 7.3 of the NIT, which prescribed initial criteria for pre-qualification. According to the petitioner, these three clauses were the only essential requirements, and the TEC was not justified in treating other requirements as decisive.
On the solvency certificate, the petitioner relied on sub-clause (iv)(d) and (e) of clause (C) under paragraph 3 of the tender document. It contended that while these required a banker’s solvency certificate or revenue solvency certificate of value not less than 40% of the estimated cost, there was no condition that the certificate must be issued after the NIT date. Therefore, using a banker’s solvency certificate dated 12.09.2018, prior to the NIT dated 27.11.2018, could not be a valid ground of rejection.
Regarding evidence of access to lines of credit and financial resources equal to 10% of contract value, certified by bankers, the petitioner pointed out that the tender expressly stated that such certificate should “not be more than 3 months old”, but no similar timing requirement was mentioned for the solvency certificate. The petitioner also contended that this evidence of access to credit was not an “essential” condition and did not need to relate specifically to the work in question.
The petitioner candidly admitted that it had not uploaded online the banker’s certificate about access to lines of credit and its Memorandum and Articles of Association. These were only furnished in hard copy. The petitioner argued that since hard copies had been provided, non-uploading in the e-tender system should be treated as a minor irregularity and not a basis for rejecting its bid.
The petitioner further relied on various Supreme Court and High Court decisions, including Poddar Steel Corporation v. Ganesh Engineering Works, Vidarbha Irrigation Development Corporation v. M/s Anoj Kumar Garwala, and M/s Cyano (Cano) Pharma (P) Ltd v. State of Telangana, to argue that non-essential or ancillary tender conditions could be relaxed, and minor deviations or procedural lapses should not lead to rejection if the bidder otherwise met the main eligibility criteria.
The petitioner also raised a grievance about the manner in which its objections were handled. It stated that the TEC’s decision of 05.02.2019 was not timely uploaded, that it learned of the decision through other means, and that it submitted its objection on 12.02.2019 at 11:45 p.m., though the cut-off time was 10:00 a.m. the same day. It relied on a letter (Annexure 10) written on 13.02.2019 by the Departmental Minister to the Principal Secretary, asking him not to open the financial bids. The petitioner alleged that despite this, the Department hurriedly opened the financial bids and moved ahead.
On the State’s side, the learned Advocate General emphasised that under clause 13 of the NIT and the “Mode of Submission” clause, the tender process was strictly by e-tendering. All documents required for technical qualification had to be uploaded on the e-procurement portal, with hard copies only supplementing them. If there was any discrepancy, the uploaded e-tender documents would prevail over the hard copies.
It was not disputed that the petitioner failed to upload at least two crucial documents: its Memorandum and Articles of Association and the banker’s certificate showing access to lines of credit and other financial resources (10% of cost of work). According to the State, this non-uploading amounted to a violation of an essential condition, so the TEC had no option but to disqualify the petitioner’s technical bid.
The Advocate General further relied on Clause 19 of the tender document, which referred to Building Construction Department letter no. 3284 dated 05.05.2009. Paragraph 5 of this letter, produced as Annexure 5/A, showed that the banker’s certificate on credit facilities and solvency certificate had to be linked to the work for which the tender had been invited. Thus, in the State’s view, the solvency certificate dated 12.09.2018, much before the NIT date, and not specifically tied to the present work, did not comply.
Respondent no. 5, through its Senior Counsel, adopted these arguments and further stressed that the NIT was an e-tender: as per Clause 13, tendering was to be carried out only through the e-tendering website. It pointed out that in the petitioner’s own rejoinder (paragraphs 7 and 9), the petitioner admitted its failure to upload the bank certificate and company charter documents.
The private respondent also highlighted that the petitioner’s claim of being a prime contractor was inconsistent. In paragraph 10 of the rejoinder, the petitioner described itself as a nodal agency of ESIC for infrastructure work, rather than a prime contractor. Though these aspects related to experience criteria under paragraph 3 of the technical qualification criteria, the High Court ultimately chose not to decide on them, because the non-uploading issue itself was decisive.
When assessing the legality of the TEC’s decisions, the Patna High Court first interpreted the tender conditions. It noted that clause 13 and the “Mode of Submission” clause made e-tendering the sole mode. If any discrepancy existed between uploaded documents and hard copies, the uploaded version would prevail. Thus, uploading all required documents was not a formality but an essential step.
The Court also examined clause 8.1.1 on “Evaluation Criteria for Technical-Qualification”. This clause stated that the initial criteria prescribed in paragraphs 7.1 to 7.3 and paragraph 3 of the Technical Qualification Criteria (covering experience, bidding capacity, financial turnover, etc.) would first be scrutinised. Therefore, the Court rejected the petitioner’s argument that only paragraphs 7.1 to 7.3 were essential.
Turning to Building Construction Department letter no. 3284 dated 05.05.2009, the Court reproduced paragraph 5 and accepted the State’s and private respondent’s submission that the banker’s certificate for credit facilities had to pertain to the work in question. The Court held that the petitioner, having not uploaded such a certificate at all, breached the essential requirement of uploading all tender documents.
On the objection about non-uploading of the TEC decision dated 05.02.2019, the Court pointed to paragraph 8 of the writ petition itself, where the petitioner had stated that Annexure 3 (the TEC decision) was uploaded on the website, with a clear note that objections, if any, were to be filed by 10:00 a.m. on 12.02.2019. The petitioner, however, filed its objection only at 11:45 p.m. that night. Yet, the respondents still considered its objection on 18.02.2019, as reflected in the minutes (Annexure 7), and gave reasons for rejecting it. Therefore, the allegation of unfairness or haste did not impress the Court.
On the legal principles, the Court held that this was a case of breach of essential tender conditions. Hence, the line of judgments such as Poddar Steel and M/s Cyano Pharma (P) Limited, where non-essential conditions or ambiguous filing modes were involved, did not assist the petitioner.
Instead, the Court found support in the Supreme Court decision in Vidarbha Irrigation Development Corporation, which reaffirmed that bids with material deviations from tender conditions cannot be treated as substantially responsive. The Court cited Bakshi Security and Personnel Services Pvt. Ltd. and Poddar Steel within that judgment to reinforce that essential conditions must be strictly complied with.
The High Court also relied on Air India Ltd. v. Cochin International Airport Ltd. and Raunaq International Ltd. v. I.V.R. Construction Ltd., where the Supreme Court cautioned High Courts against interfering in tender matters under Article 226 unless there is mala fide, arbitrariness, or overwhelming public interest. Award of a public contract is a commercial decision, and courts must not derail public projects merely because one bidder offers a lower price, especially if the process is otherwise fair and in line with rules.
Applying these principles, the Patna High Court held that:
- The tender was clearly an e-tender, and uploading of all required documents was an essential condition.
- The petitioner failed to upload its Memorandum and Articles of Association and the banker’s certificate showing access to lines of credit, both essential documents.
- This failure amounted to a breach of essential tender conditions, making its technical bid liable to rejection.
- The TEC’s decisions dated 05.02.2019 and 18.02.2019 could not be faulted on the record-based reasons; and the later criticisms of the petitioner’s performance, even if not forming the basis of rejection, only underlined that no discretionary interference was warranted.
- Differences in bid price, such as the alleged Rs. 13.91 crore savings, could not override the requirement to honour essential tender conditions and public interest in timely execution.
In conclusion, the Court held that this was not a fit case to exercise its discretionary writ jurisdiction. The writ petition was dismissed, and the contract in favour of respondent no. 5 remained undisturbed.
Why This Judgment Matters
This judgment sends a clear message to contractors participating in e-tenders in Bihar and elsewhere: every required document must be properly uploaded within the system. Sending documents in hard copy is not enough if the NIT makes e-uploading mandatory.
The Patna High Court treated non-uploading of the company constitution and banker’s credit certificate as breaches of essential conditions, even though the bidder claimed to be otherwise fully qualified and even offered a lower price. The Court refused to relax these conditions as “minor” or “technical” deviations.
For contractors, the decision underscores that:
- You must strictly follow all e-tender instructions, especially about uploading documents and meeting cut-off times.
- Courts are unlikely to overturn tender decisions just because a bidder was cheaper, if it failed to meet essential procedural requirements.
- Challenges based only on price differences, or on late objections after the process has moved forward, are unlikely to succeed unless clear illegality or mala fide is shown.
For government departments, the judgment supports consistent enforcement of tender conditions and confirms that they can insist on strict compliance with essential eligibility and submission requirements, especially in e-tendering.
Legal Issues and Answers
Issue: Whether the Tender Evaluation Committee wrongly disqualified the petitioner’s bid for not uploading certain documents in an e-tender process.
Answer: No. The Court held that uploading all required documents, including the Memorandum and Articles of Association and banker’s certificate on access to lines of credit, was an essential tender condition. The petitioner’s failure to upload them justified its disqualification.
Issue: Whether the High Court should, in writ jurisdiction, interfere with the TEC’s decisions and set aside the subsequent Letter of Acceptance and contract in favour of respondent no. 5.
Answer: No. Relying on Supreme Court precedents, the Court held that award of contracts is a commercial decision; there was no mala fide or arbitrariness proved, and no overwhelming public interest requiring interference. Hence, Article 226 powers were not exercised.
Issue: Whether the use of a banker’s solvency certificate dated prior to the NIT automatically invalidated the petitioner’s bid.
Answer: The Court accepted the respondents’ interpretation that solvency and credit certificates must relate to the work in question, but it ultimately rested its decision on the more fundamental ground that the petitioner had not uploaded necessary documents at all, breaching essential tender conditions.
Cases Cited by the Court
- Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New Delhi & Ors., AIR 1978 SC 851 : 1978 SCR (3) 272 (relied on by petitioner).
- Poddar Steel Corporation v. Ganesh Engineering Works and Others, (1991) 3 SCC 273 (relied on by petitioner, distinguished).
- Vidarbha Irrigation Development Corporation v. M/s Anoj Kumar Garwala, 2019 (1) PLJR 472 (applied in favour of respondents).
- M/s Cyano (Cano) Pharma (P) Limited v. State of Telangana, judgment of Andhra Pradesh High Court dated 31.08.2015 (relied on by petitioner, distinguished).
- Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Pvt. Ltd. and Others, (2016) 8 SCC 446 (referred via Vidarbha Irrigation).
- Air India Ltd. v. Cochin International Airport Ltd. and Others, (2000) 2 SCC 617 (relied on by respondents).
- Municipal Corporation Ujjain and Another v. BVG India Limited and Others, (2018) 5 SCC 462 (relied on by respondent no. 5).
- Raunaq International Ltd. v. I.V.R. Construction Ltd. and Others, (1999) 1 SCC 492 (relied on by respondents).
Case Details
Case Number: Civil Writ Jurisdiction Case No. 3406 of 2019
Case Title: Uttar Pradesh Rajkiya Nirman Nigam Ltd. v. The State of Bihar & Ors.
Coram: Hon’ble Mr. Justice Rajeev Ranjan Prasad
Date of Judgment: 10.04.2019
Citation: 2019 (2) PLJR 948
Nature of the Case: Writ petition under Article 226 of the Constitution challenging tender evaluation decisions, rejection of technical bid, and consequential award of contract and agreement.
Advocates:
- For the petitioner: Mr. P.K. Sahi, Senior Advocate; Mr. Ranjeet Kumar, Advocate.
- For the State (official respondents): Mr. Lalit Kishore, Advocate General; Mr. Shailendra Kumar, AC to PAAG-2.
- For private respondent no. 5: Mr. Y.V. Giri, Senior Advocate; Mr. Pranav Kumar, Advocate.
Link to Judgment: Official Patna High Court judgment
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