Case Background
This case arose from a government tender for construction of the Jataur Rewari to Bangara road in district Siwan, Bihar. The work was under the Rural Works Department and Bihar Rural Road Development Agency.
Initially, a Notice Inviting Tender (N.I.T.) for this work was issued, but no contractor came forward. That first N.I.T. was therefore cancelled.
Later, a fresh N.I.T. was published by the Executive Engineer in the daily Hindi newspaper “Prabhat Khabar” on 07.03.2017. Three contractors, including the petitioner company, submitted their bids.
The Technical Bid Committee met on 12.08.2017. It considered the documents and declared all three bidders technically qualified. The decision of the Technical Bid Committee was circulated to all concerned by memo dated 12.08.2017.
Out of the three, one bidder, Vijay Pandey, had quoted the lowest rate. His name was, therefore, recommended for opening of the financial bid. According to the petitioner, the technical bid of another bidder (later respondent no. 10) was defective and should not have been accepted.
The financial bid of only Vijay Pandey was taken up by the Financial Bid Committee. However, in a meeting held on 26.12.2017 under the Chairmanship of the Secretary, Rural Works Department, the tender submitted by Vijay Pandey was rejected in view of Clause 4.4 C of the Standard Bidding Document (PMGSY).
After this rejection, the authorities cancelled the tender process and started re-tendering for the same work. On the basis of the re-tender, only one contractor, Kunal Construction (respondent no. 10 in the writ), applied, was declared qualified, and was issued a work order on 17.04.2018.
Meanwhile, the petitioner filed the present Civil Writ Jurisdiction Case No. 792 of 2018. It sought quashing of the Technical Bid Committee decision dated 12.08.2017, and a direction to award the contract to the petitioner.
What the Court Examined and Decided
The Patna High Court, through Hon’ble Mr. Justice Mohit Kumar Shah, examined the limited prayers in the writ petition and the undisputed facts placed through pleadings.
The petitioner’s main grievance was that respondent no. 10’s technical bid was illegal and arbitrary. The petitioner argued that the tender documents of respondent no. 10 were accompanied by an affidavit sworn by an authorised representative, one Nitu Devi. According to the petitioner, all affidavits filed in support of that technical bid were without welfare stamps. On this basis, the petitioner said the technical bid of respondent no. 10 was defective and ought to have been rejected.
The petitioner further argued that among the three original contractors, one bidder’s financial bid (Vijay Pandey) was ultimately rejected and the bid of respondent no. 10 was allegedly defective. Therefore, the petitioner claimed that it remained the “only surviving contractor” and its bid ought to have been accepted and the contract awarded to it.
On the other hand, respondents no. 1 to 9 (the State authorities) filed a counter affidavit and presented a clear sequence of events. They confirmed that initially an N.I.T. was floated but had to be cancelled because no one responded. Then a fresh N.I.T. was issued on 07.03.2017 to which three tenderers, including the petitioner, applied. The Technical Bid Committee held its meeting on 12.08.2017 and declared all three tenderers technically qualified.
The State explained that because Vijay Pandey quoted the lowest rate, his name alone was recommended for opening of the financial bid. Later, in the meeting on 26.12.2017 chaired by the Secretary, the tender of Vijay Pandey was rejected pursuant to Clause 4.4 C of the S.B.D. (PMGSY). As a consequence, the entire tender process was cancelled and a fresh re-tender initiated.
In the re-tender, only Kunal Construction participated. This bidder was found qualified and a work order was issued on 17.04.2018 for execution of the road construction work. The State, therefore, argued that the petitioner’s writ had become infructuous because the previous tender, which the petitioner was challenging, no longer existed. A new contract had already been awarded.
After hearing both sides and examining the materials on record, the Court focused on the exact reliefs sought in the writ petition.
First, the Court noted that the petitioner had only sought a declaration that respondent no. 10 (Kunal Construction) ought not to have been considered qualified in the technical bid. The Court found this prayer “misplaced and misconceived” because, as the record showed, the financial bid of that respondent under the original tender had never succeeded. In other words, even if there had been some defect in the technical bid, it did not ultimately result in award of the contract under that round of tender. So attacking that technical qualification alone made little practical sense at this stage.
Second, the petitioner sought a direction that the contract be awarded in its favour since the financial bid of the second bidder, Vijay Pandey, had been rejected. The Court held that this prayer was equally untenable in law. The State authorities had pointed out that the rate quoted by the petitioner was higher than that quoted by Vijay Pandey. More importantly, the financial bid of the petitioner had already been rejected and was never recommended even for consideration like Vijay Pandey’s bid.
Once Vijay Pandey’s bid was rejected by the competent committee, the authorities decided to cancel the entire tender and re-tender the work. The Court accepted this explanation and noted that the petitioner had not placed the most crucial documents on record — the N.I.T. and the Standard Bidding Documents (SBD). These would have shown whether the authorities were legally barred from cancelling the tender without assigning reasons. Because these vital documents were not annexed, the petitioner could not demonstrate any such bar.
The State, on the other hand, had specifically shown that after cancellation, a re-tender notice was issued, and Kunal Construction had been declared qualified and given a work order dated 17.04.2018. The Court pointed out that the petitioner had not challenged this re-tender process at all. It had neither questioned the award of the re-tender to Kunal Construction nor even impleaded it as a party respondent regarding the re-tender, though it had been given the work order.
On this basis, the Court concluded that the writ petition was liable to fail. The relief sought was confined to the earlier tender stage and did not cover the subsequent and completed re-tender, where work had already been allotted. Without challenging the later process or the work order, the petitioner could not seek allotment of the work.
Before closing, the Court referred to settled law from the Supreme Court on government tenders and auctions. It emphasised that until a bid is accepted, even the highest bidder obtains no vested right to have the auction or tender concluded in his favour. The authority issuing the tender may lawfully decide not to enter into any contract and may cancel the tender.
The Court cited three decisions of the Hon’ble Supreme Court:
1996 (4) SCC 208 (Laxmikant and Ors. vs. Satyawan and Ors.)
2007 (1) SCC 477 (Rajasthan Housing Board and Anr. vs. G.S. Investments and Anr.)
2013 (5) SCC 182 (Uttar Pradesh Avas Evam Vikas Parishad and Ors. vs. Om Prakash Sharma)
These authorities supported the principle that mere participation in a tender process or being the highest/lowest bidder does not by itself create an enforceable right to demand the contract.
In light of these reasons, the Court dismissed the writ petition. It also clarified that there would be no order as to costs, meaning each side would bear its own expenses.
Why This Judgment Matters
This Patna High Court judgment is important for contractors and small construction companies who participate in government tenders. It clarifies that being a technically qualified bidder or even coming out as the sole remaining contractor does not guarantee that the government must award the contract to them.
The decision shows that until the government formally accepts a bid and issues a work order, no bidder has a legally enforceable right to demand that the contract be given to them. The issuing department can still cancel the tender and start a new one.
The judgment also highlights a practical lesson: when challenging a tender in court, a contractor must place all key documents like the N.I.T. and Standard Bidding Document on record, and must challenge the latest effective decision. Here, the petitioner did not question the re-tender or the new work order in favour of Kunal Construction, so the Court found its case weak and incomplete.
For government departments, the judgment supports their power to cancel a tender that has not yet resulted in a concluded contract, so long as they act within the rules and do not discriminate among bidders.
Legal Issues and Answers
Issue: Did the petitioner acquire a right to have the contract for construction of Jataur Rewari to Bangara road awarded in its favour after rejection of the other bidders’ financial bids?
Answer: No. The Court held that no vested right arises until a bid is accepted, the financial bid of the petitioner had already been rejected, and the authorities were entitled to cancel the tender and re-tender the work.
Issue: Was the challenge to respondent no. 10’s technical qualification under the original tender maintainable when that tender had already been cancelled and a fresh work order issued under re-tendering?
Answer: No. The Court found the prayer to declare respondent no. 10 as not technically qualified to be misplaced and misconceived, since its financial bid had not succeeded and the petitioner had not challenged the subsequent re-tender and work order.
Issue: Could the State authorities cancel the tender process without conferring the work on the petitioner as an allegedly “only surviving” contractor?
Answer: Yes. Relying on Supreme Court precedents, the Court held that the tendering authority may decide not to enter into any contract and can cancel the tender before acceptance of any bid.
Cases Cited by the Court
- 1996 (4) SCC 208, Laxmikant and Ors. vs. Satyawan and Ors.
- 2007 (1) SCC 477, Rajasthan Housing Board and Anr. vs. G.S. Investments and Anr.
- 2013 (5) SCC 182, Uttar Pradesh Avas Evam Vikas Parishad and Ors. vs. Om Prakash Sharma
Case Details
Case Number: Civil Writ Jurisdiction Case No. 792 of 2018
Case Title: M/s Gandhu Chhapar Construction Private Ltd. vs. The State of Bihar & Ors.
Coram: Hon’ble Mr. Justice Mohit Kumar Shah
Citation: 2019 (2) PLJR 958
Date of Judgment: 08.02.2019
Advocates:
For the petitioner: Mr. S.B.K. Mangalam, Mrs. Anita Kumari
For the respondents (State): Mr. Mritunjay Kumar, AC to AAG-6
Nature of the case: Writ petition under civil writ jurisdiction challenging tender process and seeking quashing of technical bid decision and award of contract.
link to judgement ; file:///C:/Users/Adity/OneDrive/Documents/Vaktrita%20Final/case%201434.pdf
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