Patna High Court
M/s Narotam KumarversusThe State of Bihar
- Decided
- Disposal
- ALLOWED
Holding
The cancellation of the tender under Clause 39 is permissible, but recording findings of forgery and initiating action against the petitioner without a show‑cause notice violates natural justice and is set aside.
Summary
The petitioner, a contractor awarded a work order for the Keshopur Payne Jeernodhar Scheme, challenged the department's cancellation of the tender and subsequent blacklisting proceedings. The department cancelled the tender under Clause 39 of the NIT without a show‑cause notice and recorded findings that the petitioner had submitted forged documents, initiating punitive action. The petitioner argued that no opportunity of hearing was given and that the department failed to comply with the earlier court order directing verification of documents. The court held that while Clause 39 permits cancellation of a tender without assigning reasons, it does not allow the authority to record adverse findings or impose punitive measures without observing natural justice. Consequently, the order dated 04‑02‑2025 was set aside and the matter remitted for fresh consideration with a requirement to issue a proper show‑cause notice. The writ application was allowed.
Issues considered
- Whether the department could cancel the tender and record findings of forgery against the petitioner without a show‑cause notice and opportunity of hearing.
- Whether Clause 39 of the NIT authorises punitive action such as blacklisting without compliance with natural justice.
- Whether the principles of natural justice apply to administrative actions that stigmatize a contractor.
Subjects
- tender cancellation
- natural justice
- audi alteram partem
- show-cause notice
- blacklisting
- administrative law
- procedural fairness
- procurement
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.10591 of 2025
======================================================
M/s Narotam Kumar through its sole Proprietor Narotam Kumar aged about
31 years, Male S/o Sri Kaushlendra Singh R/o Village Barah, P.O. -Bhuapur,
District - Patna (Bihar)
... ... Petitioner
Versus
1. The State of Bihar through the Chief Secretary to the Government of Bihar,
Patna.
2. The Principal Secretary to the Government of Bihar in the Department of
Minor Water Resources Department, Bihar, Patna.
3. The Special Secretary to the Government of Bihar in the Department of
Minor Water Resources Department, Bihar, Patna.
4. The Chief Engineer, Planning, Monitoring and Geology, Minor Water
Resources Department, Bihar, Patna.
5. The Chief Engineer, Minor Water Resources Department, Government of
Bihar, Patna.
6. The Superintending Engineer -cum- Technical Secretary, Minor Water
Resources Department, Bihar, Patna.
7. The Executive Engineer, Minor irrigation Division, Nalanda.
... ... Respondents
======================================================
Appearance :
For the Petitioner : Mr. Siddharth Prasad, Advocate
Mr. Nitesh Kumar, Advocate
For the Respondents : Mr. AC to SC-11
======================================================
CORAM: HONOURABLE MR. JUSTICE SUDHIR SINGH
and
HONOURABLE MR. JUSTICE RANJAN KUMAR JHA
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE SUDHIR SINGH)
Date : 24-06-2026
Heard learned counsel for the parties.
2. In the present writ petition, the petitioner has prayed
for the following relief(s):-
"A. For quashing of the Show Cause Notice dated
13.05.2025, issued by Respondent No. 4 (Chief
Engineer), proposing to blacklist the Petitioner on
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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vague and unfounded grounds relating to Tools &
Plants documents in respect of the 'Keshopur
Payne Jeernodhar (renovation) Scheme'.
B. For quashing of the order dated 04.02.2025
passed by the departmental authorities, which
directs to cancel the NIT No. 02/2021-22 and
retender the same and also to proceed against the
petitioner, without giving the Petitioner an
opportunity of being heard or completing the
procedure mandated by this Hon'ble Court's
earlier order dated 20.09.2024 passed in CWJC
No. 1320 of 2024.
C. For quashing the portion of the Order dated
09.01.2025 (Memo No. 68) whereby, despite
acknowledging the forged nature of the MOA
submitted by Mr. Vikash Raj of M/s Yuvraj
Engicons Pvt. Ltd., the department proceeds to
again seek verification of the Petitioner's own
documents instead of facilitating execution of the
pending agreement.
D. For a direction to the Respondents to forthwith
execute the agreement with the Petitioner
pursuant to the Work Order dated 19.05.2023
(Memo No. 1417) under Tender No. 02/2021-22
(Keshopur Payne Jeernodhar (renovation)
Scheme), in compliance with the order dated
20.09.2024 passed in CWJC No. 1320 of 2024.
E. For a direction restraining the Respondents
from taking any coercive or prejudicial action
including blacklisting and to stay the order dated
4.2.2025 during the pendency of this writ
application.
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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F. For any other relief(s) for which the Petitioner
may be found entitled in law and equity in the
facts and circumstances of this case."
3. The brief facts of the present case are that the
petitioner was awarded a work order dated 19.05.2023 under
Tender No.02/2021-22 for the Keshopur Payne Jeernodhar
Scheme. Prior to execution of the agreement, a dispute arose
regarding an alleged merger of the petitioner’s firm with M/s
Yuvraj Engicon Pvt. Ltd. on the basis of a Memorandum of
Association (MOA) produced before the departmental authorities.
4. The petitioner had earlier approached this Court in
CWJC No. 1320 of 2024, which was disposed of on 20.09.2024
with a direction to the competent authority to examine the matter
and verify the authenticity of the said MOA. Pursuant thereto, the
Chief Engineer passed Memo No.68 dated 09.01.2025 recording
that the MOA relied upon by M/s Yuvraj Engicon Pvt. Ltd. was
forged and fabricated.
5. Thereafter, by order dated 04.02.2025, the
authorities cancelled NIT No.02/2021-22, directed re-tendering of
the work and also directed initiation of proceedings against the
petitioner. Subsequently, a show-cause notice dated 13.05.2025
proposing blacklisting of the petitioner was issued.
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6. Learned counsel for the petitioner submits that the
impugned order is wholly arbitrary and unsustainable in law. It is
submitted that before recording adverse findings against the
petitioner, cancelling the tender and directing initiation of
proceedings against him, no show-cause notice was issued nor any
opportunity of hearing was afforded to the petitioner.
7. It is further submitted that the impugned order has
been passed without completing the exercise contemplated by the
order dated 20.09.2024 passed by this Court in CWJC No.1320 of
2024. Learned counsel submits that there is no material on record
to indicate that any verification was conducted by the Executive
Engineer after issuance of Memo No.68 dated 09.01.2025 and,
therefore, the decision-making process stands vitiated.
8. Learned counsel further submits that the
authorities have proceeded against the petitioner despite the
findings already recorded by the competent authority with respect
to the document which formed the basis of the dispute. According
to the petitioner, the impugned action is founded upon unverified
allegations and suffers from non-application of mind.
9. Learned counsel further submits that the entire
exercise is tainted by mala fides and bias. It is submitted that the
action has been initiated at the instance of officers against whom
the petitioner had earlier raised grievances and, therefore, the
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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proceedings are actuated by personal vendetta rather than any bona
fide administrative consideration. On the aforesaid grounds, it is
submitted that the impugned order as well as the consequential
proceedings are liable to be set aside.
10. Per contra, learned counsel for the respondents
submits that the competent committee, in its meeting held on
04.02.2025, took a decision to cancel the tender. It is submitted
that under Clause 39 of NIT No.02/2021-22, the department
reserved the right to cancel the tender without assigning any
reason and, therefore, no prior show-cause notice or opportunity of
hearing was required before cancelling the tender. It is thus
submitted that the impugned decision has been taken in accordance
with the terms of the NIT and warrants no interference.
11. The limited issue which arises for consideration is
as to whether the order dated 04.02.2025, whereby adverse
findings have been recorded against the petitioner, the tender has
been cancelled and departmental action has been directed against
him, can sustain in law in absence of any prior notice or
opportunity of hearing and without completion of the exercise
directed by this Court vide order dated 20.09.2024 passed in
CWJC No. 1320 of 2024.
12. This Court has considered the rival submissions
and perused the materials available on record.
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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13. The principal contention of the respondents is that
in view of Clause 39 of N.I.T. No. 02/2021-22, the authority was
entitled to cancel the tender without assigning any reason and,
therefore, no prior notice or opportunity of hearing was required to
be afforded to the petitioner. Clause 39 of the N.I.T. reads as
follows:-
“बबना कारण बताये एवं बबना पूवर सूचना के पूरी
बनबवदा अथवा इसके बकसी खास अं श को बकसी भी
सतर पर रद करने एवं बवसताबरत करने का अबधकार
अधोहसताकरी / सकम पदाबधकारी को सु रबकत
होगा।”
14. A plain reading of the aforesaid clause would
show that the employer has reserved unto itself the right to cancel
the tender process at any stage without assigning any reason. There
can be no quarrel with the proposition that where the terms of the
tender so permit, the authority may, in an appropriate case, cancel
the tender process in exercise of such reserved power. The
existence of such power is not under challenge before this Court.
15. The issue, however, is not whether the
respondents possessed the power to cancel the N.I.T., but whether,
while exercising such power, they could record findings imputing
misconduct to the petitioner and direct consequential action against
him without first affording him an opportunity of hearing.
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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16. For appreciating the aforesaid issue, it would be
apposite to notice the relevant portion of the proceedings dated
04.02.2025:-
"eq[; vfHk;ark dk dk;kZy;
y?kq ty lalk/ku foHkkx] iVukA
la0la0&eq0v0y0t0la0@;ks0&11¼[k.M&2½@2022
y?kq flapkbZ izeaMy] ukyUnk vUrxZRk fufonk vkea=.k lwpuk la0&02@2021&22 xzqi la0&02
ds'kksiqj ibZu ;kstuk dk th.kksZ)kj dk;Z dk ,djkjukek djus ij fopkj.k ,oa fu.kZ; gsrq
fnukad&04-02-2025 dks eq[; vfHk;ark] y?kq ty lalk/ku foHkkx] iVuk dh v/;{krk esa vkgwr
cSBd dh dk;Zokgh%&
y?kq flapkbZ izeaMy] ukyUnk vUrxZr fufonk vkea=.k lwpuk la0&02@2021&22 xzqi
la0&02 ds'kksiqj ibZu ;kstuk dk th.kksZ)kj dk;Z dh fufonk dk fu"iknu fufonknkrk esllZ
ujksÙke dqekj ds i{k esa gksus ds i'pkr eq[; vfHk;ark] y?kq ty lalk/ku foHkkx] iVuk ds
i=kad&1417 fnukad&19-05-2023 }kjk dk;kZoaVukns'k fuxZr fd;k x;k Fkk] ijUrq esllZ
ujksÙke dqekj ds Assests and liabilities ds esllZ ;qojkt bathdkWu izk0 fy0 esa
Merge gksus ls lacaf/kr ekeys esa nksuksa i{kksa }kjk fojks/kkHkk"kh vkosnu lefiZr fd;s tkus ds
dkj.k dk;kZoaVukns'k fuxZr gksus ds i'pkr Hkh yEcs le; rd ,djkjukek ugha fd;k tk
ldk] ftlds dkj.k esllZ ujksÙke dqekj }kjk ekuuh; mPp U;k;ky;] iVuk esa lekns'k
;kfpdk la0&1320@2024 esllZ ujksÙke dqekj cuke fcgkj ljdkj nk;j fd;k x;kA mDr
okn esa ekuuh; mPp U;k;ky;] iVuk }kjk fnukad&20-09-2024 dks ikfjr U;k; fu.kZ; ds
vuqikyu esa ekeys ls lacaf/kr lHkh rF;ksa ds lE;d leh{kksijkUr oknh esllZ ujksÙke dqekj
}kjk mDRk ;kstuk ds th.kksZ)kj dk;Z dh fufonk esa viyksM fd;s x;s dkxtkrksa@vfHkys[kksa
ds lR;kiuksijkUr mDr ;kstuk dk ,djkjukek esllZ ujksÙke dqekj ls djus gsrq eq[;
vfHk;ark] y?kq ty lalk/ku foHkkx] iVuk ds vkns'k Kkikad&68 fnukad& 09-01-2025 }kjk
fu.kZ; fy;k x;k] ftlds dze esa v/kh{k.k vfHk;ark] y?kq flapkbZ vapy] iVuk ds
i=kad&167 fnukad&23-01-2025 }kjk izfrosfnr fd;k x;k gS fd lUnfHkZr ;kstuk esa laosnd
esllZ ujksÙke dqekj }kjk fufonk esa viyksM fd;s x;s ;a= la;a= dk dkxtkr QthZ ik;k
x;k gS] ftlds fufonk 'krksZ ds izfrdwy gksus ds dkj.k ;kstuk dk ,djkjukek esllZ
ujksÙke dqekj ls fd;k tkuk mfpr izrhr ugha gksrk gSA mDr ifjizs{; esa y?kq flapkbZ
izeaMy] ukyUnk vUrxZr fufonk vkea=.k lwpuk la0&02@2021&22 xzqi la0&02 ds'kksiqj
ibZu ;kstuk dk th.kksZ)kj dk;Z dk ,djkjukek djus ij fopkj.k ,oa fu.kZ; gsrq
fnukad&04-02-2025 dks eq[; vfHk;ark] y?kq ty lalk/ku foHkkx] iVuk dh v/;{krk esa
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
8/13
fufonk lfefr dh cSBd vk;ksftr dh x;h] ftlesa dk;Zikyd vfHk;ark] y?kq flapkbZ
izeaMy] ukyUnk] v/kh{k.k vfHk;ark] y?kq flapkbZ vapy] iVuk ,oa v/kh{k.k
vfHk;ark&lg&rduhdh lfpo] eq[; vfHk;ark dk;kZy;] y?kq ty lalk/ku foHkkx] iVuk
lnL; ds :i esa lfEefyr gq;sA lfefr }kjk ekeys ls lacaf/kr lHkh rF;ksa ,oa vfHkys[kksa
dh leh{kk dh x;h ,oa leh{kksijkUr ik;k x;k fd esllZ ujksRre dqekj }kjk mDr ;kstuk
dh fufonk esa ;a= la;a= dk QthZ vfHkys[k layXu fd;k x;k gS] tks fufonk vkea=.k lwpuk
la0&02@2021&22 esa fufgr 'krksZa ,oa fcgkj Bsdsnkjh fuca/ku fu;ekoyh&2007 esa fufgr
izko/kkuksa ds izfrdwy gSA
vr% mDr of.kZr ifjizs{; esa lE;d~ fopkjksijkUr lfefr }kjk dk;Zfgr esa fufonk
dks jn~n dj iqufuZfonk vkeaf=r djus ,oa laosnd esllZ ujksÙke dqekj ds fo:)
fu;elEer~ dkjZokbZ djus gsrq loZlEefr ls fu.kZ; fy;k x;kA
vUr esa cSBd l/kU;okn lekIr dh x;hA
g0@& g0@& g0@&
dk;Zikyd vfHk;ark] v/kh{k.k vfHk;ark v/kh{k.k vfHk;ark&lg&rduhdh
y?kq flapkbZ izeaMy] ukyUnk y?kq flapkb vapy] iVukA lfpo] eq[; vfHk;ark dk;kZy;]
g0@& y?kq ty lalk/ku foHkkx] iVukA
eq[; vfHk;ark]
y?kq ty lalk/ku foHkkx] iVukA "
17. From perusal of the aforesaid proceedings, it is
manifest that the committee did not merely decide to cancel the
N.I.T. Rather, the committee proceeded to conclude that the
petitioner had submitted forged/fabricated documents in connection
with the tender process and, on the basis of such conclusion,
resolved to initiate departmental action against him. Thus, the
cancellation of the N.I.T. was not a standalone administrative
decision; it was intrinsically founded upon allegations of
misconduct attributed to the petitioner.
18. In the considered opinion of this Court, a clear
distinction exists between a decision cancelling a tender in exercise
of contractual powers and a decision which proceeds on a finding
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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that a bidder has indulged in forgery, fraud or other misconduct.
While the former may fall within the realm of contractual discretion
reserved under the tender conditions, the latter undoubtedly visits
the affected person with adverse civil consequences and carries an
element of stigma.
19. The law in this regard is no longer res integra. In
Gorkha Security Services v. Government (NCT of Delhi), reported
in (2014) 9 SCC 105, the Hon’ble Supreme Court held that where
an action entails civil consequences and may adversely affect the
rights or reputation of a person, compliance with the principles of
natural justice is an indispensable requirement. The relevant part of
the said order reads as follows:
“Necessity of serving show-cause notice as a
requisite of the principles of natural justice
16. It is a common case of the parties that the
blacklisting has to be preceded by a show-cause
notice. Law in this regard is firmly grounded and
does not even demand much amplification. The
necessity of compliance with the principles of
natural justice by giving the opportunity to the
person against whom action of blacklisting is
sought to be taken has a valid and solid rationale
behind it. With blacklisting, many civil and/or evil
consequences follow. It is described as “civil
death” of a person who is foisted with the order of
blacklisting. Such an order is stigmatic in nature
and debars such a person from participating in
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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government tenders which means precluding him
from the award of government contracts.”
20. Similarly, in UMC Technologies Pvt. Ltd. v.
Food Corporation of India, reported in (2021) 2 SCC 551, the
Hon’ble Supreme Court reiterated that before taking action founded
on allegations of misconduct having the effect of stigmatizing or
prejudicially affecting a contractor, a meaningful opportunity of
hearing must be afforded. The relevant part of the said order reads as
follows:
“13. At the outset, it must be noted that it is the
first principle of civilised jurisprudence that a
person against whom any action is sought to be
taken or whose right or interests are being
affected should be given a reasonable opportunity
to defend himself. The basic principle of natural
justice is that before adjudication starts, the
authority concerned should give to the affected
party a notice of the case against him so that he
can defend himself. Such notice should be
adequate and the grounds necessitating action and
the penalty/action proposed should be mentioned
specifically and unambiguously. An order
travelling beyond the bounds of notice is
impermissible and without jurisdiction to that
extent. This Court in Nasir Ahmad v. Custodian
General, Evacuee Property [Nasir Ahmad v.
Custodian General, Evacuee Property, (1980) 3
SCC 1] has held that it is essential for the notice
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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to specify the particular grounds on the basis of
which an action is proposed to be taken so as to
enable the noticee to answer the case against him.
If these conditions are not satisfied, the person
cannot be said to have been granted any
reasonable opportunity of being heard.”
21. In view of the aforesaid principles, the impugned
proceedings cannot be sustained. Even assuming that Clause 39
empowered the respondents to cancel the N.I.T. without assigning
reasons, the said clause cannot be construed as authorising the
respondents to record findings of forgery against the petitioner and
direct initiation of action against him without adhering to the
minimum requirements of procedural fairness.
22. Once the authority chose to proceed on the
premise that the petitioner had submitted forged documents, the
matter travelled beyond the confines of a simple contractual
decision. The findings recorded in the proceedings dated 04.02.2025
is clearly adverse to the petitioner, it is casting a stigma upon him
and is capable of affecting his future participation in public
contracts. In such circumstances, observance of the audi alteram
partem rule was not a matter of discretion but a mandatory
requirement.
23. Admittedly, no show-cause notice was issued to
the petitioner and no opportunity was afforded to him before the
Patna High Court CWJC No.10591 of 2025 dt.24-06-2026
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aforesaid findings came to be recorded. The respondents, therefore,
could have cancelled the tender in exercise of the power reserved
under Clause 39, but they could not have simultaneously returned
findings adverse to the petitioner and directed action against him
without first complying with the principles of natural justice.
24. The impugned proceedings dated 04.02.2025,
therefore, stands vitiated on account of violation of the principles of
natural justice and cannot be sustained in law.
25. Accordingly, for the reasons indicated
hereinabove the impugned proceedings dated 04.02.2025 is hereby
set aside.
26. The matter is remitted to the competent authority
for fresh consideration. In the event the authority proposes to
proceed on the allegations recorded in the proceedings dated
04.02.2025 and intends to cancel the N.I.T. on the basis of such
allegations, it shall first issue an appropriate show-cause notice to
the petitioner, clearly indicating the misconduct and the charges
against him and afford him a reasonable opportunity of submitting
his explanation. Thereafter, upon due consideration of the reply, if
any, and after granting such opportunity as may be required in law,
the authority shall pass a reasoned order in accordance with law.
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27. It is, however, clarified that this Court has not
expressed any opinion on the merits of the allegations levelled
against the petitioner.
28. It is further clarified that if the competent
authority proposes to cancel the N.I.T. purely in exercise of the
power reserved under Clause 39 of the N.I.T. and without attributing
any misconduct, forgery or other adverse conduct to the petitioner, it
shall be at liberty to take such decision in accordance with the terms
and conditions of the N.I.T. and the applicable rules. This
clarification has been made only to delineate the distinction between
a simple cancellation of tender and a cancellation founded upon
findings adverse to the petitioner.
29. Accordingly, the present writ application stands
allowed.
30. Pending application(s), if any, shall also stand
disposed of.
(Sudhir Singh, J.)
(Ranjan Kumar Jha, J.)
Gaurav Kumar,
Atul/-
AFR/NAFR A.F.R.
CAV DATE N.A.
Uploading Date 29.06.2026
Transmission Date N.A.
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