Patna High Court
M/s Star ConstructionversusThe State of Bihar
- Decided
- Disposal
- DISPOSED
Holding
The Court held that the authority’s power under Clause 29 to cancel the tender is valid and the cancellation was not illegal.
Summary
The petitioner, M/s Star Construction, participated in a National Invitation Tender (NIT) and was initially declared technically qualified and the lowest bidder. After the financial bids were opened, the Departmental Tender Committee later found that the petitioner lacked sufficient bid capacity due to existing commitments and cancelled the tender on 05-07-2025, issuing a fresh tender. The petitioner challenged the cancellation, alleging violation of natural justice for not being given a show‑cause notice and claiming the cancellation was arbitrary. The respondents relied on Clause 29 of the NIT, which authorises the Engineer in Chief to cancel the bidding process at any time without assigning a reason. The Court held that the clause is a valid contractual term, the petitioner voluntarily accepted its terms, and the cancellation did not prejudice the petitioner as a fresh tender was floated, thus finding no irregularity and disposing of the writ application.
Issues considered
- The cancellation of the tender without a show‑cause notice violates principles of natural justice.
- Whether Clause 29 of the NIT empowers the authority to cancel the tender unilaterally without assigning any reason.
- Whether the petitioner is entitled to relief or re‑tender on the ground of alleged insufficient bid capacity.
Subjects
- tender cancellation
- bid capacity
- natural justice
- Clause 29
- public procurement
- re‑tender
- NIT
- administrative law
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.15018 of 2025
======================================================
M/s Star Construction Balua Taal, Motihari through its Managing Partner
Parwez Ahmad Khan, aged about 53 years Male, S/o Haseen Ahmad Khan,
Resident of Mohalla-Balua Taal, P.S.-Motihari Town, District-East
Champaran, Motihari.
... ... Petitioner/s
Versus
1. The State of Bihar through the Additional Chief Secretary, Rural Works
Department, Government of Bihar, Patna.
2. The Additional Chief Secretary, Rural Works Department, Government of
Bihar, Patna.
3. The Superintending Engineer cum Nodal Officer Rural Works Department,
Bihar, Patna.
4. The Engineer in Chief, Rural Works Department, Government of Bihar,
Patna.
5. The Chief Engineer-5, Rural Works Department, Bihar, Patna.
6. The Executive Engineer, Rural Works Department, Work Division, Dhaka,
Motihari, District-East Champaran.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Dr. Ranjeet Kumar, Advocate
Mr. Rajnish Prakash, Advocate
Ms. Lakshmi Kumari, Advocate
For the State : Mr. Addl. Advocate General (04)
======================================================
CORAM: HONOURABLE MR. JUSTICE SUDHIR SINGH
and
HONOURABLE MR. JUSTICE RAJESH KUMAR VERMA
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE SUDHIR SINGH)
4 04-02-2026 Following is the relief sought for in the present writ
application:-
“I. For setting aside the minutes of the
departmental tender committee Dated 05.07.2025
headed by the Additional Chief Secretary, Rural
Works Department, whereby the financial bid
already opened on 03.06.2025 and decided in
Patna High Court CWJC No.15018 of 2025(4) dt.04-02-2026
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favour of the petitioner with respect to item Serial
No.- 17 of N.I.T. No. MR-3051-07/2024-25 Dated
05.11.2024 has been resolved to be cancelled
unilaterall on the ground that the petitioner did not
have bid capacity on the date of opening of financial
bid and finally it has been cancelled.
II. For setting aside the fresh N.I.T.
issued vide N.I.T. Re-tender No. MR-3054-02/2025-
26 Dated 11.07.2025 to the extent of item Serial No.
1, which has been issued for the same work in which
the petitioner had already been declared as L1.
III. For issuance of direction to the
respondents authorities to execute agreement with
the petitioner on the basis of financial bid Dated
03.06.2025 relating to Item Serial No. 17 of N.I.T.
No. MR-3054-07/2024-25 Dated 05.11.2024.
IV. For that any other relief/reliefs for
which the petitioner may be deemed entitled to.”
2. The brief facts of the present case are that the
petitioner had participated in the NIT No. – MR-3054-07/2024-
25 published by the respondent department dated 05.11.2024.
The petitioner was declared technically qualified in the same
vide decision of the technical evaluation committee dated
02.06.2025. Thereafter, the financial bids were opened on
03.06.2025, wherein the petitioner was declared to be L1.
However, the tender evaluation committee after opening of the
financial bids reconsidered the matter on 05.07.2025 and it was
found that petitioner did not have sufficient bid capacity. The
Patna High Court CWJC No.15018 of 2025(4) dt.04-02-2026
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respondent department in view of this finding, cancelled the
tender in question and issued directions for a fresh tender.
3. The learned counsel for the petitioner submits that
the petitioner had sufficient bid capacity for the work in
question on the date of submitting his bid. The learned counsel
for the petitioner also submits that the impugned order was
issued without giving any show cause notice to the petitioner,
and as such the principles of natural justice has been violated.
The learned counsel further submits that the impugned order is
highly arbitrary, illegal, malicious and a result of colorable
exercise of power.
4. A counter affidavit has been filed on behalf of
Respondent nos. – 2 to 6. From the perusal of the said counter
affidavit, it is apparent that the bid capacity of the petitioner is
less than the quoted rate. The relevant paragraphs of the counter
affidavit is reproduced as under:-
“11. That pursuant to aforesaid
recommendation the Financial Bid of the tender in
question was opened on 03.07.2025 and the Bidder
M/S Star Construction was declared Lowest Quoted
Bidder (L1) for the tender in question.
12. That thereafter the Bid Capacity of
the petitioner was calculated during which it came
to the notice regarding existing commitments
petitioner in of various works divisions prior to
award of Tender ID. 137506 which are as follows:-
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i. Work Allotment of Total Value
Rs.168.61302 Lakhs in Works Division Pakridayal
(MR-N/24-25 Pakaridayal/01 Tender Id-137499)
vide Chief Engineer 5 letter no 562 dated
21.02.2025.
ii. Letter of Acceptance (LOA) for the
execution of Package No. RRSMP/24-25
Pakridayal/-04 under 4515 MMGSUY (RRSMP for
Contract Price of Rs. 160.28463 Lakhs vide
Executive Engineer, Works Division, Pakridayal
Letter no 1118 dated 28.05.2025.
iii. Selected as LI in Tender Id-139540
(RRSMP) in RWD Works Division, Bettiah with
Work Value Rs.222.94739 Lakhs in Financial Bid
Opened on dated 31.05.2025, for which work has
not been awarded till date.
As the work for Tender Id-137506
Sikharna Dhaka was not been awarded till
04.07.2025, hence Bid Capacity of Bidder M/s Star
Construction in light of above mentioned existing
Commitments was -
656.64 Lakhs- (168.61302+160.28463)
Lakhs = 327.74235 Lakhs Total Tender Value-
353.25165 Lakhs. (if Work Value Rs.222.94739
Lakhs mentioned above in para 5 (iii) is not
considered in existing commitments)
656.64 Lakhs -
(168.61302+160.28463+222.94739) Lakhs =
104.79496 Lakhs < Total Tender Value-353.25165
Lakhs (if Work Value Rs.222.94739 Lakhs mentioned
above in para 5 (iii) is considered in existing
commitments)
13. That in the light of the aforesaid
Calculation of Bid Capacity of the petitioner the
Departmental Tender Committee in its meeting held
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on 05.07.2025 came to the decision to cancel the
Tender ID. 137506 on account of less bid capacity
of the petitioner from quoted rate and to invite re-
tender vide decision dated 05.07.2025.”
5. The petitioner has been unable to refute the
calculations and averments made in the counter-affidavit
relating to the existing commitment and the bid capacity of the
petitioner. Therefore, in absence of any objection to the
averments made, this Court has relied upon the statement made
in the counter-affidavit.
6. The petitioner has challenged the order dated
05.07.2025 by which the tender itself has been withdrawn.
Clause 29 of the N.I.T. dated 05.11.2024 empowers the
respondent authorities to cancel the entire bidding/tender
process. The relevant clause is reproduced as under:-
“29. The Engineer in Chief-cum-Additional
Commissioner-cum-Special Secretary/Engineer in Chief
reserved the right to accept or reject any bid and to cancel
bidding process and reject all bids, at any time prior to the
award of the contract without assigning any reason
thereof.”
7. From the perusal of materials on record and the
discussions made above, it is evident that the respondents
reserve the right of recalling the N.I.T. at any stage. The
provisions of N.I.T are binding on both the parties, and the
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petitioner had voluntarily participated in the tender process with
full knowledge of its terms and conditions, including the said
Clause 29.
8. Further, the respondent authorities have decided to
float a fresh tender with respect to the work in question.
Floating a fresh tender does not cause any prejudice to the
petitioner and the petitioner is at liberty to participate in the
same.
9. As such, we find no irregularity in the impugned
order and the directions issued by the respondent authorities.
10. Accordingly, the present application stands
disposed of.
11. Pending application(s), if any, shall also stand
disposed of.
(Sudhir Singh, J)
(Rajesh Kumar Verma, J)
Sachin/-
U
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