Patna High Court

Avian Infrastructure and Energy Pvt. Ltd.versusThe State of Bihar

Decided: 18 March 2026
Disposal: DISPOSED
Bench: SUDHIR SINGH SHAILENDRA SINGH

Holding

The impugned orders cancelling the tender and annulling the agreements are set aside as they are arbitrary, lack recorded reasons, and violate the principles of natural justice.

Summary

Avian Infrastructure and Energy Pvt. Ltd. had been awarded a government tender for water supply schemes in Katihar and had executed agreements, furnished performance guarantees and commenced work. Following a complaint by a third‑party, Aman Anand, the Department issued office orders cancelling the tender and annulling the agreements without providing any reasons or a hearing to the petitioner. The petitioner contended that the cancellation was arbitrary, violated the principles of natural justice and the requirement to record reasons, and that the complainant had no standing. The High Court examined the record, noted that the tender process had reached finality and that the cancellation was based solely on an unsubstantiated third‑party complaint, and found the orders to be cryptic and contrary to due process. Relying on the Supreme Court’s pronouncement in Kranti Associates Pvt. Ltd. v. Masood Ahmed Khan, the Court held that reasons must be recorded and audi alteram partem observed. Consequently, the Court set aside the impugned orders and allowed the writ application.

Issues considered

Whether the respondent authorities were justified in cancelling the tender and annulling the executed agreements on the basis of a complaint made by a third party who was not a participant in the tender process.
Whether the impugned orders complied with the principles of natural justice, including the requirement of recording reasons and providing a hearing.

Subjects

tender cancellation
natural justice
audi alteram partem
reasoned order
contract annulment
public procurement
writ of certiorari

Judgment

IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.15485 of 2025
======================================================
Avian Infrastructure and Energy Pvt. Ltd. Through its Director Ankit Kumar,
Male-aged 38 years, Son of Umesh Kumar Singh, House No.4, Road No.11,
Patel Nagar, P.S. Rajeev Nagar, District- Patna, Bihar.

... ... Petitioner/s
Versus
1. The State of Bihar through the Secretary, Public Health Engineering
Department, Govt. of Bihar, Patna.
2. The Engineer-in-Chief cum Special Secretary, Public Health Engineering
Department, Govt. of Bihar, Patna.
3. The Chief Engineer, Public Health Engineering Department, Purnea, Bihar.
4. The Superintending Engineer, Public Health Engineering Department,
Purnea.
5. The Executive Engineer, Public Health Engineering Department, Katihar
Division, Katihar.

... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Naresh Dikshit, Advocate
Ms. Shruti Singh, Advocate
Mr. Utkarsh Pathak, Advocate
For the State : Mr. P.K. Shahi, Advocate General
======================================================
CORAM: HONOURABLE MR. JUSTICE SUDHIR SINGH
and
HONOURABLE MR. JUSTICE SHAILENDRA SINGH
ORAL ORDER

(Per: HONOURABLE MR. JUSTICE SUDHIR SINGH)

3 18-03-2026 Heard learned counsel for the parties.

2. The present writ application has been filed for the

following reliefs:-

“ i. For issuance of an appropriate writ
in the nature of “Certiorari” for quashing and
setting aside the impugned office order bearing no.
98, 97 and 96 bearing memo no.3145, 3144 and
3143 dated 13.09.2025 (Annexure P/5 series),
issued by the Respondent no. 5 whereby the
agreements dated 22.08.2025 bearing Group no.2,
Patna High Court CWJC No.15485 of 2025(3) dt.18-03-2026
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SBD-04/2025-26, Group no.3, SBD-05/2025-26,
and Group no.4, SBD-06/2025-26 respectively
executed with the Petitioner following the tender
awarded, has been cancelled and annulled.
ii. For issuance of an appropriate writ,
order or direction in the nature of Certiorari, for
quashing and setting aside the impugned Notice /
Letter dated. 12.09.2025 (Annexure-P/6 series)
issued by the impugned Departmental Tender
Committee, whereby the tender already awarded to
the Petitioner has been cancelled, despite the fact
that the agreement had been executed and the
Petitioner had already commenced the work.
iii. For holding and declaring that the
Agreements executed with the Petitioner pursuant to
LOAs via Letter Nos. 2568, 2569 and 2570 dated
12.08.2025 are valid, subsisting and binding upon
the Respondents.
iv. For any other relief/reliefs for which
the petitioner is entitled in the facts and
circumstances of the instant case.”

3. The brief facts of the case are that the petitioner, a

commercial entity engaged in execution of government

contracts, participated in NIT No. 13–PHED_KTR_2024-25

dated 29.01.2025 issued by the respondent department for

execution of piped water supply schemes in District Katihar

under the Mukhyamantri Gramin Peyjal Nishchay Yojna. Upon

due evaluation, the petitioner was declared the lowest bidder (L-

1) and Letters of Acceptance dated 12.08.2025 were issued in its

favour, pursuant to which formal agreements were executed for

multiple groups of work having a cumulative value exceeding
Patna High Court CWJC No.15485 of 2025(3) dt.18-03-2026
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Rs. 220 crores. The petitioner furnished performance bank

guarantees and commenced execution of the work after

mobilising requisite resources and incurring substantial

expenditure. However, on the basis of a complaint made by one

Aman Anand, the respondents, vide impugned office orders

dated 13.09.2025, cancelled the entire tender process and

annulled the agreements already executed with the petitioner.

4. The impugned orders are the office orders dated

13.09.2025 (Annexure P/5 series), whereby the Agreements

executed were cancelled and the Letter dated 12.09.2025

(Annexure- P/6 series) cancelling the awarded tenders.

5. Learned counsel for the petitioner submits that the

petitioner was declared to be a successful bidder and an

agreement was executed with the Respondent-Department. The

work had also progressed and a huge amount of money was

invested by the petitioner in mobilizing and starting the work in

question. It is further submitted that a complaint was filed by

one Aman Anand on 28.08.2025, who is a third party and had

not even participated in the bid process. In the said complaint,

no allegation was made against the petitioner; at best, there was

some allegation that the tenders of other participants were

wrongly rejected by the Department. It is submitted that the
Patna High Court CWJC No.15485 of 2025(3) dt.18-03-2026
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persons whose tenders were rejected never approached this

Court and, on the basis of such a vague complaint by a third

party, the impugned order has been passed. It is further

submitted that the impugned order is a cryptic one, as no valid

reason have been assigned therein, and the same has been

passed without giving any opportunity of hearing to the

petitioner, inasmuch as neither any notice nor any show cause

was issued, thus being in contravention to the principles of

natural justice.

6. Learned counsel for the State, while referring to the

counter affidavit, has not disputed the fact that the impugned

action was taken pursuant to the complaint made by the said

Aman Anand, and the said stand is reflected in the counter

affidavit as well.

7. The limited issue that arises for consideration

before this Court is that whether the respondent authorities were

justified in cancelling the tender and annulling concluded

agreements on the basis of a complaint made by a third party,

who was a stranger to the tender process as well as the contract.

8. Upon hearing learned counsel for the parties and on

perusal of the materials on record, this Court finds that it is not

in dispute that the petitioner was declared the lowest bidder (L-
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1) pursuant to a due tender process, and Letters of Acceptance

were issued in its favour, followed by execution of formal

agreements between the parties. It is further evident from the

record that the petitioner had furnished the requisite

performance bank guarantees and had also commenced

execution of the work. Thus, the tender process had attained

finality and culminated into a concluded and binding contractual

relationship between the parties, creating vested rights and

corresponding obligations.

9. It further emerges from the record, as also from the

stand taken in the counter affidavit filed on behalf of the State,

that the entire action leading to cancellation of the tender and

annulment of the agreements has been initiated on the basis of a

complaint made by one Aman Anand. It is an admitted position

that the said complainant was neither a participant in the tender

process nor had any contractual relationship with the respondent

authorities in respect of the subject work, and thus was a

complete stranger to both the tender and the contract.

10. In such circumstances, while the respondent

authorities are not restrained of their power to examine

complaints; any action having civil consequences, particularly

one which results in nullifying concluded contracts, must be
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supported by cogent reasons and must adhere to the principles

of fairness and due process.

11. However, upon perusal of the impugned order

dated 13.09.2025, this Court finds that the same is wholly

cryptic and devoid of any reasons, inasmuch as it does not

disclose the basis on which such a drastic decision has been

taken, nor does it indicate any fault attributable to the petitioner.

The Hon’ble Supreme Court in Kranti Associates Pvt. Ltd. v.

Masood Ahmed Khan reported in (2010) 9 SCC 496 has

emphasized that recording of reasons is an essential facet of

natural justice and ensures transparency in decision-making.

The relevant part of the said order reads as follows:

“47. Summarising the above discussion, this
Court holds:
(a) In India the judicial trend has always been to record
reasons, even in administrative decisions, if such decisions
affect anyone prejudicially.
(b) A quasi-judicial authority must record reasons in
support of its conclusions.
(c) Insistence on recording of reasons is meant to serve the
wider principle of justice that justice must not only be done
it must also appear to be done as well.
(d) Recording of reasons also operates as a valid restraint
on any possible arbitrary exercise of judicial and quasi-
judicial or even administrative power.
(e) Reasons reassure that discretion has been exercised by
the decision-maker on relevant grounds and by
disregarding extraneous considerations.
(f) Reasons have virtually become as indispensable a
component of a decision-making process as observing
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principles of natural justice by judicial, quasi-judicial and
even by administrative bodies.
(g) Reasons facilitate the process of judicial review by
superior courts.
(h) The ongoing judicial trend in all countries committed to
rule of law and constitutional governance is in favour of
reasoned decisions based on relevant facts. This is virtually
the lifeblood of judicial decision-making justifying the
principle that reason is the soul of justice.
(i) Judicial or even quasi-judicial opinions these days can
be as different as the judges and authorities who deliver
them. All these decisions serve one common purpose which
is to demonstrate by reason that the relevant factors have
been objectively considered. This is important for
sustaining the litigants' faith in the justice delivery system.
(j) Insistence on reason is a requirement for both judicial
accountability and transparency.
(k) If a judge or a quasi-judicial authority is not candid
enough about his/her decision-making process then it is
impossible to know whether the person deciding is faithful
to the doctrine of precedent or to principles of
incrementalism.
(l) Reasons in support of decisions must be cogent, clear
and succinct. A pretence of reasons or “rubber-stamp
reasons” is not to be equated with a valid decision-making
process.
(m) It cannot be doubted that transparency is the sine qua
non of restraint on abuse of judicial powers. Transparency
in decision-making not only makes the judges and decision-
makers less prone to errors but also makes them subject to
broader scrutiny. (See David Shapiro in Defence of Judicial
Candor [(1987) 100 Harvard Law Review 731-37] .)
(n) Since the requirement to record reasons emanates from
the broad doctrine of fairness in decision-making, the said
requirement is now virtually a component of human rights
and was considered part of Strasbourg Jurisprudence. See
Ruiz Torija v. Spain [(1994) 19 EHRR 553] EHRR, at 562
para 29 and Anya v. University of Oxford [2001 EWCA Civ
405 (CA)] , wherein the Court referred to Article 6 of the
European Convention of Human Rights which requires,
“adequate and intelligent reasons must be given for judicial
Patna High Court CWJC No.15485 of 2025(3) dt.18-03-2026
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decisions”.
(o) In all common law jurisdictions judgments play a vital
role in setting up precedents for the future. Therefore, for
development of law, requirement of giving reasons for the
decision is of the essence and is virtually a part of “due
process”.”

12. Further, it is not in dispute that prior to passing of

the impugned order, no opportunity of hearing was afforded to

the petitioner. Admittedly, neither any show cause notice was

issued nor any explanation was sought from the petitioner,

despite the fact that the impugned action has serious civil and

financial consequences, including annulment of agreements and

disruption of ongoing work. Such action is in clear violation of

the principles of natural justice, particularly the rule of audi

alteram partem.

13. This Court also finds substance in the submission

advanced on behalf of the petitioner that the persons whose bids

were allegedly rejected during the tender process have not

chosen to assail the same before any forum. It is not the case of

the respondents that any of such unsuccessful bidders have

questioned the tender process or the award of contract in favour

of the petitioner. In such circumstances, the initiation of action

solely on the basis of a complaint made by a third party, who

neither participated in the tender process nor had any direct

grievance arising therefrom, assumes significance.
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14. This Court is of the considered view that while the

authorities are not precluded from examining complaints,

especially in public matters, the same cannot form the sole basis

for taking drastic action of cancelling a concluded tender and

annulling subsisting agreements, particularly when the persons

directly affected by the alleged irregularities have themselves

not raised any challenge. Such action, in absence of independent

application of mind, cogent reasons and adherence to due

process, partakes the character of arbitrariness.

15. In view of the aforesaid discussion, the impugned

office orders dated 13.09.2025 (Annexure-P/5 series) and the

letter dated 12.09.2025 (Annexure-P/6 series) cannot be

sustained in the eyes of law and are, accordingly, set aside.

16. Accordingly, the writ application is allowed.

17. Pending application(s), if any, shall stand disposed

of.

(Sudhir Singh, J)

( Shailendra Singh, J)

Maynaz/Anushka/
-
U

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