Patna High Court
JSP Projects Pvt. Ltd.versusThe State of Bihar
- Decided
- Disposal
- DISPOSED
Holding
The writ petition was disposed because the final order dated 08.03.2026 on the representation merged the earlier communications, rendering the reliefs sought no longer maintainable.
Summary
JSP Projects Pvt. Ltd. challenged two letters dated 16.12.2025 and 26.12.2025 issued by the Bihar State Road Development Corporation Ltd. (BSRDCL) that demanded an additional unconditional bank guarantee of Rs. 42.99 crore on the ground of an alleged abnormally low bid (ALB). The petitioner, the lowest bidder, had filed a representation on 17.12.2025 objecting to the demand, which it claimed was not considered. The High Court noted that the Court had earlier directed the respondents to ascertain the status of the representation and that the respondents subsequently issued a reasoned order on 08.03.2026 addressing the representation. Since that final order subsumed the earlier communications, the Court applied the doctrine of merger and declined to entertain the writ reliefs, disposing the petition while leaving open the possibility of challenging the 08.03.2026 order.
Issues considered
- The validity of demanding an additional unconditional bank guarantee on the basis of an alleged abnormally low bid under Clause 38.2(b) and 38.3 of the Instructions to Bidders.
- Whether the petitioner’s representation dated 17.12.2025 was duly considered before imposing the additional guarantee.
- The effect of the doctrine of merger when a final reasoned order is passed during pendency of a writ petition.
Subjects
- tender
- abnormally low bid
- bank guarantee
- doctrine of merger
- writ petition
- administrative law
- contract award
- representation
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.1699 of 2026
======================================================
JSP Projects Pvt. Ltd., having its registered office at E-27, Ground Floor,
Geetanjali Enclave, Malviya Nagar, New Delhi- 110017, through its
Authorised Representative, Mr. Saurabh Tyagi (Male), aged about 43 years,
son of D. K. Tyagi, resident of Village Dhanaura, P.O. and P.S. Hapur, Dist.
Hapur, U.P., PIN- 245101, at present residing at Flat no. G-1, Block C,
Indraprast Apartment, Ramesh Colony, Daryapur Road, Kurthoul, Patna-
804453.
... ... Petitioner
Versus
1. The State of Bihar through the Secretary, Road Construction Department,
Bihar, Patna.
2. The Secretary, Road Construction Department, Bihar, Patna.
3. The Bihar State Road Development Corporation Ltd., Patna, in the matter of
Tender for Constructions of Chhapra- Majhi-Darauli Guthani Road in the
State of Bihar under Civil Works Contract Package No. BSHP- IV (Phase 1)/
Pkg 3, through its Managing Director, BSRDCL, Patna.
4. The Managing Director, BSRDCL, Patna.
5. The Chief General Manager, BSRDCL, Patna.
... ... Respondents
======================================================
Appearance :
For the Petitioner : Mr. Manish Gupta, Advocate, Mr. Ray Saurabh
Nath, Advocate, Mrs. Manjari Nath, Advocate,
Mrs. Shalini Sinha, Advocate and Mr. Akshat
Kumar, Advocate
For the State : Mr. Vikash Kumar, SC-11
For the BSRDCL : Mr. P.K. Shahi, Sr. Advocate and Mr. Manish Dhari
Singh, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE SUDHIR SINGH
and
HONOURABLE MR. JUSTICE SHAILENDRA SINGH
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE SUDHIR SINGH)
5 18-03-2026 Heard learned counsel for the petitioner through
video conferencing, learned counsel for the State and learned
Patna High Court CWJC No.1699 of 2026(5) dt.18-03-2026
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senior counsel for the B.S.R.D.C.L.
2. The following reliefs have been sought in the
present writ application:
1. For seeking the indulgence of the Hon’ble
High Court to set aside the letter dated
16.12.2025 and letter dated 26.12.2025
issued by the Respondent No. 3 i.e., Bihar
State Road Development Corporation Ltd.,
Patna (hereinafter referred as “BSRDCL”)
wherein it has been demanded an additional
unconditional Bank Guarantee of Rs.
42,99,04,895/- (Rupees Forty Two Crores
Ninety Nine Lakhs Four Thousand Eight
Hundred and Ninety Five Only) on account
of “Abnormally Low Bid” (hereinafter
referred as “ALB”) and above the
performance unconditional Performance
Bank Guarantee of Rs. 19,19,21,829/-
(Rupees Nineteen Crores Nineteen Lacs
Twenty One Thousand Eight Hundred and
Twenty Nine Only) being 5% of the Contract
value. The said decision of the Respondent
No. 3 is directly in contravention of Clause
38.2(b) of the Instruction of Bidders
(hereinafter referred as “ITB”) being part of
the Tender.
3. The brief facts of the present case is that a tender
Patna High Court CWJC No.1699 of 2026(5) dt.18-03-2026
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was floated by the respondent authorities for construction of
Chhapra–Majhi–Darauli–Guthani Road. The petitioner
participated in the said tender process and was declared the
lowest bidder (L-1). Pursuant thereto, a Letter of Acceptance
dated 16.12.2025 was issued in favour of the petitioner, wherein
the petitioner was also required to furnish an additional
unconditional Bank Guarantee of Rs. 42,99,04,895/- on the
ground that its bid was an Abnormally Low Bid (ALB). The
petitioner, being aggrieved by the said condition, submitted a
objection/ representation dated 17.12.2025 objecting to the
demand of the additional Bank Guarantee. It is the case of the
petitioner that the said representation was not considered and, in
the meantime, the respondents reiterated the demand vide
communication dated 26.12.2025.
4. By order dated 16.12.2025, the following order
was passed by the Chief General Manager, B.S.R.D.C.L.
“ Sub: Construction of Chhapra-Manjhi-
Darauli-Guthani Road in the State of Bihar
under Civil Works Contract Package No.
BSHP-IV (Phase-1) Pkg-3.
Sir,
This is to notify you that your bid
dated 22.07.2025 for execution of
‘Construction of Chhapra-Manjhi-Darauli-
Guthani Road in the State of Bihar under
Civil Works Contract Package No. BSHP-IV
Patna High Court CWJC No.1699 of 2026(5) dt.18-03-2026
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(Phase-1)/Pkg-3’ in the State of Bihar under
Civil Works Contract Package No. BSHP-IV
(Phase-1) Pkg-2’ for the Contract Price in
the equivalent of INR 383,84,36,563.34
(Indian Rupees Three Hundred Eighty-
Three Crore Eighty-Four Lakh Thirty-Six
Thousand Five Hundred Sixty-Three and
Paise Thirty-Four) only exclusive of GST is
hereby accepted by Bihar State Road
Development Corporation Ltd.
You are requested to furnish an
unconditional Bank Guarantee amounting to
5% of Contract Price, i.e.,, INR
19,19,21,829/- (Indian Rupees Nineteen
Crore Nineteen Lakh Twenty-One Thousand
Eight Hundred Twenty-Nine) only towards
Performance Security as per Section-8 of
ADB’s SBD.
As your bid is found to be on the
lower side, you are further requested to
furnish an unconditional Bank Guarantee
amounting to INR 42,99,04,895 (Indian
Rupees Forty-Two Crore Ninety-Nine Lakh
Four Thousand Eight Hundred Ninety-Five)
only towards an Additional Performance
Security in accordance with the Clause 38.4
(b) of ITB.
The above said Bank
Guarantee(s) towards Performance Security
and Additional Performance Security shall
Patna High Court CWJC No.1699 of 2026(5) dt.18-03-2026
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be submitted within 28 days of the receipt of
Notification of Award and shall be in the
form acceptable to the Employer in
accordance with Clause 45 of ITB.”
5. When the matter was taken up on 16.02.2026, a
query was put by this Court as to whether the representation
submitted by the petitioner was still pending consideration
before the competent authority. Upon the same being taken note
of, the respondents were required to ascertain the position of the
said representation.
6. Learned counsel for the petitioner submits that
the impugned action of the respondents in demanding additional
Bank Guarantee is wholly arbitrary, illegal and contrary to the
terms and conditions of the tender. It is submitted that the action
of the respondents is in clear contravention of Clause 38.2(b)
read with Clause 38.3 of the Instructions to Bidders (ITB),
which mandates that in cases of an alleged Abnormally Low
Bid, the Employer is required to first seek a written explanation
from the bidder and undertake an objective evaluation of the
justification furnished before taking any adverse decision. It is
submitted that in the present case, without adhering to the
aforesaid mandatory procedure, the respondents have
straightaway imposed the condition of furnishing additional
Patna High Court CWJC No.1699 of 2026(5) dt.18-03-2026
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Bank Guarantee, rendering the impugned communications
unsustainable in law.
7. Learned counsel for the respondents, referring to
the supplementary counter affidavit, has brought to the notice of
this Court that in compliance of the order dated 16.02.2026, the
representation of the petitioner has been duly considered and a
reasoned order bearing Order No. 853/2026 dated 08.03.2026
has already been passed, which has been brought on record vide
Annexure 5A to the supplementary counter affidavit.
8. Upon perusal of the materials available on record
and having heard learned counsel for the parties, it transpires
that the primary grievance of the petitioner in the present writ
petition is directed against the communications dated
16.12.2025 and 26.12.2025, whereby the petitioner was called
upon to furnish additional Bank Guarantee, and the
consequential grievance is that its representation dated
17.12.2025 was not considered by the respondents.
9. It further transpires that during the pendency of
the present writ petition, this Court, vide order dated
16.02.2026, had specifically directed the respondents to
ascertain the position of the representation of petitioner. In
pursuance thereof, the respondents have now passed a detailed
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and reasoned order dated 08.03.2026.
10. Since the order dated 08.03.2026 has been
passed on the representation of the petitioner and the same is not
under challenge in the present proceedings, this Court finds no
occasion to examine the merits thereof. However, if the
petitioner remains aggrieved by the said order dated 08.03.2026,
he has always liberty to take a legal recourse against the said
order.
11. In such circumstances, the cause of action, as
originally pleaded in the writ application, stands surpassed by
the subsequent development, namely, the passing of the final
order dated 08.03.2026. Once a final, reasoned order has been
passed by the competent authority on the subject matter of
dispute, the earlier communications merge into the said final
decision and it is the said order which governs the field.
12. At this juncture, it is pertinent to take note of the
judgment rendered by the Hon’ble Supreme Court while
deciding the case of Kunhayammed and Ors. vs. State of
Kerala reported in (2000) 6 SCC 359, wherein it has been
observed that the doctrine of merger is not of universal
application but postulates that once a superior forum or
competent authority has passed a final order, it is that order
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which subsists and governs the rights of the parties. The relevant
part of the said order reads as follows:
“44. To sum up, our conclusions are:
(i) Where an appeal or revision is provided
against an order passed by a court, tribunal
or any other authority before superior
forum and such superior forum modifies,
reverses or affirms the decision put in issue
before it, the decision by the subordinate
forum merges in the decision by the
superior forum and it is the latter which
subsists, remains operative and is capable
of enforcement in the eye of law….”
13. This Court also finds that the reliefs sought in
the present writ petition are confined to the earlier
communications dated 16.12.2025 and 26.12.2025, which now
stand subsumed in the final order dated 08.03.2026. In such
circumstances, adjudication of the said communications in
isolation would not be appropriate. Moreover, this Court refrains
from entering into the merits of the case at this stage, as the
same would necessarily involve examination of the correctness
of the reasoned order dated 08.03.2026, which is not under
challenge in the present proceedings.
14. Considering the fact that a final order has
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already been passed during the pendency of the writ application,
this Court is of the considered view that no further order is
required to be passed in the present writ application in relation
to the reliefs originally sought.
15. Accordingly, the writ petition stands disposed
of.
16. However, the petitioner, if so advised, shall be at
liberty to challenge the order dated 08.03.2026 in accordance
with law.
17. Pending application(s), if any, shall also stand
disposed of.
(Sudhir Singh, J)
(Shailendra Singh, J)
U.K./-
U
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