Patna High Court

Dhanveer SinghversusThe State of Bihar

Decided: 4 February 2026
Disposal: ALLOWED
Bench: A ABHISHEK REDDY

Holding

The court held that the forfeiture order was ultra vires as it was issued before the 15‑day period expired, and therefore set aside the order and directed refund of the EMD.

Summary

The petitioner, Dhanveer Singh, was awarded a public work contract for anti‑erosion work on the Kamla River after submitting the lowest bid in NIT No. 01/2022‑23. The tender required the successful bidder to furnish a security of performance (EMD) and execute contract documents within 15 days of award. The authorities forfeited the EMD of Rs 1,92,200 and ordered the petitioner’s black‑listing on 31 May 2022, before the 15‑day period had elapsed. The petitioner challenged the forfeiture as arbitrary and sought a mandamus directing refund of the EMD with interest and quashing of the forfeiture order. The court examined Clause 1.7 of the NIT, which stipulates forfeiture only if the bidder fails to comply after the 15‑day period, and held that the authority acted beyond its powers by terminating the contract prematurely. Consequently, the court set aside the forfeiture order, directed the refund of the EMD within four weeks, and barred any coercive action against the petitioner.

Issues considered

Whether the forfeiture of the earnest money deposit before the expiry of the 15‑day period prescribed in Clause 1.7 of the NIT is legally valid.
Whether the authority’s termination of the contract and black‑listing of the petitioner constitute an arbitrary exercise of power.
Whether the petitioner is entitled to a refund of the EMD with interest under the writ petition.

Subjects

Earnest Money Deposit
Tender
Contract forfeiture
Administrative law
Writ of mandamus
Public procurement
Arbitrariness
Refund
Interest

Judgment

IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.17087 of 2023
======================================================
Dhanveer Singh, Son of Musafir Singh, Resident of Village- Bhim Nagar,
P.S.- Birpur, District- Supaul.

... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary, Water Resources
Development Department, Bihar. Patna.
2. The Engineer-in-Chief, Headquarter, Water Resources Department, Bihar.
Patna.
3. The Chief Engineer, Flood Control and Water Discharge, Water Resources
Department, Samastipur.
4. The Additional Secretary, Water Resources Department, Bihar, Patna.
5. The Executive Engineer, Water Discharge Division, Darbhanga.
6. The Executive Engineer, Water Discharge Division, Darbhanga.

... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Raju Kumar, Adv.
Mr. Pradhan Murli Manohar Pd., Adv.
Mr. Sanjay Pd., Adv.
Mr. Subham Samrat, Adv.
For the Respondent/s : Mr. Anjani Kumar (Aag4)
======================================================
CORAM: HONOURABLE MR. JUSTICE A. ABHISHEK REDDY
ORAL ORDER

11 04-02-2026 Heard the parties.

2. The present writ petition has been filed for the

following relief(s) :

“(i) To issue an appropriate order/s,
direction/s including a writ preferably in
nature of Mandamus commanding the
respondents to make the payment of earnest
money amounting to Rs. 2,00,000/-against
short term invitation information No.
01/2022-23 for the works allotted under anti
erosion work on the right bank of Kamla
river in village-Sajjanpura and Kanhauli
under Benipur Block of District- Darbhanga
vide Agenda No. 186/19/2022.
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(ii) To direct the respondents to make the
payment of Rs. 3.50,000/-for soil dumping
sand/ on the work site against the work in
question.
(iii) To direct the respondent to make the
payment of 18% interest on the
abovementioned dues to the petitioner on
account of delay and latches on the part of
respondent.”

3. The following paragraph has been added vide order

dated 22.10.2024 by way of I.A. No. 01 of 2024.

“(iv) To quash the order dated 31.05.2022
vide leter No. 630 issued by the Executive
Engineer, Drainage Division, Darbhanga
whereby and whereby he ordered for
forfeiting the earnest money of
Rs.1,92,200/- against short term Invitation
Information No. 01/2022-23 for the works
allotted under anti erosion work on the right
bank of Kamla River in Village- Sajjanpura
and Kanhauli under Benipur Bloci of
District Darbhanga vide Agenda No.
186/19/2022.”

4. Learned counsel appearing on behalf of the

Respondent Nos. 1 to 3 and 5 submits that he has filed the soft

copy of the supplementary counter affidavit before the Registry

but could not file the hard copy. Learned counsel seeks

permission to place the same on record before this Court.

5. Permission is granted.

6. Hard copy of the supplementary counter affidavit

filed by the Respondent Nos. 1 to 3 and 5 is handed over across
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the Bench and the same is taken on record.

7. It is the case of the petitioner that pursuant to the

tender notice bearing NIT No. 01/2022-23 dated 27.04.2022, the

petitioner has participated in the same and being lowest bidder,

the contract was awarded to him vide order dated 19.05.2022.

Learned counsel submits that as per the terms and conditions of

the tender the petitioner was obligated to furnish the security

performance within a period of 15 days and also execute certain

documents. However the authority without waiting for the 15

days to be over has passed the impugned order on 31.05.2022

forfeiting the EMD paid by the petitioner but also

recommending the name of the petitioner for black listing.

Learned counsel submits that the act of the respondents in

terminating the contract and forfeiting the EMD is an arbitrary

exercise of power is contrary to the terms and conditions of the

NIT. Learned counsel has therefore prayed this Hon’ble Court to

allow the present writ petition and consequentially direct the

respondent-authority to refund the EMD amount and also not to

take any coercive steps against the petitioner in respect of the

present NIT.

8. Per contra, the learned counsel appearing on behalf

of the respondent-State has vehemently opposed the very
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maintainability of the present writ petition and stated that the

petitioner in spite of being given several opportunities has failed

to deposit the security performance and also turn up before the

authority concerned for executing the necessary documents.

Learned counsel has stated that the authority was well within its

rights to cancel the allotment and forfeit the EMD amount as the

petitioner has not turned up before the authority in spite of being

put on notice. Further it is stated that the petitioner has violated

the terms and conditions of the NIT more specifically Clause 1.7

of the NIT and therefore the authority left with no other option

had to cancel the allotment and forfeit the EMD amount.

Learned counsel has therefore prayed this Hon’ble Court to

dismiss the present writ petition.

9. This Court vide order dated 05.02.2025 duly taking

note of the contents of the pleadings, directed the respondent

authorities to clarify the query raised by this Court which reads

as under:-

“3. In the meanwhile, the respondents shall
also specify by way of supplementary
counter-affidavit as to whether there is any
clause or any other document between the
parties stipulating that in case the
successful bidder does not deposit the
security and also additional performance
Patna High Court CWJC No.17087 of 2023(11) dt.04-02-2026
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guarantee then his EMD likely to be
forfeited.”

10. Thereafter the 2nd supplementary counter

affidavit is filed by the Respondent Nos. 1 to 3 and 5 wherein it

is reiterated that after the allotment of the work, the petitioner

has failed to turn up before the authority in spite of granting

several opportunities. That the authority left with no other

option has cancelled the allotment made in favour of the

petitioner and forfeited the EMD amount.

11. In order to appreciate the issue involved in the

present writ petition, it is necessary to extract Clause 1.7 of the

NIT which reads as under:-

"Within 15 days from the date of
issue of the letter accepting his tender the
successful tenderer shall furnish the required
security of performance and attend the office
of the Executive Engineer named in the letter
of acceptance for execution of contract
documents. If he fails to furnish the security of
performance or to execute the contract his
earnest money deposit shall be forfeited to
Government of Bihar and tenderer may be
disqualified for tendering in future for works
in the State of Bihar."
12. Admittedly in this particular case, the contract
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was allotted to the petitioner on 19.05.2022 and thereafter the

termination order was passed on 31.05.2022, i.e., well before

the 15 days has expired.

13. In the 2nd supplementary counter affidavit filed by

the Respondent Nos. 1 to 3 and 5, the authority has taken a

stand, which reads as under:-

“13.That in the light of Clause 1.7 of
the Instruction to bidder the Petitioner was
duty bound to furnish the security of
performance and to execute the agreement as
the Petitioner was selected as LI and work
order had been issued in his favour. But the
Petitioner did not turn up for execution of
agreement as well as to furnish the security
performance before the concerned Executive
Engineer despite repeated requests. Thus the
Petitioner violated the provision of Clause 1.7
of the Instruction to bidder which is the part of
NIT.”

14. It is not understandable as to how the authority

has taken the stand that the petitioner has violated Clause 1.7 of

the NIT, when it is manifestly clear that the termination order is

passed even before the expiry of 15 days from the date of

allotment. Once the authorities have issued a public tender the

terms and conditions for the said tender are binding on both the
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parties and any correspondence between the parties contrary to

the said terms and conditions of the tender are not lawful. The

contention of the respondents authority that number of

reminders were sent to the petitioner to furnish the security

performance he has failed to do so is contrary to the provisions

of Clause 1.7 of the NIT.

15. Having regard to the above, the impugned order

dated 31.05.2022 passed by the Executive Engineer, Drainage

Division, Darbhanga is set aside. The authorities are directed to

refund the EMD amount which has been forfeited back to the

petitioner within a period of four weeks from the date of receipt

of a copy of this order. The authorities are directed not to take

any coercive steps against the petitioner in respect of the NIT

which is subject matter of the present writ petition.

16. The present writ petition stands allowed to the

extent indicated above.

(A. Abhishek Reddy , J)
Bhardwaj/-

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