Patna High Court
Shailendra Prasad SinghversusThe State of Bihar
- Decided
- Disposal
- ALLOWED
- Bench
- SANDEEP KUMAR
Holding
The forfeiture of the petitioner’s earnest money deposit without affording a hearing violated the principles of natural justice and was therefore invalid.
Summary
The petitioner, Shailendra Prasad Singh, deposited Rs.2,34,22,500 as earnest money for a sand‑ghat auction in Aurangabad but was unable to log into the e‑auction portal due to alleged technical issues. The Department of Mines forfeited the EMD under Clause 19(v) of the tender without issuing a notice or hearing, claiming the petitioner deliberately failed to participate. The petitioner contended that a technical glitch prevented his participation and that, being the sole remaining qualified bidder, Clause 19(vi) should have applied, requiring a fresh tender. The respondents argued that the portal functioned normally, that the petitioner entered invalid credentials, and that forfeiture was mandatory under the tender clauses. The Court held that forfeiture without a hearing violated the principles of natural justice, quashed the order, and remitted the matter for a reasoned order after affording the petitioner a hearing.
Issues considered
- The forfeiture of earnest money under Clause 19(v) without a hearing violates natural justice.
- Whether a technical glitch on the e‑auction portal can excuse non‑participation and prevent forfeiture.
- Whether Clause 19(vi) applies when only one qualified bidder remains.
- Whether the authority has discretion to forfeit EMD automatically under the tender provisions.
Subjects
- Earnest Money Deposit
- Natural Justice
- Audi Alteram Partem
- Technical Glitch
- E‑auction
- Tender
- Forfeiture
- Administrative Law
- District Magistrate
- Mining Department
- Clause 19(v)
- Clause 19(vi)
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No. 17615 of 2025
======================================================
Shailendra Prasad Singh Son of Late Rajmohan Singh, Resident of Village
More Dhirai, P.S. Jamhor, Patanwan, District Aurangabad, Bihar- 824121.
... ... Petitioner
Versus
1. The State of Bihar through The Additional Chief Secretary, Department of
Mines and Geology, Govt. of Bihar, Patna.
2. The Additional Chief Secretary, Department of Mines and Geology, Govt. of
Bihar, Patna.
3. The District Magistrate cum Collector, Aurangabad cum District Mining
Officer, Department of Mines and Geology, Government of Bihar,
Aurangabad.
4. Mines Development Officer, District Mining Office, Aurangabad.
... ... Respondents
======================================================
Appearance :
For the Petitioner : Mr. Gautam Kumar Kejriwal, Advocate
Mr. Alok Kumar Jha, Advocate
For the State : Mr. Babita Kumari, A.C. to S.C.-1
For the Mines Department: Mr. Naresh Dikshit, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE SANDEEP KUMAR
C.A.V. JUDGMENT
Date : 03-04-2026
The present writ petition has been filed for the
following reliefs:-
“a) For quashing the order bearing Memo
No.1396 dated 08.10.2025 issued under
the signature of Respondent No.3
whereby the Earnest Money Deposited
by the Petitioner in the auction for
settlement of Sandghat Aurangabad
Son - 14A has been arbitrarily
forfeited;
b) For direction upon the Respondent No.
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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3 to refund the amount of Rs.
2,34,22,500/- which was deposited by
the Petitioner as EMD in connection
with Tender Notice for settlement of
Sandghat Aurangabad Block 14-A
(Aurangabad Son 14-A) or in
alternative consider the said EMD
submitted vide NEFT bearing UTR No.
SBINR52025090597754809 as EMD
for the fresh Tender Notice floated on
20.10.2025, including Aurangabad Son
14-A Sandghat at Serial 2;
c) For issuance of writ or order or a
direction restraining the respondent
from the proceeding with the fresh
tender process pursuant to NIT dated
20.10.2025 in exclusion of the
petitioner till adjudication and disposal
of this writ petition.
d) For directing the Respondent No.3 to
settle the Sandghat Aurangabad Son
14-A re-advertised vide short notice
inviting Tender Notice dated
20.10.2025 in favour of the Petitioner;
e) For holding that the Respondent No. 3
admitting the existence of Technical
glitch due to which the Petitioner could
not participate in bidding process,
could not have passed the impugned
order forfeiting the EMD due to non-
participation of the Petitioner in the
bidding process on the date of bidding;
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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f) For holding that in the facts of the
present case the Respondent No.3 could
not have forfeited the EMD of the
Petitioner as due to admitted technical
glitch, the Petitioner could not have
been alleged to have violated Clause
19(v) of the Tender Notice”
2. The brief facts relevant for the present writ
petition is that the respondent-Department of Mines & Geology,
Government of Bihar, published a tender notice for settlement of
ghats situated in the district of Aurangabad including
Aurangabad Sone 14-A. The present petitioner having been
eligible, participated in the bid and paid EMD of Rs.
2,34,22,500/- along with bid security amount of Rs.5000/- and
Rs.5900 along with other necessary documents. Pertinently,
according to the tender notice, the date and time for financial
bidding/auction was slated for 16.09.2025 between 11:00 AM to
01:00 PM.
3. It is the case of the petitioner that on the day
of financial bid, he attempted to participate, however, according
to him, he was prevented from participating in the financial
bidding process on account of some technical error/glitch on the
portal. The technical glitch preventing him from participating in
the financial bid process on the specified date and within
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stipulated time was beyond the control of the petitioner. It is
further the case of the petitioner that the petitioner immediately
contacted the office of BELTRON which was entrusted for
operating the e-portal at proc2.bihar.gov.in and therefore boda
fide attempted to participate in the financial bidding process.
4. It is also the case of the petitioner that he has
submitted a representation dated 16.09.2025 requesting the
respondent authorities to conduct the process afresh but vide
impugned order dated 08.10.2025, the earnest money deposit of
an amount of Rs.2,34,22,500/- was forfeited in terms of Clause-
19(v) of the tender notice on the ground that the petitioner
deliberately did not participate in the bidding process.
5. Learned counsel for the petitioner submits
that the forfeiture of the Earnest Money Deposit (EMD) of the
petitioner is wholly illegal since he had attempted to log-in into
the portal for participating in the e-auction process, however, for
the reasons beyond the control of the petitioner he was
prevented from participating in the aforesaid process.
6. Learned counsel for the petitioner further
submits that consequent upon the representation dated
16.09.2025, filed by the petitioner, the respondent authorities
had called for a report from BELTRON regarding the technical
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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glitch on the date and time when the process of e-auction was
going on, to which, BELTRON had replied vide its e-mail dated
24.09.2025 wherein, according to the learned counsel for the
petitioner, BELTRON had admitted that there was indeed
certain technical error on the portal of e-auction which had
subsisted till 1:01 P.M. on 16.09.2025. Pertinently, according to
the tender notice, the auction process was only till 1:00 P.M. and
therefore, the petitioner could not participate in the e-auction
process.
7. Adverting to Clauses- 14 and 19(v) of the
tender notice, the learned counsel for the petitioner has argued
that though the participant to the e-auction process has to be
vigilant regarding I.T. resources and its functioning, however,
the technical glitch or issue on the portal itself was beyond the
control of the petitioner and therefore, cannot result into
punishing the petitioner himself, more-so, when admittedly, the
respondents have admitted to the existence of technical glitch on
the aforesaid portal.
8. It has been argued by learned counsel for the
petitioner that in the present case, no show-cause notice seeking
an explanation from the petitioner was issued before forfeiture
of the EMD of the petitioner, which is in gross violation of the
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principles of natural justice and is bad in the eyes of law.
9. The next limb of argument of learned
counsel for the petitioner is that for the settlement of sand ghat
at Aurangabad Sone 14-A, altogether three participants
including the petitioner had filed tender notice document and in
the technical bid the petitioner and one M/s. Laxmi H.P. Gas
Agency were found technically qualified for the bid. The
learned counsel has emphasized that the aforesaid other
participant namely, M/S. Laxmi H.P. Gas Agency was
automatically restrained from participating in the present bid
process since one Sand Ghat i.e. Sand Ghat No.16-A had
already been allotted to the aforesaid other participant and
therefore, the said bidder being restrained from participating in
the auction, therefore, the petitioner remained the sole bidder.
10. It is the contention of the learned counsel for
the petitioner that out of a total of three participants one was
disqualified in the technical bid itself and out of remaining two
bidders, one was restrained from participating in the bid process
since he had already been allotted another sand ghat in the same
district, and therefore, as a consequence, the petitioner remained
the sole bidder and in such case, the provisions under Clause-
19(vi) of the Tender Documents ought to have been applied
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whereunder the respondents are bound to issue a fresh auction
and in case of no participation even in response to such fresh
notice, the respondent no.3 would be required to make
necessary recommendation to the respondent department for
decision on the point of acceptance of the proposal of the single
bidder. Therefore, once the co-bidder M/S. Laxmi H.P. Gas
Agency was prevented from participating and the petitioner was
left as the single bidder, the provisions of Clause-19(vi) ought to
have been implemented and the respondent no.3 had to issue a
notice instead of passing the impugned order forfeiting the
E.M.D.
11. By making the aforesaid submissions, it has
been submitted by learned counsel for the petitioner that the
impugned order forfeiting the E.M.D. of the petitioner is
punitive, arbitrary and wholly illegal and deserves to be quashed
and set aside.
12. During the pendency of this case, the
respondents had come out with fresh tender notice for the
settlement of the subject sand ghat and in these circumstance
this Court vide order dated 04.11.2025, had permitted the
petitioner to participate in the fresh tender process without
depositing fresh E.M.D. subject to the final outcome of this writ
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petition. Thereafter, a supplementary affidavit has been filed by
the petitioner stating therein that pursuant to the order of this
Court he was allowed to participate in the fresh bidding process
but the petitioner failed to succeed in the said fresh bidding
process.
13. Learned counsel for the answering
respondent nos.3 and 4 has submitted at the outset that the
allegation of the petitioner regarding technical glitch is totally
incorrect, which is confirmed from the e-mail dated 24.09.2025
sent by BELTRON to the respondent authorities which
illustrates that the petitioner has deliberately entered invalid /
incorrect log-in details on the e-auction portal and as a
consequence, he did not participate in the e-auction process.
Adverting to the aforesaid e-mail dated 24.09.2025, it is
categorically submitted that on the date and time of the tender
process, altogether 287 tenders were successfully closed with
multiple bids which clearly shows that there was no system
malfunction on the e-portal.
14. It is the categorical submission of the learned
counsel for the answering respondent nos.3 and 4 that the
petitioner did not participate in the e-auction process and even
as per the representation preferred by the petitioner himself, the
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issue was that of ‘log-in issue’. The petitioner contacted
BELTON at 12:57 PM, that is, merely three minutes before the
close of the bidding process and the issue stood resolved at
01:01 PM. The root cause of the issue faced by the petitioner
was that the petitioner had himself entered invalid credentials on
the e-auction portal which is clearly attributable to the petitioner
himself.
15. Pertinently, clause 16 expressly states that all
intending bidders shall ensure that they must duly verify their
I.T. related resources and equipment related to the e-auction
process and therefore, it was incumbent upon the petitioner to
ascertain the correct log-in details of the e-auction process.
Further, the petitioner waited for the last minute to contact
BELTRON to resolve the issue of invalid credential.
16. It has been empahsised by the learned
counsel for the answering respondent nos.3 and 4 that
BELTRON found no fault on the e-portal which is illustrated by
the fact that on the very same portal 287 other tenders were
conducted successfully on the very same day. It is, therefore, the
submission that the conduct of the petitioner itself does not
warrant any interference from this Court.
17. It is the next submitted by the learned
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counsel for the answering respondent nos. 3 and 4 that under
clause 19 (v) of the N.I.T., there is no discretion on the part of
the Collector and in case of non-participation by a technically
qualified bidder, the forfeiture shall be mandatory and a natural
consequence.
18. Lastly, it is submitted that clause 19(vi) of
the N.I.T. would only apply when a single bid is received, but in
the present case, another bidder namely, M/s. Laxmi H.P. Gas
Agency had participated in the auction and were found
technically qualified and hence, it cannot be said that the present
e-auction was a ‘single bidder auction’ and therefore, clause
19(vi) of the N.I.T. could not be triggered.
19. I have considered the submissions of the
parties and perused the materials on record.
20. From the record, it appears that the petitioner
had participated in the settlement of sand ghats situated in the
district of Aurangabad particularly, Aurangabad Sone 14-A.
After depositing the E.M.D. of Rs.2,34,22,500/- the petitioner
had qualified to participate in the financial bidding which was
scheduled for 16.09.2025 between 11:00 A.M and 1:00 P.M.
When the petitioner could not participate in the e-auction
process, he made a representation on the very same date and the
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respondent authorities had called for a report from BELTRON,
which was entrusted to manage the e-auction portal, on the issue
of malfunction or technical glitch on the portal. Responding to
the aforesaid request, BELTRON had replied through e-mail
dated 24.09.2025. The relevant portion of the aforesaid e-mail
reads as under:-
“For Prop. Shailendra Prasad Singh:
As per the attached timestamp of call
records, bidder had called us at 12:57 PM (Call
screen attached) from mobile number xxx132
regarding login issue. Our team member
provided required support and login issue
resolved around 01:01 PM but auction
participation time was over. The reason of
login issue was on invalid credentials (Login
ID/Password wrong), we had (sic) investigated
and found that there was no issue of eproc2
application as total no of 287 tenders were
closed with multiple bids received against the
tenders.
We would like to confirm you that, portal
was up and running properly as we have not
received any calls or complaint from eProc2
user.
Kindly note that during the investigation
we found that we received calls from common
mobile number xxx132 from both bidders HP
Gas (Laxmi HP Gas Agency) & Prop.
Shailendra Prasad Singh for auction assistance
(Calls record details attached). As per the pre-
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defined process of e-auction, bidder should not
be allowed to share auction details or
information during live auction to prevent cartel
and department will get desire result after
auction but this has not happened with auction
against Tender No.108369-Aurangabad Sone
14A.
We hope above facts will suffice your concerns
raised to us.” (emphasis supplied).
21. The aforesaid e-mail has been brought on
record by the answering respondents in their counter affidavit.
Upon perusal of the aforesaid e-mail, it is clear that on the date
and time of e-auction, there was no malfunction or technical
glitch on the portal which is fortified by the fact that about 287
tender processes were successfully completed with multiple bids
on the very same portal. Further, the error identified by
BELTRON in the aforesaid e-mail is of wrong credential (log-in
ID / password) which has been entered by the petitioner on the
portal. This Court has noted that the date and time for financial
bidding/auction was slated for 16.09.2025 between 11:00 A.M.
to 01:00 PM. but the petitioner has chosen to contact BELTRON
only at 12:57 P.M. i.e. merely three minutes before close of the
e-auction process.
22. Be that as it may, this Court has noted that
the respondents have forfeited the E.M.D. of the petitioner
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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under Clause-19(v) of the Tender Documents but, the contention
of the respondents that the EMD can be forfeited automatically
without affording an opportunity to the petitioner on the ground
that there is no discretion available to the Collector, is not
appealing to this Court. It appears that the petitioner was neither
issued notice nor was heard before forfeiting his E.M.D., which
clearly violates the principles of nature justice.
23. Recently, the Hon’ble Supreme Court in the
case of Krishnadatt Awasthy vs. State of M.P. & Ors., reported
as (2025) 7 SCC 545 has emphasized on the imperativeness of
principles of natural justice, particularly, before an
administrative authority acting as a quasi judicial function and
has held as under:-
“43. The opportunity of hearing is considered so
fundamental to any civilised legal system that
the courts have read the principles of natural
justice into an enactment to save it from being
declared unconstitutional on procedural
grounds [Olga Tellis v. Bombay Municipal
Corpn., (1985) 3 SCC 545] .
44. It has been argued before us that if the failure to
provide hearing does not cause prejudice,
observing the principle of natural justice may
not be necessary. In this context, a three-Judge
Bench of this Court in S.L. Kapoor v. Jagmohan
[S.L. Kapoor v. Jagmohan, (1980) 4 SCC 379]
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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speaking through Chinappa Reddy, J.
considered such arguments to be “pernicious”
and held that “[t]he non-observance of natural
justice is itself prejudice to any man and proof
of prejudice independently of proof of denial of
natural justice is unnecessary”. The Supreme
Court, however, has drawn out an exception
where “on the admitted or indisputable facts
only one conclusion is possible, and under the
law only one penalty is permissible, then the
Court may not compel the observance of natural
justice” [Swadeshi Cotton Mills v. Union of
India, (1981) 1 SCC 664 : (1981) 51 Comp Cas
210; Aligarh Muslim University v. Mansoor Ali
Khan, (2000) 7 SCC 529 : 2000 SCC (L&S)
965].
45. Professor I.P. Massey [I.P. Massey,
Administrative Law (8th Edn., 2012).] has
commented on this shift as under:
“Before the decision of the highest Court
in S.L. Kapoor v. Jagmohan [S.L. Kapoor
v. Jagmohan, (1980) 4 SCC 379], the
rule was that the principles of natural
justice shall apply only when an
administrative action has caused some
prejudice to the person, meaning thereby
that he must have suffered some “civil
consequences”. Therefore, the person
had to show something extra in order to
prove “prejudice” or civil consequences.
This approach had stultified the growth
of administrative law within an area of
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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highly practical significance. It is
gratifying that in Jagmohan [S.L. Kapoor
v. Jagmohan, (1980) 4 SCC 379] , the
Court took a bold step in holding that a
separate showing of prejudice is not
necessary. The non-observance of
natural justice is in itself prejudice
caused. However, merely because facts
are admitted or are undisputable it does
not follow that the principles of natural
justice need not be observed.”
46. In State Bank of Patiala v. S.K. Sharma [State
Bank of Patiala v. S.K. Sharma, (1996) 3 SCC
364 : 1996 SCC (L&S) 717], the Supreme Court
observed that where an enquiry is not convened
by any statutory provision and the only
obligation of the administrative authority is to
observe the principles of natural justice, the
court/tribunal should make a distinction
between a total violation of the rule of fair
hearing and violation of the facet of that rule. In
other words, a distinction must be made between
“no opportunity” or “no adequate
opportunity”. In the case of the former, the
order passed would undoubtedly be invalid and
the authority may be asked to conduct
proceedings afresh according to the rule of fair
hearing. But in the latter case, the effect of
violation of a facet of the rule of fair hearing
has to be examined from the standpoint of
prejudice.
47. In Dharampal Satyapal Ltd. v. CCE
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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[Dharampal Satyapal Ltd. v. CCE, (2015) 8
SCC 519 : (2015) 33 GSTR 1], this Court dealt
with the prejudice question as under: (SCC p.
540, para 42)
“42. So far so good. However, an
important question posed by Mr Sorabjee
is as to whether it is open to the
authority, which has to take a decision, to
dispense with the requirement of the
principles of natural justice on the
ground that affording such an
opportunity will not make any difference?
To put it otherwise, can the
administrative authority dispense with
the requirement of issuing notice by itself
deciding that no prejudice will be caused
to the person against whom the action is
contemplated? Answer has to be in the
negative. It is not permissible for the
authority to jump over the compliance
of the principles of natural justice on
the ground that even if hearing had
been provided it would have served no
useful purpose. The opportunity of
hearing will serve the purpose or not
has to be considered at a later stage and
such things cannot be presumed by the
authority. This was so held by the
English Court way back in the year 1943
in General Medical Council v. Spackman
[1943 AC 627 (HL)]. This Court also
spoke in the same language in Board of
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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High School & Intermediate Education,
U.P. v. Chitra Srivastava [Board of High
School & Intermediate Education, U.P. v.
Chitra Srivastava, (1970) 1 SCC 121]
….”
48. In a more recent decision in State of U.P. v
Sudhir Kumar Singh [State of U.P. v. Sudhir
Kumar Singh, (2021) 19 SCC 706] , the position
of law was summarised as under: (SCC pp. 748-
49, para 42)
“42. …42.1. Natural justice is a flexible
tool in the hands of the judiciary to reach
out in fit cases to remedy injustice. The
breach of the audi alteram partem rule
cannot by itself, without more, lead to the
conclusion that prejudice is thereby
caused.
42.2. Where procedural and/or
substantive provisions of law embody the
principles of natural justice, their
infraction per se does not lead to
invalidity of the orders passed. Here
again, prejudice must be caused to the
litigant, except in the case of a
mandatory provision of law which is
conceived not only in individual interest,
but also in public interest.
42.3. No prejudice is caused to the
person complaining of the breach of
natural justice where such person does
not dispute the case against him or it.
This can happen by reason of estoppel,
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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acquiescence, waiver and by way of non-
challenge or non-denial or admission of
facts, in cases in which the Court finds
on facts that no real prejudice can
therefore be said to have been caused to
the person complaining of the breach of
natural justice.
42.4. In cases where facts can be stated
to be admitted or indisputable, and only
one conclusion is possible, the Court
does not pass futile orders of setting
aside or remand when there is, in fact, no
prejudice caused. This conclusion must
be drawn by the Court on an appraisal of
the facts of a case, and not by the
authority who denies natural justice to a
person.
42.5. The “prejudice” exception must be
more than a mere apprehension or even a
reasonable suspicion of a litigant. It
should exist as a matter of fact, or be
based upon a definite inference of
likelihood of prejudice flowing from the
non-observance of natural justice.”
24. The doctrine of audi alteram partem has
three basic essentials. Firstly, a person against whom an order is
required to be passed or whose rights are likely to be affected
adversely, must be granted an opportunity of being heard.
Secondly, the authority concerned should provide a fair and
Patna High Court CWJC No. 17615 of 2025 dt.03-04-2026
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transparent procedure and lastly, the authority concerned must
apply its mind and dispose of the matter by a reasoned or
speaking order.
25. Considering the aforesaid decision of the
Hon’ble Supreme Court in the case of Krishnadatt Awasthy
(supra), it is clear that the principles of nature justice must be
adhered to strictly. However, in the present case, the same has
not been adhered to since the earnest money deposited by the
petitioner has been forfeited without having been given an
opportunity of hearing. In my opinion, the petitioner should
have been issued a proper notice and should have been given an
opportunity of hearing before forfeiture of the earnest money
deposited by the petitioner.
26. In view of the aforesaid discussions, this
Court deems it appropriate that the violation of principle of
natural justice in the present case, warrants remand of the
present matter to the District Magistrate-cum-District Mining
Officer, Aurangabad for passing a reasoned and speaking order
after affording an opportunity of hearing to the petitioner in
consonance with the principles of natural justice.
27. Accordingly, the impugned order dated
08.10.2025 issued by the District Magistrate-cum-District
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Mining Officer, Aurangabad is hereby quashed and set aside.
The matter is remitted to the District Magistrate-cum-District
Mining Officer, Aurangabad for passing a reasoned and
speaking order after giving an opportunity of hearing to the
petitioner.
28. The writ petition is allowed to the above
extent.
(Sandeep Kumar, J)
pawan/-
AFR/NAFR N.A.F.R.
CAV DATE 13.01.2026
Uploading Date 03.04.2026
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