Patna High Court
JSP Projects Pvt. Ltd.versusThe State of Bihar
- Decided
- Disposal
- DISPOSED
Holding
The writ petition is disposed of as the matter has been finally decided by the order dated 08.03.2026, which merges the earlier communications.
Summary
JSP Projects Pvt. Ltd. was declared the lowest bidder for the Ara‑Ekauna‑Khaira‑Sahar Road contract and was asked to furnish an additional unconditional bank guarantee on the ground of an alleged abnormally low bid (ALB). The petitioner objected to this demand, submitting a representation which it claimed was not considered. The High Court earlier directed the respondents to ascertain the status of the representation, and the respondents subsequently issued a reasoned order on 08.03.2026 addressing the representation. The Court held that the final order of 08.03.2026 subsumes the earlier communications and that the writ petition seeking relief against those communications could not be entertained. Consequently, the petition was disposed of, with the petitioner advised that it may challenge the 08.03.2026 order through the appropriate legal remedy.
Issues considered
- Whether the demand for an additional bank guarantee on the basis of an alleged abnormally low bid was made in accordance with Clause 38.2(b) and Clause 38.3 of the Instructions to Bidders.
- Whether the petitioner’s representation dated 17.12.2025 was required to be considered before imposing the additional guarantee.
- Whether the writ petition seeking to set aside the letters dated 16.12.2025 and 26.12.2025 remains maintainable after the issuance of a final order on 08.03.2026.
Subjects
- tender
- abnormally low bid
- bank guarantee
- doctrine of merger
- writ petition
- administrative law
- contract award
- performance security
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.1782 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 Dhanarua, 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 Ara-Ekauna-Khaira-Sahar Road in the State of
Bihar under Civil Works Contract Package No. BSHP-IV (Phase-I)/pkg-2,
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.1782 of 2026(5) dt.18-03-2026
2/9
senior counsel for the B.S.R.D.C.L.
2. The following reliefs have been sought for 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. 22,28,50,456/- (Rupees
Twenty Two Crores Twenty Eight Lakhs Fifty
Thousand Four Hundred and Fifty Six Only)
on account of “Abnormally Low Bid”
(hereinafter referred as “ALB”) and above
the performance unconditional Performance
Bank Guarantee of Rs. 9,45,88,479/-
(Rupees Nine Crores Forty Five Lacs
Eighty Eight Thousand Four Hundred and
Seventy 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.1782 of 2026(5) dt.18-03-2026
3/9
was floated by the respondent authorities for construction of
Ara-Ekauna-Khaira-Sahar 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. 22,28,50,456/- 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 Ara-Ekauna-Khaira-
Sahar Road in the State of Bihar under Civil
Works Contract Package No. BSHP-IV
(Phase-1) Pkg-2.
Sir,
This is to notify you that your bid
dated 22.07.2025 for execution of
‘Construction of Ara-Ekauna-Khaira-Sahar
Road in the State of Bihar under Civil Works
Contract Package No. BSHP-IV (Phase-
Patna High Court CWJC No.1782 of 2026(5) dt.18-03-2026
4/9
1)/Pkg-2’ for the Contract Price in the
equivalent of INR 189,17,69,571.00 (Indian
Rupees One Hundred Eighty-Nine Crore
Seventeen Lakh Sixty-Nine Thousand Five
Hundred Seventy-One) 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
9,45,88,479/- (Indian Rupees Nine Crore
Forty-Five Lakh Eighty-Eight Thousand
Four Hundred Seventy-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 22,28,50,456/-(Indian
Rupees Twenty-Two Crore Twenty-Eight
Lakh Fifty Thousand Four Hundred Fifty-
Six) 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
be submitted within 28 days of the receipt of
Notification of Award and shall be in the
form acceptable to the Employer in
Patna High Court CWJC No.1782 of 2026(5) dt.18-03-2026
5/9
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
Bank Guarantee, rendering the impugned communications
unsustainable in law.
7. Learned counsel for the respondents, referring to
Patna High Court CWJC No.1782 of 2026(5) dt.18-03-2026
6/9
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. 854/2026 dated 08.03.2026
has already been passed, which has been brought on record vide
Annexure- 5/A 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
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
Patna High Court CWJC No.1782 of 2026(5) dt.18-03-2026
7/9
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
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
Patna High Court CWJC No.1782 of 2026(5) dt.18-03-2026
8/9
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
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.
Patna High Court CWJC No.1782 of 2026(5) dt.18-03-2026
9/9
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
Checking your session…