Patna High Court
M/s Mavin Switchgears and Control Pvt. Ltd. and M/s GCKC Projects and Works Pvt. Ltd.versusThe State of Bihar
- Decided
- Disposal
- PARTLY ALLOWED (DISPOSAL)
Holding
The three‑year debarment is unlawful because neither Clause 11.4.7 nor Clause 51 authorises such debarment in the present facts, and an order cannot be based on reasons not recorded in it.
Summary
The petitioner, a joint venture, was awarded a contract under NIT No. 02/PR/BSPTCL/2025 but failed to furnish the required performance security within the stipulated time. The employer issued Office Order No. 80 cancelling the award, forfeiting the earnest money and debarred the petitioner for three years, citing Clause 11.4.7 of the General Conditions of Contract. The petitioner challenged the debarment, arguing that Clause 11.4.7 only permits cancellation and forfeiture, not debarment, and that Clause 51, which deals with debarment, is inapplicable as no contract had been executed. The court held that the debarment was not authorized by either clause and that an administrative order cannot rely on reasons not recorded in it. Consequently, the court set aside the debarment portion of the order while leaving the cancellation and forfeiture untouched.
Issues considered
- Whether Clause 11.4.7 of the General Conditions of Contract authorises debarment of a bidder for non‑submission of performance security
- Whether Clause 51 of the Standard Bidding Document can be invoked to debar a bidder when no contract has been executed
- Whether an administrative order can be sustained on reasons not recorded in the order itself
- Whether the debarment is legally sustainable in the absence of an express provision
Subjects
- tender
- performance security
- debarment
- administrative order
- standard bidding document
- public procurement
- contract law
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.20831 of 2025
======================================================
M/s Mavin Switchgears and Control Pvt. Ltd. and M/s GCKC Projects and
Works Pvt. Ltd. a joint venture of two Private Limited Companies, Regd.
Office of lead partner at Plot No. 9, N-11, CIDCO, Aurangabad, Maharashtra
431003 through its authorized signatory, namely, Pinkesh Jain, Male, aged
about 46 years, Son of Surendra Kumar, Resident of Daftariyon ki gali,
Nagaur, P.O. and P.S. Nagaur, Dist. Nagaur, Rajasthan.
... ... Petitioner
Versus
1. The State of Bihar through the Secretary, Department of Energy,
Government of Bihar, Patna.
2. The Bihar State Power Holding Company Limited, through its Chairman-
cum-Managing Director, Vidyut Bhawan, Bailey Road, Patna-800021.
3. Bihar State Power Transmission Company Limited (BSPTCL), through its
Managing Director, Vidyut Bhawan, Bailey Road, Patna-800021.
4. The Director (Project), Bihar State Power Transmission Company Limited,
Vidyut Bhawan, Bailey Road, Patna - 800021.
5. The Chief Engineer (Project-I), Bihar State Power Transmission Company
Limited, Vidyut Bhawan, Bailey Road, Patna - 800021.
6. The Electrical Superintendent Engineer, Bihar State Power Transmission
Company Limited, Vidyut Bhawan, Bailey Road, Patna-800021.
... ... Respondents
======================================================
Appearance :
For the Petitioner : Mr. Lalit Kishore, Sr. Advocate with
Mr. Ayush Kumar, Advocate
Mr. Kanishka Shankar, Advocate
Mr. Sanjeev Kumar, Advocate
For Respondent Nos2 to 6 : Dr. Anand Kumar, Advocate
For the State : Mr. Manish Kumar, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE SUDHIR SINGH
and
HONOURABLE MR. JUSTICE RAJESH KUMAR VERMA
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE SUDHIR SINGH)
3 24-02-2026 The present writ application has been filed seeking the
following relief(s):-
“(i) For issuance of a writ in the nature of
certiorari for quashing the Office Order No. 80
dated 15/10/2025 issued by Respondent No. 5,
the Chief Engineer (Project-1), Bihar State
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Power Transmission Company Limited, wherein
and whereby the Notification of Award issued to
the Petitioner in reference to Tender Notice
(NIT) No. 02/PR/BSPTCL/2025 has been
cancelled, the Earnest Money Deposit (E.M.D.)
has been forfeited, and the Petitioner has been
debarred for a period of 03 (three) years.
(ii) For issuance of a writ in the nature of
mandamus directing the Respondent authorities
to accept the Bank Guarantee for Performance
Security from the Petitioner and allow the
Petitioner to execute the work awarded under
NIT No. 02/PR/BSPTCL/2025.
(iii) For issuance of a writ in the nature of
mandamus for staying the operation,
implementation, and execution of the Office
Order No. 80 dated 15/10/2025 issued by
Respondent No. 5, the Chief Engineer (Project-
I), Bihar State Power Transmission Company
Limited during pendency of the instant writ
application.
(iv) For any other relief or reliefs for which the
Petitioner may be deemed entitled to in the facts
and circumstances of the case.”
2. The brief facts of the case are that the petitioner is a
Joint Venture comprising M/s Mavin Switchgears and Control
Pvt. Ltd. (Lead Partner) and M/s GCKC Projects and Works Pvt.
Ltd. The Joint Venture participated in NIT No.
02/PR/BSPTCL/2025 dated 07.01.2025 issued by BSPTCL for
construction of three 132 KV D/C Transmission Lines. Upon
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being declared L-1, Notification of Award (NOA) Nos. 09 and
10 dated 01.07.2025 were issued in favour of the petitioner,
which were duly accepted. In terms of the General Conditions
of Contract, the petitioner was required to furnish Performance
Security equivalent to 10% of the contract value and execute the
agreement within 30 days. It is the case of the petitioner that due
to internal compliance requirements and technical issues faced
by its bank in issuing the Performance Bank Guarantee in the
name of the Joint Venture entity, there was delay in submission
of the same. The petitioner communicated its difficulty to the
respondents vide letters dated 29.08.2025, 02.09.2025 and
10.09.2025, seeking short accommodation of time. Since the
Performance Security was not furnished within the stipulated
period, the employer issued Letter No. 1046 dated 18.09.2025
(Annexure–P/5) referring to GCC Clause 11.4.7 of Standard
Bidding Document (SBD) directing submission of the
Performance Security within seven days, failing which
cancellation of award, forfeiture of Earnest Money, and
subsequent debarment were proposed. Despite the petitioner
seeking short extension vide letter dated 25.09.2025 and
reiterating its readiness and willingness to execute the work, the
respondent invoking Clause 11.4.7 of Section IV (General
Conditions of Contract) of the Standard Bidding Document,
passed the impugned Office Order No. 80 dated 15.10.2025
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(Annexure–P/7), which reads as follows:-
“In light of the above, on account of non-
submission of Performance Security Bank
Guarantee by the L-1 bidder M/s Mavin
Switchgears and Control Pvt. Ltd. in JV with
M/s GCKC Projects and Works Pvt. Ltd. as per
the terms & conditions as specified in the
Clause 11.4.7 of Sec-IV: General Condition of
Contract of the Standard Bidding Document,
the14 following decisions have been taken by
BSPTCL:
(a) Cancellation of notification of award issued
to firm vide BSPTCL Notification of Award
(NOA) No: 09 & 10 both dated 01.07.2025.
(b) Forfeiture of Earnest Money/bid guarantee
submitted by the bidder M/s Mavin Switchgears
and Control Pvt. Ltd. in JV with M/s GCKC
Projects and Works Pvt. Ltd. against NIT No.
02/PR.BSPTCL/2025 and
(c) Debarment of firm M/s Mavin Switchgears
and Control Pvt. Ltd., Aurangabad
(Maharastra) in JV with M/s GCKC Projects
and Works Pvt. Ltd., Jaipur (Rajasthan) from all
future tenders of BSPTCL and other subsidiary
companies of BSPHCL for next 03 (Three) years
from the date of issue of this Order.”
3. Thereafter, the employer cancelled the tender and
issued a fresh tender for the same project, bearing NIT
No.69/PR/BSPTCL/2026.
4. Learned counsel for the petitioner submits that the
challenge is confined only to that portion of the impugned order
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whereby the petitioner has been debarred from participating in
future tenders for a period of three years.
5. Learned counsel for the petitioner further submits
that Clause 11.4.7 of the General Conditions of Contract
(GCC), does not provide for debarment and is not applicable in
the petitioner’s case. Clause 11.4.7 reads as follows:
“11.4.7. The successful bidder, after receipt of
LOA, shall execute the agreement within 30
days of award of the contract after duly
furnishing the 10% bank guarantee. If there is
delay beyond the specified period in submission
of contract performance BG, 15 days’ notice
will be given to the successful bidder and after
which the Employer may entail cancellation of
letter of award after giving another 15 days
final notice and forfeiting of Earnest Money/bid
guarantee as also detailed under Earnest Money
Clause.”
6. Learned counsel for the petitioner submits that
Clause 11.4.7 contemplates only cancellation of the Letter of
Award and forfeiture of Earnest Money, but does not provide for
debarment. Hence, the debarment of the petitioner is bad in the
eye of law.
7. Per contra, learned counsel for the respondent
submits that the order of debarment has been passed in
pursuance of Clause 51 of the SBD, which reads as follows:
“51. DEBARMENT FROM FUTURE
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TENDERS:-
51.1 In the event of non-completion of 80% of
any mile stone during contract period for any
reason other than those attributable to
Employer and Force Majeure, then the
Employer may debar the contractor to
participate in the future tenders of BSPHCL and
its subsidiary companies till whole project is
completed by the contractor.”
8. Upon perusal of the impugned Office Order dated
15.10.2025, it is evident that the action has been taken “as per
the terms & conditions as specified in Clause 11.4.7 of Sec-IV:
General Condition of Contract of the Standard Bidding
Document.” Thus, the foundation of the impugned order, on its
own showing, is Clause 11.4.7 of the GCC.
9. Clause 11.4.7, as quoted hereinabove, provides that
in case of delay in submission of the Performance Security Bank
Guarantee, the employer may, after issuance of notice, cancel
the Letter of Award and forfeit the Earnest Money. The
consequences contemplated under the said clause are specific
and limited. The provision does not stipulate debarment, much
less debarment for a fixed tenure of three years.
10. However, in the supplementary counter affidavit
filed before this Court, the respondent-authority has sought to
justify the order of debarment by placing reliance upon Clause
51 of the Standard Bidding Document.
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11. At this stage, it becomes necessary to observe that
the validity of an administrative order must be tested on the
reasons recorded in the order itself and cannot be supplemented
by fresh reasons assigned in an affidavit. An order must stand or
fall on the reasons contained therein. The respondents cannot be
permitted to improve or substitute the basis of the impugned
order through pleadings filed before this Court.
12. Even otherwise, upon bare perusal of Clause 51, it
is evident that the same deals with debarment in respect of an
ongoing work after execution of a formal agreement between
the employer and the contractor. The provision is attracted in a
situation where milestones are not completed during the contract
period. In the present case, admittedly only a Notification Of
Award was issued. Due to non-deposit of the Performance
Security, no agreement could be executed between the parties.
Thus, the stage of commencement of contractual performance
never arose.
13. In such circumstances, Clause 51 of the SBD,
which presupposes existence of a subsisting contract and failure
to complete milestones during the contract period, cannot be
invoked.
14. In view of the above, the position that emerges is
twofold, firstly, Clause 11.4.7, which forms the basis of the
impugned order, does not provide for debarment as a
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consequence of non-submission of Performance Security i.e.
Bank Guarantee. Secondly, Clause 51, now sought to be relied
upon in the supplementary counter affidavit, neither finds
mention in the impugned order nor is attracted on facts in the
present case.
15. Debarment, which results in serious civil
consequences by restricting future commercial participation,
must necessarily be founded upon an express provision in the
applicable terms and conditions of the tender, or under any
statutory rule or regulation governing the tender. In the absence
of such enabling provision, the action of debarment cannot be
legally sustained.
16. Considering the facts referred to above, this Court
is of the considered view that the order of debarment for a
period of three years, issued by the employer, is unjustified and
the same cannot be sustained in the eyes of law.
17. Accordingly, the impugned Office Order No. 80
dated 15.10.2025 is set aside only to the extent it debars the
petitioner from participating in future tenders for a period of
three years. The cancellation of Notification Of Award and
forfeiture of Earnest Money are not interfered with.
18.The present writ application is, therefore, allowed
in part to the extent indicated above.
19. Pending application(s), if any, shall also stands
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disposed of.
(Sudhir Singh, J.)
(Rajesh Kumar Verma, J.)
Gaurav Kumar,
Ibrar/ A.F.R.-
U
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