Patna High Court
M/s Halcons through its working partner Mr. Binod Kumar Singh,versusBihar Police Building Construction Nigam
- Decided
- Disposal
- ALLOWED
- Bench
- A ABHISHEK REDDY
Holding
The Court held that the respondents' refusal to refund the EMD was arbitrary, illegal, and contrary to the terms of the NIT, and therefore ordered a refund.
Summary
The petitioner, M/s Halcons, deposited Rs. 18,51,464 as Earnest Money Deposit (EMD) for two tenders issued under NIT No. 26/SBD/2023-24. The technical bids were rejected on the ground of an allegedly false experience certificate, and an FIR was lodged against the petitioner’s partners. The petitioner sought a refund of the EMD, arguing that Clause 16.6 of the Standard Bidding Document (SBD) only permits forfeiture on specific grounds, none of which applied to his case. The respondents contended that the EMD could be forfeited for fraud or false documents under the NIT terms. The Court examined Clause 16.6 and held that the forfeiture was not based on any enumerated ground and therefore was arbitrary and illegal. Relying on precedent, the Court ordered the respondents to refund the full EMD within four weeks. The writ petition was consequently allowed.
Issues considered
- Whether the respondents were authorized to forfeit the Earnest Money Deposit on the ground of a false experience certificate not listed in Clause 16.6 of the Standard Bidding Document.
- Whether the refusal to refund the EMD amounts to an arbitrary, colourable exercise of power and violation of the terms of the NIT.
- Whether the petitioner is entitled to a refund of the EMD under the applicable bidding regulations.
Subjects
- Earnest Money Deposit
- EMD forfeiture
- Public procurement
- Tendering process
- Arbitrariness
- Administrative law
- Standard Bidding Document
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.7718 of 2025
======================================================
M/s Halcons through its working partner Mr. Binod Kumar Singh, Aged about
53 Years (Male), Son of Late Deo Kumar Singh, Resident of Mohalla- South
Chitragupta Nagar, Behind Sanjeevani Hospital, Kankarbagh P.O- Lohia
Nagar, P.S-Patrakar Nagar, District- Patna-800020.
... ... Petitioner/s
Versus
1. Bihar Police Building Construction Nigam through its Chairman-cum
Managing Director, Kautilya Nagar, B.M.P-5 Campus, Patna-800014.
2. The Chairman-cum-Managing Director, Bihar Police Building Construction
Nigam, Kautilya Nagar, B.M.P-5 Campus, Patna-800014.
3. The Chief Engineer, Bihar Police Building Construction Nigam, Kautilya
Nagar, B.M.P-5 Campus, Patna-800014.
4. The Superintending Engineer-2, Bihar Police Building Construction Nigam,
Kautilya Nagar, B.M.P-5 Campus, Patna-800014.
5. The Executive Engineer, Bihar Police Building Construction Nigam,
Muzaffarpur Division camp Hajipur.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr. Rajendra Narain, Sr. Adv.
: Mr. Manish Sahay, Adv.
: Mr. Anil Kumar Sinha, Adv.
: Mr. Siddhartha Aditya, Adv.
: Mr. Amrit Kirti, Adv.
: Mr. Aman Raj, Adv.
For the Respondent/s : Mr. Prasoon Sinha, Adv.
======================================================
CORAM: HONOURABLE MR. JUSTICE A. ABHISHEK REDDY
ORAL JUDGMENT
Date : 08-07-2026
Heard the learned counsel for the parties.
The present writ petition has been filed for the following
relief(s):-
“(I) For commanding and directing the concerned Respondent to refund
a sum of Rs. 18,51,464/-(Rupees Eighteen Lakhs Fifty One Thousand Four Hundred
Sixty Four) only in favour of the petitioner which was deposited by him through
online as Earnest Money (i.e. EMD) in his following tenders arising out of NIT No.
26 / SBD /2023-24.
Patna High Court CWJC No.7718 of 2025 dt.08-07-2026
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Sl. NIT No. Name of Works Group Nos. Amount of Earnest
Money
1. NIT No. Construction of Model Police GR No. 09 Rs. 9,03,943/-
26/SBD/202 3-24 Station Building (G+2 Structure),
Out House with Electrification at
Jaitpur O.P in the District of
Muzaffarpur.
2. NIT No. Construction of Model Police GR No. 18 Rs. 9,47,521/-
26/SBD/202 3-24 Station Building (G+2 Structure),
Out House with Electrification at
Jaitpur O.P in the District of
Muzaffarpur.
Total Rs. 18,51,464/-
(II) For declaring that the actions of the respondents are arbitrariness,
colourable exercise of powers, discriminatory as well as against the law.
(III) For passing such an order or orders for which the petitioner would
be entitle in accordance with law in the facts and circumstances of this case.”
3. Learned counsel appearing on behalf of the petitioner
submits that pursuant to the NIT issued by the respondent
authority vide Inviting Tender No. 26 / SBD /2023-24, the
petitioner has participated in the said bids. However, the technical
bids of the petitioner were rejected on the ground that the
experience certificate was not proper and correct and for which an
FIR was lodged against the partners of the petitioner’s firms
bearing Hawai Adda P.S. Case No. 43 of 2024. That the authorities
have issued a fresh NIT solely on the ground that two bidders who
have participated in the tender process remained non-responsive
and the technical bids were rejected. Thereafter, on the basis of the
fresh NIT, the work was allotted to some other contractors and the
Patna High Court CWJC No.7718 of 2025 dt.08-07-2026
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work has been completed. That when the petitioner has made a
request for refund of the earnest money deposited (EMD) to the
tune of Rs. 18,51,464/- for above two tenders (group 9 & 18), the
authorities did not refund the same. Therefore, the petitioner left
with no other alternative has to approach this Hon’ble Court.
Learned counsel submits that as per Clause 16.6 of the instruction
to the bidders of the Standard Bidding Document (SBD), the EMD
by the bidders can be forfeited only on the grounds enumerated
therein but not otherwise. That the technical bids of the petitioner
were rejected on the ground that the petitioner had submitted false
experience certificate and the said ground is not available under
Clause 16.6. Learned counsel has therefore, prayed this Hon’ble
Court to allow the present writ petition and direct the respondents
to refund the EMD amount of Rs. 18,51,464/- by fixing a time-
frame.
4. Per contra, the learned counsel appearing on behalf
of the respondent-State has vehemently opposed the very
maintainability of the present writ petition. Learned counsel has
stated that the petitioner had filed a false experience certificate and
for which an FIR was also lodged. Further, the petitioner after
opening of the technical bids was non-responsive and therefore,
the authority has taken a decision to forfeit the EMD amount paid
Patna High Court CWJC No.7718 of 2025 dt.08-07-2026
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by the petitioner. Learned counsel has stated that as per terms and
conditions of the NIT, the authorities are well within their rights to
forfeit the EMD amount if the participants have played any fraud
or submitted false documents.
5. In order to resolve the issue involved in the present
writ petition, it is necessary to extract the relevant portion of the
instruction to bidders of the Standard Bidding Document, more
specifically, Clause 16.6 which reads as under;
“16.6 The Earnest money may be forfeited
(a) if the Bidder withdraws the Bid after Bid opening during
the period of Bid validity:
(b) if the Bidder does not accept the correction of the Bid
Price, pursuant to Clause 26; or
(c) in the case of a successful Bidder, if the Bidder fails
within the specified time limit to
(i) sign the Agreement; or
(ii) furnish the required Performance Security.”
6. Admittedly in the present case, the forfeiture of the
EMD by the respondent authorities is not on the basis of the above
enumerated clauses.
7. A Division Bench of this Hon’ble Court while
interpreting the Clause 16.6 of the Standard Bidding Document in
CWJC No. 15901 of 2023 dated 11..09.2024 has held as under;
“7. The learned Counsel for the respondent Corporation
points out from the supplementary counter affidavit that the petitioner
had also not signed the agreement, despite notices having been issued
as per Annexure R/k and R/l. The non-signing of an agreement would
definitely enable forfeiture of earnest money deposit as per the above
extracted clause. However, on the basis of the verification made of
Patna High Court CWJC No.7718 of 2025 dt.08-07-2026
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the experience certificate, the award itself was not carried out. In
such circumstances, the question of signing of agreement pales into
insignificance.
8. We also have to notice that the reason stated in
Annexure P/8 series is that an FIR was registered, for the act of
forgery, in the Patna Airport Police Station on which ground alone
the forfeiture was made. Reliance can be usefully made to Mohinder
Singh Gill & Anr. vs. The Chief Election Commissioner, New Delhi
& Ors. [(1978) 1 SCC 405] which held that a counter affidavit cannot
supplement reasons, which are not available in the orders passed”
8. Having regard to the above mentioned facts and also
the judgment of a Division Bench of this Hon’ble Court, this Court
is of the opinion that the act of the respondents in not refunding
the EMD amount of Rs. 18,51,464/- has to be held as arbitrary,
illegal, bad and contrary to the terms and conditions of the NIT.
9. Having regard to the same, the present writ petition
is allowed. The respondent authorities are directed to refund the
amount of Rs. 18,51,464/- as expeditiously as possible preferably
within a period of four weeks from the date of receipt of a copy of
this order.
10. With the above directions, the present writ petition
stands allowed to the extent indicate.
(A. Abhishek Reddy, J)
Ayush/-
AFR/NAFR NAFR
CAV DATE NA
Uploading Date 10.07.2026.
Transmission Date NA
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