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IN THE HIGH COURT OF JUDICATURE AT PATNA
P. B. BAJANTHRI, CJ and ALOK KUMAR SINHA, J.
CWJC Nos. 19226 and 19173 of 2024
(9.10.2025)
M/s Nirman Engicons Pvt. Ltd. (in 19226)
Chandan Kumar (in 19173) ... Petitioners
vs.
Chairman-cum-Managing Director-cum-Appellate Authority, Bihar Police Building Construction Corporaration, Kautilya Nagar, Patna-14 ... Respondents
(in both)
Bihar Contractors Registration Rules, 2007 – Rule 11 – Blacklisting and forfeiture of Earnest Money Deposit by way of penalty – Petitioner had withdrawn its tender prior to opening of technical bid – Communication evidencing such withdrawal was duly received and acknowledged by respondent department before any technical evaluation commenced – Once withdrawal was effected, petitioner ceased to have any locus in ongoing tender process, and bid documents submitted by it lost their operative character in law – Any action taken thereafter, treating petitioner as a continuing participant in tender, would be dehors governing tender conditions and beyond authority vested in respondents under applicable statutory rules – When very date and process of bid opening remain unsubstantiated, consequential reliance on petitioner's bid documents for initiating penal action becomes legally untenable – Principle that administrative orders affecting civil consequences must be founded upon verifiable and contemporaneous records stands clearly violated in this case. (Para 5)
Bihar Contractors Registration Rules, 2007 – Rule 11 – Blacklisting and forfeiture of Earnest Money Deposit by way of penalty – Blacklisting order has been primarily founded upon allegation that petitioner submitted a forged experience certificate – However, such allegation cannot, by itself, sustain a punitive action of blacklisting when petitioner had already withdrawn from tender before evaluation and before any contract was awarded – Power under Rule 11 of Bihar Contractors Registration Rules, 2007, though wide, cannot be invoked mechanically or retrospectively against a party who was no longer a part of procurement process at relevant time – Respondents have failed to establish any causal nexus between alleged irregularity and prejudice to tender process – There is nothing on record to demonstrate that purported experience certificate influenced evaluation process – Blacklisting affects not only present rights of a contractor but also casts a shadow on their professional reputation and future business prospects and it is in violation of Article 14,19(1)(g) & 21 of Constitution – Such an order must reflect application of mind to all relevant facts and a clear finding of wilful misconduct – Respondents cannot validly sustain a punitive order against a bidder who had lawfully withdrawn before stage of evaluation – Orders of blacklisting passed against petitioners held to be unsustainable in law. (Para 5)
Bihar Contractors Registration Rules, 2007 – Rule 11 – Blacklisting and forfeiture of Earnest Money Deposit by way of penalty – Respondents have failed to produce any material document or record showing either extension of bid validity by mutual consent or precise date and manner of bid opening within prescribed validity period – Forfeiture clause in a tender document is penal in nature and must be construed strictly – It can only be invoked upon clear proof that conditions precedent for such forfeiture were satisfied – Forfeiture of earnest money is a drastic measure carrying civil consequences – Tender process, having been vitiated at its inception, cannot form a lawful basis for any penal or administrative action against petitioner – Non-supply of documents forming basis of adverse findings amounts to clear denial of reasonable opportunity to defend, thereby violating fundamental principle of audi alteram partem – Respondents directed to refund entire EMD amount to petitioners. (Para 5)
Alok Kumar Sinha, J. – From a comprehensive perusal of records of both the cases, it is found that the facts of both the cases are similar and common issues arise for consideration. Therefore, both the cases are being disposed of by this common judgment.
CWJC No. 19226 OF 2024
FACTS OF THE CASE:
Heard the parties.
2. The petitioner in the present writ application seeks the following main relief: –
“(i) To issue an appropriate writ/ order/ direction in the nature of certiorari for setting aside/ quashing of the order passed by the Respondent Chief Engineer, Bihar Police Building Construction Corporation, Patna (BPBCC) dated 17.08.2024 contained in memo no. HQ3310 as well as the Appellate order dated 13.11.2024 bearing memo no. HQ4625 by which the petitioner’s firm/ company M/s Nirman Engicons Pvt. Ltd. has been imposed a penalty of blacklisting for two years and further for a direction to the Respondent Corporation to return the security money of Rs. 11,15,000 deposited at the time of submitting the tender paper.”
3. Learned counsel for the petitioner respectfully submits that the present writ petition has been preferred challenging the order dated 17.08.2024 contained in Memo No. HQ-3310 passed by the Respondent Chief Engineer, Bihar Police Building Construction Corporation (hereinafter referred to as the “BPBCC”), Patna, whereby the petitioner’s firm, M/s Nirman Engicons Pvt. Ltd., has been blacklisted for a period of two years, as also the appellate order dated 13.11.2024 contained in Memo No. HQ-4625, by which the said order of blacklisting has been affirmed. The petitioner has further prayed for a direction upon the respondent Corporation to refund the security deposit of Rs. 11,15,000/- which was submitted at the time of tender participation.
4. The learned counsel for the petitioner submits that the controversy arises out of E-Tender Notice No. 05/SBD/2022-23 published on 18.05.2022 by the respondent Corporation, wherein the petitioner’s firm was one of the bidders with respect to item No. 17 of the said tender. It is submitted that as per the tender notice, the technical bid was initially scheduled to be opened on 01.07.2022, but subsequently corrigenda dated 23.06.2022 and 28.06.2022 extended the dates for uploading the bid papers and for opening of the technical bid. However, despite such corrigenda, the entire bid process was mandatorily required to be completed within 120 days from 18.05.2022, i.e. on or before 17.09.2022.
5. Learned counsel submits that contrary to the conditions of the tender, the technical bid was in fact opened on 25.04.2023, i.e., after a delay of more than seven months, rendering the entire tender process infructuous. In view of such prolonged delay, the petitioner’s firm duly withdrew its tender by submitting a withdrawal letter dated 24.04.2023, which was received and acknowledged by the office of the respondent Corporation. Consequently, the bid of the petitioner stood declared as non-responsive.
6. It is further submitted that the petitioner had deposited security money of Rs. 11,15,000/- in terms of the NIT, but without issuing any notice or affording opportunity, the said deposit, along with accrued interest, was forfeited and encashed by the respondent Corporation. Learned counsel points out that Clause 16.6 of the Standard Bidding Document (SBD) clearly specifies the limited conditions under which earnest money may be forfeited, and none of those conditions are attracted in the present case since the petitioner had withdrawn the tender prior to the opening of technical bids and was not a valid bidder thereafter.
7. Learned counsel for the petitioner further submits that the basis for the impugned black-listing order lies in the allegation that the petitioner had submitted a forged experience certificate dated 22.06.2018 purportedly issued by the office of the Dy. Chief Engineer, East Central Railway, Samastipur. It is the case of the respondents that upon verification, the said authority denied
Blacklisting as a penalty requires clear proof of intentional misconduct, and actions taken based on allegations alone may be deemed disproportionate and legally untenable.
Blacklisting a contractor for submitting a false experience certificate requires clear proof of intentional wrongdoing; failure to provide such evidence renders the action disproportionate.
Tender bid valid 180 days from submission; post-expiry forfeiture of EMD and debarment invalid without extension. Debarment requires prior show cause notice per natural justice principles.
The court affirmed that submitting false documents in tender processes justifies disqualification and forfeiture of bid security under the relevant tender clauses.
Disqualification from tender processes necessitates adherence to procedural fairness; blacklisting without notice is arbitrary and invalid.
The submission of a bogus Bank Guarantee by a bidder justifies a two-year ban under tender conditions, as the term 'certificate' includes documents.
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