Authority Cannot Proceed Without Bidders Consent After Making Bid Validity Extension A Condition For Evaluation: Patna High Court

The Patna High Court has held that a tendering authority, after expressly making extension of bid validity a condition for consideration of a tender, cannot proceed to evaluate the bid where the bidder has not consented to such extension.

A Division Bench of Acting Chief Justice Sudhir Singh and Justice Rajesh Kumar Verma was hearing a writ petition filed by M/s Universal Agro Corporation Ltd. challenging orders blacklisting the firm for allegedly furnishing a forged experience certificate along with its bid.

The dispute arose from E-Tender Notice No. 05/SBD/2022-23 dated 18.05.2022 issued by the Bihar Police Building Construction Corporation for construction of police station buildings in different districts of Bihar. The petitioner participated in the tender for Group No. 19.

Under Clause 8 of the NIT, the bid validity was prescribed as 120 days. The schedule for submission and opening of bids was subsequently modified through corrigenda, with the last date for submission extended to 21.07.2022 and the technical bid scheduled to be opened on 22.07.2022.

The original bid validity expired on 17.09.2022. On 12.01.2023, the respondent-Corporation emailed the petitioner seeking extension of the bid validity up to 31.03.2023. The email specifically stated that in case the petitioner failed to extend the bid validity, the tender would not be considered.

The petitioner did not consent to the extension.

Despite this, the technical bid was opened on 13.04.2023 and was rejected during technical evaluation. Subsequently, one of the experience certificates submitted with the bid was reported to be non-genuine. An FIR was registered in connection with the allegation under Sections 467, 468, 471, 420, 120-B and 511 of the IPC.

On 22.06.2023, the Chief Engineer blacklisted the petitioner-firm for an indefinite period under the Bihar Contractors Registration Rules, 2007. The order was subsequently modified on 03.07.2023, fixing the period of blacklisting at five years with retrospective effect from 21.07.2022. The petitioner's appeal was rejected on 13.12.2023, with the blacklisting also extended to other organisations, corporations, departments and institutions.

The petitioner contended that since it had never consented to the extension of the bid validity, its bid had ceased to remain valid and could not thereafter have been opened or evaluated. It was further submitted that the blacklisting proceedings were founded on documents considered during this subsequent evaluation.

The respondents, on the other hand, argued that the alleged misconduct was complete when the petitioner submitted the disputed experience certificate along with its bid during the prescribed period. Therefore, according to the respondents, the subsequent expiry of the bid validity could not efface the alleged misconduct.

The High Court examined Clause 15.2 of the Standard Bidding Document and observed:

“A plain reading of the aforesaid provision makes it clear that while the Employer is entitled to request the bidders to extend the period of validity of their bids, the bidder is not bound to accept such request.”

The Court noted that the provision expressly recognised the bidder's right to refuse an extension without forfeiting the bid security. Thus, extension of bid validity was not unilateral and required the bidder's response.

The Court found that the Corporation's communication dated 12.01.2023 had made consideration of the petitioner's tender conditional upon extension of its validity. The communication stated that the extension was required “so that your tender can be considered” and further stipulated that, without such extension, the tender would not be considered.

The Court recorded:

“It is not in dispute that the petitioner did not furnish its consent to extend the validity of its bid upto 31.03.2023. Consequently, there was no consensual extension of the bid validity in terms of Clause 15.2.”

The Court held that once the petitioner had not agreed to the extension, the consequence expressly stipulated by the respondents was that the tender would not be considered.

However, the respondents subsequently proceeded with consideration and evaluation of the technical bid and relied upon the documents submitted with the bid for initiating the blacklisting proceedings.

The Court held:

“The respondents, however, proceeded thereafter with the consideration and evaluation of the petitioner's technical bid and ultimately relied upon the documents submitted by the petitioner for initiating the proceedings which culminated in the impugned orders of blacklisting. In our considered view, such action cannot be sustained.”

The Court rejected the respondents' argument that submission of the alleged forged certificate during the original validity period was sufficient to sustain the subsequent action. While acknowledging that submission of a forged or false document, if established, is a serious matter, the Court held that the question before it was whether the respondents could evaluate a bid after expressly stating that it would not be considered without an extension which the bidder had not provided.

The Court answered this question in the negative:

“The answer, in the facts of the present case, has to be in the negative.”

The Court clarified that it was not holding that expiry of bid validity by itself extinguishes every consequence arising from an act committed during the subsistence of the bid. Rather, the conclusion was based on the respondents' own representation that extension of bid validity was a condition for consideration.

The Court observed:

“Having made extension of bid validity a condition for consideration of the petitioner's tender and having expressly stated that, in the event of failure to extend the validity, the tender would not be considered, the respondents could not thereafter proceed contrary to that stipulation.”

It further emphasised:

“A administrative authority cannot disregard the very stipulation upon the basis of which it had called upon the bidder to make a conscious choice.”

The Court also clarified that it was not required to record any final finding on whether the disputed experience certificate was genuine or forged, as that allegation was already the subject matter of criminal proceedings. The issue before the Court was confined to the legality of the administrative action based on evaluation of the petitioner's bid after its validity had expired without the petitioner's consent.

Accordingly, the High Court allowed the writ petition and quashed Memo No. HQ2203 dated 22.06.2023, Memo No. HQ2288 dated 03.07.2023 and the appellate order bearing Memo No. HQ4601 dated 13.12.2023.

Case Title: M/S Universal Agro Corporation Ltd. v. The Bihar Police Building Construction Corporation

Case Number: Civil Writ Jurisdiction Case No. 5267 of 2026

Appearance:

For the Petitioner/s: Mr. Kundan Kumar Sinha, Advocate

For the Respondent/s: Mr. Prasoon Sinha, Advocate; Mr. Aditya Narayan Singh, Advocate; Mr. Kundan Kumar Sinha, Advocate; Mr. Kumar Anjaneya Shanu, Advocates