Bidder Who Furnished Unconditional Undertaking To Execute Work Cannot Challenge Letter Of Acceptance Subsequently: Patna High Court
The Patna High Court has held that a bidder who had voluntarily furnished an affidavit and undertaking expressing its unconditional willingness to execute the work at the quoted rate, and on the basis of which the Letter of Acceptance was issued, cannot subsequently challenge the validity of the Letter of Acceptance on grounds of want of jurisdiction and expiry of the bid validity period.
A Division Bench of Acting Chief Justice Sudhir Singh and Justice Rajesh Kumar was hearing a writ petition challenging the Letter of Acceptance issued in favour of the petitioner in connection with a tender floated by Bihar Rajya Pul Nirman Nigam Limited (BRPNNL).
The present writ application was filed seeking quashing of the Letter of Acceptance contained in Letter No. 1223 dated 12.06.2025, issued by the Senior Project Engineer, BRPNNL, by which the petitioner was directed to furnish Performance Guarantee and Additional Performance Guarantee amounting to Rs. 4,79,49,408 within a period of 21 days, failing which action under Para 31.3 of the Instructions to Bidders (ITB) was proposed. The petitioner also sought a direction to the respondents to revoke the Letter of Acceptance and return the original Bank Guarantee dated 10.12.2024 furnished towards earnest money deposit.
The writ petition arose out of Notice Inviting Tender No. BRPNNL/WD/KA17/1862/2024 dated 16.11.2024 issued by Bihar Rajya Pul Nirman Nigam Limited for construction of an RCC Bridge (8 × 24.00 m) with approach road over the Parman River from Chandani Chowk to Azmatpur Road in Araria District, having an estimated contract value of Rs. 19,87,12,838. Pursuant to the NIT, the petitioner submitted its bid and furnished Earnest Money Deposit by way of Bank Guarantee No. 15926248G0Y00179 dated 10.12.2024 for Rs. 36,65,000, valid up to 09.06.2025.
Upon opening and evaluation of the financial bids, the petitioner was declared the lowest bidder, having quoted a rate 25.44% below the estimated cost. The grievance of the petitioner was against Letter No. 1233 dated 11.06.2025, communicated on 12.06.2025, issued by the Senior Project Engineer, BRPNNL, Works Division, Katihar, whereby a Letter of Acceptance was issued in favour of the petitioner and the petitioner was directed to furnish Performance Security and Additional Performance Security.
Counsel for the petitioner submitted that the impugned Letter of Acceptance was “wholly without jurisdiction and contrary to the provisions of the Standard Bidding Document”. It was argued that under Clause 30 of the Instructions to Bidders, the Letter of Acceptance was required to be issued by the “Employer” before expiry of the bid validity period. According to the petitioner, the impugned Letter of Acceptance was issued by the Senior Project Engineer, who was merely the Engineer-in-Charge and not the “Employer” as defined under the Contract Data. The petitioner further submitted that the bid validity period of 120 days had expired before issuance of the Letter of Acceptance and, in the absence of any extension of the bid validity in terms of Clause 15.2 of the Instructions to Bidders, the Letter of Acceptance was “non est in the eye of law”.
Opposing the petition, the respondents contended that the petitioner had voluntarily furnished an affidavit and undertaking expressing its willingness to execute the work at the quoted rate and that the Letter of Acceptance was issued on the basis of such representation.
The Court noted that the “limited issue” before it was whether the petitioner, “having voluntarily furnished an affidavit and undertaking expressing its unconditional willingness to execute the work at the quoted rate pursuant to the respondents' request and on the basis whereof the Letter of Acceptance came to be issued, is estopped from challenging the validity of the said Letter of Acceptance on the grounds of want of jurisdiction and expiry of the bid validity period”.
The Court observed that the petitioner had quoted a rate which was 25.44% below the BOQ value. Owing to such substantially lower quoted rate, the respondents, vide Letter No. 954 dated 07.05.2025, called upon the petitioner to furnish justification for the quoted rate. In response, the petitioner, by communication dated 10.05.2025, furnished the requisite rate justification along with an affidavit and undertaking “categorically stating that it was ready and willing to execute the work at its quoted rate with the prescribed technical specifications within the stipulated time”.
The Court noted that the petitioner had “neither pleaded nor established” that the affidavit and undertaking were obtained by fraud, coercion, misrepresentation or any other vitiating circumstance. The undertaking, the Court observed, was furnished voluntarily and without any protest. The Court held:
“Thus, the sequence of events clearly demonstrates that the issuance of the Letter of Acceptance was preceded by and founded upon the petitioner's own unequivocal representation expressing its willingness to execute the work.”
The Court observed that the petitioner had not merely furnished a rate justification but had “voluntarily submitted an affidavit and undertaking unequivocally expressing its readiness and willingness to execute the work at the quoted rate”. The Bench further held:
“Once the petitioner consciously represented its willingness to perform the contract and induced the respondents to act upon such representation, it cannot thereafter be permitted to challenge the Letter of Acceptance on grounds which were available even at the time when the undertaking was furnished.”
The Court observed that if the petitioner was of the view that the bid validity period had expired or that the Senior Project Engineer lacked competence to proceed further, “nothing prevented it from asserting such objections at the stage when the respondents sought the rate justification”. Instead, the Court noted, the petitioner “unequivocally accepted the respondents' request and affirmed its willingness to execute the work”, which amounted to “acquiescence in the continuation of the tender process”.
The Court held that the petitioner, having furnished the affidavit and undertaking expressing unconditional willingness to execute the work and having induced the respondents to issue the Letter of Acceptance on that basis, was precluded from questioning the validity of the Letter of Acceptance on the grounds raised in the writ petition. The Court held that permitting the petitioner to do so would amount to allowing it to “approbate and reprobate in the same transaction, which is impermissible in law”.
Accordingly, the Court answered the issue against the petitioner and dismissed the writ application.
Cause Title: Raj Kishor Singh v. State of Bihar and Ors
Case Number: Civil Writ Jurisdiction Case No. 15034 of 2025
Appearance:
For the Petitioner: Mr. Prabhat Ranjan, Advocate.
For the State: Standing Counsel-9.
For B.R.P.N.N. Ltd.: Mr. P.K. Shahi, Senior Advocate; Mr. Vikas Kumar, Advocate; Mrs. Aradharana Kumari, Advocate and Mr. Akash Deep, Advocate.