[Cites 12, Cited by 0]
Patna High Court
The State Of Bihar vs M/S Kumar And Kumar Through Its ... on 9 April, 2026
Author: Harish Kumar
Bench: Harish Kumar
IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.320 of 2025
In
Civil Writ Jurisdiction Case No.7771 of 2017
======================================================
1. The State of Bihar through Principal Secretary, Home Department,
Government of Bihar, Patna.
2. Director General of Police, Bihar, Patna.
3. Assistant to Deputy Inspector General of Police Q, Office of Director
General of Police, Bihar Patna.
4. Deputy Inspector General of Police Protection Special Branch, Bihar, Patna.
... ... Appellant/s
Versus
1. M/s Kumar and Kumar through Its Proprietor Raj Kuma Gupta @ R. K.
Gupta Son of Sri Radha Prasad Gupta, Resident of Bibiganj, Danapur Cantt,
Banbasti, P.O. and P.S. Danapur Cantt and District- Patna.
2. Inspector General of Police Provision, Office of Director General of Police,
Bihar, Patna.
3. Superintendent of Police Protection Bihar, Patna.
4. Sri Raj Kumar Gupta @ R.K. Gupta, Proprietor of M/S Kumar and Kumar,
Son of Sri Radha Prasad Gupta, Resident of Bibiganj, Danapur Cantt,
Banbasti, P.O. and P.S. Danapur Cantt and District- Patna.
... ... Respondent/s
======================================================
Appearance :
For the Appellant/s : Mr. P K Shahi, Advocate General
Mr. N H Khan, SC-1
Mr. Md. Irshad, AC to SC-1
Mr. M H Kuraishi, AC to SC-1
For the Respondent/s : Mr. Madan Mohan, Adv.
For the Res. Nos. 1 & 2 : Mr. Ganpati Trivedi, Sr. Adv.
Mr. Saurabh Suman, Adv.
Mr. Ritik Shah, Adv.
Mr. Rahul Raj, Adv.
======================================================
CORAM: HONOURABLE THE CHIEF JUSTICE
and
HONOURABLE MR. JUSTICE HARISH KUMAR
ORAL JUDGMENT
(Per: HONOURABLE THE CHIEF JUSTICE)
Date : 09-04-2026
This Letters Patent Appeal has been filed by the State
of Bihar, challenging the order dated 18.11.2024 passed by the
learned Single Judge in C.W.J.C. No. 7771 of 2017 in allowing
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
2/27
the writ petition and setting aside the order passed in Memo No.
3408 dated 16.03.2017 as well as notice inviting tender vide
Notice No. 02/2017-18.
2. Writ petition was filed by M/s. Kumar and Kumar
represented through its proprietor Raj Kumar Gupta, seeking
quashing of the order passed by the Inspector General of Police
contained in Memo No. 3408 dated 16.03.2017, whereby he
cancelled the previous tender no. 7/2008-09, which was
approved in favour of the petitioner's firm for the purpose of
sale of empty cartridges stored at Munger Gun Factory, Munger,
with a further information that fresh tender would be issued for
the said purpose.
Further prayer has been made by the petitioner firm
for a direction to the respondent to abide by the previously
approved tender as the delay was not caused at the instance of
the petitioner firm and to restrain the respondent authorities
from proceeding with the fresh notice inviting tender, which has
been previously issued in favour of the petitioner firm.
3. Briefly stated, a notice inviting tender was floated
for the purpose of sell of empty cartridges stored in Munger Gun
Factory and the petitioner firm submitted its quotation to the
Assistant of Inspector General of Police (Q), Bihar, Patna along
with all necessary documents required for such purpose and
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
3/27
National Saving Certificate of Rupees One Lakh as security.
Several firms also submitted tender papers and after scrutiny, the
petitioner firm was approved for the purpose of sale of empty
cartridges at the rate of Rs. 241.11/- paise per kg. The Assistant
to Inspector General of Police (Q) was informed vide letter
dated 17.10.2008 that the sale of empty cartridges, is to be
conducted under the supervision of Superintendent of Police
(Protection), Special Branch, Bihar, Patna and the petitioner
firm was to take possession of such empty cartridges after
weightment thereof and making payment of the sale value.
4. It is the further case of the petitioner firm that the
Deputy Inspector General of Police (Protection), Special
Branch, Bihar, Patna constituted a committee of four members,
presided by Deputy Superintendent of Police, Special Branch
Headquarters, Bihar, Patna for the purpose of disposal of empty
cartridges stored at the gun factory, situated at Munger on
09.01.2009
with a direction to the members of the Committee to
be present on the occasion. Since there was some health issues,
the petitioner firm through its proprietor requested the Deputy
Inspector General of Police, Special Branch for extending the
date of measurement of empty cartridges after 15 th February,
2009, and the request was accepted and the measurement of
empty cartridges was deferred and the petitioner's firm was
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
communicated by the concerned authorities to remain present on
20.03.2009 at Gun Factory, Munger for the purpose of
measurement of empty cartridges vide letter dated 06.03.2009.
5. It is the further case of the petitioner that the
proprietor of the petitioner firm appeared before the
Superintendent of Police on the date fixed i.e. on 20.03.2009,
however, he submitted an application requesting again to defer
the measurement work after 5th or 6th of April, 2009. The request
was accepted and the Superintendent of Police (Protection),
Special Branch, Bihar, Patna fixed the date of measurement to
06.04.2009. However, in view of the Parliamentary Election as
well as deployment of police force, the measurement work
which was supposed to be conducted on 06.04.2009 could not
be done and it was intimated to the petitioner firm that the date
would be communicated to him after the completion of
Parliamentary Election. The petitioner firm was again intimated
by the authority that in connection with some security works of
the VVIP, the measurement of the empty cartridges could not be
conducted, which was scheduled to be held on 09.06.2009 and
another date would be communicated to him.
6. It is the further case of the petitioner that thereafter
he submitted repeated representations to the concerned authority
for fixing an early date for measurement of the empty cartridges,
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
for which his tender had been approved. However, he received
no response from the authorities. In the meanwhile, all of a
sudden, he came to know that the previous tender has been
cancelled and a decision has been taken to issue a fresh tender,
as after lapse of eight years since 2009, the quantity of empty
cartridges in different districts stored in the Ordinance Factory,
Munger has increased to a great extent and the price thereof had
also multiplied.
7. It is the further case of the petitioner that the
measurement could not take place due to the fault of the
petitioner firm, rather the delay was caused at the instance of the
authorities themselves for not holding the measurement and
deferring the same on some ground or the other and inspite of
his repeated representations before the authorities, no response
was received and all of a sudden the tender issued in his favour
of was cancelled and a new tender has been floated illegally.
According to the petitioner, the action of the respondent
authorities is illegal, arbitrary and tainted with malice and the
ground of financial loss to the Government exchequer cannot be
sustained in the eyes of law.
8. After issuance of notice, counter affidavit has been
filed on behalf of respondent no. 2 to 5, wherein it is stated inter
alia that total number of six firms participated in the tender and
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
since the cost rate of the petitioner firm was maximum, his name
was recommended by the C.P.C. for selling of the empty
cartridges. However, it is stated that at the first instances, when
the authorities were ready for conducting the measurement and
to hand over the materials to the petitioner firm, the petitioner
sought time on the ground of extreme cold and that labourers
were not ready and his request was accepted and the disposal
work of the empty cartridges was postponed. Thereafter, when
another date was fixed, again a request came from the petitioner
firm for deferment and that was also accepted.
9. It is the case of the respondents that according to
the agreement, six months has been fixed for the authorized
contractor, which was supposed to end on 17.04.2009 and since
the petitioner firm continuously delayed to co-operate with the
authorities for disposal of the empty cartridges, the materials
could not be handed over to him. Thereafter, on account of
Parliament Election, 2009 and for other reasons, the authorities
remained busy.
10. It is also highlighted in the counter affidavit that
another tender bearing no. 08/2011-12 was published by the
Police Headquarters, Bihar, Patna for supply of iron folding cot
to Bihar Police and the petitioner firm participated in the tender,
but due to commission of forgery, a decision was taken and the
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
petitioner firm was declared black-listed vide order dated
21.12.2011.
11. It is further emphasized in the counter affidavit
that during the period of eight years, a large quantity of
additional empty cartridges had gathered and the cost of
cartridges rate had gone up and, therefore, keeping in view the
basic tenets of the financial rules i.e. transparency, economy and
competitiveness, the previous tender was cancelled and a fresh
tender was published vide Memo No. 3408/S dated 16.03.2017.
12. The petitioner submitted his rejoinder to the
counter affidavit filed by the respondent nos. 2 and 3 and also
filed a supplementary affidavit.
13. The learned Single Judge after considering the
pleadings and also the submissions of the learned Counsel for
the respective parties has been pleased to observe as follows:-
"8. Heard the Learned counsel
for the petitioner as well as the Learned
counsel for the respondents and perused
the records.
9. On perusal of the record, it
is evident that the petitioner has requested
twice for time which was granted by the
respondent. Pursuant to the petitioner's
request, the Superintendent of Police
(Protection) Special Branch, Bihar, Patna
by order contained in memo dated
16.03.2009 fixed the date of measurement
on 06.04.2009 and also directed the
Deputy Superintendent of Police vide
letter dated 25.03.2009 to make all
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
necessary arrangement for completion of
the measurement work of empty
cartridges at Gun factory Munger and
issued necessary gate pass for the
labourersof the petitioner. However, the
Superintendent of Police, (G), Special
Branch, Bihar, Patna under his letter
dated 06.04.2009 (Annexure-10)
adjourned the measurement process till
further orders keeping in view the
Parliamentary Election with a content
that the date for disposal of empty
cartridges would be informed at a later
stage. The impugned order do not
dislcose that the tender was cancelled due
to lapse of six months time as per
condition No. 5 of the notice inviting
tender. On perusal of condition No. 5 of
notice to inviting tender the Director
General of Police would be the competent
authority to take a decision, but it
appears that the Director General of
Police has not passed any order. It also
appears from the record that on last
occasion, the respondent authorities
deferred the matter themselves for the
measurement of the empty cartridges,
stored at the Gun Factory Munger due to
Parliamentary Election and thereafter
took a plea of lapse of six months time as
per condition No. 5 of the notice inviting
tender.
10. In view of the discussion it
is evident that the respondents,
unilaterally cancelled the tender for no
fault of the petitioners and the impugned
order under challenge is liable to be
quashed."
14. The learned Advocate General argued that on
17.10.2008, the tender of the petitioner firm was approved for
the sale of empty cartridges and the period of six months was
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
completed by 17.04.2009 and two dates i.e. 09.01.2009 and
20.03.2009 were fixed by the Bihar Police Headquarters, Patna
for weighing the empty cartridges. However, on both the dates,
the petitioner firm requested on some ground to defer the
weighing of the empty cartridges and thereafter, the authorities
remained busy in Lok Sabha Election and VVIP's security and
for that, the process of weighing of the empty cartridges could
not be completed on the next scheduled fixed date i.e. on
06.04.2009. He argued that the approach of the petitioner firm
was delaying the weighing of the empty cartridges and the
authorities cannot be said to be at fault.
15. The learned Advocate General further argued that
the petitioner firm could have approached this Court earlier, if
he had a bona fide grievance but only submitted representation
before the authorities, which according to him was not acted
upon but there was gross delay on his part in approaching this
Court in the year 2017. It is further argued that the price has
gone up substantially and the State would suffer huge loss, if at
the old rate the petitioner firm is provided the empty cartridges
as per the tender floated and it would not be in the public
interest.
16. It is also argued that since there is no arbitrariness
and mala fide in the conduct of the respondents in inviting the
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
fresh tender, the learned Single Judge was not justified in
allowing the writ petition and quashing the orders dated
16.03.2017 and also the notice inviting tender. Reliance has also
been placed upon the decision of the Hon'ble Supreme Court in
the case of Kisan Sahkari Chini Mills Ltd. & Ors. -Vrs.-
Vardan Linkers & Ors. reported in (2008) 12 Supreme Court
Cases 500.
17. Learned Senior Counsel Mr. Ganpati Trivedi,
appearing for the respondents, on the other hand, supported the
impugned judgment and submitted that though the petitioner
firm has taken time on two occasions, requesting deferment of
the measurement of the empty cartridges, but thereafter, the
petitioner firm was all along ready and willing to co-operate, but
the authorities did not take any step in completing their part and
the petitioner firm has also submitted number of representations
for such purpose. He further argued that the issuance of fresh
tender would not only cause financial loss to the petitioner firm,
but it would be detrimental to him and it would also not be in
the interest of justice. He contended that the decisions of the
authorities were illegal, arbitrary and capricious. He placed
reliance on the decision of Subodh Kumar Singh Rathour
-Vrs.- Chief Executive Officer & Ors., reported in AIR 2024
Supreme Court 3784. The relevant paragraphs are quoted
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
hereinbelow:-
"116. We may again refer to the
decision of this Court in M.P. Power
Management Co. [M.P. Power
Management Co. Ltd. v. Sky Power
Southeast Solar India (P) Ltd., (2023) 2
SCC 703] wherein this Court observed
that merely because the rates embodied in
a contract with the passage of time have
become less appealing, the same cannot
become a determinative criterion for
either terminating the contract or for the
courts to decline interference in such
contractual disputes. The relevant
observations read as under: (SCC pp.
779-80, paras 138-40)
"138. Therefore, on a conspectus of the
case law, we find that the concept of
overwhelming public interest has
essentially evolved in the context of cases
relating to the award of contract by the
State. It becomes an important
consideration in the question as to
whether then the State with whatever free
play it has in its joints decides to award a
contract, to hold up the matter or to
interfere with the same should be
accompanied by a careful consideration of
the harm to public interest. We do not go
on to say that consideration of public
interest should not at all enter the mind of
the court when it deals with a case
involving repudiation of a claim under a
contract or for that matter in the
termination of the contract. However,
there is a qualitative....
139. ... State enters into the contract,
rights are created. If the case is brought to
the constitutional court and it is invited to
interfere with State action on the score
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
that its action is palpably arbitrary, if the
action is so found then an appeal to public
interest must be viewed depending on the
facts of each case. If the aspect of public
interest flows entirely on the basis that the
rates embodied in the contract which is
arbitrarily terminated has with the
passage of time become less appealing to
the State or that because of the free play of
market forces or other developments, there
is a fall in the rate of price of the services
or goods then this cannot become
determinative of the question as to
whether the Court should decline
jurisdiction. In this case, it is noteworthy
that the rates were in fact settled on the
basis of international competitive bidding
and in which as many as 182 bidders
participated and the rate offered by the
first respondent was undoubtedly the
lowest. The fact that power has become
cheaper in the market subsequently by
itself should not result in non-suiting of
the complaint of the first respondent, if it
is found that a case of clear arbitrariness
has been established by the first
respondent.
140. In other words, public interest cannot
also be conflated with an evaluation of the
monetary gain or loss alone."
(emphasis supplied)
x x x
118. Considerations of public
interest should not be narrowly confined
to financial aspects. The courts must have
a more holistic understanding of public
interest wherever the fairness of public
authorities is in question, giving due
regard to the broader implications of such
action on the stability of contractual
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
obligations. Merely because the financial
terms of a contract are less favourable
over a period of time does not justify its
termination. Such decisions must be based
on a careful consideration of all relevant
factors, including the potential harm to the
integrity and sanctity of contractual
relationships. The larger interest of
upholding contracts cannot be discarded
in the name of monetary gain labelled as
public interest.
x x x
127. Public tenders are designed to
provide a level playing field for all
potential bidders, fostering an
environment where competition thrives,
and the best value is obtained for public
funds. The integrity of this process ensures
that public projects and services are
delivered efficiently and effectively,
benefitting society at large. The principles
of transparency and fairness embedded in
public tender processes also help to
prevent corruption and misuse of public
resources. In this regard we may refer to
the observations made by this Court in
Nagar Nigam, Meerut v. Al Faheem Meat
Exports (P) Ltd. [Nagar Nigam, Meerut v.
Al Faheem Meat Exports (P) Ltd., (2006)
13 SCC 382] , which reads as under:
(SCC p. 395, para 16)
"16. The law is well settled that contracts
by the State, its corporations,
instrumentalities and agencies must be
normally granted through public
auction/public tender by inviting tenders
from eligible persons and the notification
of the public auction or inviting tenders
should be advertised in well-known dailies
having wide circulation in the locality with
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
all relevant details such as date, time and
place of auction, subject-matter of
auction, technical specifications,
estimated cost, earnest money deposit, etc.
The award of government contracts
through public auction/public tender is to
ensure transparency in the public
procurement, to maximise economy and
efficiency in government procurement, to
promote healthy competition among the
tenderers, to provide for fair and equitable
treatment of all tenderers, and to eliminate
irregularities, interference and corrupt
practices by the authorities concerned.
This is required by Article 14 of the
Constitution."
(emphasis supplied)
128. The sanctity of public tenders
lies in their role in upholding the
principles of equal opportunity and
fairness. Once a contract has come into
existence through a valid tendering
process, its termination must adhere
strictly to the terms of the contract, with
the executive powers to be exercised only
in exceptional cases by the public
authorities and that too in loathe. The
courts are duty bound to zealously protect
the sanctity of any tender that has been
duly conducted and concluded by ensuring
that the larger public interest of upholding
bindingness of contracts are not sidelined
by a capricious or arbitrary exercise of
power by the State. It is the duty of the
courts to interfere in contractual matters
that have fallen prey to an arbitrary action
of the authorities in the guise of technical
faults, policy change or public interest,
etc.
129. The sanctity of contracts is a
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
fundamental principle that underpins the
stability and predictability of legal and
commercial relationships. When public
authorities enter into contracts, they
create legitimate expectations that the
State will honour its obligations. Arbitrary
or unreasonable terminations undermine
these expectations and erode the trust of
private players from the public
procurement processes and tenders. Once
a contract is entered, there is a legitimate
expectation, that the obligations arising
from the contract will be honoured and
that the rights arising from it will not be
arbitrarily divested except for a breach or
non-compliance of the terms agreed
thereunder. In this regard we may make a
reference to the decision of this Court in
Sivanandan C.T. v. High Court of Kerala
[Sivanandan C.T. v. High Court of Kerala,
(2024) 3 SCC 799 : (2024) 1 SCC (L&S)
67] wherein it was held that a promise
made by a public authority will give rise
to a legitimate expectation that it will
adhere to its assurances. The relevant
portion reads as under: (SCC pp. 812 &
822, paras 18 & 45)
"18. The basis of the doctrine of
legitimate expectation in public law is
founded on the principles of fairness and
non-arbitrariness in Government dealings
with individuals. It recognises that a
public authority's promise or past conduct
will give rise to a legitimate expectation.
The doctrine is premised on the notion
that public authorities, while performing
their public duties, ought to honour their
promises or past practices. The legitimacy
of an expectation can be inferred if it is
rooted in law, custom, or established
procedure. [Salemi v. MacKeller (No. 2),
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
1977 HCA 26 : (1977) 137 CLR 396]
x x x
45. The underlying basis for the
application of the doctrine of legitimate
expectation has expanded and evolved to
include the principles of good
administration. Since citizens repose their
trust in the State, the actions and policies
of the State give rise to legitimate
expectations that the State will adhere to
its assurance or past practice by acting in
a consistent, transparent, and predictable
manner. The principles of good
administration require that the decisions
of public authorities must withstand the
test of consistency, transparency, and
predictability to avoid being regarded as
arbitrary and therefore violative of Article
14."
(emphasis supplied)
18. Adverting to the contentions raised by the learned
Counsel for the respective parties and on perusal of the records,
it is evident that in the notice inviting tender i.e. Annexure-J
dated 14.08.2008 issued by Director General of Police, Bihar,
especially Clause 5 thereof, it was specifically stipulated that the
empty cartridges shall be mandatorily lifted within six months
by the successful firm from the date of the order, failing which
the penal cost shall be realized in this regard. Clause 6 further
stipulated that the Director General of Police shall reserve the
right to cancel the tender without assigning any reason.
19. Admittedly, during such period of six months, on
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
the request made by the petitioner firm, the measurement of
empty cartridges could not be held twice and thereafter, the
authorities concerned remained busy in general elections and
other duties. If the petitioner firm was genuinely ready thereafter
and for which he submitted the representation and no response
was received from the authorities to carry out the measurement
and to hand over the empty cartridges as per the tender, then the
petitioner firm could have approached this Court at the earliest.
Going on filing the representations, would not save the delay
and it is the well settled principle of law that this Court may
refuse to grant relief to a party, whose conduct suffers from
delay and laches.
20. In the case of Mrinmoy Maity -Vrs.- Chhanda
Koley & Ors., reported in (2024) 15 Supreme Court Cases 215,
the Hon'ble Supreme Court has observed as follows:-
"11. For filing of a writ
petition, there is no doubt that no fixed
period of limitation is prescribed.
However, when the extraordinary
jurisdiction of the writ court is invoked, it
has to be seen as to whether within a
reasonable time same has been invoked
and even submitting of memorials would
not revive the dead cause of action or
resurrect the cause of action which has
had a natural death. In such
circumstances on the ground of delay and
laches alone, the appeal ought to be
dismissed or the applicant ought to be
non-suited. If it is found that the writ
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
petitioner is guilty of delay and laches,
the High Court ought to dismiss the
petition on that sole ground itself,
inasmuch as the writ courts are not to
indulge in permitting such indolent
litigant to take advantage of his own
wrong. It is true that there cannot be any
waiver of fundamental right but while
exercising discretionary jurisdiction
under Article 226, the High Court will
have to necessarily take into
consideration the delay and laches on the
part of the applicant in approaching a
writ court."
21. All the more after going through the pleadings in
the writ petition as well as the counter affidavit, we are of the
view that no fault can be found with the authorities concerned so
far as the delay is concerned, rather we are of the view that the
petitioner firm should have approached this Court within a
reasonable period, knowing very well that the validity of tender
period was only for six months and there was no specific
stipulation for relaxation of the period. Further, there is no
dispute that the cost of the material/brass, which was used in
that empty cartridges had gone up substantially in the meantime
and the quantity has also increased by passage of time.
22. In the case of Kisan Sahkari Chini Mills Ltd.
(supra), the Hon'ble Supreme Court has been pleased to hold as
follows:-
"45. The various serious
irregularities were noticed by the
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
Secretary (Sugar) in his detailed and
reasoned order dated 24-4-2004 and
resultantly, he directed cancellation of the
letter dated 26-3-2004 issued by the
Assistant Cane Commissioner which
permitted the first respondent to lift
85,000 quintal of molasses from five mills.
He also held that there was no valid
contract. In the facts and circumstances
narrated hereinabove, it is not legally
possible to hold that the order dated 24-4-
2004 was either arbitrary or
unreasonable or mala fide. It was fully
justified and in public interest. If the order
dated 24-4-2004 did not suffer from an
infirmity which required correction by
application of principles of administrative
law, the High Court ought not to have
interfered with it. There was, apparently,
no justification for invoking the principles
of legitimate expectations, estoppel,
acquiescence and principle of part
performance to make out a contract
where none existed, or to give directions
to five independent sugar mills to supply
huge quantities of molasses to the first
respondent without any contract at an
admittedly low price of Rs 127 per
quintal."
23. After hearing the learned Counsel for the
respective parties, we are of the view that if a tender period
lapses without a formal extension, the contract is considered to
have naturally terminated; hence it cannot be said that the action
of the appellants in cancelling the earlier tender and deciding to
hold a fresh tender was arbitrary and there is any kind of mala
fide in it. If such quantity would be put to fresh tender, it would
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
definitely fetch more money and that is one of the reasons for
which the decision had been taken to float a new tender.
24. The Hon'ble Supreme Court in the case of
Principal Chief Conservator of Forest & Ors. -Vrs.- Suresh
Mathew & Ors., reported in (2025) Supreme Court Cases
OnLine SC 933, in context of scope of judicial review in tender
matters and Government being the State Exchequer has
observed as follows:-
"16. The question of scope of
judicial review in the cases of award of
contracts has already been dealt with by
the Hon'ble Supreme Court in the case of
Jagdish Mandal v. State of Orissa wherein
the Court observed as under:
"22. Judicial review of
administrative action is intended to
prevent arbitrariness, irrationality,
unreasonableness, bias and mala fides. Its
purpose is to check whether choice or
decision is made "lawfully" and not to
check whether choice or decision is
"sound". When the power of judicial
review is invoked in matters relating to
tenders or award of contracts, certain
special features should be borne in mind.
A contract is a commercial transaction.
Evaluating tenders and awarding
contracts are essentially commercial
functions. Principles of equity and natural
justice stay at a distance. If the decision
relating to award of contract is bonafide
and is in public interest, courts will not, in
exercise of power of judicial review,
interfere even if a procedural aberration
or error in assessment or prejudice to a
tenderer, is made out. The power of
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
judicial review will not be permitted to be
invoked to protect private interest at the
cost of public interest or to decide
contractual disputes. The tenderer or
contractor with a grievance can always
seek damages in a civil court. Attempts by
unsuccessful tenderers with imaginary
grievances, wounded pride and business
rivalry, to make mountains out of
molehills of some technical/procedural
violation or some prejudice to self, and
persuade courts to interfere by exercising
power of judicial review, should be
resisted. Such interferences, either interim
or final, may hold up public works for
years, or delay relief and succour to
thousands and millions and may increase
the project cost manifold. Therefore, a
court before interfering in tender or
contractual matters in exercise of power
of judicial review should pose to itself the
following questions:
(i) Whether the process
adopted or decision made by the authority
is mala fide or intended to favour
someone;
Or
Whether the process adopted
or decision made is so arbitrary and
irrational that the Court can say:"the
decision is such that no responsible
authority acting reasonably and in
accordance with relevant law could have
reached.
(ii) Weather public interest is
affected.
If the answers are in the
negative, there should be no interference
under Article 226. Cases involving
blacklisting or imposition of penal
consequences on a tenderer/contractor or
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
distribution of State largesse (allotment of
sites/shops, grant of licenses, dealerships
and franchises) stand on a different
footing as they may require a higher
degree of fairness in action."
17. In the case of State of
Orissa v. Harinarayan Jaiswal, in relation
to excise revenue, the Supreme Court
observed as under:
"13. ... The Government is the
guardian of the finances of the State. It is
expected to protect the financial interest
of the State. Hence quite naturally, the
Legislature has empowered the
Government to see that there is no
leakage in its revenue. It is for the
Government to decide whether the price
offered in an auction sale is adequate.
While accepting or rejecting a bid, it is
merely performing an executive function.
The correctness of its conclusion is not
open to judicial review. We fail to see how
the plea of contravention of Article 19(1)
(g) and Article 14 can arise in these
cases..."
18. The law regarding
government contracts or auctions and the
nature and scope of its judicial review is
well settled. In the case of Michigan
Rubber (I) Ltd. v. State of Karnataka, the
Supreme Court observed as under:
"23. From the above decisions, the
following principles emerge:
(a) The basic requirement of
Article 14 is fairness in action by the
State, and non-arbitrariness in essence
and substance is the heartbeat of fair
play. These actions are amenable to the
judicial review only to the extent that the
State must act validly for a discernible
reason and not whimsically for any
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
ulterior purpose. If the State acts within
the bounds of reasonableness, it would be
legitimate to take into consideration the
national priorities;
(b)Fixation of a value of the
tender is entirely within the purview of the
executive and the courts hardly have any
role to play in this process except for
striking down such action of the executive
as is proved to be arbitrary or
unreasonable. If the Government acts in
conformity with certain healthy standards
and norms such as awarding of contracts
by inviting tenders, in those
circumstances, the interference by courts
is very limited;
(c) In the matter of formulating
conditions of a tender document and
awarding a contract, greater latitude is
required to be conceded to the State
authorities unless the action of the
tendering authority is found to be
malicious and a misuse of its statutory
powers, interference by courts is not
warranted;
(d) Certain preconditions or
qualifications for tenders have to be laid
down to ensure that the contractor has the
capacity and the resources to successfully
execute the work; and
(e) If the State or its
instrumentalities act reasonably, fairly
and in public interest in awarding
contract, here again, interference by court
is very restrictive since no person can
claim a fundamental right to carry on
business with the Government."
19. In the case of Tata Cellular
v. Union of India, the Supreme Court
emphasised the need to find a right
balance between administrative discretion
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
to decide the matters on the one hand,
and the need to remedy any unfairness on
the other, and observed:
"94. (1) The modern trend points
to judicial restraint in administrative
action.
(2) The court does not sit as a
court of appeal but merely reviews the
manner in which the decision was made.
(3) The court does not have the
expertise to correct the administrative
decision. If a review of the administrative
decision is permitted it will be
substituting its own decision, without the
necessary expertise, which itself may be
fallible.
(4) The terms of the invitation
to tender cannot be open to judicial
scrutiny because the invitation to tender
is in the realm of contract.
(5) The Government must have
freedom of contract. In other words, a fair
play in the joints is a necessary
concomitant for an administrative body
functioning in an administrative sphere or
quasi-administrative sphere. However, the
decision must not only be tested by the
application of Wednesbury principle of
reasonableness (including its other facts
pointed out above) but must be free from
arbitrariness not affected by bias or
actuated by mala fides.
(6) Quashing decisions may
impose heavy administrative burden on
the administration and lead to increased
and unbudgeted expenditure."
x x x
22. ............However, we are of
the opinion that the said observations by
the High Court are contrary to the settled
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
principles of law laid down by the
Supreme Court that the Government is the
protector of financial resources of the
state and thus, it has every right to cancel
and call for fresh tender if it is in the
nature of protecting the financial interests
of the State."
(emphasis supplied)
25. In the case of State of Jharkhand & Ors. -Vrs.-
CWE-SOMA Consortium reported in (2016) 14 Supreme Court
Cases 172, the Hon'ble Supreme Court has observed as
follows:-
"22. The Government must
have freedom of contract. In Master
Marine Services (P) Ltd. v. Metcalfe &
Hodgkinson (P) Ltd. [Master Marine
Services (P) Ltd. v. Metcalfe &
Hodgkinson (P) Ltd., (2005) 6 SCC 138] ,
SCC in para 12 this Court held as under:
(SCC p. 147)
"12. After an exhaustive
consideration of a large number of
decisions and standard books on
administrative law, the Court enunciated
the principle that the modern trend points
to judicial restraint in administrative
action. The court does not sit as a court of
appeal but merely reviews the manner in
which the decision was made. The court
does not have the expertise to correct the
administrative decision. If a review of the
administrative decision is permitted it will
be substituting its own decision, without
the necessary expertise, which itself may
be fallible. The Government must have
freedom of contract. In other words, fair
play in the joints is a necessary
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
concomitant for an administrative body
functioning in an administrative sphere or
quasi-administrative sphere. However, the
decision must not only be tested by the
application of Wednesbury principles of
reasonableness but also must be free from
arbitrariness not affected by bias or
actuated by mala fides. It was also
pointed out that quashing decisions may
impose heavy administrative burden on
the administration and lead to increased
and unbudgeted expenditure. (See para
113 of the Report, SCC para 94.)"
26. We are of the humble view that since there was no
illegality committed by the authorities in cancelling the tender
on account of passage of time and since admittedly, during the
relevant period, the petitioner firm did not come forward to
receive the goods, rather took time on some pretext or the other
which was also granted to him and, moreover, since he
approached this Court about seven to eight years thereafter, and
went on filing representation after representation and by floating
the new tender, there would benefit to the State exchequer and
the same is necessary for public interest, the learned Single
Judge was not justified in entertaining such writ petition and
also passing the impugned order. The order passed by the
learned Single Judge suffers from palpable unreasonableness
and there is perversity in it and therefore, in exercise of the
appellate jurisdiction, we have to correct the same and
Patna High Court L.P.A No.320 of 2025 dt.09-04-2026
accordingly, the impugned order stands quashed.
27. However, the security money, which has been
deposited by the petitioner firm amounting to Rs. One Lakh
shall be refunded to him within a period of four weeks from
today, with 6.5% interest per annum from the date of deposit till
the date of actual payment.
28. Accordingly, the LPA stands allowed with the
direction, afore-noted.
(Sangam Kumar Sahoo, CJ)
(Harish Kumar, J)
shivank/-
AFR/NAFR AFR
CAV DATE NA
Uploading Date 11.04.2026
Transmission Date NA
