Rajasthan High Court - Jodhpur

M/S Kailash Chand Choudhary vs State Of Rajasthan ... on 25 November, 2025

Author: Pushpendra Singh Bhati

Bench: Pushpendra Singh Bhati

[2025:RJ-JD:50910-DB]

      HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
                       JODHPUR
                 D.B. Civil Writ Petition No. 21703/2025

M/s Kailash Chand Choudhary, Through Its Proprietor Kailash
Chand Choudhary S/o Shri Kaluji Choudhary, R/o Vajpura,
Dhariyawad, District Pratapgarh (Raj.).
                                                                           ----Petitioner
                                       Versus
1.        State Of Rajasthan, Through Secretary, Water Resources
          Department, Jaipur (Raj.).
2.        The    Secretary,       Department           Of     Finance,        Govt.    Of
          Rajasthan, Jaipur (Raj.).
3.        The Chief Engineer And Additional Secretary, Water
          Resources Department, Jaipur (Raj.).
4.        Additional     Chief       Engineer,       Water          Resources,     Zone
          Banswara (Raj.).
                                                                      ----Respondents


For Petitioner(s)            :     Mr. Naresh Khatri
For Respondent(s)            :     Dr. Praveen Khandelwal, AAG



     HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

HON'BLE MR. JUSTICE SANJEET PUROHIT

Order

25/11/2025

1. Learned counsel for the parties jointly submit that the

controversy involved in the present writ petition is no more res-

integra and it is covered by the decision rendered by a Division

Bench of this Hon'ble Court in M/s. Choudhary Construction v.

State of Rajasthan & Ors. (D.B. Civil Writ Petition

No.11359/2025) and other connected writ petitions on

03.11.2025. The relevant portion of the judgment reads as

under:-

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"11. The objective of the Act of 2012 is to regulate public procurement to ensure transparency, fairness, and equitable treatment of bidders, promote competition, enhance efficiency and economy and safeguard integrity in the procurement process and for matters connected therewith or incidental thereto.

12. Section 55 of the Act of 2012 is reproduced as under: "55. Power of State Government to make rules.-

(xxvi) provisions relating to bid securities, performance securities, inspection of works, goods and services, modification and withdrawal of bids, and contract management;

13. The said section empowers the State Government to make Rules or a different set of Rules for the purpose of carrying out the provisions of the Act. Rule 55(2)(xxvi) empowers the State government to frame rules relating to bid securities, performance securities, inspection of work, goods and services, modification and withdrawal of goods and contract management. Thus, a bare reading of the Rule clarifies that the State Government is empowered to frame rules specifically in respect of performance securities

14. Further, it nowhere says that there has to be only one performance security. Since the power is vested in the State Government by virtue of the Act to frame a rule, therefore, the introduction of Rule 75-A by the State Government vide Gazette Notification dated 22.10.2021 cannot be said to have been issued without legislative power. Since the legislative power is with the State Government to frame a Rule, the exercise of the power by the State Government cannot be said to be ultra vires. Accordingly, the argument of the petitioner that the rule is ultra vires is untenable as the power to legislate on the provision of 'Performance Securities' is vested with the State Government.

15. So far as the argument of the learned counsel for petitioners with regard to the introduction of Rule 75-A by the State Government as an arbitrary measure for the reason that different measures are already available with the procuring entity is concerned, this Court is of the opinion that the 'Additional Performance Security' is required by the procuring entity only in case where a contractor bids below 15% of the scheduled rate. Quoting a rate below 15% of the scheduled rate always raises a doubt about how a contractor would

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complete the work at a rate that is quoted below 15% of the scheduled rate.

16. This Court is also of the view that if a rate below 15% is quoted, then there are high chances of compromise with the quality of the work and leaving the work without completion by the contractor. Thus, in order to avoid such situation and for healthy competition, there is a requirement of additional performance security to be deposited by the bidder who quotes a rate less than 15% of the scheduled rate. Rule 75-A only mandates the deposit of an additional security by the contractor who has made a bid 15% below the scheduled rate.

17. So far as the argument that petitioner will suffer financial hardship is concerned, this Court finds that no rule can be held to be illegal or ultra vires merely on account of any inconvenience or hardship to a person. This view is supported by the judgment passed in Ramayana Ispat Pvt. Ltd. and Ors. Vs. State of Rajasthan & Ors. :: AIR 2025 SC 2341 wherein the Hon'ble Apex Court has held as under:-

"68. The Jodhpur Bench in common order dated 29.08.2016, which has been challenged before us in Civil Appeals No. 7965 of 2019 and 7966 of 2019, has rightly upheld the validity of the Regulations of 2016 holding that any inconvenience caused or even some hardship faced by the captive power generators shall not make the regulations illegal. The High Court also rightly pointed out that the appellants have failed to establish that the impugned regulations are in contravention of their rights protected under Part-III or any other provision of the Constitution of India or that the regulations have been enacted without having the competence to do so or they are manifestly arbitrary or unreasonable. It has been rightly held by the High Court that the Regulations of 2016 are in consonance with the objects of the Act of 2003 and have been framed as per the competence available under Section 181 read with Section 42 of the Act of 2003"

18. Another argument of the counsel for the petitioners is that Rule 75-A permits the procuring entity to forfeit the Additional Performance Security if there is a delay in execution of the work even in those circumstances where the delay is not attributable to the contractor. This argument is again fallacious as Rule 75-A itself provides that the Additional Performance Security has to be

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refunded back on satisfactory completion of the work by the contractor.

19. Certainly, the said additional performance security is always refundable on the satisfactory completion of the work by the contractor. The demand of additional performance security from the contractor is just to ensure that neither the quality of the work is compromised nor the contractor leaves the work without completing the work. Therefore, this Court finds that the introduction of Rule 75-A is neither ultra vires nor arbitrary as the same is being applied uniformly to all the contractors/bidders who submit the bid below 15% of scheduled rates.

20. In the present bunch of writ petitions, the contractors have approached the Court after having participated in the bid process, which mandated the deposit of additional performance security in case a contractor bids less than 15% of the scheduled rate and only after having been succeeded in the bid, when the demand to deposit of the additional security was made, the present writ petitions were filed. In such circumstances, the conduct of the petitioners also disentitles them from seeking a restraining order for the deposit of additional performance security as the petitioners after having participated in the game cannot challenge the rules of games.

21. Further, since a Co-ordinate Bench of this Hon'ble Court has already decided the validity of the Rule 75-A of the Rules of 2013 and has upheld the said Rule. Thus, once the validity of a rule has been upheld by a Division Bench, no different view can be taken by another Division Bench and therefore, this Court concurs with the opinion of the Co-ordinate Bench regarding the validity of the Rule 75-A of Rules of 2013.

22. In view of the above, this Court upholds Rule 75-A of the Rules of 2013 as intra vires. So far as the second prayer of the petitioners seeking restrain order against the procuring entities is concerned, this Court finds that after having entered into the game and having played the game, the petitioners cannot challenge the Rules of the game and therefore also, the prayer of the petitioners that the respondents may be restrained from insisting the petitioners to deposit the additional performance security cannot be accepted and such prayer is required to be rejected.

23. For the foregoing discussions, as made, the writ petitions are dismissed.

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24. No order as to costs.

25. Stay petition also stands disposed of."

2. Accordingly, the present writ petition is dismissed in the light

of the decision rendered vide order dated 03.11.2025 passed in

M/s. Choudhary Construction's case (supra) in the same

terms.

3. All pending applications stand disposed of.

(SANJEET PUROHIT),J (DR. PUSHPENDRA SINGH BHATI),J

2-JatinS/-