The Patna High Court has set aside the cancellation of a Public Health Engineering Department (PHED) tender and the subsequent re-tender issued for a drinking water project in Bihar, holding that the authorities could not rely on the expiry of bid validity after themselves initiating the process to extend it. The Division Bench clarified that while the government has the power to cancel a tender, such power must be exercised in a fair and legally consistent manner.
Background of the Case
The case was filed by J and S Joint Venture (JV) after it participated in NIT No. 15/2024-25 (LoT/PRD) for the design, construction, supply of materials, testing and commissioning of piped water supply schemes under the Har Ghar Nal Jal Nischay Yojana.
According to the petition, the firm was declared technically qualified and later emerged as the lowest (L-1) bidder. During the tender process, PHED officials twice sought extensions of bid validity, and the petitioner gave unconditional consent on both occasions. However, before any final decision was taken, the petitioner received an email informing it that the tender had been cancelled, following which a fresh tender was issued.
The petitioner argued that the cancellation was arbitrary because no reasons were communicated and that the authorities themselves had continued the tender process by seeking extensions of bid validity.
Court's Observations
The Bench examined Clauses 15.1 and 15.2 of the Standard Bidding Document, which deal with bid validity and its extension.
The Court observed that once the department invoked the procedure for extending bid validity and obtained the bidders' consent, it could not later justify cancellation solely on the basis that the original validity period had expired.
As the Bench observed,
"The respondents cannot, on the one hand, invoke the machinery contemplated under Clause 15.2 and call upon the bidders to extend the validity of their bids and, on the other hand, rely upon the very expiry of the original bid validity under Clause 15.1 as the basis to sustain the cancellation."
The Court noted that although a formal order extending the bid validity had not ultimately been issued, the authorities had admittedly initiated the extension process and obtained the bidders' consent. Therefore, they were required to explain why that process was not completed before cancelling the tender.
The Bench also reiterated that a bidder does not automatically acquire the right to receive a contract merely by being the lowest bidder. At the same time, decisions cancelling tenders remain open to judicial review if they are arbitrary or inconsistent with the governing conditions.
Court's Decision
Allowing the writ petition, the Patna High Court quashed both the communication dated 2 December 2025 cancelling Tender ID No. 89096 and the Re-Tender NIT No. 04/2025-26 (LoT/PRD) issued on the same date.
The Court remitted the matter to the competent authority to take a fresh decision regarding the original tender strictly in accordance with the Standard Bidding Document and the Notice Inviting Tender.
It also directed that any future decision should be a reasoned one and made in accordance with law.
Case Details
Case Title: J and S Joint Venture (JV) v. State of Bihar & Ors.
Case Number: Civil Writ Jurisdiction Case No. 20099 of 2025
Judges: Hon'ble Acting Chief Justice Sudhir Singh and Hon'ble Mr. Justice Ranjan Kumar Jha
Decision Date: 14 July 2026
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