Authorities cannot blacklist a bidder based on evaluating a bid contrary to their own validity-extension stipulation.

The petitioner participated in Group No. 19 of E-Tender Notice No. 05/SBD/2022-23, issued by the Bihar Police Building Construction Corporation for construction of police station buildings.

The tender conditions prescribed a bid-validity period of 120 days, with the last date for submission of bids subsequently extended to 21 July 2022 and technical bids scheduled to be opened on 22 July 2022.

On 12 January 2023, the respondents requested the petitioner to extend its bid validity up to 31 March 2023, stating that its tender would not be considered without such extension.

The petitioner did not furnish consent or the requested declaration/affidavit.

The respondents nevertheless proceeded to consider the petitioner’s technical bid and alleged that an experience certificate submitted with the bid was forged; an FIR was thereafter registered.

The Chief Engineer blacklisted the petitioner indefinitely by Memo No. HQ2203 dated 22 June 2023.

The order was modified to impose blacklisting for five years retrospectively from 21 July 2022, and the Appellate Authority subsequently extended the blacklisting to other organisations, departments and institutions while rejecting the petitioner’s appeal.

Whether, in the absence of the petitioner’s consent to extend the bid validity, the respondents could proceed to consider and evaluate its bid contrary to their communication dated 12 January 2023 stating that the tender would not be considered without such extension?

Whether the respondents could rely upon the documents submitted with such subsequently considered bid to impose an order of blacklisting on the allegation that an experience certificate was forged?

Whether the impugned blacklisting orders were legally sustainable in view of the principles of fairness, natural justice, reasonableness and proportionality governing blacklisting by State instrumentalities?

Clause 15.2 of the Standard Bidding Document provides that the employer may request an extension of bid validity, but the bidder may refuse such request without forfeiting its bid security; therefore, extension requires the bidder’s consent and cannot be imposed unilaterally.

The respondents’ own communication dated 12 January 2023 made consideration of the tender conditional upon extension and expressly stated that, without such extension, the tender would not be considered under any circumstances.

Although submission of a forged document in a tender process may justify appropriate action under the applicable tender conditions and Bihar Contractor Registration Rules, 2007, administrative action must remain consistent with the authority’s own representations and governing conditions.

Under Erusian Equipment & Chemicals Ltd. v. State of West Bengal, (1975) 1 SCC 70, blacklisting entails serious civil consequences and requires fair opportunity and objective satisfaction.

Under Kulja Industries Ltd. v. Chief General Manager, Western Telecom Project, BSNL, (2014) 14 SCC 731, State action of blacklisting is subject to judicial review on the grounds of fairness, reasonableness, rationality, natural justice and proportionality.

The Court held that Clause 15.2 protected the petitioner’s right to refuse extension of the bid validity.

The petitioner did not consent to the requested extension, and the respondents’ email unequivocally stated that the tender would not be considered in the absence of such consent.

Having imposed that condition themselves, the respondents could not subsequently treat the bid as valid, evaluate it and rely upon its documents for blacklisting.

The respondents’ argument that the alleged misconduct was complete when the experience certificate was uploaded did not answer the legal effect of their subsequent representation that the tender would not be considered without extension.

The Court clarified that it was not holding that expiry of bid validity automatically extinguishes every consequence of an act committed during the bid period; rather, the decision rested on the specific stipulation made by the respondents and their failure to act consistently with it.

Since the blacklisting action was founded on consideration and evaluation of a bid that, under the respondents’ own communication, was not to be considered, the impugned orders could not be sustained.

The Court did not decide whether the experience certificate was actually forged, leaving that question and the pending criminal proceedings unaffected.

Memo No. HQ2203 dated 22 June 2023, Memo No. HQ2288 dated 3 July 2023 and the appellate order bearing Memo No. HQ4601 dated 13 December 2023 were quashed.

The writ petition was allowed, with the clarification that the judgment concerned only the legality of the administrative blacklisting action and would not prejudice the criminal proceedings relating to the disputed experience certificate.