Simplified Explanation of the Judgment
The Patna High Court recently addressed the case of a government contractor who was blacklisted and had his security deposit forfeited after failing to supply goods to Central Jail, Gaya, despite being awarded a tender. The contractor had sought to overturn the blacklisting order and recover his forfeited security on the grounds of a “computer misprint” in the price quotation.
The petitioner had participated in an e-tender process floated by the Bihar Home Department (Prisons) for the supply of food items and other goods to Central Jail, Gaya, and Sub-Jail, Sherghati for the 2022–2023 financial year. He claimed that due to a computer error, he mistakenly quoted a flat rate of Rs. 82 for most items in a particular section of the tender.
Despite realizing the error and sending a letter to the Jail Purchase Committee on 1st May 2022 seeking rectification, he did not receive a response. The authorities, meanwhile, accepted his bid—deeming it the lowest—and directed him to deposit a bank guarantee of Rs. 6.5 lakhs and begin the supply process.
However, the contractor did not supply any goods, citing the lack of correction in the tender rates. Authorities sent multiple reminders in June 2022, but the petitioner remained inactive. His non-compliance led the Jail Committee to meet and recommend action. The Superintendent of Central Jail, Gaya issued memo no. 8151 dated 27.12.2022 blacklisting the contractor and forfeiting the security.
The petitioner argued in court that since no formal agreement had been signed, he was not bound to supply goods. He also objected to the blacklisting being “indefinite,” lacking a specific time period.
The Court, after reviewing the case, found no merit in the petitioner’s arguments. It noted that once his bid was accepted and communication was made to furnish the bank guarantee and begin supplies, he was obligated to act. The failure to supply essential items to the jail not only violated the tender terms but also created chaos and inconvenience for prison operations.
While the Court upheld the decision to blacklist the petitioner and forfeit his security deposit, it agreed with the petitioner that the blacklisting order should not be indefinite. Accordingly, it limited the blacklisting period to two years from the date of the order, i.e., until 26.12.2024.
Significance or Implication of the Judgment
This judgment highlights the accountability expected from government contractors in supply-related tenders, especially those involving critical services like jail operations. It reinforces that mere clerical or technical errors in bidding cannot justify non-performance after being awarded a tender.
At the same time, the Court ensured fairness by limiting the duration of the blacklisting, preventing the possibility of lifelong exclusion from government contracts due to a single incident. For the public, this serves as a reminder of the importance of diligence in government procurement, while for the government, it affirms the right to take strict action in cases of contractor default.
Legal Issue(s) Decided and the Court’s Decision
- Whether a contractor can refuse to supply goods due to a misquoted bid post tender finalization?
- No. The Court held that the petitioner was bound by the terms of his successful bid and cannot withdraw later citing errors.
- Was the blacklisting order without specifying duration valid?
- Partly. The Court upheld the blacklisting but limited it to two years from the date of the order.
- Was the forfeiture of the security deposit valid?
- Yes. The petitioner’s failure to perform justified the forfeiture.
Case Title
Sanjeev Ranjan v. The State of Bihar & Ors.
Case Number
Civil Writ Jurisdiction Case No.13788 of 2023
Coram and Names of Judges
Hon’ble the Chief Justice
Hon’ble Mr. Justice Rajiv Roy
Names of Advocates and who they appeared for
Mr. Satish Kumar Sinha — for the Petitioner
Mr. Md. Nadim Seraj (GP 5) — for the Respondents
Link to Judgment
https://www.patnahighcourt.gov.in/ShowPdf/web/viewer.html?file=../../TEMP/5a21c754-a4d5-4a40-bc4b-66e0a89f9d75.pdf&search=Blacklisting
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