Cube Construction Engineering Vs State of Hp and Others

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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CWP No.8987 of 2026 Reserved on : 24.06.2026 Decided on : 01.07.2026 Uploaded on : 01.07.2026

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Cube Construction Engineering ...Petitioner. Versus State of HP and Others. …Respondents.

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Coram

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Hon’ble Mr. Gurmeet Singh Sandhawalia, Chief Justice.

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Hon’ble Mr. Justice Bipin Chander Negi, Judge.

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Whether approved for reporting?¹

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For the petitioner : Ms. Yashodhan Thakur, Advocate. For the respondent(s) : Mr. Pranay Pratap Singh, Addl. Advocate General for respondents-State. Mr. Sumeet Raj Sharma, Advocate, for the applicant in CMP No.14044 of 2026.

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Bipin Chander Negi, Judge

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The present petition has been filed seeking the following substantive reliefs:-

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“i. Issue a writ of mandamus directing the respondents to declare the petitioner as Responsive for packages Nos.HP-02-34, HP-02-52 and HP-02-53 and to proceed in accordance with the terms and conditions of the tender under law.

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ii. Issue a writ of mandamus restraining the respondents from awarding, finalizing or otherwise acting upon the packages Nos.HP-02-34, HP-02-52 and HP-02-53 in favour of third parties until the petitioner’s case is duly considered and it’s financial

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1 Whether the reporters of the local papers may be allowed to see the Judgment? Yes

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price bids are opened and evaluated in a uniform manner.

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iii. Issue a writ of mandamus, directing the respondents to open the petitioner’s financial price bids for packages Nos.HP-02-34, HP-02-52 and HP02-53 and to proceed in accordance with law.”

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Respondent No. 2, in the case at hand had issued

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a notice inviting tender under the Pradhan Mantri Gram Sadak Yojana-IV (for the sake of brevity, hereinafter referred as PMGSY-IV), with respect to construction of roads in the District Chamba. The notice inviting tender is annexed herewith as Annexure P-2. The said notice inviting tender was qua 33 separate packages, all were governed by the same standard bidding document and the same tender conditions. The petitioner in the case at hand had submitted bid with respect to 11 packages detailed in Annexure P-2. Details whereof are given in paragraph 4 of the civil writ petition.

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3 The petitioner’s bid was treated as a bid on behalf of a joint venture therefore the technical bid of the petitioner was rejected in terms of the Tender Committee Evaluation Report dated 20.04.2026. The rejection was with respect to Package No’s. HP-02-34, HP-02-29, HP-02-24, HP-02-23 (four packages). Feeling aggrieved of the aforesaid rejection, the

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petitioner had made a representation to respondent No.2 on 21.04.2026 (Annexure P-5). The representation so made was decided by a committee constituted under respondent No.2. The committee so constituted was of the view that the petitioner-firm had participated in the tender process as an individual entity and not as a joint venture hence, the bid of the petitioner-firm, in the considered view of the Committee, was required to be evaluated as an individual bidder and not as a joint venture.

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Thereafter, respondent No. 3, vide letter dated 05.05.2026,(Annexure R-VI page 503 of the paperbook) had directed the petitioner to re-deposit EMD in four packages, that is, Packages No. HP-02-34, HP-02-29, HP-02-24 and HP02-23. It was made clear that in case of non-deposit, the bidder would be made non-responsive. On 11.05.2026, reminder was issued for deposit of EMD (Annexure P-7 Colly). As per the provisions of e-procurement portal, EMD of nonresponsive bidder is automatically refunded by the system. Hence, in the case at hand, once the petitioner was declared to be non-responsive for Package Nos. HP-02-34, HP-02-29, HP-02-24, HP-02-23, the EMD deposited qua the said packages were auto-refunded through the portal. However,

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once in pursuance to the decision taken on representation dated 21.04.2026(Annexure P-5), the Committee constituted under respondent No. 2 had declared the petitioner to be responsive (Annexure P-6), vide letter dated 05.05.2026, the petitioner-firm was required to fulfill all eligibility criteria and to comply with the requirements as stipulated in ITB Clause 12.1, Part-III. In order to meet the eligibility criteria, the bidder was required to re-deposit EMD in the form of a FDR duly pledged in the name of the concerned Executive Engineer through offline mode before 5:00 PM till 11.05.2026.

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In pursuance to the aforesaid deadline, the petitioner-firm had re-deposited the EMD in Package Nos.HP02-23, HP-02-24, HP-02-34. Admittedly, insofar as Package No. HP-02-29 is concerned, the EMD had not been redeposited. As according to the petitioner, the FDR for the said package had been misplaced.

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Insofar as the petitioner’s financial bid of six packages were concerned, they were treated as admitted. In Package No. HP-02-29, since the EMD had not been redeposited as per the tender conditions, the petitioner's bid was bound to be rejected. However, insofar as Package No. HP-02-

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34, HP-02-52, and HP-02-53 are concerned, the petitionerfirm has been declared to be non-responsive. The same can be made out from the screenshot taken from the concerned portal (Annexure P-10). As a consequence, the financial bids for the aforesaid three packages, insofar as petitioner-firm is concerned, are not being opened. In the aforesaid backdrop, the present petition has been filed.

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In the response filed, the respondents have placed reliance upon Clause 4.6(ii) of the Standard Bidding Document. Based on the same, it is submitted that a bidder can only be awarded seven number of works or works not exceeding Rs.100/- crore. As per the respondents, the Committee concerned had obtained the record of existing commitments of the bidders who had submitted their bids. As per the records received qua the petitioner, it was found that the petitioner is having a work of PMGSY in hand under PIU Doda in Jammu and Kashmir, and the said work is stated to be in progress, completion whereof is stipulated as September, 2027. Hence, in view of the aforesaid background, it is submitted that the petitioner could have secured six more works after taking into account the aforesaid on-going work in Doda, Jammu and Kashmir.

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In the aforesaid facts and circumstances, it is, therefore contended that the respondents were only required to evaluate six bids out of the eleven submitted by the petitioner-firm along with other tenders. In six packages, namely Package Nos.HP-02-24, HP-02-23, HP-02-51, HP-0229, HP-02-62, and HP-02-61, the petitioner was found to be L-1(six works). Once six works had been awarded under the PMGSY-IV in the State of Himachal Pradesh and one in the Union Territory of Jammu and Kashmir, therefore, in terms of Clause 4.6(ii), according to the respondents, the petitionerfirm was disentitled for any further indulgence and hence the balance financial bids submitted by the petitioner-firm were not required to be opened.

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Other than the aforesaid, it is contended that in Package No. HP-02-29, the petitioner intentionally avoided the re-deposit of EMD as he had submitted a low bid to the extent of 30% below the estimated cost which would not have been profitable to the petitioner. This selective approach in not resubmitting the EMD, according to the respondents, was to get the petitioner-firm to be declared as non-responsive in Package No. HP-02-29 so that the petitioner's other bids in respect of other works could be opened. Hence, it is contended

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that EMD was re-submitted by the petitioner-firm in only those cases where higher bids had been submitted by the petitionerfirm.

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In rejoinder, allotment of work with respect to Package No. HP-02-29 by Letter of Acceptance dated 06.06.2026 has been objected on the ground that once EMD

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qua the same had not been deposited, then the bid made by the petitioner-firm in terms of the provisions of the Standard Bidding Document should have been declared to be nonresponsive. Attention in this regard has been drawn to e-mail dated 15.06.2026 (Annexure R-4) appended with the rejoinder, wherein the aforesaid contention has been raised.

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Other than the aforesaid, in the rejoinder filed, the declaring of the bids of the petitioner-firm to be nonresponsive qua Package Nos.HP-02-34, HP-02-52, HP-02-53 is stated to be in contravention of the provisions of the Standard Bidding Document/tender conditions and based on a criteria not contemplated therein.

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Admittedly, in the case at hand, the technical bids submitted by the petitioner-firm had been declared to be nonresponsive insofar as Package Nos.HP-02-23, HP-02-24, HP-

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02-29, and HP-02-34 were concerned. Thereafter, postconsideration of a representation made by the petitioner-firm, the respondents had agreed to treat the petitioner as responsive for the aforesaid four packages, however, the condition precedent being that EMD, which had been refunded, be deposited. The EMD was to be deposited in terms of letter dated 05.05.2026 on or before 5:00 PM till 11.05.2026. Besides the aforesaid, in terms of ITB Clause 12.1 Part-III, in order to meet the eligibility criteria, the petitioner-firm was required to deposit the EMD as per the amount in the shape of FDR duly pledged in the name of concerned Executive Engineer through offline mode. Insofar as Package Nos.HP-02-23, HP-02-24, and HP-02-34 are concerned, the petitioner had re-submitted the EMDs (Annexure P-8, from pages 226-228 of the paper book).

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The same were submitted on 06.05.2026, much prior to the cut-off date i.e. 11.05.2026. Insofar as Package No. HP-02-29 is concerned, vide e-mail dated 19.05.2026 (Annexure P-11, page 237 of the paper book), the petitionerfirm had categorically submitted that the FDR qua said package has been misplaced and hence the same was not deposited. Therefore, according to the petitioner-firm, the bid

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made qua the said package was required to be declared nonresponsive. The non-deposit of the EMD qua the said package by the present petitioner-firm and its consequence are evident from the petitioner’s e-mail dated 19.05.2026 at page 237 of the paper book. As correctly pointed out by the petitionerfirm, the aforesaid non-deposit of the EMD by the petitionerfirm qua the said package made the petitioner-firm noneligible in terms of the requirements as stipulated in NIT Condition No.10 and Clause 12.1 Part-III.

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The contention raised by the respondents is that qua six bids submitted by the petitioner-firm, the financial bids with respect to two bids had been opened on 12.05.2026. Insofar as the remaining four bids are concerned, the financial bids had been opened on 16.05.2026. The detail of the six bids have been given at pages 257-258 of the paper book (internal page 8/9 of the reply). In all the aforesaid bids, the petitionerfirm has been held to be L-1. Interestingly package No. HP02-29 (serial no 4 therein) wherein the EMD had not been redeposited was included in the six bids wherein the petitionerfirm had been declared to be L-1. As already stated supra in terms of the tender condition the petitioner-firm should have been held to be non-responsive qua package No. HP-02-29

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once EMD had not been re-deposited. Hence, in the aforesaid backdrop, foisting the said package on the petitioner-firm despite the petitioner-firm being ineligible to bid for the same makes the declaration of the petitioner-firm as L-1 against the said package illegal.

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Other than the aforesaid, it is submitted in the response by the respondents that under PMGSY-IV, the petitioner-firm has already been awarded one work in the Union Territory of Jammu and Kashmir, which is an ongoing work and now in six works the petitioner-firm has been shown as L-1 in the NIT in the case at hand. Based on the aforesaid, it is contended that since the petitioner-firm has already been shown as L-1 in seven works, hence in view of the Clause 4.6(ii), no more bids can be awarded to the petitioner-firm. Hence, financial bids w.r.t. package Nos.HP-02-34, HP-02-52 and HP-02-53 need not be opened. Relevant extract whereof reads as follow:

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“ Note: (i) The statements showing the value of existing commitments and on-going works as well as the stipulated period of completion remaining for each of the works listed should be counter signed by the Engineer in charge, not below the rank of an Executive

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Engineer or equivalent. No bidder shall be awarded further works:

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(ii) If the aggregate value of awarded PMGSY-IV works exceeds ₹100 crores or

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(iii) If the number of PMGSY-IV works awarded reaches 7 (seven) whichever is earlier.”

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The aforesaid submission of the respondents needs

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to be examined in light of the way and manner in which the bids submitted by the petitioner have to be opened as detailed in Clause 4.4(c) of the Standard Bidding Document. The same reads as follows:

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“ 4.4(c)- To qualify for a package of contracts made up of this and other contracts for which bids are invited in the Notice Inviting Tender, the bidder must demonstrate having experience and resources sufficient to meet the aggregate of the qualifying criteria for the individual contracts.

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As per Operation Manual

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Important: - If any bidder is bidding more than one package in the Notice Inviting Tender the bidder must inform to the Tender Inviting Authority at the time or before the opening of technical bid about one of the following two options failing which the Tender Inviting Authority will act for Option 2.

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Option 1: Bidders may be asked to indicate in each technical bid the order of opening of their bids, so that

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the financial offers corresponding to the qualifying technical bids are opened in that order of his Assessed Available Bid Capacity is exhausted. Remaining financial offers of the bidder will be kept unopened.

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Option 2: Financial bids of all qualifying bidders may be opened, and bids arranged in order with that package where the difference between potential L-1 and potential L-2 is the greatest followed by the one in which it is next greatest and so on. L-1 will be awarded packages till his bid capacity is exhausted. The process will be repeated for the remaining packages based on difference between earlier potential L-2 (now potential L-1) and earlier potential L-3 (now potential L-2) values etc.”

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From the aforesaid it is evident that in pursuance

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to the Notice Inviting Tender if a bidder is bidding for more than one package than the bidder must exercise an option and inform the Tender Inviting Authority at the time or before the opening of technical bid about one of the two options (order of opening the bids) stated in Clause 4.4(c) of the Standard Bidding Document. In the absence of an option having been exercised the Tender Inviting Authority will act in accordance with Option No.2. In the case at hand the petitioner-firm at the appropriate stage i.e at the time or before the opening of technical bid had not exercised an option, therefore, the Tender Inviting Authority had to “punctiliously and rigidly”

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enforce the terms of the tender and act in consonance with option no 2.

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The wholesome principle articulated in Nazir Ahmad v. King Emperor , AIR 1936 PC 253 , namely, “… where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden.”, also applies to bid documents, contractual disputes, particularly in commercial contracts or bids leading up to commercial contracts, where there is stiff competition.

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Other than the aforesaid the principle laid down in Ramana Dayaram Shetty , (1979) 3 SCC 489 qua the right of the party issuing the tender (the employer) to “punctiliously and rigidly” enforce the terms of the tender is well accepted. [ Qua applicability of both principles to tenders see Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) , (2016) 8 SCC 622 ].

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In the case at hand, Clause 4.4(c) stated supra , which deals with the way and manner in which bids submitted by the petitioner-firm have to be dealt with, has been observed more in its breach rather than in its observance.

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For the aforesaid reasons, the present petition is

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allowed and the respondents are directed to open the petitioner’s financial bids w.r.t. package Nos.HP-02-34, HP-0252 and HP-02-53 and in terms of Option No.2 contained in Clause 4.4(c), all the bids made by the petitioner be considered and work be thereafter allotted to the petitionerfirm strictly in accordance with the prescribed procedure.

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Present petition stands disposed of in aforesaid terms. Pending miscellaneous application(s), if any, stand disposed of.

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(G.S. Sandhawalia) (Bipin Chander Negi) Chief Justice Judge

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01^st July, 2026 (Gaurav Rawat)

Cube Construction Engineering v. State of Hp and Others

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Cube Construction Engineering v. State of Hp and Others

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