Rajasthan High Court - Jodhpur
Shri Rana Bai Construction vs The State Of Rajasthan on 3 November, 2025
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HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Writ Petition No. 11359/2025
M/s. Choudhary Construction, Village Hiredesar, Tehsl
Bhopalgarh, District Jodhpur, Through Its Proprietor Bhinya Ram
Choudhary S/o Shri Pura Ram Choudhary, Aged About 48 Years.
----Petitioner
Versus
1. State Of Rajasthan, Through Secretary Water Resources
Department, Jaipur (Raj.).
2. The Secretary Department Of Finance, Secretariat, Jaipur
(Raj.).
3. The Chief Engineer, Water Resources Department, Jaipur
(Raj.).
4. The Superintendent Engineer, Water Resources Division,
Jodhpur (Raj.).
5. The Executive Engineer, Water Resources Department,
Division, Merta City (Raj.). ----Respondents
Connected With
D.B. Civil Writ Petition No. 2094/2022
Vijendar Singh Ahada S/o Deep Singh Ahada, Aged About 38
Years, Mukam Madkola, Post Sagwara, District Udaipur
(Rajasthan). ----Petitioner
Versus
1. State Of Rajasthan, Through The Chief Secretary,
Government Of Rajasthan, Secretariat, Jaipur
(Rajasthan).
2. The Principal Secretary, Water Resources Department,
Government Of Rajasthan, Jaipur (Rajasthan).
3. The Joint Secretary Finance (G And T) Department,
Government Of Rajasthan, Jaipur (Rajasthan).
4. Additional Secretary Cum Chief Engineer, Water
Resources Department Rajasthan, Jaipur (Rajasthan).
5. The Superintending Engineer, Water Resources
Construction Circle, Dungarpur (Rajasthan).
6. Office Of The Executive Engineer, Water Resources Som
Kamla Amba Canal Division Aspur, District Dungarpur
Through The Executive Engineer Water Resources Som
Kamla Amba Canal Division Aspur, District Dungarpur
(Rajasthan). ----Respondents
D.B. Civil Writ Petition No. 15035/2023
Nav Bharat Buildcon Pvt. Ltd., Through Its Director Shrenik
Luhadia S/o Shri Ashok Kumar Luhadia, Aged 37 Years, R/o -
501, Sanchi Enclave, Opp. Dps School, Bhuwana, Udaipur
312001. ----Petitioner
Versus
1. State Of Rajasthan, Through The Principal Secretary,
Department Of Finance, Jaipur.
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2. The Secretary, Water Resources Department, Jaipur
(Raj.).
3. The Chief Engineer, Water Resources Department,
Rajasthan, Jaipur (Raj.).
4. The Additional Chief Engineer, Water Resources Zone,
Banswara (Raj.).
5. The Executive Engineer, Water Resources B And Rmc
Canal Division, Banswara (Raj.). ----Respondents
D.B. Civil Writ Petition No. 3839/2025
Shri Rana Bai Construction, Through Its Partner Dilip Choudhary
S/o Shri Pukharam, Aged 31 Years, R/o 5-D/76 Kuri Bhagtasani,
Housing Board, Jodhpur.
----Petitioner
Versus
1. The State Of Rajasthan, Through The Chief Secretary,
Govt. Of Rajasthan, Jaipur.
2. The Principal Secretary, Water Resources Department,
Govt. Of Rajasthan, Jaipur.
3. He Joint Secretary Finance (G And T), Govt. Of Rajasthan,
Jaipur.
4. The Chief Engineer, Water Resources Department, Govt.
Of Rajasthan, Jaipur.
----Respondents
D.B. Civil Writ Petition No. 3843/2025
M/s Shera Ram Choudhary, Through Its Proprietor Shera Ram S/
o Shri Udaram, Aged 51 Years, R/o 2/1909, Kuri Bhagtasani,
Housing Board, Jodhpur.
----Petitioner
Versus
1. The State Of Rajasthan, Through The Chief Secretary,
Govt. Of Rajasthan, Jaipur.
2. The Principal Secretary, Water Resources Department,
Govt. Of Rajasthan, Jaipur.
3. The Joint Secretary Finance (G And T), Govt. Of
Rajasthan, Jaipur.
4. The Chief Engineer, Water Resources Department, Govt.
Of Rajasthan, Jaipur.
----Respondents
D.B. Civil Writ Petition No. 7742/2025
M/s. Saran Buildwell Pvt. Ltd., Through Its Director Shri Ram
Niwas Saaran S/o Shri Pema Ram Saaran, Aged About 40 Years,
R/o Ward No. 6, Karmisar, Bikaner 334001, Rajasthan.
----Petitioner
Versus
1. State Of Rajasthan, Through The Secretary, Department
Of Finance, Govt. Ofon Rajasthan,
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2. The Secretary, Water Resources Department, Government
Secretariat, Jaipur (Rajasthan)
3. The Additional Chief Engineer, Water Resources
Department, Zone-Udaipur Rajasthan
4. The Executive Engineer, Water Resources Division,
Udaipur, Rajasthan.
5. The Superintending Engineer, Water Resources Zone
Udaipur, Rajasthan.
6. The Executive Engineer (Operation), Water Resources
Department, Division- Udaipur Rajasthan
7. The Chief Accounts Officer, Water Resources, Zone
Udaipur.
----Respondents
D.B. Civil Writ Petition No. 7873/2025
M/s Dullar Real Estate Private Ltd, 20/135-136, Kaveri Path,
Mansarovar, Jaipur-302020 Through Its Authorised Signatory Jay
Narayan S/o Shri Harchand Godara, Aged 52 Years
----Petitioner
Versus
1. State Of Rajasthan, Through Secretary Water Resources
Department, Jaipur (Raj.)
2. The Secretary Department Of Finance, Secretariat, Jaipur
(Raj.)
3. The Chief Engineer, Water Resources Department, Jaipur
(Raj.)
4. The Superintendent Engineer, Water Resources Division,
Pali (Raj.)
5. The Executive Enginner, Water Resources Department,
Division, Sirohi (Raj.)
----Respondents
D.B. Civil Writ Petition No. 7904/2025
M/s. Saran Buildwell Pvt. Ltd., Through Its Director Shri Ram
Niwas Saaran S/o Shri Pema Ram Saaran, Aged About 40 Years,
R/o Ward No. 6, Karmisar, Bikaner-334001, Rajasthan.
----Petitioner
Versus
1. State Of Rajasthan, Through The Secretary, Department
Of Finance, Govt. Of Rajasthan, Jaipur.
2. The Secretary, Water
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Secretariat, Jaipur (Rajasthan).
3. The Additional Chief Engineer, Water Resources
Department, Zone-Udaipur, Rajasthan.
4. The Executive Engineer, Water Resources Division,
Chittorgarh, Rajasthan.
5. The Superintending Engineer, Water Resources Zone
Bhilwara, Rajasthan.
6. The Executive Engineer (Operation), Water Resources
Department, Division Udaipur, Rajasthan.
7. The Chief Accounts Officer, Water Resources, Zone
Udaipur.
----Respondents
D.B. Civil Writ Petition No. 13105/2025
M/s Krishna And Company, A Partnership Firm-Through Its
Authorised Partner Om Prakash Beniwal S/o Shri Hanuman Ram
Beniwal, Resident Of C-225, Murlidhar Vyas Colony, Bikaner,
District Bikaner (Raj.) Age About 42 Years.
----Petitioner
Versus
1. The State Of Rajasthan, Through The Secretary, Water
Resources Department, Government Of Rajasthan, Jaipur
(Raj.).
2. The Joint Secretary, Finance (G And T), Government Of
Rajasthan, Jaipur.
3. Additional Chief Engineer, Ignp, Jaisalmer (Raj.).
4. Superintending Engineer, State-2, Circle-3, Indira Gandhi
Nahar Project, Jaisalmer (Raj.).
5. Executive Engineer, 19Th, Indira Gandhi Nahar Project,
Jaisalmer (Raj.).
----Respondents
D.B. Civil Writ Petition No. 13809/2025
M/s Gouri Construction Company, 4C Gayatri Sadan, Jawahar
Tower, Bani Park, Jaipur, Through Its Power Of Attorney Holder
Mahendra Singh Rajpurohit S/o Rakesh Singh, Aged 50 Years, R/
o Netra, District Pali (Raj.)
----Petitioner
Versus
1. The State Of Rajasthan, Through Secretary Water
Resources Department, Jaipur
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2. The Chief Engineer, Water Resources Department, Jaipur
(Raj.)
3. The Chief Engineer, Water Resources Department,
Jodhpur (Raj.)
4. The Superintendent Engineer, Water Resources Circle, Pali
(Raj.)
----Respondents
D.B. Civil Writ Petition No. 15459/2025
M/s Madhusudan Construction Company, Through Its Proprietor
Anand Kumar Mali S/o Shri Kuldeep Kumar Mali, Aged 34 Years,
R/o Moongthala, Abu Road, District Sirohi (Raj.).
----Petitioner
Versus
1. State Of Rajasthan, Through The Secretary, Water
Resources Department, Jaipur (Raj.)
2. The Chief Engineer Cum Additional Secretary, Water
Resources Department, Jaipur (Raj.)
3. The Chief Engineer, Water Resources Department, Zone
Jodhpur (Raj.)
4. The Superintending Officer Engineer, Water Resources
Circle Pali (Raj.)
5. The Joint Secretary, Finance (G And T), Government Of
Rajasthan, Jaipur (Raj.)
----Respondents
D.B. Civil Writ Petition No. 15461/2025
M/s Madhusudan Construction Company, Through Its Proprietor
Anand Kumar Mali S/o Shri Kuldeep Kumar Mali, Aged 34 Years,
R/o Moongthala, Abu Road, District Sirohi (Raj.).
----Petitioner
Versus
1. State Of Rajasthan, Through The Secretary, Water
Resources Department, Jaipur (Raj.).
2. The Chief Engineer Cum Additional Secretary, Water
Resources Department, Jaipur (Raj.).
3. The Chief Engineer, Water Resources Department, Zone
Jodhpur (Raj.).
4. The Superintending Officer Engineer, Water Resources
Circle Pali (Raj.).
5. The Joint Secretary, Finance
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Rajasthan, Jaipur (Raj.).
----Respondents
D.B. Civil Writ Petition No. 15628/2025
M/s. Kailash Chandra Choudhari, Through Its Proprietor Shri
Kailash Chandra Choudhary S/ Shri Kalu Ji Choudhary, Aged
About 47 Years, R/o Ward No. 6, Aamli Fala Bajpura, Khunta,
Pratapgarh - 313611, Rajasthan.
----Petitioner
Versus
1. State Of Rajasthan, Through The Secretary Department
Of Finance, Govt. Of Rajasthan, Jaipur.
2. The Secretary, Water Resources Department,
Government Secretariat, Jaipur (Rajasthan).
3. The Superintending Engineer, Water Resources And
Canal Construction Circle, Banswara Rajasthan.
4. The Chief Engineer, Water Resources Department, Zone
Banswara, Rajasthan.
5. The Additional Chief Engineer, Water Resources Zone,
Banswara, Rajasthan.
6. The Executive Engineer, Peepalkhunt High Level Canal
Project, Division 2Nd, Pratapgarh, Rajasthan.
----Respondents
For Petitioner(s) : Mr. Shailendra Gwala
Mr. Rajendra Singh Rathore
Mr. Kuldeep Kumar Shah
Mr. Bhavit Sharma
For Respondent(s) : Mr. Sajjan Singh Rathore, AAG
Mr. Mahaveer Bishnoi, AAG
Mr. Harshvardhan Singh
Dr. Praveen Khandelwal, AAG with
Mr. Yashashvi Khandelwal and
Mr. Piyush Bhandari
HON'BLE MR. JUSTICE MUNNURI LAXMAN
HON'BLE MR. JUSTICE BIPIN GUPTA
Order
Reportable
Reserved on : 28/08/2025
Pronounced on: 03/11/2025
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Per Mr. Bipin Gupta, J.
1. In the bunch of these writ petitions, a challenge has been
made to a gazette notification dated 22.10.2021, whereby Rule
75-A has been inserted in the Rajasthan Transparency in Public
Procurement Rules, 2013 (hereinafter referred to as the 'Rules of
2013').
2. Rule 75-A of the Rules of 2013 is reproduced as under:
75A.Additional Performance Security. - (1) In addition
to Performance Security as specified in rule 75, an
Additional Performance Security shall also be taken from
the successful bidder in case of unbalanced bid. The
Additional Performance Security shall be equal to fifty
percent of Unbalanced Bid Amount. The Additional
Performance Security shall be deposited in lump sum by
the successful bidder before execution of Agreement. The
Additional Performance Security shall be deposited through
e-Grass, Demand Daft, Banker's Cheque, Government
Securities 9 [Bank guarantee or electronic bank guarantee
(e-BG)].
Explanation : For the purpose of this rule,-
(i) Unbalanced Bid means any bid below more than
fifteen percent of Estimated Bid Value.
(ii) Estimated Bid Value means value of subject matter
of procurement mention in bidding documents by the
Procuring Entity.
(iii) Unbalanced Bid Amount means positive difference
of eighty five percent of Estimated Bid Value minus Bid
Amount Quoted by the bidder
Provided that in case of unbalanced bid relating to IT &
e-Governance Project having cost of twenty crore
rupees or more and approved by the State e-
Governance Mission Team (SeMT), Department of
Information Technology & Communication, Rajasthan
as a High Tech Project, the Additional Performance
Security shall not required to be taken.
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(2) The Additional Performance Security shall be refunded
to the contractor after satisfactory completion of the entire
work. The Additional Performance Security shall be
forfeited by the Procuring Entity when work is not
completed within stipulated period by the contractor.
Provision for 'Unbalanced Bid' and 'Additional Performance
Security' shall be mentioned in the Bidding Documents by
the Procuring Entity."
3. Learned counsel for the petitioners submitted that Rule 75-A,
which has been inserted, is an arbitrary rule, as already under the
Rules of 2013, various measures are available to protect the
interest of the procuring entity. The petitioners argued that
Section 7 and Section 46 of the Rajasthan Transparency in Public
Procurement Act, 2012 (hereinafter referred to as the 'Act of
2012') and Rule 38, Rule 65, Rule 68, Rule 69 and 70 of the Rules
of 2013 already provides safeguards to protect the interest of the
procuring entity and now the introduction of the concept of
'Additional Performance Security' through Rule 75-A in the Rules of
2013 is not only arbitrary and unsustainable in the eyes of law but
also renders the Rule to be ultra vires.
4. It was further argued that the object of the procuring entity
is to get the work done within the scheduled amount and in a
specific time frame and for the said purpose different types of
securities are already available under the Act of 2012 as well as
Rules of 2013. Thus, there was no requirement for the insertion
of Rule 75-A, in cases where a quotation of tender is rated below
15% of the scheduled amount. It was also contended that a bidder
would in any case not leave/abandon the work as he would be
facing a loss of substantial amount deposited in the form of other
securities as provided under the Act of 2012 and the Rules of 2013
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and this additional deposit of Additional Perform Security will
cause financial hardship to contractors.
5. It was further argued that in the present scenario of
inevitable competition, every bidder ventures to quote a lower
price so that he can get the contract and thereby earn a livelihood,
which in turn also benefits the procuring entity by saving a huge
amount. The petitioners further contended that there is no data
with the respondents to the effect that how many unbalanced
contractors have failed to execute their work contracts, which
could justify the actions of the respondents to introduce such a
harsh condition of requiring 'Additional Performance Security' if
the bid amount quoted by the contractor is below 15% of the
scheduled rates.
6. Learned counsel for the petitioners further submitted that
the Rule 75-A also entitles the procuring entity to forfeit the
additional performance security, in case, there is a delay in
completing the work even without any adjudication as to whom
the delay is attributable, and such forfeiture has been made
permissible even when the delay is not attributable to the
contractor. The petitioners also contended that the introduction of
Rule 75-A is ultra vires as the bidders in these cases will be
required to furnish two types of performance security for the same
work. The petitioners therefore prayed that the Gazette
Notification dated 22.10.2021, whereby, Rule 75-A has been
introduced be declared ultra vires and further, it has been prayed
that the different respondent Departments with whom the
petitioners had successfully bid may be restrained from insisting
the deposit additional performance security under the provision of
Rule 75-A of the Rules of 2013.
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7. Per contra learned counsel for the respondents submitted at
the outset that the challenge to the Rule 75-A has already been
decided by a Co-ordinate Bench of this Hon'ble Court at Jaipur
Bench in D.B. Civil Writ Petition No.10701/2025 (M/s. Moga
Builder Vs. State of Rajasthan & Ors.), vide judgment dated
21.07.2025, whereby, the validity of Rule 75-A has been upheld
by the Co-ordinate Bench and it has been held that there is
nothing illegal or arbitrary in the introduction of Rule 75-A in the
Rules of 2013 and such provision has been introduced to address
possible situations where contractors bid excessively low and
subsequently fail to complete the work.
8. It has been further argued by learned counsel for the
respondents that the petitioners, despite the clear applicability of
Rule 75-A in the bidding documents, submitted their bids at the
rate which is less than 15% of the scheduled rate and have not
challenged the validity of the Rule 75-A before submitting the
bids. Therefore, the petitioners cannot claim that the procuring
entities should be restrained from demanding the additional
performance security from the contractors, Accordingly, it was
prayed that the writ petitions be dismissed.
9. Heard learned counsel for the parties and perused the
material available on record.
10. Sections 7, 42, 46 of the Act of 2012, are reproduced
as under :
"7. Qualifications of bidders.-- (1) A procuring entity
may determine and apply one or more of the requirements
specified in sub-section (2) for a bidder to be qualified for
participating in a procurement process.
(2) Any bidder participating in the procurement process
shall -
(a) possess the necessary professional, technical, financial
and managerial resources and competence required by the
bidding documents, pre-qualification documents or bidder
registration documents, as the case may be, issued by the
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procuring entity;
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(b) have fulfilled his obligation to pay such of the taxes
payable to the Central Government or the State
Government or any local authority as may be specified in
the bidding documents, pre-qualification documents or
bidder registration documents;
(c) not be insolvent, in receivership, bankrupt or being
wound up, not have its affairs administered by a court or a
judicial officer, not have its business activities suspended
and must not be the subject of legal proceedings for any of
the foregoing reasons;
(d) not have, and their directors and officers not have,
been convicted of any criminal offence related to their
professional conduct or the making of false statements or
misrepresentations as to their qualifications to enter into a
procurement contract within a period of three years
preceding the commencement of the procurement process,
or not have been otherwise disqualified pursuant to
debarment proceedings;
(e) not have a conflict of interest as may be prescribed and
specified in the pre-qualification documents, bidder
registration documents or bidding documents, which
materially affects fair competition;
(f) fulfil any other qualifications as may be prescribed.
(3) Subject to the right of bidders to protect their
intellectual property or trade secrets the procuring entity
may require a bidder to provide any such information or
declaration as it considers necessary to make an evaluation
in accordance with sub-section (1).
(4) Any requirement established pursuant to this section
shall be set out in the pre-qualification documents or
bidder registration documents, if any, and in the bidding
documents and shall apply equally to all bidders.
(5) The procuring entity shall evaluate the qualifications of
bidders only in accordance with the requirement specified
in this section.
42. Interference with procurement process.- (1)
Whoever-
(a) interferes with or influences any procurement process
with the intention of securing any wrongful gain or undue
advantage for any prospective bidder or bidder; or
(b) interferes with the procurement process with the
intention of causing any unfair disadvantage for any
prospective bidder or bidder; or
(c) engages in any action or lobbying, directly or indirectly,
with the objective of unduly restricting fair competition; or
(d) intentionally influences any procuring entity or any
officer or employee thereof or wilfully or fraudulently
makes any assertion or representation that would restrict
or constrain fair competition in any procurement process;
or
(e) engages a former officer or employee of a procuring
entity as an employee, director, consultant, adviser or
otherwise, within a period of one year after such former
officer or employee was associated with a procurement in
which the employer had an interest; or
(f) engages in any form of bid-rigging, collusive bidding or
anticompetitive behaviour in the procurement process; or
(g) intentionally breaches confidentiality referred to in
section 49 for any undue gain, shall be punished with
imprisonment for a term
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and shall also be liable to fine which may extend to fifty
lakh rupees or ten per cent of the assessed value of
procurement, whichever is less.
(2) A bidder who-
(a) withdraws from the procurement process after opening
of financial bids;
(b) withdraws from the procurement process after being
declared the successful bidder;
(c) fails to enter into procurement contract after being
declared the successful bidder;
(d) fails to provide performance security or any other
document or security required in terms of the bidding
documents after being declared the successful bidder,
without valid grounds,
shall, in addition to the recourse available in the bidding
documents or the contract, be punished with fine which
may extend to fifty lakh rupees or ten per cent of the
assessed value of procurement, whichever is less.
46. Debarment from bidding.- (1) A bidder shall be
debarred by the State Government if he has been
convicted of an offence -
(a) under the Prevention of Corruption Act, 1988 (Central
Act No. 49 of 1988); or
(b) under the Indian Penal Code, 1860 (Central Act No. 45
of 1860) or any other law for the time being in force, for
causing any loss of life or property or causing a threat to
public health as part of execution of a public procurement
contract.
(2) A bidder debarred under sub-section (1) shall not be
eligible to participate in a procurement process of any
procuring entity for a period not exceeding three years
commencing from the date on which he was debarred.
(3) If a procuring entity finds that a bidder has breached
the code of integrity prescribed in terms of section 11, it
may debar the bidder for a period not exceeding three
years.
(4) Where the entire bid security or the entire performance
security or any substitute thereof, as the case may be, of a
bidder has been forfeited by a procuring entity in respect of
any procurement process or procurement contract, the
bidder may be debarred from participating in any
procurement process undertaken by the procuring entity
for a period not exceeding three years.
(5) The State Government or a procuring entity, as the
case may be, shall not debar a bidder under this section
unless such bidder has been given a reasonable
opportunity of being heard."
Rules 38, 42, 65, 68 69, 70 of the Rules of 2013, are
reproduced as under :
"38. Qualification of bidders.- In addition to the
provisions regarding qualification of bidders as set out
in section 7,-
(a) the procuring entity shall disqualify a bidder if it
finds at any time that,-
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(i) the information submitted, concerning the
qualifications of the bidder, was false or constituted a
misrepresentation; or
(ii) the information submitted, concerning the
qualifications of the bidder, was materially inaccurate
or incomplete; and
(b) the procuring entity may require a bidder, who
was pre-qualified, to demonstrate its qualifications
again in accordance with the same criteria used to
prequalify such bidder. The procuring entity shall
disqualify any bidder that fails to demonstrate its
qualifications again, if requested to do so. The
procuring entity shall promptly notify each bidder
requested to demonstrate its qualifications again as to
whether or not the bidder has done so to the
satisfaction of the procuring entity.
42. Bid security.- (1) Bid security shall not be taken
in case of petty procurement valuing up to rupees ten
thousand and procurement by the methods of limited
bidding under clause (b) and (c) of sub-section (1) of
section 30, request for quotations, spot purchase,
single source procurement and competitive
negotiations.
(2) In case of open competitive bidding, two-stage
bidding, rate contract, electronic reverse auction, bid
security shall be 2% or as specified by the State
Government of the estimated value of subject matter
of procurement put to bid. In case of Small Scale
Industries of Rajasthan it shall be 0.5% of the
quantity offered for supply and in case of sick
industries, other than Small Scale Industries, whose
cases are pending with Board of Industrial and
Financial Reconstruction, it shall be 1% of the value of
bid. Concessional bid security may be taken from
registered bidders as specified by the State
Government. Every bidder, if not exempted,
participating in the procurement process shall be
required to furnish the bid security as specified in the
notice inviting bids.
[(3) In lieu of bid security, a bid securing declaration
shall be taken from the,-
(i) Departments/Boards of the State Government or
Central Government;
(ii) Government Companies as defined in clause (45)
of section 2 of the Companies Act, 2013;
(iii) Company owned or controlled, directly or
indirectly, by the Central Government, or by any State
Government or Governments, or partly by the Central
Government and partly by one or more State
Governments which is subject to audit by the Auditor
appointed by the Comptroller and Auditor-General of
India under sub-section (5) or (7) of section 139 of
the Companies Act, 2013; or
(iv) Autonomous bodies, Registered Societies,
Cooperative Societies which
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managed by the State Government or Central
Government.]
(4) Bid security instrument or cash receipt of bid
security or a bid securing declaration shall necessarily
accompany the sealed bid.
(5) Bid security of a bidder lying with the procuring
entity in respect of other bids awaiting decision shall
not be adjusted towards bid security for the fresh bids.
The bid security originally deposited may, however, be
taken into consideration in case bids are re-invited.
(6) The bid security may be given in the form of cash,
a banker's cheque or demand draft or bank guarantee,
in specified format, of a scheduled bank or deposit
through eGRAS. The bid security must remain valid
thirty days beyond the original or extended validity
period of the bid.
(7) The bidding documents may stipulate that the
issuer of the bid security and the confirmer, if any, of
the bid security, as well as the form and terms of the
bid security, must be acceptable to the procuring
entity. In cases of International Competitive Bidding,
the bidding documents may in addition stipulate that
the bid security shall be issued by an issuer in India.
(8) Prior to presenting a submission, a bidder may
request the procuring entity to confirm the
acceptability of proposed issuer of a bid security or of
a proposed confirmer, if required. The procuring entity
shall respond promptly to such a request.
(9) The bank guarantee presented as bid security shall
be got confirmed from the concerned issuing bank.
However, the confirmation of the acceptability of a
proposed issuer or of any proposed confirmer does not
preclude the procuring entity from rejecting the bid
security on the ground that the issuer or the
confirmer, as the case may be, has become insolvent
or has otherwise ceased to be creditworthy.
(10) The bid security of unsuccessful bidders shall be
refunded soon after final acceptance of successful bid
and signing of Agreement and submitting performance
security.
(11) The Bid security taken from a bidder shall be
forfeited in the following cases, namely:-
(a) when the bidder withdraws or modifies its bid after
opening of bids;
(b) when the bidder does not execute the agreement,
if any, after placement of supply / work order within
the specified period;
(c) when the bidder fails to commence the supply of
the goods or service or execute work as per supply /
work order within the time specified;
(d) when the bidder does not deposit the performance
security within specified period after the supply / work
order is placed; and
(e) if the bidder breaches any provision of code of
integrity prescribed for bidders specified in the Act and
Chapter VI of these rules.
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(12) In case of the successful bidder, the amount of
bid security may be adjusted in arriving at the amount
of the Performance Security, or refunded if the
successful bidder furnishes the full amount of
performance security.
(13) The procuring entity shall promptly return the bid
security after the earliest of the following events,
namely:-
(a) the expiry of validity of bid security;
(b) the execution of agreement for procurement and
performance security is furnished by the successful
bidder;
(c) the cancellation of the procurement process; or
(d) the withdrawal of bid prior to the deadline for
presenting bids, unless the bidding documents
stipulate that no such withdrawal is permitted.
65. Evaluation of financial bids.- Subject to the
provisions of section 27, the procuring entity shall take
following actions for evaluation of financial bids:-
(a) in case of single part bid system where bid is
received in single cover along with requisite bid
security, processing fee or user charges and price of
bidding documents within specified time, it shall be
considered for financial evaluation by the bids
evaluation committee;
(b) in case of two part bid system the financial bids of
the bidders who qualified in technical evaluation shall
be opened at the notified time, date and place by the
bid evaluation committee in the presence of the
bidders or their representatives who choose to be
present;
(c) the process of opening, marking and signing on the
financial bids shall be as prescribed in rule 55;
(d) the names of the bidders, the rates given by them
and conditions put, if any, shall be read out and
recorded;
(e) conditional bids are liable to be rejected;
(f) the evaluation shall include all costs and all taxes
and duties applicable to the bidder as per law of the
Central / State Government / Local Authorities, and
the evaluation criteria specified in the bidding
documents shall only be applied;
(g) the offers shall be evaluated and marked L1, L2,
L3 etc. L1 being the lowest offer and then others in
ascending order in case price is the only criteria, or
evaluated and marked H1, H2, H3 etc. in descending
order in case quality is also a criteria and the
combined score of technical and financial evaluation is
considered;
(h) the bid evaluation committee shall prepare a
comparative statement in tabular form in accordance
with rule 58 with its report on evaluation of financial
bids and recommend the lowest offer for acceptance
to the procuring entity, if price is the only criterion, or
most advantageous bid
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(i) it shall be ensured that the offer recommended for
sanction is justifiable looking to the prevailing market
rates of the goods, works or service required to be
procured; and
(j) in case a rate contract is being entered, more than
one firm at the same lowest rate may be considered to
ensure uninterrupted delivery but for this purpose,
counter offer of lowest rate will be given for
acceptance to the bidders quoting higher rates in the
order of ascending value.
68. Lack of competition.- (1) A situation may arise
where, if after evaluation of bids the bid evaluation
committee may end-up with one responsive bid only,
in such situation, the bid evaluation committee should
check as to whether while floating the Notice Inviting
Bids all necessary requirements to encourage
competition like standard bid conditions, industry
friendly specifications, wide publicity, sufficient time
for formulation of bids, etc. were fulfilled. If not, the
Notice Inviting Bids should be refloated after rectifying
deficiencies. The bid process shall be considered valid
even if there is one responsive bid, provided that-
(a) the bid is technically qualified;
(b) the price quoted by the bidder is assessed to be
reasonable; (c) the bid is unconditional and complete
in all respects;
(d) there are no obvious indicators of cartelisation
amongst bidders; and
(e) the bidder is qualified as per the provisions of
section 7
[(2) The bid evaluation committee shall prepare a
justification note for approval of the procuring entity,
clearly including views of the accounts/finance
member of the committee.
(3) The procuring entity competent to decide a
procurement case, as per delegation of financial
powers, shall decide as to whether to sanction the
single bid or re-invite bids after recording its reasons
for doing so.]
(4) If a decision to re invite the bids is taken, market
assessment shall be carried out for estimation of
market depth, eligibility criteria and cost estimate.
69. Negotiations.- (1) Except in case of procurement
by method of single source procurement or
procurement by competitive negotiations, to the
extent possible, no negotiations shall be conducted
after the pre-bid stage. All clarifications needed to be
sought shall be sought in the pre-bid stage itself.
(2) Negotiations may, however, be undertaken only
with the lowest or most advantageous bidder under
the following circumstances-
(a) when ring prices have been quoted by the bidders
for the subject matter of procurement; or
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(b) when the rates quoted vary considerably and
considered much higher than the prevailing market
rates.
(3) The bid evaluation committee shall have full
powers to undertake negotiations. Detailed reasons
and results of negotiations shall be recorded in the
proceedings.
(4) The lowest or most advantageous bidder shall be
informed in writing either through messenger or by
registered letter and email (if available). A minimum
time of seven days shall be given for calling
negotiations. In case of urgency the bid evaluation
committee, after recording reasons, may reduce the
time, provided the lowest or most advantageous
bidder has received the intimation and consented to
regarding holding of negotiations.
(5) Negotiations shall not make the original offer made
by the bidder inoperative. The bid evaluation
committee shall have option to consider the original
offer in case the bidder decides to increase rates
originally quoted or imposes any new terms or
conditions.
(6) In case of non-satisfactory achievement of rates
from lowest or most advantageous bidder, the bid
evaluation committee may choose to make a written
counter offer to the lowest or most advantageous
bidder and if this is not accepted by him, the
committee may decide to reject and re-invite bids or
to make the same counter-offer first to the second
lowest or most advantageous bidder, then to the third
lowest or most advantageous bidder and so on in the
order of their initial standing and work / supply order
be awarded to the bidder who accepts the counter-
offer. This procedure should be used in exceptional
cases only.
(7) In case the rates even after the negotiations are
considered very high, fresh bids shall be invited.
70. Acceptance of the successful bid and award
of contract.-
(1) The procuring entity after considering the
recommendations of the bid evaluation committee and
the conditions of bid, if any, financial implications,
trials, sample testing and test reports, etc., shall
accept or reject the successful bid. If any member of
the bid evaluation committee, has disagreed or given
its note of dissent, the matter shall be referred to the
next higher authority, as per delegation of financial
powers, for decision.
(2) Decision on bids shall be taken within original
validity period of bids and time period allowed to
procuring entity for taking decision. If the decision is
not taken within the original validity period or time
limit allowed for taking decision, the matter shall be
referred to the next higher authority in delegation of
financial powers for decision.
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(3) Before award of the contract, the procuring entity
shall ensure that the price of successful bid is
reasonable and consistent with the required quality.
(4) A bid shall be treated as successful only after the
competent authority has approved the procurement in
terms of that bid. (5) The procuring entity shall award
the contract to the bidder whose offer has been
determined to be the lowest or most advantageous in
accordance with the evaluation criteria set out in the
bidding documents and if the bidder has been
determined to be qualified to perform the contract
satisfactorily on the basis of qualification criteria fixed
for the bidders in the bidding documents for the
subject matter of procurement.
(6) Prior to the expiration of the period of bid validity,
the procuring entity shall inform the successful bidder,
in writing, that its bid has been accepted.
(7) As soon as a bid is accepted by the competent
authority, its written intimation shall be sent to the
concerned bidder by registered post or email and
asked to execute an agreement in the format given in
the bidding documents on a non judicial stamp of
requisite value and deposit the amount of performance
security or a performance security declaration, if
applicable, within a period specified in the bidding
documents or where the period is not specified in the
bidding documents then within fifteen days from the
date on which the letter of acceptance or letter of
intent is despatched to the bidder.
(8) If the issuance of formal letter of acceptance is
likely to take time, in the meanwhile a Letter of Intent
(LOI) may be sent to the bidder. The acceptance of an
offer is complete as soon as the letter of acceptance or
letter of intent is posted and/ or sent by email (if
available) to the address of the bidder given in the
bidding document. Until a formal contract is executed,
the letter of acceptance or Letter of Intent shall
constitute a binding contract.
(9) The bid security of the bidders whose bids could
not be accepted shall be refunded soon after the
contract with the successful bidder is signed and its
performance security is obtained."
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.-
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(Downloaded on 03/11/2025 at 10:00:03 PM) [2025:RJ-JD:40868-DB] (19 of 22) [CW-11359/2025] (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 (Uploaded on 03/11/2025 at 05:09:09 PM) (Downloaded on 03/11/2025 at 10:00:03 PM) [2025:RJ-JD:40868-DB] (20 of 22) [CW-11359/2025] 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 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 (Uploaded on 03/11/2025 at 05:09:09 PM) (Downloaded on 03/11/2025 at 10:00:03 PM) [2025:RJ-JD:40868-DB] (21 of 22) [CW-11359/2025] 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 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. (Uploaded on 03/11/2025 at 05:09:09 PM) (Downloaded on 03/11/2025 at 10:00:03 PM) [2025:RJ-JD:40868-DB] (22 of 22) [CW-11359/2025]
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.
24. No order as to costs.
25. Stay petition also stands disposed of.
(BIPIN GUPTA),J (MUNNURI LAXMAN),J
AnilKC/praveen-
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