Only Subsisting, Enforceable Obligations Qualify As 'Existing Commitments' In Tender Process: Patna High Court

The Patna High Court has held that only subsisting and enforceable obligations can be treated as “existing commitments” for purposes of tender disclosure requirements, setting aside the disqualification of a bidder for alleged non-disclosure of a work which had already been proposed to be dropped by the department.A Division Bench of Justice Sudhir Singh and Justice Shailendra Singh was hearing a writ petition challenging the decision of the Technical Evaluation Committee disqualifying the petitioner from the technical bid stage under a tender floated by the Rural Works Department for construction and six-year operation and maintenance of a rural road/bridge project under the Sulabh Samparakta Yojana.The petitioner had initially been declared technically qualified pursuant to the tender process. However, following a complaint by another bidder alleging non-disclosure of prior work, the department issued a show cause notice and subsequently disqualified the petitioner on the ground that it had failed to disclose work under Agreement No. 23/SBD/2020-21 while submitting its bid.The petitioner contended that the said work had already been proposed to be dropped by the competent authority prior to submission of the bid and therefore did not constitute an “existing commitment” or “ongoing work” requiring disclosure under Clause 4.6 of the Combined Model Bidding Document (CMBD).The State defended the disqualification, arguing that Clause 4.2(m) and Clause 4.6 of the CMBD mandate disclosure of all existing commitments and ongoing construction works, including works pending for foreclosure or proposed to be dropped.The Court framed the issue as whether a work proposed to be dropped by the competent authority prior to bid submission could be treated as an “existing commitment/ongoing work” under the tender conditions.Interpreting the relevant clauses of the CMBD, the Court held that the expression “existing commitment” refers only to subsisting obligations having a real bearing on the bidder's capacity to execute the tendered work. The Court observed:“From a combined reading of the aforesaid provisions, it is clear that the expression 'existing commitment' refers to a subsisting and enforceable obligation which has a direct bearing on the bidder's capacity to execute the work for which tender has been issued. The emphasis is on the value of work 'to be completed', thereby indicating that only such works which are ongoing and capable of execution fall within its scope.”On facts, the Court noted that the disputed work had been proposed to be dropped by the Executive Engineer on 18.06.2024, well before the last date of submission of bid, and no work was required to be executed under the said agreement as on the relevant date. The Court further held that the formal delay in departmental approval of dropping the work could not be attributed to the petitioner.Rejecting the respondents' interpretation, the Court observed:“In the present case, the interpretation adopted by the respondents treats even a work which had been proposed to be dropped and was not being executed as an 'existing commitment'. Such an interpretation, in the opinion of this Court, is unreasonable and contrary to the object of Clause 4.6, which is to assess the actual capacity of a bidder. The purpose of disclosure of existing commitments is to assess the real workload of the bidder. A work which is not being executed and in respect of which the department itself has initiated steps for dropping (as being constructed by another scheme) cannot be equated with an ongoing and subsisting commitment where there is necessity of work to be done.”The Court also clarified that executive clarifications or press releases cannot override the terms of the CMBD and may only clarify, but not expand, tender conditions.Holding the disqualification to be arbitrary and contrary to the bidding document, the Court allowed the writ petition and set aside the impugned disqualification.Case Title: Gopal Kumar v. State of Bihar and Ors.Case No.: Civil Writ Jurisdiction Case No. 20584 of 2025.Appearance: Senior Advocate Mr. Shekhar Singh, along with Mr. Kumar Anjaney Shanu, Mr. Shubham, Mr. Ranvir Pratap Singh, and Ms. Shambhavi Singh appeared for the Petitioner. Mr. Anand Kumar Ojha-I, Mr. Bachan Jee Ojha and Mr. Amish Kumar appeared for the Respondents.Click Here To Read/Download Order

Only Subsisting, Enforceable Obligations Qualify As 'Existing Commitments' In Tender Process: Patna High Court

Rushil Batra

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