Authority: High Court of Chhattisgarh at Bilaspur

Order Date: 06.07.2026

Case Overview

  • Petitioner: M/s Bundelkhand Engineers Through – Proprietor Madhur Agrawal, a registered government contractor operating from Korba, Chhattisgarh.
  • Respondents: 1) State of Chhattisgarh (through Secretary, Urban Administration Department) and 2) Municipal Corporation Korba (through its Commissioner).
  • Nature of dispute: Writ petition (WPC No. 3429 of 2026) challenging the legality of the order dated 30.04.2026 issued by Municipal Corporation Korba that (i) cancelled the tender awarded to the petitioner, (ii) forfeited the security amount of Rs 21,50,000, and (iii) blacklisted the petitioner for two years.
  • Tender details: System Tender No. 181916 dated 29.12.2025 for construction of CC road, retaining wall, box culvert, pitching work, borewell work and installation of high‑mast and street lights at CBG Plant Area, Barbaspur, Korba. Probable contract value Rs 285.00 lakhs. Online bids invited up to 20.01.2026. The petitioner was declared successful.
  • Letter of Intent: Issued on 02.04.2026, stating that because the bid amount was 18.60 % below the Schedule of Rates (SOR), the petitioner must deposit an additional performance guarantee of Rs 21,50,000 and complete formalities before execution.
  • Communications: On 16.04.2026 the corporation reminded the petitioner to deposit the guarantee or face rejection and forfeiture. The petitioner replied on 27.04.2026 citing bank and government holidays, requesting an extension till 04.05.2026. The petitioner obtained the TDR and submitted it on 02.05.2026, stating that the remaining formalities were being completed.
  • Impugned order: Dated 30.04.2026, served on 05.05.2026 (dispatch recorded as 04.05.2026 10:22:10 hrs), cancelled the tender, forfeited the security amount and blacklisted the petitioner for two years.
  • Subsequent actions by petitioner: Review application filed on 11.05.2026, reminder on 29.05.2026, and appeal before the Appeal Committee of Municipal Corporation Korba on the same day. On 05.06.2026 the Executive Engineer returned the TDR and informed the petitioner that a second tender notice (System Tender No. 191792 dated 27.05.2026) had been issued.

Final Outcome

  • The Court held that the cancellation of the tender/Letter of Intent is lawful because the petitioner had not complied with the essential condition of depositing the additional performance guarantee within the time originally stipulated, and no formal extension had been granted.
  • The Court found the blacklisting order to be illegal as it was passed without a specific show‑cause notice and without affording the petitioner an opportunity to be heard; consequently, the blacklisting provision of the impugned order is set aside.
  • Regarding forfeiture of the security amount, the Court observed that the order did not record any consideration of the petitioner’s request for extension or the fact that the TDR had been deposited on 02.05.2026. The matter is therefore remitted to Municipal Corporation Korba for fresh consideration of the forfeiture issue, with a requirement to afford a hearing to the petitioner and to pass a reasoned order within 60 days of receipt of the Court’s order.
  • The petition is partially allowed: cancellation of the tender is upheld; blacklisting is quashed; forfeiture is remitted for reconsideration.
  • No order as to costs; any pending applications are disposed of.

Topics: Tender Procurement, Blacklisting