The petitioner was the losing bidder’s alter ego: Supreme Court revives a quashed road contract

The Himachal Pradesh High Court quashed a Rs 23 crore PMGSY award on a public interest petition and ordered a re-tender within a month. The Supreme Court has given the contractor three months to finish instead.

In December 2024 a Division Bench of the Himachal Pradesh High Court at Shimla allowed a public interest petition, quashed the award of work in favour of a contractor, and directed the State to re-tender the remaining work within one month. The work was the upgradation of the Matiana and Mahori to Chhaila road, kilometre 0/00 to 25/650, under Pradhan Mantri Gram Sadak Yojana package No. HP-09-694. The contractor whose award was quashed had been arrayed as the fifth respondent in that petition, and is the appellant here.

On 23 September 2026, in O.P. Mehta v. Mohinder Kalta and Ors., a Bench of Justice Dipankar Datta and Justice Sheel Nagu declined to let that re-tender proceed for now. The order, authored by Justice Nagu, does not decide the appeals. It records a reservation about the proceeding itself, and makes a practical arrangement in the meantime.

A question the Court says glares in the face

The aspect which glares in the face in this case, the order says, is whether the validity of a tender — where the comparative claims of competing tenderers are what have to be adjudged — can be made the subject matter of a challenge in a public interest petition at all.

The Bench has its reservations, for two reasons it states plainly. The grounds raised before the High Court predominantly dealt with an inter se comparative assessment between the two bidders whose bids had been received, including the appellant. And the cost of the work, Rs 23 crores, was not of such magnitude as to allow a petitioner in a PIL to raise the plea of wastage of public resources.

To that the order adds a finding about who was actually litigating. The petitioner before the High Court was, it records, the alter ego of the unsuccessful bidder. That unsuccessful bidder had itself complained against the successful bidder — and has since withdrawn the complaint.

What had persuaded the High Court

The order sets out the five factors that weighed with the High Court, and they are the ordinary currency of a tender dispute rather than of public interest litigation.

The first was the contradictory stand taken by the official respondents on whether a complaint by M/s PK Construction Pvt. Ltd., the other bidder, had been received at all, and if received, whether it had been withdrawn. The second was whether the experience the appellant relied on had been gained as a sub-contractor or as a prime contractor. The third was whether he could be allowed to operate under two different names, said to violate certain clauses of the tender documents. The fourth was that although sub-contracts were admittedly permitted under the tender conditions, they were permitted subject to conditions the High Court found missing here. The fifth was that the nature of work reflected in the appellant’s experience certificate was at variance with the work he had actually executed in the past.

Each of those is a comparison between two bidders on the terms of the tender. That is the point the Supreme Court’s reservation fastens on: the forum was a public interest petition, but the contest was between rivals, and the petitioner was standing in for one of them.

Three months, at 2024 rates

Rather than decide the maintainability question, the Court dealt with the road. By an affidavit of 3 September 2026 the appellant informed the Court that three kilometres of construction are complete, along with retaining and breast walls, on the Matiana to Mohri stretch in Shimla district, and that he is ready and willing to complete the work at the same rates on which it was awarded to him in March 2024. He gave an assurance that quality would not be compromised.

On that assurance, the Court extended a period of three months for the appellant to complete the entire work allotted to him, at the rates prevailing as on 15 March 2024 — not at present-day rates. If the work is not completed within that time, and subject to the official respondents verifying the quality of what has been executed, they are directed to re-tender the same work at the prevailing market rate.

An interim order of March 2025 had restrained the official respondents from creating third party rights pending the appeal. That order continues, modified to the extent of the arrangement now made.

The matter has been deferred and will be listed in the first week of December 2026 for the appellant to file a compliance report. The same order governs the connected appeal filed by the State of Himachal Pradesh, which had appealed alongside the contractor against the quashing of its own award.

The arrangement is a pragmatic one. Three kilometres of hill road already exist; re-tendering would mean abandoning that work, procuring afresh at current prices, and starting the twenty-five kilometre upgradation over. The appellant has instead been held to the price he bid two and a half years ago and given a deadline, with the re-tender direction preserved as the consequence of missing it. Whether a tender challenge of this kind belongs in a public interest petition remains, for the present, a question the Court has raised rather than answered.