Supreme Court: While considering this appeal against dismissal of challenge against certain tender conditions contained in 3 tender notices which were issued for supply of Sports Kits to the students at Government Primary School, Government Upper Primary Schools and Government High and Higher Secondary Schools in the State of Chhattisgarh; the Division Bench of Sanjay Kumar and Alok Aradhe*, JJ., quashed the impugned tender notices holding that the impugned tender condition of past supply of sports kit within Chhattisgarh, had the effect of excluding bidders who have no experience of supply of sports goods to the State Government agencies of Chhattisgarh in past 3 years. The State by linking the eligibility criteria with past local supplies, thus created an artificial barrier, against the suppliers who had no past dealing with the State of Chhattisgarh, thereby curtailing the fundamental rights of the bidders, who have been ineligible to participate in the tenders.
Background:
The appellant Company is registered under the Companies Act, 2013 and claimed to have experience of supplying Sports Kits to various Departments of the States of Bihar, Karnataka, Gujarat and Government of NCT Delhi. The Integrated Child Development Service (ICDS) Scheme is a Scheme for providing for supplementary nutrition, immunization and pre-school education to the children, launched in the year 1975. ICDS provides for the integrated package of services, for the holistic development of the child and is a centrally sponsored scheme implemented by State Governments and the Union Territories.
The Samagra Shiksha Chhattisgarh State Project Office, Department of School Education, Chhattisgarh published 3 tender notices (“impugned tender notices”) on 21-07-2025 through Government-e-Market Place Portal for supply of Sports Kits to the students of Primary School, Upper Primary Schools and High and Higher Secondary Schools run by the State Government in the State of Chhattisgarh. The Sports Kits were to be supplied to 5540 cluster resource centres situated across all 33 districts in the State.
Section III(A) of the impugned tender notices prescribed qualification criteria with additional terms and conditions. The appellant was aggrieved by additional terms and conditions namely, condition Nos. 1, 4, 11 and 13, which rendered them ineligible for participation in the impugned tender process. The appellant filed a representation before the department concerned, but there was no response. Therefore, the appellant filed writ petitions before the High Court. The High Court repelled the challenge to the impugned tender conditions, especially condition 4 which was with regard to past performance. The High Court held that State is entitled to prescribe the condition in the impugned tender notices, to ensure that selection of the most capable and reliable bidder takes place, to execute the public project of significant scale, sensitivity and public importance. It was also held that impugned tender condition is neither violative of Article 14 nor Article 19 (1)(g) of the Constitution.
Court’s Assessment:
Perusing the matter, the Court had to consider whether condition with regard to past performance met the test of reasonableness and fairness and or whether the same constituted an arbitrary criteria which excluded the other eligible bidders from participation thereby violating, the mandate contained in Articles 14 and 19(1)(g) of the Constitution.
The Court referred to Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489, where it was held that discretion of the Government in granting the largesse, is not unlimited and the Government cannot give or withhold largesse in its arbitrary discretion or at its sweet will. It had been further held that Government cannot without adequate reason exclude any person from dealing with it or take away largesse arbitrarily. The Court further referred to other case laws wherein it stated that Government must have free hand in setting the terms of the tender and the Court cannot strike down the terms of the tender prescribed by the Authority merely because it feels some other terms in the tender would have been fairer, wiser or more logical. Furthermore, it was pointed out that in the matter of formulating conditions of tender document unless the action of tendering authority is found to be arbitrary and malicious the Court would not interfere.
The Court stated that Article 14 embodies the principle of non-discrimination and has to be read in conjunction with rights conferred by other Articles like Article 21 of the Constitution. Right to life under Article 21 includes ‘opportunity’ as well. The Court pointed out that the doctrine of level playing field is an important concept while construing Article 19 (1) (g) of the Constitution. Article 19(1) (g) confers Fundamental Right to carry out business to a company, it is entitled to invoke the doctrine of level playing field which is however, subject to public interest. The Court stated that doctrine of level playing field as enunciated in Union of India v. Bharat Forge Ltd., (2022) 17 SCC 188, stated that the same finds expression in Article 19(1)(g). The doctrine of level playing field requires that all equally placed competitors must be given an equal opportunity to participate in trade and commerce. It is designed to prevent the State from skewing the market in favour of few by erecting artificial barriers.
Coming onto the facts of the present case, the Court noted that the impugned tenders were about supply of Sports Kit. The eligibility criteria mentioned in the impugned tender notices must have rational nexus with the object sought to be achieved i.e., supply of good quality Sports Kits to students of the school, at the best price. The eligibility criteria in impugned notices therefore, should be framed in a manner which encourages wider participation and secures the best prize for the State, which in turn safeguards the public exchequer. However, the impugned tender condition, had the effect of excluding bidders who though otherwise financially sound and technically competent, have no experience of supply of sports goods to the State Government agencies of Chhattisgarh in past three years.
The object of public procurement is to secure quality goods and services for the benefit of public exchequer. The said object can be achieved by requiring the bidders to demonstrate financial capacity, technical experience, and past performance in contracts of similar nature, regardless of place of performance of the contract. To confine the eligibility to participate in the tender, within one State is not only irrational but is also disproportionate to the goal of ensuring effective delivery of Sports Kits. Therefore, such restriction is unjustifiable within the meaning of 19(6) of the Constitution.
The State while it enjoys the freedom to prescribe the conditions in the tender, cannot exercise that power in a manner that infringes upon constitutional guarantees, by closing the market to outsiders without just cause.
“The doctrine of level playing field requires that gates of competition be opened to all who are equally placed”.
The impugned tender condition excluded the competent and experienced suppliers, who may have executed contracts of far greater magnitude in other States or for the Central Government departments, from participating in the tender and has the impact of promoting cartelisation. The impugned condition operated as a closed door to outsiders and restricted the wider participation of bidders and restricts competition.
The Court further held that justification advanced by the State that Chhattisgarh being a Maoist affected area and only those with past experience of supply in the State-to-State Government agencies of Chhattisgarh can be relied upon, was untenable as the tender was not for security sensitive equipment but for supply of Sports Kits; only some districts of Chhattisgarh have been affected by Maoist activities, and it is incorrect to treat the entire State, as uniformly affected by Naxalites, for exclusion of other eligible bidders; and a successful bidder, who may not be conversant with the topography can engage a local supply chain to supply the Sports Kits.
Thus, Court found that the impugned tender condition on past performance was arbitrary, unreasonable and discriminatory and did not have any rational nexus to the object of ensuring effective supply of Sports Kits to the children in State. It offended the mandate of Article 14 and freedom of trade guaranteed by Article 19(1)(g) of the Constitution.
[Vinishma Technologies Pvt. Ltd v. State of Chhattisgarh, 2025 SCC OnLine SC 2119, decided on 6-10-2025]
*Judgment by Justice Alok Aradhe
Advocates who appeared in this case:
For Petitioner(s): Mr. M. Dutta, Sr. Adv. Mr. Nitish Kumar Singh, Adv. Mr. Abhishek Raj, Adv. Mr. Amit Kumar Thakur, Adv. Mr. Harsh Abhishek, Adv. Mr. Anand Kumar Soni, Adv. Mr. Niteen Kumar Sinha, AOR
For Respondent(s): Mr. Balbir Singh, Sr. Adv. Mr. Pallav Mongia, AOR Mr. Anubhav Mishra, Adv. Ms. Kashish Lalwani, Adv. Ms. Akanksha Jain, Adv. Mr. Sunil Otwani, Sr. Adv. Mr. Amit Soni, Adv. Mr. Abhay Kumar, AOR Mr. Rajat Khattry, Adv. Mr. Shagun Ruhil, Adv. Mr. Karan Chopra, Adv. Mr. Praphulla Kumar Bharat, Sr. Adv./A.G. Ms. Ankita Sharma, Adv./AOR Mr. Arjun D. Singh, Adv. Ms. Ishika Neogi, Adv. Mr. Siddharth Bhatnagar, Sr. Adv. Mr. Siddhartha Iyer, AOR Mr. Aditya Sidra, Adv. Mr. Chhatresh Kumar Sahu, Adv.
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