Case Note & Summary
The Supreme Court considered three civil appeals arising from special leave petitions challenging orders of the High Court of Chhattisgarh dated 11.08.2025 and 12.08.2025, which dismissed writ petitions filed by Vinishma Technologies Pvt. Ltd. against tender conditions for supply of sports kits to government schools in Chhattisgarh. The appellant, a company registered under the Companies Act, 2013 with experience of supplying sports kits to various state governments, challenged condition No.4 of the tender notices published on 21.07.2025, which required bidders to have supplied sports goods worth at least Rs.6.00 crores cumulative to State Government agencies of Chhattisgarh in the last three financial years. The tender pertained to supply of sports kits to primary, upper primary, high and higher secondary schools across 33 districts, with contract values of Rs.15.24 crores, Rs.13.08 crores and Rs.11.49 crores. The appellant submitted representation on 29.07.2025, which received no response, and then filed three writ petitions. During pendency, corrigendum dated 07.08.2025 deleted conditions 1, 11 and 13, but condition 4 remained. The High Court dismissed the petitions, holding condition similar to one upheld in Association of Registration Plates v. Union of India, and prevalent in other states; it also noted a similar contract had been awarded to appellant in Jharkhand. The High Court held the condition not violative of Articles 14 and 19(1)(g), as it ensured technical competence and reliability. Before the Supreme Court, the appellant argued that the High Court erred in applying Association of Registration Plates, which was distinguishable; condition 4 excluded competent suppliers from outside the state, discouraged wider participation and fostered cartelisation, violating Articles 14 and 19(1)(g). The respondents contended that the tendering authority had power to frame conditions, that the condition was incorporated to ensure timely delivery, quality compliance and prevent supply chain disruptions given Chhattisgarh's geographic and social conditions including naxal-affected areas, and that financial bids had already been opened on 21.08.2025, with re-tendering causing delay. The Court referred to settled principles on judicial review of tender conditions: Government must have free hand in setting terms, but cannot act arbitrarily; court can interfere if condition is arbitrary, discriminatory or mala fide. It noted the doctrine of level playing field under Article 19(1)(g), which requires equally placed competitors to have equal opportunity. The Court held that the impugned condition requiring past supplies to Chhattisgarh state agencies created an artificial barrier excluding otherwise competent bidders, lacked rational nexus to the object of procuring quality sports kits at best price, and was irrational and disproportionate. It held that the restriction could not be justified as reasonable under Article 19(6). The Court concluded that condition 4 was arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution, and accordingly the appeals were allowed and the impugned condition struck down, with the High Court orders set aside.
Headnote
A) Constitutional Law - Judicial Review of Tender Conditions - Scope of Interference - Constitution of India, 1950, Articles 14 and 19(1)(g) - Government has freedom to set tender terms but court may interfere only if condition is arbitrary, discriminatory or mala fide. High Court dismissed writ petitions holding condition reasonable; Supreme Court re-examined condition under constitutional guarantees. Held that condition failed reasonableness and fairness test (Paras 15-16). B) Constitutional Law - Level Playing Field Doctrine - Article 19(1)(g) - Constitution of India, 1950, Article 19(1)(g) - State cannot create artificial barriers by linking eligibility to past local supplies as it excludes equally competent bidders and violates level playing field. Doctrine requires equally placed competitors to have equal opportunity to participate in trade and commerce. Held that impugned condition curtails fundamental rights of ineligible bidders (Paras 16-18). C) Constitutional Law - Right to Equality - Arbitrary Exclusion - Constitution of India, 1950, Article 14 - Imposing condition of past supplies worth Rs.6 crores to State Government agencies of Chhattisgarh in last three years creates unreasonable classification without rational nexus to object of procuring quality sports kits at best price. Held that confining eligibility within one state is irrational and disproportionate (Paras 17-19). D) Public Procurement - Eligibility Conditions - Reasonableness - Constitution of India, 1950, Article 19(6) - Restriction confining eligibility to within one state is irrational and disproportionate, hence not reasonable under Article 19(6). Held that State cannot exercise power to prescribe tender conditions in manner infringing constitutional guarantees by closing market to outsiders (Para 20).
Issue of Consideration
Whether condition No.4 in tender notices requiring bidders to have supplied sports goods worth at least Rs.6.00 crores cumulative to State Government agencies of Chhattisgarh in last three financial years violated Articles 14 and 19(1)(g) of the Constitution of India; whether High Court erred in applying Association of Registration Plates v. Union of India
Final Decision
The appeals were allowed; the impugned tender condition No.4 was struck down as arbitrary and violative of Articles 14 and 19(1)(g) of Constitution of India; High Court orders set aside.
Law Points
- Government must have free hand in setting terms of tender
- court cannot interfere unless tender condition is arbitrary
- discriminatory or mala fide
- level playing field is part of Article 19(1)(g) of Constitution
- state cannot create artificial barriers by linking eligibility to past local supplies
- object of public procurement is to secure quality goods and services for public exchequer
- restriction confining eligibility within one state is irrational and disproportionate
