The Delhi High Court has asserted that Clause A1, requiring ownership of a manufacturing unit in Uttar Pradesh, could not be reopened because its validity already stood upheld in earlier litigation that had attained finality. At the same time, the Court clarified that a private lease arrangement is materially distinct from a State-allotted industrial tenure, and therefore refusal to treat them alike does not violate Article 14.
The Court held that invocation of arbitration or existence of a bona fide contractual dispute, especially where an arbitral award exists in favour of the bidder, does not by itself constitute a disqualifying dispute under Clause A12. However, where the bidder independently fails to satisfy an essential eligibility condition such as Clause A1, reconsideration under Clause A12 becomes academic, and no interference is warranted in judicial review.
The High Court also noted the Relevant Tender Clauses: Clause A1 required that the bidder should have an owned manufacturing unit of recipe-based supplementary nutrition food items in Uttar Pradesh, supported by ownership title deed, factory licence, electricity connection proof and FSSAI certificate, all predating the tender. Whereas, Clause A12 required that the bidder should neither be blacklisted/debarred nor have any pending legal/criminal cases or other disputes associated with THR supplies with any State/Central/UT/State-level agency on the date of bid submission, supported by an affidavit.
The Division Bench comprising Justice Anil Kshetarpal and Justice Amit Mahajan treated the ownership requirement as linked to logistical feasibility, continuity of supply, quality supervision, avoidance of disputes arising from leased premises, and compliance with statutory obligations under the National Food Security Act, 2013. On the petitioner’s Article 14 argument, the Bench rejected the claim of parity and drew a distinction between: State-allotted industrial plots held from statutory authorities like UPSIDA/GIDA; and the petitioner’s private lease arrangement with its sister concern.
The Bench observed that statutory allotments are regulated, long-term, policy-backed tenures intended to promote permanent industrial infrastructure, whereas a private lease remains contingent on private contractual arrangements and is susceptible to termination, non-renewal or restructuring. Accordingly, the Bench held that the petitioner could not equate its position with those bidders and that Article 14 does not mandate equal treatment between unequals. The alleged differential treatment was therefore not arbitrary.
The Bench noted that the validity and scope of Clause A12 had not been finally adjudicated earlier, even though it had been referred to in prior proceedings. On the facts, the Bench found that the arbitration relied upon to disqualify the petitioner had been initiated by the petitioner itself for recovery of contractual dues, did not record misconduct or default by the petitioner, and had culminated in an arbitral award dated 28.01.2026 in favour of the petitioner.
The Bench held that invocation of arbitration for enforcement of statutory or contractual rights cannot, by itself, be treated as a disqualifying “dispute” within Clause A12, because that would penalise a bidder for resorting to remedies recognised by law. It observed that where an arbitral award in favour of the bidder subsisted and had not been set aside, Clause A12 should not obstruct future participation. The Bench clarified, however, that this did not strike down Clause A12 generally, but indicated that bona fide contractual disputes ending in an award in favour of the bidder do not automatically amount to disqualification.
The Bench declined to adjudicate the petitioner’s allegations of collusion/ cartelisation, holding that such issues involve disputed questions of fact, economic and market analysis, and fall within the specialised statutory domain of the Competition Commission of India (CCI) rather than the writ jurisdiction under Article 226. The Bench also recorded that the tender work had already been awarded to Respondent Nos. 4 to 7 and that, while Respondent Nos. 4 and 5 may be intrinsically connected, nothing on record showed a causal connection with Respondent Nos. 6 and 7.
Briefly, the earlier batch led by Rasi Nutri Foods India Pvt Ltd. v. NAFED, the Delhi High Court had already upheld Clause A1, which required the bidder to have an owned manufacturing unit in Uttar Pradesh, and the Supreme Court declined to interfere. The Supreme Court, however, observed that if Clause A12 was invoked in future tenders to exclude a bidder, such bidder could challenge its application in accordance with law.
The petitioner, Interlink Foods Pvt Ltd., submitted its bid and later received an email dated 02.04.2026 informing it that its technical bid was disqualified on the basis of Clause A1 and Clause A12. The petitioner alleged that the disqualification was arbitrary and discriminatory, particularly because other bidders (Respondent Nos. 4 to 8) were allegedly treated as technically qualified despite, according to the petitioner, not meeting mandatory eligibility conditions.
Appearances:
Vivek Tankha and Jayant Mehta, Sr. Advs. along with Sumeer Sodhi, Varun Tankha, Harshit Joshi, Chaitanya Sharma, Anannya Jain, Sidhika Nagrath and Siddharth Dixit, Advs, for Petitioner
Sandeep Sethi and Anil Airi, Sr. Advs. along with Aaditya Vijaykumar, Akshita Katoch, Naman Garg, Anirudh Anand, Krishna Gambhir, Shreya Sethi, Vishal Tyagi, Bindiya Logawney Airi, Jasmin Sokhi and Harsh Gautam, Advs. with Amit Goel and Babita, AR for Respondent -1
Chetan Sharma, ASG with Anil Mittal, Shaurya Mittal, Advs. for Respondent -2
Radhika Bishwajit Dubey, CGSC along with Gurleen Kaur Waraich, Mr. Kritarth Upadhyay, Vivek Sharma and Amulya Dev Mishra, Advs. for Respondent -3
Narendar Hooda, Sr. Adv. along with Abhinav Agrawal, Adv. for Respondent -5
Akshay Ringe, Adv. for Respondent -6
Avneesh K. Upadhyay, Adv. for Respondent -7
Lakshay Pareek, Adv. for Respondent -8
