SC strikes down Chhattisgarh tender clause favouring local bidders, calls it ‘arbitrary and discriminatory’

The Supreme Court on Monday said the State enjoyed the freedom to prescribe conditions in a tender, yet it could not exercise that power in a manner which infringed upon constitutional guarantees by closing the market to outsiders without a just cause.

A bench of Justices Sanjay Kumar and Alok Aradhe quashed a tender condition which prescribed that bidders must have supplied sports kits worth at least ₹6 crore (cumulative) to Chhattisgarh government agencies in the last three financial years, terming it violative of Articles 14 and 19(1)(g) of the Constitution.

The bench allowed an appeal filed by Vinisha Technologies Pvt. Ltd against the High Court’s order rejecting the challenge to the tender notice issued on July 21, 2025.

The court held that the condition excluded competent and experienced suppliers who may have executed contracts of far greater magnitude in other States or for central government departments, thereby promoting cartelisation.

The court pointed out that the doctrine of level playing field required 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 a few by erecting artificial barriers,” the bench said.

The court stressed that the right to life under Article 21 included ‘opportunity’ as well. The principle of non-discrimination embodied in Article 14 has to be read in conjunction with rights conferred by other Articles like Article 21, it said.

The bench held that the condition in the tender notice was arbitrary, unreasonable and discriminatory, lacking any rational nexus to the objective of ensuring effective supply of sports kits to children in the state.

Eligibility criteria should be framed in a manner that encourages wider participation and secures the best price for the State, which in turn safeguards the public exchequer, it added.

The court also rejected the State’s justification that Chhattisgarh was a Maoist-affected area and only those with past supply experience to government agencies there could be relied upon.

Firstly, the bench noted, the tender was not for security-sensitive equipment but for sports kits, which do not involve any special risk or security repercussions.

Secondly, only some districts of Chhattisgarh are affected by Maoist activities, and it is incorrect to treat the entire State as uniformly affected for the purpose of excluding other eligible bidders.

Thirdly, a successful bidder unfamiliar with the region could always engage a local supply chain to deliver the sports kits, the court said.