Constitution of India – Arts.14, 19(1)(g) – Tender – Tender condition – Test of reasonableness and fairness – State of Chhattisgarh issued tender notices for the supply of Sports Kits to government schools – Tender condition as regards past performance restriction that bidders must have supplied sports goods worth at least Rs.6.00 crores to State Government agencies of Chhattisgarh in last three financial years – Appellant rendered ineligible for participation in the tender process – Writ petition by the appellant challenging the validity of the tender condition – Dismissed by the High Court – Correctness:
Held: Impugned tender condition arbitrary, unreasonable and discriminatory – Does not have any rational nexus to the object of ensuring effective supply of Sports Kits to the children in State – It offends the mandate of Art.14 and freedom of trade guaranteed by Art.19(1)(g) – Impugned tender condition has 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 – Object of public procurement is to secure quality goods and services for the benefit of public exchequer – 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 – 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 – Doctrine of level playing field requires that gates of competition be opened to all who are equally placed – Impugned tender condition excludes 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 – 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, untenable – Impugned orders passed by the High Court as well as impugned tender notices quashed and set aside. [Paras 17-23]
Constitution of India – Art.19 (1) (g) – Doctrine of level playing field – Concept of:
Held: Doctrine of level playing field is an important concept while construing Art.19(1)(g) – Art.19(1)(g) confers fundamental right to carry out business to a company, it is entitled to invoke the doctrine of level playing field however, subject to public interest – Doctrine of level playing field provides the space within which equally placed competitors are allowed to bid so as to subserve larger public interest – 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. [Paras 16, 18]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.