Naxal tag can’t cover entire state: SC junks C’garh tender clause

The Supreme Court criticized Chhattisgarh's tender condition for sports kits, calling it discriminatory and quashing it for violating equality principles.

The Supreme Court on Monday pulled up the Chhattisgarh government for branding the entire state as Naxal-affected to justify a tender condition that limited eligibility only to firms with prior supply experience in the state, calling the restriction “arbitrary, unreasonable and discriminatory”.

The court’s ruling came on an appeal filed by Vinishma Technologies Pvt Ltd, which had challenged the Chhattisgarh high court’s orders upholding the tender condition (HT Photo)

A bench of justices Sanjay Kumar and Alok Aradhe quashed the contentious tender clause, which was part of three government notices issued in July 2025 for supplying sports kits to school students, holding that it violated the constitutional principles of equality, non-discrimination and freedom of trade under Articles 14 and 19(1)(g).

“Only some districts of Chhattisgarh are affected by Maoist activities, and it is incorrect to treat the entire state as uniformly affected by Naxalites for exclusion of other eligible bidders…this Court finds that the impugned tender condition is arbitrary, unreasonable and discriminatory… it does not have any rational nexus to the object of ensuring effective supply of sports kits to children in the state,” said the bench.

The court’s ruling came on an appeal filed by Vinishma Technologies Pvt Ltd, which had challenged the Chhattisgarh high court’s orders upholding the tender condition. The tenders, worth ₹39.8 crore in total, were issued by the Samagra Shiksha Chhattisgarh State Project Office, under the Department of School Education, for supplying sports kits to students of primary, upper primary and higher secondary schools across 33 districts.

“The state, by linking the eligibility criteria with past local supplies, has created an artificial barrier against suppliers who had no prior dealings with Chhattisgarh…Such a restriction curtails the fundamental rights of bidders who have been rendered ineligible to participate,” it noted.

The bench underscored that the doctrine of level playing field, derived from Article 19(1)(g), ensures all equally placed competitors get an equal opportunity to participate in public tenders. “The doctrine is designed to prevent the state from skewing the market in favour of a few by erecting artificial barriers,” it said.

Rejecting the state’s argument that local experience was vital since Chhattisgarh was a Maoist-affected region, the bench noted that such reasoning was “untenable” because the tender was not for security-sensitive material but merely for sports kits.

“Firstly, the tender is not for security equipment but for supply of sports kits, which does not involve any special risk. Secondly, only some districts are affected by Maoist activities, and it is incorrect to treat the entire state as uniformly affected. Thirdly, a successful bidder, even if new to the state, can engage a local supply chain to ensure delivery,” it held.

Calling the tender clause “irrational and disproportionate to the goal of ensuring effective delivery,” the court said that restricting eligibility to firms with prior experience in Chhattisgarh was neither reasonable under Article 19(6) nor compatible with the constitutional guarantees of equality and fair opportunity.

The court emphasised that the objective of public procurement is to secure the best quality goods and services for the public exchequer, which can be achieved only by encouraging wider competition. But the impugned condition, it noted, operates as a closed door to outsiders and restricts the wider participation of bidders and restricts competition, besides promoting cartelisation.

The court then proceeded to quash the three tender notices issued, even as it allowed the state government to issue fresh tender notices conforming to constitutional standards.