In a recent judgment, the Allahabad High Court dismissed a writ petition challenging a tender condition that restricted participation only to pellet manufacturers based in the National Capital Region (NCR) or within 100 km of the Harduaganj Thermal Power Station, Aligarh. The Court ruled that this restriction, aimed at reducing stubble burning and controlling pollution in NCR, is not arbitrary or discriminatory but is in the larger public interest.
The division bench of Justice Shekhar B. Saraf and Justice Vipin Chandra Dixit observed:
“The raison d'être of the condition allowing only existing pellet manufacturers in NCR or within 100 km of the power station is to reduce stubble burning, a major cause of air pollution in the region.”
Background of the Case
The petitioner, M/s Rajan Construction Company, a biomass pellet supplier from Ambedkar Nagar, UP, was barred from participating in a 2024 tender floated by Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. (UPRVUNL). The tender mandated that only manufacturers located in NCR or within 100 km from the thermal plant could bid.
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The petitioner argued that this clause violated Articles 14, 19(1)(g), 21, and 301 of the Constitution, calling it unreasonable and without any rational nexus to the tender's objective. Despite fulfilling all other criteria, including using 50% crop residue from Punjab, Haryana, or NCR as mandated by the central Model Contract, the firm was excluded solely due to its geographical location.
The Court reviewed the tender clause, the central government’s model contract (dated January 6, 2023), and environmental advisories. It concluded that the restriction was consistent with national policy goals. The restriction aimed to ensure that biomass is sourced from NCR and nearby regions to directly reduce stubble burning and its impact on air quality.
“The impugned conditions are tailor-made and incorporated with a specific motive for public interest... There is no evidence that these were aimed at excluding any specific bidder.”
The Court relied on multiple Supreme Court rulings including Tata Cellular v. Union of India and Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd., which emphasized judicial restraint in tender matters and upheld the autonomy of tendering authorities.
“A term is essential or not is a decision taken by the employer, which should be respected. Reasonableness of restriction is to be determined from the standpoint of general public interest.”
The Court also highlighted that twelve other bidders meeting the criteria had already started supplying pellets, indicating genuine competition and demand fulfillment under the tender.
The High Court concluded that judicial intervention was unwarranted as there was no mala fide, irrationality, or illegality in the tender condition. It held:
“Judicial review in contractual matters is limited, particularly when the decision is bona fide and taken in public interest.”
Accordingly, the writ petition was dismissed.
Case Title: M/S Rajan Construction Company vs.State Of U.P. And Another 2025 [WRIT-C NO. 34248 OF 2024]
