In a major setback to the Chhattisgarh government, the Supreme Court on Monday struck down a controversial tender clause that restricted participation to companies having prior experience supplying goods to state agencies within Chhattisgarh. The bench of Justices Sanjay Kumar and Alok Aradhe ruled that such a condition “violates the principles of equality and free trade” guaranteed under Articles 14 and 19(1)(g) of the Constitution.
Background
The case arose when Vinishma Technologies Pvt. Ltd., a Delhi-based firm with supply experience in Bihar, Gujarat, and Karnataka, was disqualified from bidding for a ₹39.81 crore project to supply sports kits to students across Chhattisgarh.
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The Samagra Shiksha Chhattisgarh office had floated three tenders on July 21, 2025, for government-run schools. A contentious clause required bidders to have supplied goods worth at least ₹6 crore to Chhattisgarh state agencies during the last three financial years.
Vinishma challenged this before the Chhattisgarh High Court, calling it discriminatory and anti-competitive. However, the High Court upheld the condition, holding that it ensured reliability and local familiarity.
Court’s Observations
Hearing the appeal, the Supreme Court carefully examined whether restricting bids to suppliers with local experience was “reasonable or arbitrary.”
Justice Aradhe, writing the judgment, remarked, “The State cannot close the market to outsiders without just cause. The doctrine of level playing field requires that all equally placed competitors be allowed to participate.”
The bench noted that the tender aimed to supply basic sports kits, not sensitive or high-security material. Therefore, citing Chhattisgarh’s “Naxal-affected” status to justify local exclusivity was “untenable.”
The Court found the rule to be an “artificial barrier” that excluded competent bidders who might have handled larger contracts in other states or with central agencies. “Such restrictions promote cartelisation rather than competition,” it observed.
The bench also referred to earlier judgments like Ramana Dayaram Shetty v. International Airport Authority of India (1979) and Bharat Forge Ltd. v. Union of India (2022) to underline that tender conditions must not defeat fairness or discourage wider participation.
Decision
Holding the clause unconstitutional, the Supreme Court quashed both the High Court’s orders dated August 11 and 12, 2025, and the tender notices themselves. The judges directed that the State was free to issue fresh tenders with reasonable, non-discriminatory conditions.
“The impugned condition is arbitrary, unreasonable, and discriminatory,” the Court declared, adding that it had “no rational nexus with the object of ensuring effective supply of sports kits.”
The ruling not only restores Vinishma Technologies’ right to compete but also reaffirms the constitutional guarantee of equal opportunity in public contracts across India.
Case: Vinishma Technologies Pvt. Ltd. v. State of Chhattisgarh & Anr.
Citation: 2025 INSC 1182
Date of Judgment: October 6, 2025
