State cannot prescribe conditions in tender that infringe upon constitutional guarantees: SC

New Delhi, Oct 6 (PTI) The State cannot exercise its power to prescribe conditions in a tender in a manner that infringes upon constitutional guarantees, by closing the market to outsiders without a just cause, the Supreme Court said on Monday.

A bench of Justices Sanjay Kumar and Alok Aradhe made the observation while setting aside tenders issued by the Chhattisgarh government for supplying sports kits to students of government primary, upper primary, high and higher secondary schools.

"The 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 a just cause. The doctrine of level-playing field requires that gates of competition be opened to all who are equally placed," the bench said.

The top court said the eligibility criteria mentioned in the impugned tender notices must have a rational nexus with the object sought to be achieved, that is, supplying good-quality sports kits to school students at the best price.

"The eligibility criteria in the impugned notices, therefore, should be framed in a manner which encourages wider participation and secures the best prize for the State, which in turn safeguards the public exchequer," the bench said.

The court said the 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 a few by erecting artificial barriers. In the instant case, the impugned tender condition has the effect of excluding bidders who, though otherwise financially sound and technically competent, have no experience of supplying sports goods to the state government agencies of Chhattisgarh in the past three years.

"The State, by linking the eligibility criteria with past local supplies, has created an artificial barrier against the suppliers who had no past dealing with the state of Chhattisgarh. The impugned condition curtails the fundamental rights of the bidders, who have been ineligible to participate in the tenders," the bench said. PTI PKS RC