The Delhi High Court has upheld a tender condition introduced by the Delhi Jal Board (DJB). The clause disqualifies bidders who face FIRs, charge sheets, or criminal proceedings related to corruption, fraud, or economic offences. Notably, the disqualification applies even in the absence of a conviction.
A Division Bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul dismissed writ petitions filed by two companies. The companies had challenged an eligibility condition in a January 2026 tender for constructing, operating, and maintaining decentralised sewage treatment plants.
Challenge to the Eligibility Clause
Under the impugned clause, a bidder becomes ineligible if authorities have registered an FIR or filed a charge sheet against the company or its directors. Specifically, the clause targets offences involving corruption, fraud, or financial irregularities connected with DJB contracts.
In this case, the petitioners face proceedings under the Prevention of Corruption Act and the Prevention of Money Laundering Act (PMLA). They argued that the clause effectively punishes them before conviction. Relying on Article 21 of the Constitution, they invoked the presumption of innocence. Additionally, they cited Rule 151 of the General Financial Rules, 2017, which permits debarment only after conviction.
Court Rejects Presumption of Innocence Argument
However, the Bench rejected these submissions. According to the Court, participation in a tender process does not constitute a fundamental right. Instead, it forms part of a commercial arrangement governed by eligibility criteria.
The Court clarified that the presumption of innocence applies strictly to criminal trials. It does not control administrative or contractual eligibility conditions. In commercial matters, authorities may adopt preventive measures and rely on risk assessment.
Further, while referring to Rule 151 of the General Financial Rules, 2017, and the Central Vigilance Commission Manual, the Bench observed that these provisions prescribe minimum standards. Importantly, they do not prevent authorities from adding stricter conditions suited to project requirements.
The Court observed:
“The fact remains that the provisions contained in the GFRs, particularly Rule 151, as well as those in the Central Vigilance Commission Manual, can be termed as basic requirements. However, there is no embargo created by the aforesaid rule on the right of the respondents to frame additional tender conditions which suits its requirement.”
Limited Scope of Judicial Review
Moreover, the Bench reiterated that tendering authorities and technical experts are best equipped to determine project requirements. Courts should intervene only where decisions appear arbitrary, discriminatory, or mala fide.
Significantly, the Court noted that the petitioners allegedly engaged in activities prejudicial to DJB’s interests. At the same time, the petitioners did not allege victimisation or mala fide action in the filing of criminal complaints.
Public Health and Environmental Considerations
Importantly, the Court emphasised the critical nature of the sewage treatment project. Any delay or disruption could harm groundwater quality and increase pollution in the Yamuna River. Such consequences, the Bench noted, would directly affect public health.
In this context, the Court linked the project to the State’s constitutional obligations under Articles 21 and 47 of the Constitution of India. Maintaining sanitation and sewage infrastructure, it observed, forms part of these duties.
Accordingly, the Bench held that DJB acted within its authority in adopting a cautious approach. Contractors, the Court stressed, must demonstrate integrity and capacity, especially in projects involving environmental safety.
Conclusion
In view of these findings, the Court found no arbitrariness in the eligibility clause. Consequently, it dismissed both writ petitions.
Appearance
For the Petitioner:
Mr. Amit Sibal, Senior Advocate, with Mr. Sanjeev Mahajan, Mr. Harsh Bora and Ms. Simran Rao, Advocates.
For DJB:
Mr. Tushar Sannu, Standing Counsel, with Mr. Priyankar Tiwary, Ms. Pulak Gupta, Ms. Shambhavi Vatsa, Ms. Rajbala and Ms. Fajallu Rehman, Advocates; Mr. Pankaj Kumar, EE; Mr. Ravinder Kumar, AE; and Mr. Anil Kharb, JE, officers of DJB.
For Respondent No. 2:
Mr. Dinesh Malik, Panel Counsel, with Mr. Puneet Jain, Advocate.
Case Title: M/S Dhanvine Engineering Pvt. Ltd. v. DJB.
