CASE NAME: Denish Jasubhai Sankhala & Anr. v. Union of India & Ors. (with connected Writ Petition (L) No. 28202 of 2026)
CASE NUMBER: Writ Petition (Lodging) No. 16159 of 2026, along with Interim Application (Lodging) No. 27395 of 2026 and Writ Petition (Lodging) No. 28202 of 2026
COURT: High Court of Judicature at Bombay, Ordinary Original Civil Jurisdiction
DATE: Reserved on 19 August 2026; Pronounced on 21 August 2026
QUORUM: Hon’ble Ravindra V. Ghuge, Acting Chief Justice, and Hon’ble Gautam A. Ankhad, J. (Judgment per Ankhad, J.)
FACTS
The Petitioners challenged Condition Nos. 22.3(vi), (ix), (x)(c) and (x)(e) of a tender floated by Indian Oil Corporation Limited (IOCL) for the supply, fabrication, transportation, installation and commissioning of Retail Visual Identity (RVI) elements – canopies, signages and building fascias across 4,730 outlets in 16 State Offices, with an estimated value of approximately Rs. 1,198 crores. The tender prescribed a price band of (-)20% to (+)5%, and stipulated that where bidders tied at the same rate, the bidder with the higher annual turnover would be ranked higher. A connected petitioner, Retail Impact Private Limited, had actually submitted a bid under the tender, while the original petitioners had not participated but challenged the conditions pre-bid.
Respondent No. 2 objected to the maintainability of the lead petition since its petitioners had not participated in the tender, but the Court proceeded to examine the merits given that the connected petitioner had a live bid pending consideration.
ISSUE
Whether the impugned tender conditions, particularly the use of annual turnover as a tie-breaking criterion, and the threshold prescribed for “Similar Work” experience were arbitrary, discriminatory, or contrary to the Central Vigilance Commission’s guidelines, so as to warrant interference under Article 226.
LEGAL PROVISIONS
Article 226 of the Constitution of India;
CVC Office Memorandum dated 17 December 2002 on tender eligibility norms.- “Prequalification Criteria (PQ)” –
- Issued by the CVC’s Chief Technical Examiner’s Organisation, in response to complaints of discriminatory or unclear prequalification criteria in tender documents..
- Clarifies that organizations may modify guidelines for specialized works, provided criteria remain exhaustive, specific, and fair.
- Prescribes eligibility yardsticks for civil/electrical works:
- Average annual turnover (preceding 3 years) of at least 30% of the estimated project cost.
- Experience of similar completed work in the preceding 7 years, satisfying any one of:
- Three similar works, each worth 40% of estimated cost, or
- Two similar works, each worth 50% of estimated cost, or
- One similar work worth 80% of estimated cost.
- Requires “similar work” to be clearly and unambiguously defined in each tender document.
ARGUMENTS
PETITIONERS: It was argued that using the bidder’s overall annual turnover (from all business sources, not just RVI-related work) as a tie-breaker unfairly favoured larger entities and disadvantaged MSME bidders, since most bidders were expected to quote the lowest permissible rate of (-)20%, making turnover the de facto deciding factor. It was also contended that the “Similar Work” threshold of Rs. 37.50 lakhs was disproportionately low compared to the scale of the tender, violating CVC guidance that such experience should ordinarily be pegged near 80% of estimated project value.
RESPONDENTS: IOCL submitted that turnover was not an eligibility bar but operated only as a narrow, last-resort tie-breaking mechanism after bidders had already cleared technical qualification. It relied on its own affidavit explaining that the tender was structured as 16 separate State Office-wise contracts with 109 total work orders, that no single bidder could receive more than one work order per State Office, and that the CVC circular was illustrative guidance rather than a binding formula.
ANALYSIS
The Court examined the tender’s structure in detail and found it was not a single monolithic contract but a consolidated tender generating 109 separate work orders across 16 State Offices, with merit lists and empanelment done separately for each. On this footing, it held that the turnover criterion did not determine who could enter the competition, it only resolved a residual tie between bidders who had already cleared identical, more substantive pre-qualification thresholds on work experience, financial capacity, and manufacturing infrastructure. Since a single bidder could not be awarded more than one order per State Office, even a high-turnover bidder could win at most 16 of the 109 orders, defeating the monopolisation argument. On the point of CVC Circular, the Court held that its 80% benchmark was illustrative rather than mandatory, and could not be applied by comparing it against the aggregate value of the entire tender rather than the value of individual work orders.
JUDGMENT
Both writ petitions, along with the connected interim application, were dismissed. The Court held that judicial review in tender matters is confined to instances of mala fides, manifest arbitrariness, or irrationality, none of which was made out. Rule was discharged with no order as to costs.
CONCLUSION
The ruling reinforces that courts will not second-guess a tendering authority’s structuring of eligibility and tie-breaking criteria so long as they bear a rational connection to the tender’s scale and object, and that a criterion operating only at the margins to resolve ties among already-qualified bidders is not the same as an exclusionary eligibility bar.
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WRITTEN BY: DRISHTITA BANIK
Read the Judgement copy below:
Denish_Jasubhai_Sankhala_&_Ors_vs_Union_of_India_&_260901_204549
