LUCKNOW: In a significant ruling on public procurement law, the Lucknow Bench of the High Court of Judicature at Allahabad, comprising Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary, has held that a subsequent order placing a debarment in abeyance operates only prospectively and cannot retrospectively cure a bidder’s threshold ineligibility existing on the bid submission date. Dismissing a writ petition filed by Larsen and Toubro Limited (L&T), the Court upheld the decision of the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA) declaring L&T’s technical bid non-responsive for the Jewar Airport to Ganga Expressway link project due to an existing debarment order issued by the Jal Jeevan Mission, Uttar Pradesh.
Background of the Case
On June 22, 2026, UPEIDA issued an electronic Notice Inviting Tender (NIT) on an EPC basis for the development of the Jewar Airport to Ganga Expressway via Bulandshahar Link Expressway (Package-I), covering the stretch from Bhaipur Brahman (Gautam Buddha Nagar) to Bichaula (Bulandshahar). Following a corrigendum, the bid due date was fixed as September 7, 2026, and technical bids were opened on September 8, 2026. L&T submitted its bid on the due date alongside eleven other bidders.
Prior to the tender submission, on April 13, 2026, the Jal Jeevan Mission, U.P., had issued an order debarring L&T, which remained in force on the bid due date. In its tender submission, L&T did not disclose this debarment and furnished only an undertaking under Clause 2.2.2.10 affirming that it had not experienced any catastrophic failure of structures or highways due to construction defects during the preceding five years.
During technical evaluation, UPEIDA noticed information regarding the debarment in the public domain and issued a letter on September 18, 2026, seeking clarification under Clauses 2.1.18 and 2.2.10 of the Request for Proposal (RFP). In its response dated September 22, 2026, L&T disclosed for the first time that the U.P. State Water and Sanitation Mission had, by an order dated September 14, 2026, kept the debarment order in abeyance. L&T also disclosed that the State of Madhya Pradesh had issued a separate debarment order on August 13, 2026, which was under challenge before the High Court of Madhya Pradesh at Jabalpur.
On September 25, 2026, UPEIDA’s Technical Evaluation Committee rejected L&T’s technical bid as non-responsive on the sole ground that the company was debarred by the Jal Jeevan Mission, U.P. L&T subsequently approached the High Court seeking a writ of certiorari to quash the rejection and a mandamus directing the authorities to open its financial bid alongside other qualified bidders.
Arguments of the Parties
Appearing for L&T, learned Senior Advocates Mr. Mukul Rohatgi and Mr. J.N. Mathur, assisted by advocates Ms. Mahima Pahwa and Mr. Prashant Kumar Singh, argued that Clause 2.2.2.10 specifically dealt with structural failures and outshined Clause 2.1.18, and that the RFP did not mandate an explicit declaration regarding debarment. They contended that under Clause 1.2.2, which provided a bid validity period of 120 days, the eligibility should be judged on the date the technical evaluation was finalized and uploaded (September 25, 2026), by which time the debarment had already been put in abeyance on September 14, 2026.
Counsel also asserted that L&T was denied an opportunity to cure deficiencies, unlike other bidders, and highlighted that L&T’s quoted price was approximately Rs 252 crore lower than that of the lowest bidder (L-1), resulting in substantial prejudice to the public exchequer. In support of their arguments, they relied on judgments including Kimberly Club Private Limited v. Krishi Mandi, Banshidhar Construction (P) Ltd. v. Bharat Coking Coal Ltd., National High Speed Rail Corporation Ltd. v. Monte Carlo Ltd., U.P. Jal Sansthan Karmchari Sangh v. State of U.P., and Food Corporation of India v. Kamdhenu Cattle Feed Industries.
Opposing the plea, learned Senior Advocate Mr. Gaurav Mehrotra, assisted by advocates Mr. Abhineet Jaiswal and Mr. Sharad Tewari, appearing for UPEIDA (respondent nos. 2 and 3), submitted that Clause 2.1.18 explicitly stipulated that any entity barred by the Central or State Government whose bar subsisted on the bid due date was ineligible to submit a bid. He maintained that eligibility had to be assessed on the bid due date (September 7, 2026) and that L&T was guilty of suppression and fraudulent practice under Clause 4.3(b) by concealing the debarment.
Mr. Mehrotra argued that the subsequent abeyance order of September 14, 2026, operated prospectively and could not relate back to erase the ineligibility existing on the cut-off date. Citing Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association and Najma Khatun v. State of West Bengal, he differentiated between an order being stayed or kept in abeyance and one being quashed. He also relied on Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium), Tata Motors Ltd. v. BEST, and PSEB v. Bhatia International Ltd. to argue that essential tender terms must be strictly enforced to ensure a level playing field.
Learned Senior Advocate and Additional Advocate General Mr. Pritish Kumar, assisted by advocate Mr. Rahul Kapoor, appearing for the State of Uttar Pradesh (respondent no. 1), supported UPEIDA’s stance, arguing that diluting the terms for L&T would be discriminatory to other potential participants who refrained from bidding due to subsisting debarments. He cited the Delhi High Court Division Bench ruling in CJDARCL Logistics Ltd. v. Rites Ltd. to stress that deviation from tender terms cannot be permitted if it distorts the level playing field.
The Court’s Analysis
Addressing the scope of judicial review in government contracts, the Bench recalled the principles settled in Tata Cellular v. Union of India, Jagdish Mandal v. State of Orissa, Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., and Tata Motors Ltd. v. BEST, reiterating that the writ court examines the legality of the decision-making process rather than the merits of the commercial decision. The Court noted that an author of a tender document is best placed to interpret its requirements, unless such construction is shown to be perverse or irrational.
Analyzing the RFP provisions, the Bench held that Clause 2.1.18 is an essential eligibility condition:
“A clause declaring a class of person’s ineligible to submit a bid is by definition an eligibility condition.”
The Court rejected the contention that Clause 2.2.2.10 displaced Clause 2.1.18, observing that the two operate in completely different spheres—one testing past construction safety records as a technical attribute, while the other constitutes a threshold eligibility bar on the right to participate.
The Bench firmly dismissed the argument that the evaluation date could serve as the reference date instead of the bid due date, clarifying that Clause 1.2.2 merely governed offer validity and could not amend an express provision fixing the eligibility benchmark. Testing eligibility strictly as of the cut-off date is an established principle under Central Coalfields and PSEB v. Bhatia International.
Regarding the legal impact of the September 14, 2026 abeyance letter, the Court noted:
“An order suspending the operation of a debarment operates prospectively. It does not erase the debarment or makes it non-existent for any period prior to its passing.”
Relying on the distinction laid down in Shree Chamundi Mopeds, the Court explained that while quashing restores the original status quo, an abeyance or stay operates only prospectively and does not erase the debarment’s past existence. Consequently, on the bid due date of September 7, 2026, L&T was legally and factually an entity barred under Clause 2.1.18.
Turning to the distinction between curable and non-curable terms established in Poddar Steel Corporation v. Ganesh Engineering Works, W.B. State Electricity Board v. Patel Engineering Co. Ltd., and B.S.N. Joshi & Sons v. Nair Coal Services Ltd., the Bench ruled that Clause 2.1.18 was an essential condition that could neither be relaxed nor cured post-deadline:
“That is not rectification of a lapse in the bid. It is a change in the eligibility of the bidder.”
The Court observed that permitting a post-due-date abeyance to validate an ineligible bid would violate the level playing field guaranteed under Article 14 of the Constitution, heavily prejudicing entities that refrained from bidding due to published eligibility restrictions, as recognized in Reliance Energy Ltd. v. MSRDC.
On the argument regarding public exchequer savings and the Rs 252 crore price difference, the Court held:
“A lower quote by an ineligible bidder does not translate into a right to be considered. Nor can the Court, in the name of price advantage, direct the respondents to ignore an express eligibility clause.”
The Court added that while it made no finding of fraud against the petitioner, L&T’s silence on the subsisting debarment until confronted weighed against exercising equitable discretionary jurisdiction under Article 226 of the Constitution, referencing Ramjas Foundation v. Union of India, K.D. Sharma v. SAIL, Dalip Singh v. State of U.P., and Avtar Singh v. Union of India.
The Decision
The High Court summarized the governing principles of law and held that:
- An express clause barring an entity under governmental debarment on the bid due date is an essential threshold requirement.
- Eligibility must be evaluated strictly as on the bid due date, and an abeyance order operates only prospectively without retrospective cure.
- Tendering authorities have no power to waive or cure non-compliance with essential conditions post due date, and courts cannot direct such relaxation.
- A lower quote does not confer any vested right on an ineligible participant.
Finding that the Technical Evaluation Committee acted within the terms of the RFP and that its decision was neither arbitrary, irrational, mala fide, nor perverse, the High Court dismissed the writ petition. The Court clarified that its observations remain confined to this petition and do not prejudice L&T’s rights to pursue legal remedies against the debarment orders before competent forums or the High Court of Madhya Pradesh.
Case Details:
Case Title: Larsen And Toubro Limited Thru. Authorized Representative Arghya Chattopadhyay Versus State Of U.P. Thru. Prin. Secy. Deptt. Of Infrastructure/Industrial Development Lko. And 5 Others
Case No.: WRITC No. 10822 of 2026
Bench: Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary
Date: September 29, 2026
