GTPL HATHWAY LIMITED vs GUJARAT FIBRE GRID NETWORK LIMITED

C/SCA/13907/2026 JUDGMENT DATED: 06/11/2026
(GJHC240731242026)
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13907 of 2026

FOR APPROVAL AND SIGNATURE:


HONOURABLE THE ACTING CHIEF JUSTICE MR. JUSTICE MANASH
RANJAN PATHAK

and
HONOURABLE MR. JUSTICE NIKHIL S. KARIEL

==========================================================
Approved for Reporting Yes No
YES
==========================================================
GTPL HATHWAY LIMITED
Versus
GUJARAT FIBRE GRID NETWORK LIMITED & ORS.
==========================================================
Appearance:
MR MIHIR THAKORE, SENIOR ADVOCATE with
MR DHAVAL VYAS, SENIOR ADVOCATE with
MR DHRUVIN N DOSSANI(10528) for the Petitioner(s) No. 1
MR G H VIRK, GOVERNMENT PLEADER with
MR SIMRANJITSINGH H VIRK, ADVOCATE with
MR PRASHANT UNDURTI, ADVOCATE for the Respondent No. 1
MR G H VIRK, GOVERNMENT PLEADER with
MS DHARITRI PANCHOLI, AGP for the Respondent(s) No. 2
MR KAMAL TRIVEDI, ADVOCATE GENERAL with
MR ANKIT SHAH, ADVOCATE with
MR VINAY BAIRAGRA, ADVOCATE for the Respondent(s) No. 3,4
==========================================================
CORAM:HONOURABLE THE ACTING CHIEF JUSTICE MR. JUSTICE
MANASH RANJAN PATHAK
and
HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
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Date : 06/11/2026

JUDGMENT
(PER : HONOURABLE MR. JUSTICE NIKHIL S. KARIEL)
1. Heard learned Senior advocate Mr. Mihir Thakore with
learned Senior advocate Mr. Dhaval Vyas and learned advocate
Mr. Dhruvin Dossani on behalf of the petitioner. Learned
Government Pleader Mr. G.H. Virk with learned Assistant
Government Pleader Ms. Dharitri Pancholi and learned
advocate Mr. S.H. Virk and learned advocate Mr. Prashant
Undurti on behalf of respondent Nos. 1 and 2. Learned
Advocate General Mr. Kamal Trivedi appearing with learned
advocate Mr. Ankit Shah and learned advocate Mr. Vinay
Bairagra for respondent Nos. 3 & 4.
2. By way of this petition, the petitioner challenges revised
Request For Proposal for selection of Project Implementing
Agency (‘PIA’, in short) for implementation of amended
BharatNet program in Gujarat, published by the respondent No.
1 herein. The challenge to the tender in so far as Sub-clause
10 of Clause 3.1 of the tender, whereby ISP/TSP (Internet
Service Provider / Telecom Service Provider) having
license/authorization for License Service Area (LSA) being
Gujarat have been declared to be ineligible to participate. The
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petitioner further challenge the requirement of submitting an
undertaking as per Format XX at Annexure 9.20 of the tender
document. The affidavit as per Format XX inter alia requiring
the sole bidder/lead bidder and each consortium partner to
separately submit an affidavit declaring that they are not
holding ISP/TSP license/authorization covering Gujarat State
and that they are not having more than 50% stake in their
company of another company, which is holding an ISP/TSP
license/authorization covering Gujarat State, that they are not
having more than 50% stake in any company holding ISP/TSP
license/authorization covering Gujarat State and they are not a
subsidiary of a parent company holding ISP/TSP
license/authorization covering Gujarat State. The undertaking
also requires that in case the sole bidder/lead bidder or any of
their associates or parent company falling in the above
category, wishes to obtain ISP/TSP license during the contract
period, if the tender is awarded to them, shall obtain prior
permission from respondent No. 1 for getting such
license/authorization.
3. The case of the petitioner being that it is a wholly
owned subsidiary holds an ISP license for the State of Gujarat,
and though it is eligible in every other aspect, because of the
said impugned condition the petitioner is unable to bid for the
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tender in question. The case of the petitioner further being
that while the present tender is with regard to Phase-IIII of the
BharatNet project, which is now re-categorized as the Amended
BharatNet Program, whereas the petitioner having bid for and
awarded the contract for Phase-II for the State of Gujarat for
one of the packages, consisting of Saurashtra area and had
completed the part of tender awarded to it successfully and at
present is operating and maintaining the same as per the terms
of the contract.
3.1 The case of the petitioner further being that the
petitioner could participate in the said tender as there were no
conditions in the said tender as in the present tender
impugned in the present petition and whereas, though being
experienced and qualified on every aspect, yet on account of
the impugned condition, the petitioner is ineligible to bid in
the present tender.
Facts leading to the present petition being as under:
4. The Government of India had approved a National
Optical Fibre Network in the year 2001. Originally, in the year
2012, the Bharat Broadband Network Limited had been
incorporated by the Government of India as a Special Purpose
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Vehicle for establishment, management, and operation of the
National Optical Fibre Network. The BharatNet is a national
public digital infrastructure program which is funded by Digital
Bharat Nidhi (DBN), operated by the Department of
Telecommunications (DoT), conceptualized to provide high-
speed broadband internet connectivity to all inhabited Gram
Panchayats and villages across India. The underlying object, as
could be discernible from the tender document itself, being
that the network infrastructure under the project would be a
national asset accessible on a non-discriminatory basis to all
eligible service providers to enable providing internet services
in rural areas.
4.1 BharatNet project is having three phases, namely Phase-I
and Phase-II being completed, the present tender for Phase-III
of the BharatNet project. It would be profitable to observe
here that implementation of Phase-I was done by Central
Public Sector Units led model by the BSNL and whereas the
same was a multi-stakeholder project with many organizations
collaborating including the DoT, the Ministry of Electronics and
Information Technology, BBNL, BSNL, RailTel, PGCIL, C-DOT,
TCIL, and NIC to ensure that the objective of providing
broadband connectivity to every Gram Panchayat is fulfilled. It
also appears that in Phase-I around 11 districts in the State of
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Gujarat consisting of around 761 villages have been connected
with broadband internet facility.
4.2 It also appears that BharatNet Phase-II was
conceptualized with a modified strategy to overcome
shortcoming experienced during Phase-I of the project
execution and whereas the Central Government had approved
implementation methodology of BharatNet Phase-II to connect
all the remaining Gram Panchayats with state-of-the-art
network designed to enhance bandwidth to achieve the vision
of Digital India.
4.3 It appears that in the State of Gujarat, BharatNet Phase-II
was implemented in two separate packages and whereas while
Package A had 12 districts, Package B had 10 districts. It
further appears as per the tender document that around 837
new locations consisting of Gram Panchayats, Talukas / District
Panchayats, GIDC, etc. have been ensured connectivity.
4.5 BharatNet Phase-III was conceptualized as a
comprehensive project for integration, expansion, and
technological upgrade of BharatNet Phase-I and Phase-II
networks for a more robust broadband infrastructure and to
integrate, expand and technologically upgrade the existing
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BharatNet Phase-I and BharatNet Phase-II networks. In so far
as State of Gujarat is concerned, the project envisages
connecting around 4,400 more villages over and above the
existing rural connectivity to bridge the digital divide and to
create a seamless, unified digital network across the State of
Gujarat.
4.6 The petitioner herein is a public limited company having
its registered office at Ahmedabad and is engaged inter alia in
the business of construction, operation, and maintenance of
optical fiber network and claims to be India's largest multi-
system provider providing digital cable services at pan-India
level. It also appears that a subsidiary company owned by the
petitioner, M/s. GTPL Broadband Private Limited, holds an ISP
license for the State of Gujarat. It also appears that the
petitioner as part of a consortium had successfully bid for one
of the packages in the State of Gujarat for implementation of
BharatNet Phase-II and has constructed a network of
underground optical fiber of around 15,173 kilometers. It also
appears that the underground optical fiber network had been
laid by the petitioner completely on 27.04.2022 and at present
the petitioner is operating and maintaining the same
independently and whereas the contract for operation and
maintenance is extended till 31.03.2027.
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4.7 Respondent No. 1 herein is the Gujarat Fibre Grid
Network Limited, which is a state implementing agency for
implementation of the BharatNet Programme, wholly owned by
the State of Gujarat. It appears that the respondent No. 1 had
floated a tender for the very self-same purpose on 29.01.2025
in two packages. It would appear that the bids could be, inter
alia, submitted for the entire package subject to eligibility
criteria or for individual packages. It would appear that the
said tender did not contain the conditions impugned in the
present tender in question.
4.8 It also appears that the petitioner had bid for both
packages, and whereas, while the technical bids were opened
and evaluated, the respondent No. 1 had canceled the said
tender. It also appears that upon cancellation of the earlier
tender, the present RFP request for proposal for BharatNet
Phase-III in Gujarat had been issued by respondent No. 1 on
04.06.2026 with the additional conditions, which are under
challenge before this Court by way of the present petition. It
also appears that the tender, seeks for implementation of the
entire work in a single package and whereas there are certain
criteria which have been changed, including enhancing the
requirement of turnover as well as the experience and the bid
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security and whereas this Court is not called upon to
adjudicate on the said issues and therefore, they are not being
referred herewith.
4.9 It appears that the last date for submitting the bid was
fixed on 02.07.2026. It also appears that the petitioner had
submitted representation on 17.06.2026 vide email and whereas
the said email also contains certain queries by the petitioner. It
also appears that the petitioner had attended a pre-bid
conference on 18.06.2026 and had requested deletion of the
condition or modification to the extent that the condition of
not having TSP/ISP license is confined to the bidding entity
itself or to the lead bidder in the consortium subject to certain
safeguards. The petitioner also appears to have submitted
representations to various authorities including the Hon'ble
Chief Minister and the Hon'ble Deputy Chief Minister, State of
Gujarat.
4.10 It appears that the respondent, vide Corrigendum-5 issued
to the tender, had also submitted clarification/response to the
queries of the petitioner and whereas it is clarified that in so
far as the requirement of ISP/TSP license holders for Gujarat
area being declared ineligible to participate, that there would
be no change to the condition since it is based on
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requirements mandated by the DBN (Digital Bharat Nidhi) at
the national level under the ABP (Amended BharatNet
Program) framework. Furthermore, in so far as the clarification
sought with regard to the bidder not having direct or indirect
ownership, shareholding, or management control of more than
50%, it was replied that there would be no change in the
condition of the RFP-tender. It appears that the petitioner had
even thereafter made certain representations and whereas the
representation of the petitioner had not been answered.
4.11 It would also appear that the last date for submission of
the bid has been extended 10 times from 02.07.2026 to
25.09.2026. The petitioner had thereafter approached this Court
by filing the present petition on 23.09.2026, inter alia,
challenging qualification criteria at Sub-clause 10 of Clause 3.1
of the tender as well as the format of the affidavit at Format
XX.
5. This Court, had heard the petitioner as well as the
learned advocates for respondent Nos. 1 and 2 on 24.09.2026
and having regard to the fact that the petition had been
moved on the penultimate date for applying, this Court had
directed the petitioner to show its bona fides by depositing an
amount of Rs. 5 lakhs with the Registry, which the petitioner
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has deposited. This Court, has heard the petitioner on
28.09.2026, 29.09.2026, 07.10.2026, 12.10.2026 and on
15.10.2026 the arguments had been concluded. The respondent
No. 1 had undertaken to ensure that the last date for
submitting the bid would be extended, and whereas the same
stands extended as of now till the final disposal of the present
petition.
5.1 At this stage, it would be appropriate to observe that
during the course of hearing, apart from the pleadings on
record, large number of documents were presented on various
dates of the when the hearing had taken place. Copies of such
documents had also been provided by the State Authorities to
the petitioner. The learned Senior advocate appearing for the
petitioner have also elaborately made submissions as regards
the documents relied upon. Considering the above, submissions
of the parties including upon the documents, which are not on
record, have been taken into consideration by this Court.
6. Heard learned Senior advocate Mr. Mihir Thakore with
learned Senior Advocate Mr. Dhaval Vyas with learned
advocate Mr. for learned advocate Mr. Dosani for the
petitioner, who would assail the RFP tender, more particularly
the impugned clause referred to hereinabove, submitting that
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there is no reason stipulated by the respondents for excluding
TSP/ISP from competing in the tender. Learned Senior
Advocate would submit that, as such, the tender document
does not contain any reason for the exclusion. It is submitted
by the learned Senior Advocate that the exclusion, is illogical
inasmuch as while the substantive condition of exclusion at
Sub-clause 10 of Clause 3.1 - Pre-qualification Criteria only
mentions that an ISP/TSP license holder for Gujarat State shall
be ineligible to participate, whereas the documentary proof
sought for in the format XX affidavit, has number of conditions
which are otherwise not part of the tender document. It is
submitted that while the tender document only excludes
ISP/TSP license holder for Gujarat State, the affidavit, inter
alia, seeks the bidder to undertake that they are not having
more than 50% stake in their company by another company
who is holding an ISP/TSP license covering Gujarat State, or
the bidder company does not have stake of more than 50% in
any other company who is having an ISP/TSP license covering
Gujarat State. The bidder company is also required to mention
that it is not a subsidiary of a parent company who is holding
an ISP/TSP license covering Gujarat State. It is submitted that
the petitioner would not be excluded on the basis of the
substantive condition in the tender document, yet, since the
petitioner is required to file an undertaking as in the nature of
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what has been submitted hereinabove, the petitioner would
automatically get excluded from participating in the tender.
6.1 Learned Senior advocate would submit that while the
petitioner, in pre-bid meeting as well as otherwise, had
requested the respondent No. 1 to modify or amend the
conditions, and whereas, in their reply, as per Corrigendum-5,
the only reason mentioned is that the request could not be
acceded to since the same was mandated by DBN at national
level under the Amended BharatNet Project. Learned Senior
advocate would submit that, as such, till date, no such
mandate has been brought to the notice of this Court by the
DBN. Learned Senior advocate would submit that, as such, at
some stage, the DBN had also found this condition restrictive.
6.2 Learned Senior advocate would submit that, as such, the
respondent No. 1 had invited tenders as the project
implementing agency for BharatNet Phase-II in the State of
Gujarat, in two packages and while the tender did not have
any condition like the present disqualifying ISP/TSP license
holders from applying and while the petitioner had applied for
one of the packages and was the successful bidder. It is
submitted that the tender was not only for laying down Optical
Fibre Network, it also required the successful bidder to run
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and maintain the network for 7 years and give dark fibre and
shared bandwidth to ISPs and TSPs, etc. It is submitted that
the present tender also requires the successful bidder to
undertake the same exercise. Learned Senior advocate would
submit that, as such, while the petitioner was the successful
bidder in the year 2018, its group company held an ISP license
and while the petitioner has been maintaining the network for
all these years, there has not been any allegation, much less a
complaint against the petitioner of conflict of interest. It is
submitted that at the relevant point of time, in the year 2018,
there being no apprehension of conflict of interest, which is
the main contention of the State – respondents and on the
other hand there is nothing on record to justify the rationale
behind including the clauses impugned being an apprehension
of conflict of interest.
6.3 Learned Senior advocate would submit that, as such,
rationale now being relied upon is with regard to following a
pan-India policy. It is submitted that while the Union Cabinet
had approved Phase-III of the BharatNet Project, the same was
now known as the Amended BharatNet Program (ABP). It is
submitted that the BSNL was appointed as the project
management agency for implementing the ABP. It is submitted
that though BSNL was the project management agency, yet,
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the ABP includes a State-led implementation model for
execution of the project through SPVs in co-ordination with the
BSNL. It is submitted that the State of Gujarat had continued
with the State-led model and whereas, the conditions
incorporated by the BSNL in the RFPs/tenders, in States where
the BSNL was the project implementing agency, would not be
automatically applicable to States which had decided to
continue with the State-led model.
6.4 Learned Senior advocate would submit that while a
report of committee of BSNL, being relied upon, yet, what
would be apparent from a perusal of the said document being
that all the members of the committee were from the BSNL
and the deliberation was to decide the conditions to be
included in RFP to be floated by the BSNL for the 16 States
where it was the project implementing agency. It is submitted
that the State of Gujarat is not part of the 16 States. It is
submitted that while the BSNL - RFP excludes a ISP/TSP
provider having license in a particular State from bidding for
that area, yet, the document clearly reveals that the DBN had
actually objected to the said Clause as being too restrictive.
6.5 Learned Senior advocate would submit that the
respondent No. 1, in their reply to the request of the
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petitioner for amending the RFP in so far as the impugned
Clauses were concerned, relies upon mandate of the DBN and
while no such mandate had ever been produced, the document
referred to hereinabove clearly reveals that, as such, the DBN
had, in fact, opposed such a Clause as being restrictive even in
so far as tenders which were to be floated by the BSNL for the
16 States in which the BSNL was the project implementing
authority.
6.6 Learned Senior advocate would further submit that while
the BSNL, as a pan-India ISP/TSP license holder, it would be
for such a reason that the BSNL did not want any competitor
of the BSNL to run the network. It is submitted that probably
would be the rationale for the BSNL including the restriction
Clause in its RFP/tender. It is submitted that such a restrictive
condition would not be applicable when the BSNL was not the
project implementing agency for the State of Gujarat. It is
further submitted that none of the documents which have been
produced reveal a decision at an appropriate level that the
conditions found in the BSNL - RFP would have to be applied
by the States, where the BSNL is not the project implementing
agency and the ABP is being implemented through a State-led
model.
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6.7 Learned Senior advocate would submit that, as such, the
respondent No. 1 had originally floated a tender for the very
self-same project on 29.01.2025 for the State of Gujarat in two
packages and whereas the said tender, did not contain the
above restrictive clause or the requirement for filing the
affidavit in a particular format. Learned Senior advocate would
submit that the petitioner had submitted its bid for both the
packages and whereas, while the technical bids were opened
and evaluated, the respondent No. 1 had canceled the tender
without any reason. It is submitted that minutes of the 30th
Board Meeting of Respondent No. 1 held on 30.03.2026 is
being relied upon and whereas it is submitted that the Board
Meeting, inter alia, decided to cancel the bids received for
tender issued on 29.01.2025. It is submitted that the only
rationale that could be found for the restrictive conditions was
a general wish to avoid any conflict of interest that may result
in an undue advantage to a specific bidder under the
BharatNet Program.
6.8 It is submitted that the minutes, do not reveal any
discussion or decision to bring the restrictive condition of
barring an ISP/TSP provider nor there appears to be any
discussion with regard to any conflict of interest, upon an
ISP/TSP license holder being permitted to participate. It is
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submitted that merely aligning with the BSNL's RFP, could not
be considered as a rationale, since the BSNL, appears to have
included such a condition, since the BSNL itself was a pan-
India ISP/TSP license holder, more particularly the BSNL
commercializing its services, had decided to exclude any
competitor from participating. It is submitted that the minutes
also does not reveal any discussion with regard to the affidavit
format, that bars bidders having more than 50% stake in a
subsidiary company, or the bidder itself being subsidiary of an
ISP/TSP holder who has more than 50% stake in the bidder
company. Learned Senior advocate would submit that merely
aligning with the BSNL tender could not be the only rationale
for including the restrictive conditions.
6.9 Learned Senior advocate, with regard to the above,
would also rely upon Office Memorandum issued by the DBN,
which is annexed with the reply of Respondent Nos. 3 and 4.
Learned Senior advocate would submit that as per the OM
dated 09.01.2025, it is submitted that the annexure to the said
Office Memorandum envisages that the Respondent No. 1,
GFGNL, shall act as a single project management agency with
overall responsibility, including selection of professional agency
through competitive bidding for construction, upgradation, and
operation and maintenance of BharatNet network in Gujarat. It
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is submitted that the GFGNL, Respondent No. 1, was
empowered to draft its own RFP clearly indicates that for the
state-led model, for implementation of the ABP, there was a
discretion conferred on the SPVs i.e., the GFGNL here, to
decide what would be appropriate for them. It is submitted
that even the DBN never envisaged that the conditions of RFP
decided by the BSNL would automatically apply to the state-
led models where the BSNL was not the PMA.
6.10 Learned Senior advocate would further submit that a
document, which is relied upon by the Respondent Nos. 3 and
4, being a note on the DBN website with regard to the
amended BharatNet Program, mentions that the ABP also
includes State-led implementation model, allowing execution
through SPVs in coordination with BSNL. It is submitted that
the term 'co-ordination' could not be stretched to include
conditions included by the BSNL in its RFP in a tender floated
by the GFGNL, i.e., the SPV in the State-led model.
6.11 In so far as an issue raised with regard to acquiescence,
it is submitted that while BSNL had floated tender for 16
States on 15.02.2024 while it included a condition barring an
ISP/TSP license holder for the licensed service area from
participating, yet, the tender did not contain a requirement of
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submitting the affidavit as per any format. It is submitted that
the petitioner had participated as a consortium member with
one M/s Infra Projects Limited for Package 10 Haryana and
Package 11, Northeast Region-1. It is submitted that while the
tender had never been amended, the BSNL had extended the
bar of excluding ISP/TSP license holders for the licensed
service area to also include more than 50% stake in a company
which was a ISP/TSP license holder, etc. It is submitted that
ultimately, while the consortium of the petitioner had been
declared as L1, yet, there was never any work order issued to
the consortium at any point of time. It is submitted that
ultimately, while the BSNL had canceled the tenders, yet, no
order rejecting the bid had been issued to the consortium,
more particularly the bid of the consortium was treated as
non-responsive as the bid did not comply with the
requirements of the BSNL. It is submitted that the petitioner as
a minority member of the consortium could not have
challenged the decision by itself.
6.12 It is further submitted that the condition has no nexus
with the object of the tender, more particularly while it is
emphasized that the network is a national asset being
accessible on a non-discriminatory basis to all eligible service
providers, yet, there is no specific reason for coming to a
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conclusion that permitting an ISP/TSP license holder to
participate may result in any conflict of interest or any undue
advantage. It is submitted that the petitioner, doing the very
self-same work for Phase-II of the BharatNet Program for one
of the parts of the State of Gujarat, without any complaint all
the while, should be enough proof of the fact that the
rationale relied upon, i.e. conflict of interest and undue
advantage are based on imaginary grounds. It is further
submitted that as such, the conditions itself envisage that
penalties could be imposed for any digression from the object
of non-discrimination between service providers is, being an
in-built safeguard, should have taken care of any apprehension
as regards any conflict of interest, etc.
6.13 Learned Senior advocate would summarize by stating that
the Clauses impugned are restrictive and whereas there is no
justifiable rationale found for including a condition whereby
the ISP license holders for the licensed service area are
excluded. Learned Senior advocate would submit that in reply
to the representation as well as inquiries raised by the
petitioner at the pre-bid meetings, were rejected on the ground
of mandate of the DBN, yet no mandate has been produced on
record till date. It is submitted that while such a condition
being included by the BSNL, is stated to be the rationale, yet
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there is nothing to show that except for following what BSNL
has done without any application of mind, the condition
included by the BSNL had been included in the GFGNL tender
for any justifiable reason.
6.14 Learned Senior Advocate Mr. Thakore, in support of his
submissions, has relied upon the following decisions:
* Vinishma Technologies Private Limited v.s. State of
Chhattisgarh and Another, reported in 2025 SCC OnLine SC
2119;
* Union of India and Others v.s. Dinesh Engineering
Corporation and Another, reported in (2001) 8 SCC 491;
* Subodh Kumar Singh Rathour v.s. Chief Executive Officer
and Others, reported in (2024) 15 SCC 461;
* Michigan Rubber (India) Limited v.s. State of Karnataka and
Others reported in 2012 (8) SCC 216;
* Tata Cellular v.s. Union of India reported in (1994) 6 SCC
651;
* Meerut Development Authority v.s. Association of
Management Studies and Another, reported in (2009) 6 SCC
171.
6.15 Relying upon the above decisions, learned senior
advocate would request this Court to interfere, more
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particularly by quashing and setting aside the impugned
condition as well as the affidavit format ‘XX'.
7. Contentions raised by learned Senior Advocate Mr.
Thakore have been vehemently opposed by learned Advocate
General Mr. Kamal Trivedi, appearing on behalf of Respondent
No. 3 - Union of India.
7.1 Learned Advocate General would, at the outset, inter
alia, submit that the present petition may not be entertained
only on the ground of delay. Learned Advocate General
submitting that the RFP, had been floated by Respondent No.
3 on 04.06.2025 and whereas, though the condition as well as
format of affidavit, were present in the RFP from its very
inception, yet the petitioner has approached this Court
absolutely belatedly, inasmuch as the petitioner has moved the
Court on 24.09.2026, whereas the last date for bidding for the
RFP was 25.09.2026 at 06:10 PM, that too being the tenth
extension.
7.2 Learned Advocate General would submit that the petition
having been moved approximately after three months of the
tender being issued and before the last date, which was
extended vide 10 different corrigendums and whereas the
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petition is moved on the last date prior to the last date in the
Corrigendum 10, thereby disrupting the entire tender process.
Learned Advocate General would submit that the petition, may
not be entertained by this Court only on the limited ground of
belated challenge.
7.3 Learned Advocate General would submit that the petition,
also may be rejected on the ground of suppression. Learned
Advocate General would submit that the petitioner, along with
a consortium, had bid for Package 10 and Package 11 -
Haryana and North-East Region, including Mizoram, Tripura,
and Meghalaya. It is submitted that the tender document, inter
alia, contained the very Clause which is now being assailed by
the present petitioner, i.e. Sub-clause 10 in Clause 3.1 - pre-
qualification criteria. Learned Advocate General would submit
that the bidders and the consortium partners, had thereafter
been called upon to furnish an affidavit in the format which is
under question. Since the affidavit of the petitioner, did not
match with the prescribed format, the BSNL as the project
implementing authority had sought for a re-submission of the
affidavit in the prescribed form and whereas, instead of
complying with the same, the petitioner had submitted a
representation. It is submitted that ultimately, the bids for
package 10 and 11 referred to hereinabove were treated as
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technically non-responsive. It is submitted that the BSNL had
canceled the tenders on 26.06.2025 and it is submitted in this
regard that the petitioner, being aware about the said
condition from the time they had bid as a consortium partner
for Package 10 and 11, undoubtedly floated by the BSNL, as
the project implementing authority, yet, the petitioner ought to
have mentioned about the same since the tender as floated by
the BSNL, was for the very selfsame purpose, i.e. under the
amended BharatNet programme.
7.4 Learned Advocate General would further submit that
apart from the fact that a relevant fact had not been
mentioned in the writ petition, what would be more glaring is
that the petitioner, having known about the present impugned
condition, had at the relevant point of time not questioned the
same, nor have they questioned the same before this Court
within reasonable time and whereas the petitioner have
approached this Court on the very last day prior to the 10th
extension. It is submitted that the conduct of the petitioner in
that regard may also be appropriately appreciated by this
Court.
7.5 Learned AG would in this regard further submit that the
petitioner, having not challenged the impugned condition and
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the format, more particularly when the petitioner had applied
and their bids were treated as non-responsive on account of
the same, the present petition may not be considered by this
Court since the petitioner may be deemed to have acquiesced
to the said condition and format.
7.6 Learned Advocate General on merits would submit that
the BharatNet Program is a public digital infrastructure
program funded through a statutory public funding framework
administered by the Digital Bharat Nidhi, formerly known as
the Universal Service Obligation Fund. Learned Advocate
General would submit that the project was conceived as a
national asset to provide middle-mile broadband internet
connectivity to Gram Panchayats and villages.
7.7 It is submitted that the BharatNet program, over the
years, has acquired status of a program of National Public
importance. It is submitted that after the implementation of
Phase-I and Phase-II of BharatNet Program, the Government of
India had adopted the Amended BharatNet Program, i.e. , the
BharatNet Phase-III. It is submitted that the Union Cabinet, in
its meeting held on 04.08.2023, approved the ABP on basis of
a note for the Cabinet dated 02.08.2023 by the Department of
Telecommunications, Government of India. It is submitted that
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the Union Cabinet had approved nomination/appointment of
BSNL as the Project Management Agency for implementation of
the ABP. It is submitted that the BSNL, is not a mere Project
Management Agency for the States where the BSNL was
entrusted with implementation of the program; rather, the
BSNL was placed at the centre of the National Implementation
Architecture for the ABP, including procurement and co-
ordination framework for selection of professional agencies for
development, creation, upgradation, operation and maintenance
of the BharatNet program.
7.8 It is submitted that the Union Cabinet had also, inter
alia, approved continuation of the State-led implementation
model with necessary changes to the State-led agreements.
Reliance in this regard is placed on a note on the Amended
BharatNet Program which is uploaded on the website of the
DBN, wherein it is mentioned that: "ABP also includes a State-
led implementation model, allowing execution through SPVs, in
coordination with BSNL."
7.9 It is submitted that the role of the BSNL is clearly
discernible from the above note, which clarifies the central
role played by the BSNL in the ABP. It is further submitted by
the learned Advocate General that while the ABP recognizes
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implementation through different models, i.e., the BSNL-led
model as well as the State-led model, yet, the network, which
would be laid, would remain part of the BharatNet National
Architecture. It is submitted that all the models, are part of
the national framework and more particularly the State-led
model is required to co-ordinate with the Central Project
Management Agency, i.e., BSNL, as well as the DBN.
7.10 Learned Advocate General would submit that the decision
to exclude TSP/ISP license holders for the LSA was not an
independent decision of the State or the State-led model;
rather, respondent No. 1 has adopted the exclusion model
which had been conceived by the BSNL. Learned Advocate
General in this regard would take this Court through a report
of Committee of BSNL, dated 27.12.2023, whereby the
Committee had prepared the RFP for amended BharatNet
Programme. Learned Advocate General would submit in this
regard that the committee had deliberated on all issues and
whereas, the decision to exclude ISP/TSP license holders was a
well thought about decision, at the level of the BSNL. Learned
Advocate General would pertinently draw our attention to
discussion in this regard between the BSNL and the USOF -
now DBN, where the USOF had inter alia flagged the clause
i.e. Section 2.1(f) of BSNL draft RFD, opining that the same
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may be restrictive. The BSNL, had inter alia opined that since
as per the BSNL policy any ISP/TSP bidder may have conflict
of interest, therefore, the clause was retained. Learned
Advocate General would also draw the attention of this Court
to Section 4A of the draft RFP as finalized by the BSNL
Committee which was a special instruction to bidders and
special conditions of the contract and would submit that the
Section 2.1 of the eligibility condition inter alia states about
bidder not having any conflict of interest and specifically, six
categories were outlined, which would constitute a conflict of
interest, and clause (f) thereof, stating as regards an ISP/TSP
license holder for an LSA shall be ineligible to participate in
the package comprising of that LSA. Learned Advocate General
would submit that the above clearly reflecting that the decision
to exclude ISP/TSP holders of the LSA, was a well thought
about decision. It is submitted that the BSNL, vide a meeting
of its Management Committee held on 12.02.2024, had
approved the RFP for implementation of the ABP on the
Design, Build, Operate, Maintain (DBOM) model.
7.11 It is submitted that later on, the BSNL had floated tender
for selection of Project Implementing Agencies for 16
Packages/States and whereas, the said states did not include
the State of Gujarat. It is submitted that the impugned
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condition, was also a part of the said RFP and whereas, since
there appeared to be certain queries, including a query by the
petitioner as regards the clause in question, the BSNL had
sought opinion from the Central Government which through a
Senior Law Officer (ASG) had tendered an opinion dated
23.05.2025 whereby, the ASG had inter alia reiterated his
earlier opinion that bidders need to comply with the pre-bid
clarification with regard to clause 2.1(f) regarding TSP/ISP
criteria.
7.12 Learned Advocate General would submit that the decision
to including the exclusion clause being a well thought about
decision and whereas, the BSNL, since certain doubts had been
raised, had sought for an opinion, the stand of BSNL, stood
fortified by the opinion of the ASG. Learned Advocate General
would reiterate that since the consortium wherein the
petitioner was a party, having not complied with the
requirements as put out in the RFP, i.e. the very selfsame
condition, vide communications dated 26.06.2025 the bid of
the petitioner for Package 10 (Haryana) and Package 11 (NER-
1) (Mizoram, Tripura, Meghalaya), the tender itself was
canceled.
7.13 Learned Advocate General would further draw the
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attention of this Court to an Office Memorandum issued by the
DBN dated 09.01.2025 whereby the State of Gujarat had been
granted in-principle approval to implement the ABP, as
approved by the Union Cabinet as per the terms and
conditions set out in the said Office Memorandum. Learned
Advocate General would emphasize on the aspect of
implementation of the ABP model as approved by the Union
Cabinet and submit that the same clearly denotes the fact that
the State-led model is a component of the ABP as approved by
the Union Cabinet and hence, the role of the BSNL would be
central to the same.
7.14 Attention of this Court is also drawn to Clause 5(ix)
whereby it has been inter alia stated that the State shall first
sign an MOU with the DBP for implementation of the ABP
under the State-led model and whereas subsequently, the State
would sign a quadripartite agreement with DBN, BSNL, and
GFGNL and whereas the first MOU shall be part of the
quadripartite agreement. Learned Advocate General would
submit that the DBN, envisaging that an agreement would have
to be signed by the State with, amongst others, the BSNL also
emphasizes on the fact that the role of BSNL was central to
the entire ABP.
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7.15 Attention of this Court is further drawn to Paragraph No.
27 of the affidavit filed on behalf of Respondent No. 3 - Union
of India wherein it has been specifically stated that the State
Government as well as the DBN and BSNL, had signed an
addendum to the original ABP agreement, as executed i.e., the
quadripartite agreement and whereas the addendum expressly
provides that an ISP/TSP license holder for that State shall be
ineligible to participate in the tender in question. Learned
Advocate General would submit that since the implementation
of the ABP in Gujarat, is part of the National ABP
Architecture, therefore, the condition, as incorporated by the
BSNL, would remain equally applicable to the State-led model.
7.16 In so far as the rationale of the policy is concerned,
it is submitted that the same was intended to ensure that there
is neutrality and absence of any conflict of interest. It is
submitted in this regard that the PIA under the DBOF model,
is required to develop, build, operate, and maintain the entire
network, which is intended to provide access to multiple ISPs,
TSPs, and other eligible users. It is submitted that an ISP/TSP
itself being a user of the BharatNet infrastructure, would not
be permitted to participate in the RFP since the scope of work
in addition to develop and build, also envisages that the
project implementing agency operates and maintains the
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network throughout the State. It is submitted that this is an
inherently conflicting position since an ISP/TSP license holder,
while he would build the infrastructure, would also operate
and maintain the infrastructure upon which, other competing
service providers would be using. It is submitted that the
exclusion of the ISP/TSP license holder is not across the board;
rather, it is submitted that the ISP/TSP holder, is precluded
from bidding for the same area in which it has a license to
operate, thereby, minimizing the possibility of a conflict of
interest. It is submitted that the rationale was not conceived
only for the Gujarat State, i.e. to state that the petitioner was
being excluded; rather, the said clause was included in the
national RFP process where the clause was consciously
retained.
7.18 It is further submitted as regards a contention raised by
the learned Senior Advocate appearing for the petitioner that
the tender document itself provides for penalties in case of
conflict of interest situation and whereas, it is submitted that
the inclusion of such penal provisions, inter alia reflects the
fact that a conflict of interest could not be ruled out at any
stage and whereas, such inclusion, would not necessarily enure
in favour of the petitioner since inclusion of such penalty
clearly reflects that a conflict of interest would be possible. It
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is submitted that the State authorities, in order to ensure that
such a conflict of interest does not arise, have very consciously
chosen to incorporate the exclusion clause and whereas, the
inclusion of the penal consequences would be rather against
the petitioner since such clause envisages possibility of a
conflict of interest rather than negate the same.
7.19 In so far as a submission by learned Senior Counsel for
the petitioner that the Format ‘XX’ is illogical since it requires
the bidding company to state on affidavit that it does not have
more than 50% stake in any other company which is an
ISP/TSP license holder covering the State, or that no other
company which is an ISP/TSP license holder has more than
50% stake in the bidding company. It is submitted that the
contention as regards 50% being an illogical term, since a
company having 49% stake either in the bidding company or
the bidding company having less than 50% stake would not
negate the conflict of interest part. As against the same, it is
submitted by learned Advocate General that such a contention
is hypothetical, since the petitioner is having a subsidiary,
which is wholly owned by the petitioner, which is having an
ISP license. Furthermore, it is submitted that the 50%
threshold is a concept well understood under the Companies
Act, 2013, which, inter alia, defines a subsidiary as a
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Company in which more than one-half of total voting power is
exercised or controlled. It is submitted that, as such, the 50%
threshold reflects application of mind, inasmuch as every
minority investment or remote association with an ISP/TSP's
license holder is not excluded; rather, what is excluded is a
verifiable majority threshold.
7.20 Learned Advocate General would reiterate that the
impugned condition is a conscious policy decision of the
Government of India, inasmuch as, the Union Cabinet having
approved the amended BharatNet Programme and whereas the
BSNL having been approved to be appointed as the Project
Management Agency and the role of the BSNL being central to
the amended BharatNet Programme and whereas, since the
BSNL, has specifically included this condition after due
deliberation and since a Senior Law Officer of the Government
of India has also examined the same and opined in favour of
the exclusionary condition and since the DBOM model
envisages operation and maintenance of the network by the
Project Implementing Agency and whereas an ISP/TSP holder,
being an operator who would use the network, there is an
inherent risk of conflict of interest, hence, the policy decision
for excluding the TSP/ISP holder may not be interfered by this
Court in exercise of judicial review.
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7.21 Learned Advocate General, in support of his submissions,
would rely upon decisions of the Hon'ble Supreme Court:
* In case of Micky Traders v.s. L.R.Y. Labour Contractor and
Others, reported in 2026 SCC SC 1936;
* Union of India and Others v.s. N. Murugesan and Others,
reported in (2022) 2 SCC 25;
* Air India Limited v.s Cochin International Airport Limited
and Others, reported in (2000) 2 SCC 617.
* Utkarsh Enterprises and Others v.s Union of India and
Others, reported in 2026 SCC OnLine SC 1598;
* Association of Registration Plates v.s. Union of India and
Others, reported in (2005) 1 SCC 679;
* Tata Cellular v. Union of India, reported in (1994) 6 SCC
651;
* Decision of Division Bench of this Court in case of Larsen &
Toubro Limited v. Gujarat State Petroleum Corporation Limited
and Others, reported in (2001) 2 GLR 934;
* Decision of a Single Judge of this Court in case of Larsen &
Toubro Limited v. Gujarat State Petroleum Corporation Limited
and Others, reported in (2000) 2 GLR 1814;
* Decision of a learned Single Judge of the High Court of
Delhi in case of National Highways Builders Federation v.
National Highways Authority of India and Others, dated
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03.11.2008 in W.P. (C) No. 566 of 2008;
8. The present petition is also vehemently objected to by
learned Government Pleader Mr. G. H. Virk appearing for
respondent No. 1. Learned Government Pleader Mr. Virk would
submit at the outset that he would adopt all the submissions of
the learned Advocate General and whereas his submissions
would be to compliment the submissions already made.
8.1 In addition to the neutrality factor as submitted by
learned Advocate General, it is submitted that there are
technical and practical reasons for the ISP/TSP restriction. It is
submitted that while the exclusion is in clear public interest,
yet there are technical aspects, which also have to be
appreciated whereby the integrity of the network would be
compromised, inasmuch as it is submitted that in a scenario
where two downstream service providers seek activation of
high capacity link for two enterprise customers and while the
price and the access policy may be identical to both, yet if the
PIA alters the order in which the activation is done, i.e. to
suit a subsidiary which is a service provider, it may result in
the said subsidiary getting a preference of activation over the
non-affiliated provider, which could affect the trust of the
enterprise customer in the non-affiliated provider. It is
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submitted that such conflicts could arise without any express
denial of service and by mere delay, which could be justified
through various reasons. Likewise, it is submitted that in so far
as fault restoration, an affiliated subsidiary provider, may
receive a faster resolution as compared to a non-affiliated
subsidiary, which could also be justified, but which would
have the effect of undermining the object of the network being
neutral. It is further submitted that the PIA would have access
to information as regards either a congestion in the network or
a new enterprise being connected with additional bandwidth
and whereas such information could be commercially exploited
for gains, which would also undermine the primary objective
of neutrality.
8.2 It is based upon such illustrations sought to be submitted
that to maintain the object of neutrality and to obviate any
possible conflict of interest, an ISP/TSP license holder in the
LSA, is excluded. It is also submitted that the condition is not
Gujarat-specific and whereas since the same is a pan-India
condition, the allegation of bias, mala fides, and a tailor-made
condition are made without any basis.
8.3 Learned Government Pleader Mr. Virk would further draw
the attention of this Court to minutes of meeting of the
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respondent No. 1, more particularly of the 29th Board Meeting
held on 24.02.2026, as well as the 30th Board Meeting held on
30.03.2026. It is submitted that the minutes of the Board
Meeting, reflect a clear and deliberate application of mind with
regard to including the conditions impugned, in the tender in
question, after the earlier tender floated on 29.01.2025 had
been canceled by the respondent No. 1. Learned Government
Pleader would specifically draw the attention of this Court to
deliberation on Item No. 9 of the minutes of 29th Meeting,
whereby there was a specific discussion as regards the BSNL
central RFP clause and the exclusion.
8.4 Learned Government Pleader submits that the minutes of
the meeting, more particularly Agenda No. 9, also requests the
Board to opine as to whether the bid, i.e. the bids received
pursuant to RFP dated 29.01.2025, should be canceled and re-
tendered to ensure administrative transparency, audit
compliance and alignment with, amongst others, DBN/BSNL
RFP provisions. It is submitted that in the next Board Meeting,
the Board had discussed the implementation of the Phase-III of
BharatNet Programme and had examined the issue of alignment
with the RFP provisions of the BSNL central RFP, and had
inter alia observed that the same from the perspective of
ensuring consistency, compliance, and avoidance of any conflict
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of interest that may result in undue advantage to specific
bidders. The Board also noted the decision of the Management
Committee with regard to cancellation of the bids and the re-
tendering process in light of Agenda Items Nos. 5.1 and 5.2
discussed hereinabove.
8.5 Learned Government Pleader would submit that the
decision to cancel the tender and to opt for re-tendering after
inclusion of the TSP/ISPs as per the BSNL central RFP was a
deliberate and well-thought-out decision and has not been a
decision taken without any application of mind and
furthermore, the entire idea was to ensure that the tender is
aligned with the BSNL RFP to ensure consistency and avoid
any conflict of interest. Learned Government Pleader would
therefore request this Court not to entertain the present
petition.
8.6 Learned Government Pleader, in support of his
submissions, has relied upon the following decisions:
* Directorate of Education and Others v. Educomp Datamatics
and Others reported in 2004 (4) SCC 19;
* Association of Registration Plates v. Union of India, reported
in (2005) 1 SCC 679;
* Meerut Development Authority v. Association of Management
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Studies and Others, reported in (2009) 6 SCC 171;
* Michigan Rubber Limited v. State of Karnataka and Others,
reported in 2012 (8) SCC 216;
* Maa Binda Express Carrier and Another v. North-East
Frontier Railway and Others, reported in (2014) 3 SCC 760;
* Silppi Constructions Contractors v.s. Union of India and
Another reported in (2020) 16 SCC 489;
* Uflex Limited v. Government of Tamil Nadu and Others,
reported in (2022) 1 SCC 165.
9. We have heard the learned advocates for the respective
parties at length and we have perused the documents including
the additional documents tendered across the bar as well as
the judgments cited by the learned advocates for the respective
parties.
10. In our considered opinion, the following issues have
arisen for our consideration:
1. Whether validity of a tender condition could be examined
in judicial review in exercise of powers available under Article
226 of the Constitution of India?
2. Whether the impugned tender condition and Format ‘XX’
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reflect a rationale?
3. Whether the rationale in excluding ISP/TSP license
holders in the licensed service area, is a reasonable
classification from the perspective of Article 14 of the
Constitution of India?
4. Whether the impugned tender condition is actuated with
malafides?
5. Whether the petition ought not to be entertained on the
ground of delay and/or acquiescence?
6. Whether the impugned tender condition as well as the
requirement of affidavit in format XX is required to be quashed
and set aside?
11. Having formulated the issues for consideration, before we
deal with the same, in our considered opinion, it would be
profitable to refer to the scope and extent of exercise of
powers by this Court, more particularly, when considered from
the context of challenge against action of the government in
tender matters. In this context, it would be profitable to rely
upon observations of the Hon'ble Apex Court in case of
Ramana Dayaram Shetty versus International Airport Authority
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of India, reported in 1979 (3) SCC 489. Observations of the
Hon'ble Supreme Court at Paragraph Nos. 11 and 12, being
relevant for the present purpose, are reproduced hereinbelow
for benefit:
“11. To-day the Government, in a welfare State is
the regulator and dispenser of special services and
provider of a large number of benefits, including
jobs contracts, licences, quotas, mineral rights etc.
The Government pours forth wealth, money,
benefits, services, contracts, quotas and licences.
The valuables dispensed by Government take many
forms, but they all share one characteristic. They
are steadily taking the place of traditional forms of
wealth. These valuables which derive from
relationships to Government are of many kinds.
They comprise social security benefits, cash grants
for political sufferers and the whole scheme of
State and local welfare. Then again, thousands of
people are employed in the State and the Central
Government and local authorities. Licences are
required before one can engage in many kinds of
businesses or work. The power of giving licences
means power to withhold them and this gives
control to the Government or to the agents of
Government on the lives of many people. Many
individuals and many more businesses enjoy largess
in the form of Government contracts. These
contracts often resemble subsidies. It is virtually
impossible to lose money on them and many
enterprises are set up primarily to do business with
Government. Government owns and controls
hundreds of acres of public land valuable for
mining, and other purposes. These resources are
available for utilisation by private corporations and
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individuals by way of lease or licence. All these
mean growth in the Government largess and with
the increasing magnitude and range of
governmental functions as we move closer to a
welfare State, more and more of our wealth
consists of these new forms. Some of these forms
of wealth may be in the nature of legal rights but
the large majority of them are in the nature of
privileges. But on that account, can it be said that
they do not enjoy any legal protection- Can they
be regarded as gratuity furnished by the State so
that the State may withhold, grant or revoke it at
its pleasure- Is the position of the Government in
this respect the same as that of a private giver-
We do not think so. The law has not been slow to
recognise the importance of this new kind of
wealth and the need to protect individual interest
in it and with that end in view, it has developed
new forms of protection. Some interests in
Government largess, formerly regarded as
privileges, have been recognised as rights while
others have been given legal protection not only by
forging procedural safeguards but also by confining
/ structuring and checking Government discretion
in the matter of grant of such largess. The
discretion of the Government has been held to be
not unlimited in that the Government cannot give
or withhold largess in its arbitrary discretion or at
its sweet will. It is insisted, as pointed out by
Professor Reich in an especially stimulating article
on "The New Property" in 73 Yale Law Journal
733, "that Government action be based on
standards that are not arbitrary or unauthorised."
The Government cannot be permitted to say that it
will give jobs or enter into contracts or issue
quotas or licences only in favour of those having
grey hair or belonging to a particular political
party or professing a particular religious faith. The
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Government is still the Government when it acts in
the matter of granting largess and it cannot act
arbitrarily. It does not stand in the same position
as a private individual.
12. We agree with the observations of Mathew, J.,
in V. Punnan Thomas V/s. State of Kerala AIR
1969 Ker 81 (FB) that: "The Government, is not
and should not be as free as an individual in
selecting the receipts for its largess. Whatever its
activity, the Government is still the Government
and will be subject to restraints, inherent in its
position in a democratic society. A democratic
Government cannot lay down arbitrary and
capricious standards for the choice of persons with
whom alone it will deal". The same point was
made by this Court in Erusian Equipment and
Chemicals Ltd. V/s. State of West Bengal (1975) 2
SCR 674 where the question was whether black-
listing of a person without giving him an
opportunity to be heard was bad- Ray, C. J.,
speaking on behalf of himself and his colleagues on
the Bench pointed out that black-listing of a person
not only affects his reputation which is in
Poundian terms an interest both of personality and
substance, but also denies him equality in the
matter of entering into contract with the
Government and it cannot, therefore, be supported
without fair hearing. It was argued for the
Government that no person has a right to enter
into contractual relationship with the Government
and the Government, like any other private
individual, has the absolute right to enter into
contract with any one it pleases. But the Court,
speaking through the learned Chief Justice,
responded that the Government is not like a
private individual who can pick and choose the
person with whom it will deal, but the
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Government is still a Government when it enters
into contract or when it is administering largess
and it cannot, without adequate reason, exclude
any person from dealing with it or take away
largess arbitrarily. The learned Chief Justice said
that when the Government is trading with the
public, "the democratic form of Government
demands equality and absence of arbitrariness and
discrimination in such transactions ..The activities
of the Government have a public element and,
therefore, there should be fairness and equality.
The State need not enter into any contract with
anyone, but if it does so, it must do so fairly
without discrimination and without unfair
procedure." This proposition would hold good in
all cases of dealing by the Government with the
public, where the interest sought to be protected is
a privilege. It must, therefore, be taken to be the
law that where the Government is dealing with the
public, whether by way of giving jobs or entering
into contracts or issuing quotas or licences or
granting other forms of largess, the Government
cannot act arbitrarily at its sweet will and, like a
private individual, deal with any person it pleases,
but its action must be in conformity with standard
or norm which is not arbitrary, irrational or
irrelevant. The power or discretion of the
Government in the matter of grant of largess
including award of jobs, contracts quotas, licences
etc., must be confined and structured by rational,
relevant and non- discriminatory standard or norm
and if the government departs from such standard
or norm in any particular case or cases, the action
of the Government would be liable to be struck
down, unless it can be shown by the Government
that the departure was not arbitrary, but was
based on some valid principle which in itself was
not irrational, unreasonable or discriminatory.”
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12. The Hon'ble Supreme Court, in the aforesaid
observations, has, inter alia, laid down that the power or
discretion of the Government in the matter of grant of
largesse, including contracts, should be on basis of rational,
relevant and non-discriminatory principles. In case the
Government departs from such settled principles, then the
action of the Government would be liable to be struck down.
It is also observed, inter alia, that even in matters of tenders,
if the Government acts arbitrarily, irrationally or unreasonably,
then the decision of the Government is liable to be interfered
with.
13. We will now advert to the decision of the Hon'ble Apex
Court in case of Tata Cellular (supra), as relied upon by both
the parties, wherein the Hon'ble Supreme Court had laid down
certain principles in the matter of judicial review of
administrative action from the context of award of tenders.
Paragraph No. 113 of Tata Cellular (supra), as relied upon by
both the counsels:
“113. The principles deducible from the above
are :
(1) The modern trend points to judicial restraint in
adm
inistrative action.
(2) The court does not sit as a court of appeal but
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merely reviews the manner in which the decision
was made.
(3) The court does not have the expertise to
correct the administrative decision. If a review of
the administrative decision is permitted it will be
substituting its own decision, without the necessary
expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be
open to judicial scrutiny because the invitation to
tender is in the realm of contract. Normally
speaking, the decision to accept the tender or
award the contract is reached by process of
negotiations through several tiers. More often than
not, such decisions are made qualitatively by
experts.
(5) The government must have freedom of contract.
In other words, a fair play in the joints is a
necessary concomitant for an administrative body
functioning in an administrative sphere or quasi-
administrative sphere. However, the decision must
not only be tested by the application of
Wednesbury principle of reasonableness (including
its other facts pointed out above) but must be free
from arbitrariness not affected by bias or actuated
by mala fides.
(6) Quashing decisions may impose heavy
administrative burden on the administration and
lead to increased and unbudgeted expenditure.”

14. The principles laid down by the Hon'ble Supreme Court,
inter alia being that:
Normally, there should be judicial restraint, while
reviewing administrative actions, and whereas, the Court would
not consider challenge to an administrative action as a Court
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of Appeal, but it is only required to review the decision-
making process, the Court may not have the expertise to
correct an administrative decision, while invitation to tender is
in the realm of contract, and therefore, terms of invitation to
tender cannot be open to judicial scrutiny.
15. Having observed as such, the Hon'ble Supreme Court also
observes that while the Government must have freedom of
contract and should also be granted some leeway in
administrative action. Having observed as thus, the Hon'ble
Apex Court also lays down that if an action of the Government
is challenged, then the same should be tested by considering
whether considered from the context of Wednesbury principle
of reasonableness and also from the perspective of being non-
arbitrary or not affected by bias or actuated by mala fides. The
Hon'ble Supreme Court further observes that quashing decisions
of Government may result in heavy administrative burden and
increase in expenditure. Thus, what flows from the decision is
that normally, while terms of tender would not be scrutinised,
but there is also a requirement, if the same is questioned, to
examine the same from the perspective of the decision being
reasonable, non-arbitrary, or not actuated by bias or malafides.
16. Profitable at this stage would also be to refer to decision
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of the Hon'ble Apex Court in case of Air India Limited (supra),
referred to by the parties. The Hon'ble Supreme Court, after
considering various decisions of the Hon'ble Apex Court,
including the above-referred decisions, had, inter alia, laid
down as under at Paragraph No. 7 of the decision, which is
reproduced for benefit:
“7. The law relating to award of a contract by the
State, its corporations and bodies acting as
instrumentalities and agencies of the Government
has been settled by the decision of this Court in R.
D. Shetty V/s. International Airport Authority,
Fertilizer Corporation Kamgar Union V/s. Union of
India, Asstt. Collector, Central Excise V/s. Dunlop
India Ltd. Tata Cellular V/s. Union of India,
Ramniklal N. Bhutta V/s. State of Maharashtra, and
Raunaq International Ltd. V/s. I.V.R. Construction
Ltd. The award of contract, whether it is by a
private party or by a public body or the State, is
essentially a commercial transaction. In arriving at
a commercial decision considerations which are of
paramount are commercial considerations. The
State can choose its own method to arrive at a
decision. It can fix its own terms of invitation to
tender and that is not open to judicial scrutiny. It
can enter into negotiations before finally deciding
to accept one of the offers made to it. Price need
not always be the sole criterion for awarding a
contract. It is free to grant any relaxation, for
bona fide reasons, if the tender conditions permit
such a relaxation. It may not accept the offer even
though it happens to be the highest or the lowest.
But the State, its corporations, instrumentalities
and agencies are bound to adhere to the norms,
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standards and procedures laid down by them and
cannot depart from them arbitrarily. Though that
decision is not amenable to judicial review, the
Court can examine the decision making process and
interfere if it is found vitiated by mala fides,
unreasonableness and arbitrariness. The State, is
corporations, instrumentalities and agencies have
the public duty to be fair to all concerned. Even
when some defect is found in the decision making
process the Court must exercise its discretionary
power under Art. 226 with great caution and
should exercise it only in furtherance of public
interest and not merely on the making out of a
legal point. The Court should always keep the
larger public interest in mind in order to decide
whether its intervention is called for or not. Only
when it comes to a conclusion that overwhelming
public interest requires interference, the Court
should intervene.”

17. The Hon'ble Supreme Court, in its dictum as reproduced
hereinabove, has, inter alia, laid down that award of contract,
even by a public body or a State, is a commercial transaction,
and in such transaction, commercial considerations would be
paramount. It is laid down that the State is empowered to
choose its own method to arrive at a decision, that it can fix
its own terms of invitation to tender, which is not open to
judicial scrutiny, that it can enter into negotiations before
accepting any offers. Financial gain may not be the sole
criteria to accept any of the offers, and the State is free to
grant a relaxation if the tender conditions permit such
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relaxation, albeit for bona fide considerations.
17.1 Having observed as thus, the Hon'ble Supreme Court
further holds that the State is required to adhere to norms,
standards, and procedure laid down by it and departure from
such norms could not be done arbitrarily. It is further held
that while the decision of the State itself may not be amenable
to judicial review, yet, Courts are empowered to examine the
decision-making process and interfere if the same is vitiated by
malafides, unreasonableness and arbitrariness. The State has a
public duty to be fair to all. The Hon'ble Supreme Court
further holds that even if there is some defect found in the
decision-making process, then discretionary power under Article
226 must be exercised with circumspection and only in
furtherance of public interest and not merely on the making of
a legal point. The overarching consideration which should
weigh with the Court should be larger public interest.
Furthermore, it is emphasised by the Hon'ble Apex Court that
a Court should intervene only if it comes to a conclusion that
overwhelming public interest requires interference.
18. Profitable at this stage would also be to refer to
observations of the Hon’ble Apex Court in case of Subodh
Kumar Singh Rathore (supra), relied upon by learned Senior
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Advocate Mr. Thakore. Paragraph No. 57.2 of the said
decision, being relevant for the present purpose, is reproduced
hereinbelow for benefit:
“57.2 An action under a writ will lie even at
the stage prior to the award of a contract by the
State wherever such award of contract is imbued
with procedural impropriety, arbitrariness,
favouritism or without any application of mind. In
doing so, the courts may set-aside the decision
which is found to be vitiated for the reasons stated
above but cannot substitute the same with its own
decision. The relevant observations read as under: -
“82.4. An action will lie, undoubtedly, when the
State purports to award any largesse and,
undoubtedly, this relates to the stage prior to the
contract being entered into [See R.D. Shetty
(supra)]. This scrutiny, no doubt, would be
undertaken within the nature of the judicial
review, which has been declared in the decision in
Tata Cellular vs. Union of India.” (Emphasis
supplied)””
18.1 The Hon’ble Apex Court has, inter alia, laid down that
disputes pre-award of the contract would be amenable to
challenge under writ jurisdiction when such award is tainted
with procedural impropriety, arbitrariness, favouritism or
without any application of mind. It is held that while the
Courts are empowered to set aside a decision on the
considerations observed hereinabove, yet the Court would not
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substitute the same with a decision of its own.
19. Having appreciated the law laid down by the Hon’ble
Supreme Court and being guided by the same, we will now
examine the issues formulated by us hereinabove.
ISSUE NO. 1
20. In so far as Issue No. 1 with regard to power of the
Courts to examine validity of a tender condition, in our
considered opinion, the law laid down by the Hon’ble Supreme
Court as referred to hereinabove, meets with the said
contingency, yet, it would be profitable to refer to certain
decisions referred to by the learned counsels as regards the
scope of interference when a tender condition is challenged.
Profitable in this regard would be to refer to the observations
of the Hon’ble Supreme Court in the decision of Vinishma
Technologies Private Limited (supra) wherein Paragraphs No.
14, 15, 16, being relevant for the present purpose, is
reproduced hereinbelow for benefit.
“14. The solitary question which arises for
consideration in the instant appeals is whether the
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aforesaid impugned tender condition meets the test
of reasonableness and fairness and or whether the
same constitutes an arbitrary criteria which
excludes the other eligible bidders from
participation thereby violating, the mandate
contained in Articles 14 and 19(1)(g) of the
Constitution of India.
15. Before proceeding further, it is apposite to
briefly advert to contours of judicial review with
regard to tender conditions which are well
delineated. A three Judge Bench of this Court in
Ramana Dayaram Shetty v. International Airport
Authority of India & Ors.2, held that discretion of
the Government in granting the largesse, is not
unlimited and the Government cannot give or
withhold largesse in its arbitrary discretion or at
its sweet will. It has further been held that
Government cannot without adequate reason
exclude any person from dealing with it or take
away largesse arbitrarily. It also held that activities
of the Government have a public element and
therefore there should be fairness and equality. It
is well settled in law that Government must have
free hand in setting the terms of the tender and
the Court cannot strike down the terms of the
tender prescribed by the Authority merely because
it feels some other terms in the tender would have
been fairer, wiser or more logical. It is equally
well settled legal proposition that in the matter of
formulating conditions of (1979) 3 SCC 489; AIR
1979 SC 1628 Directorate of Education & Ors. v.
EDUCOMP Datamatics Ltd. & Ors. (2004) 4 SCC 19
tender document unless the action of tendering
authority is found to be arbitrary and malicious
the Court would not interfere4. It is also well
settled in law that a Court cannot sit over
judgment on what should be the eligibility criteria
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in the tender notice unless the same is arbitrary,
discriminatory or actuated by mala fides.
16. The principle of non-discrimination is embodied
in Article 14 of the Constitution of India. Article
14 has to be read in conjunction with Rights
conferred by other Articles like Article 21 of the
Constitution of India. Article 21 of the Constitution
of India refers to Right to Life which includes
‘opportunity’ as well. The doctrine of level playing
field is an important concept while construing
Article 19 (1) (g) of the Constitution of India.
Article 19(1) (g) confers Fundamental Right to
carry out business to a company, it is entitled to
invoke the doctrine of level playing field which is
however, subject to public interest. The doctrine of
level playing field Global Energy Ltd. & Anr. v.
Adani Exports Ltd. & Ors. (2005) 4 SCC 435 -
Shimni Utsch India Pvt. Ltd. & Anr. v. West
Bengal Transport Infrastructure Development
Corporation Ltd. & Ors (2010) 6 SCC 303. Icomm
Tele Ltd vs. Punjab State Water Supply and
Sewerage Board & Anr. (2019) 4 SCC 401; Uflex
Ltd. V. Government of Tamil Nadu & Ors. (2022) 1
SCC 165 provides the space within which equally
placed competitors are allowed to bid so as to
subserve larger public interest.”
21. From the aforequoted observation of the Hon’ble Supreme
Court, it would be clear that the Hon’ble Supreme Court was
concerned with a challenge to a tender condition as being
violative of Article 14 and 19(1)(g) of the Constitution of India.
The Hon’ble Apex Court has referred to decision of the
Hon’ble Supreme Court in case of Ramana Dayaram Shetty
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(supra) and held that the Courts would not interfere with the
action of the tendering authority as regards a tender condition
unless the action is found to be arbitrary and malicious.
Likewise, it is observed that Courts would not interfere with
regard to the eligibility criteria in a tender notice unless such
criteria is arbitrary, discriminatory or actuated by malafides. It
is further laid down that Right to Life as guaranteed under
Article 21 of the Constitution of India includes right to
opportunity as well. It is observed that in construing the right
guaranteed under Article 19(1)(g) to carry out any occupation,
trade or business from the perspective of a challenge on the
ground of violation of such a fundamental right then the
doctrine of level playing field would also be applicable, which
provides space whereby equally placed competitors are allowed
a level playing field, albeit subject to larger public interest.
21.1 To us, it would appear that the said decision,
interpreting earlier decision of the Hon’ble Supreme Court,
inter alia, clearly lays down that while in normal
circumstances challenge to tender conditions would not be
entertained unless the decision of the tendering authority is
arbitrary, discriminatory or actuated by malafides. What also
flows from the above observation is that while Article 19(1)(g)
of the Constitution of India guarantees the right to carry out
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occupation, trade or business, in matters relating to tender,
such a right would always be considered from the perspective
of whether upholding such right subserves larger public
interest.
21.2 While learned Advocate General as well as the
Government Pleader have attempted to submit before us that
the law laid down by the Hon’ble Apex Court in case of
Vinishma Technologies Private Limited (supra), has been
diluted by the Hon’ble Apex Court in later decision of Micky
Traders (supra) and Utkarsh Enterprises (supra), yet, in our
considered opinion, none of the decisions lay down a law that
there could not be any challenge to a tender condition.
21.3 In our considered opinion, rather in the decision of
Micky Traders (supra), the Hon’ble Apex Court has, inter alia,
relying upon earlier decisions, observed that while the State is
free to enter into commercial transactions without undue
interference by the Courts, provided its action is fair and free
from arbitrariness, that Courts interfere only to prevent
arbitrariness, irrationality, bias, malafides or perversity; that
while the author of the tender document is the best judge of
its requirements and an interpretation which is not acceptable
to a Constitutional Court would not be a good ground for
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interference. Paragraphs No. 14 to 16 of the said decision are
relied for benefit.
“14. The contours of judicial review in the matters
of tender are well-settled and need only brief
restatement. The principles governing judicial
review of the award of a contract are well- settled.
A three-Judge Bench of this Court in Tata Cellular
(supra) held that the Court is concerned with the
manner in which the decision is taken and not
with the decision itself, that review lies on the
grounds of illegality, irrationality and procedural
impropriety, and that the tender floating authority
is the best person to interpret the terms of its
tender. In Sterling Computers Ltd. v. M&N
Publications Ltd., it was held that what the Court
examines is whether the decision- making process
was reasonable, rational and not arbitrary or
violative of Article 14, and not whether the
decision was correct. In Air India Ltd. (supra), it
was held that the State is free to enter into
commercial transactions without undue interference
by the courts, provided its action is fair and free
from arbitrariness.
15. In Jagdish Mandal (supra), the test was stated
to be whether the process or decision is mala fide
or intended to favour someone or is so arbitrary
and irrational that no responsible authority acting
reasonably and in accordance with law could have
reached it, and whether public interest is affected.
The question is whether the decision is lawful, not
whether it is sound. In Michigan Rubber (India)
Ltd. v. State of Karnataka & Ors., it was reiterated
that the courts do not sit in judgment over the
technical or commercial wisdom of the tendering
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authority unless the process is arbitrary or mala
fide.
16. In Afcons Infrastructure Ltd. (supra), it was
held that the employer, having authored the tender
document, is the best person to understand and
interpret it. In Silppi Constructions Contractors
(supra), it was reiterated that the Court does not
sit as a court of appeal over the authority, that
where two interpretations are possible, the
interpretation of the author must be accepted, and
that the courts interfere only to prevent
arbitrariness, irrationality, bias, mala fides or
perversity. The same view has been taken in later
decisions, including by a three-Judge Bench in
Galaxy Transport Agencies (supra).”
21.4 Furthermore, in the decision of Hon'ble Supreme Court in
case of Utkarsh Enterprises (supra) also, we would not find any
law laid down by the Hon’ble Supreme Court whereby the
Hon’ble Supreme Court has, inter alia, laid down the law that
challenge to a tender condition is impermissible, rather, upon
perusal of the said decision, we find that the Hon’ble Supreme
Court, in addition to ousting the petitioner on the ground of
delay and a lack of bonafides and whereas the Hon’ble
Supreme Court in conclusion has clearly stated that challenge
to the validity of the clause is left open to be examined in an
appropriate case, thus signifying that there is no embargo on a
challenge to a clause in the tender by a Constitutional Court.
Thus in our considered opinion there is no bar to a Court
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examining tender condition, rather what has been emphasized
by the Hon’ble Supreme Court is that such an exercise should
be with due care and circumspection.
Issue No. 1 is answered accordingly.
ISSUE NO. 2
22. Insofar as Issue No. 2, i.e. whether the impugned tender
condition and format reflect a rationale, at the outset, it would
be profitable to reproduce the impugned condition at Clause
3.1 Pre-Qualification Criteria Sub-Clause 10, which is
reproduced hereinbelow:
# Description Minimum
Documentary Proof
Requirement
10 ISP/TSP
License
An ISP/TSP
license/authoriz
ation holder
fore Gujarat
LSA shall be
ineligible to
participate
The bidder and
consortium partners
(if any) shall submit
an undertaking in
the form of an
affidavit, as per
Annexure_9.20.
Format XX Affidavit
for TSP/ISP
Compliance
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“Date:……….
Signature of Authorized signatory Place:
Name of bidder Along with date & Seal
9.20 Format XX Affidavit for TSP/ISP Compliance
Affidavit for TSP/ISP Compliance
(To be submitted by the Sole bidder/ Lead Bidder
and each Consortium Partner, separately on a non-
judicial stamp paper of Rs. 100/-)
1. We, …………………….. hereby declare and
confirm that on the date of bid submission, we
were complying to the tender eligibility conditions
as mentioned in the subject RFP No…………...
dated …………….
2. Accordingly, we hereby declare the following:
i That we are not holding any ISP/ TSP
license/authorization, covering Gujarat State.
ii We are not having more than 50% stake in our
company of any other company who is bolding
ISP/TSP license/authorization covering Gujarat
State.
iii We are not having more than 50% stake in any
other such company who is holding ISPA TSP
license/authorization covering Gujarat State.
iv We are not a subsidiary of a parent company
who is holding ISP/ TSP license/authorization
covering Gujarat State.
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We, …………....... also undertake and confirm that
we shall obtain prior approval of GFGNL, in case
we or any of our associate / parent company
(falling under any of the above categories) intends
to obtain ISP/TSP License/authorization / provide
ISP/TSP service, during the contract period under
the referred tender, in Odisha-Gujarat State, if
awarded.
We, , also unconditionally undertake that
in case of any of the above fact is found to be
incorrect, our bid/agreement may be cancelled /
terminated and, any further action by GFGNL/DBN
DOT as per tender terms & conditions of the RFP
shall be acceptable to us, without any liability on
GFGNL/DBN.
We also understand that any suppression of
information or breach of our undertaking herein
would entitle GFGNL to take any action in
accordance with law, including but not limited to
civil and criminal law.
For…………..
(Signature, name, designation and address)
[SIGN OF BIDDER]”
22.1 A perusal of Sub-Clause 10 of Clause 3.1 shows the
requirement that an Internet Service Provider/Telecom Service
Provider (ISP/TSP), license holder, for State of Gujarat License
Service Area shall be ineligible to participate. The above being
the minimum requirement, it is further observed that proof of
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the same would be based on the bidder and consortium
partners submitting an undertaking in form of affidavit as per
Format ‘XX’.
22.2 Format ‘XX’ inter alia, requires the bidder/consortium
holder to declare that on the date of bid submission, the
bidder/consortium partner is not holding an ISP/TSP license
covering Gujarat State. That the bidder/consortium partner is
not a subsidiary of another company which is having an
ISP/TSP license covering the State of Gujarat, the stake being
not more than 50%. The bidder/consortium partner is also
required to declare that the bidder or the consortium partner
do not have a subsidiary in which they are having 50% stake,
which subsidiary company is holding an ISP/TSP license
covering the State of Gujarat. That the bidder/consortium
partner is not a subsidiary of a company having ISP/TSP
license covering State of Gujarat. The bidder/consortium
partner is also required to undertake as regards taking prior
approval in case the associate/subsidiary/parent company
intends to obtain ISP/TSP license for Gujarat State during the
contract period if the bidder/consortium partner is awarded the
contract. Further clauses include incorrect information leading
to cancellation/termination of the contract and leading to civil
and criminal consequences.
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22.3 At this stage, before adverting to the contentions, it
would also be profitable to refer to the history of the
impugned clause and the format being included in the present
tender. It would appear in this regard that the Union Cabinet
had on 04.08.2023 approved the Phase-III of the BharatNet
Program, which was amended to expand the scope of
utilization of services and engaging professional agencies for
operation and maintenance of the network. The Amended
BharatNet Program (ABP), had been approved based on a note
circulated by the Ministry of Communications through
Department of Telecommunications dated 02.08.2023. It would
appear that the BSNL had been nominated as the Project
Management Agency for implementation of the Amended
BharatNet Program, as discernible from the minutes of meeting
of Management Committee of BSNL dated 14.02.2024. It would
appear that the BSNL had thereafter formed a committee of
senior officers for finalizing the tender document for the
Amended BharatNet Program.
22.4 It appears from the report of the committee dated
27.12.2023 that the committee had deliberated in detail with
regard to the technical specification and had also discussed
observations/suggestions received from the Technical Committee
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of the USOF - now DBN and had taken a decision after
appropriate consultation. It would appear that a meeting had
been held to discuss as regards the suggestions by the
Technical Committee USOF in a meeting chaired by the
Chairman, BSNL and whereas insofar as the suggestions with
regard to the draft RFP clauses, it would appear that the USOF
- DBN had raised an objection with regard to Clause No. 2.1(f)
of the draft tender conditions, which according to the USOF
was restrictive and may require modification.
22.5 It would appear that the Clause 2.1 was with regard to
the eligibility conditions in Section 4A with regard to special
instructions to bidders and special conditions of the contract.
Clause 2.1(c) being relevant for the present purpose is
reproduced for benefit:
“2.1(c) A Bidder shall not have a conflict of
interest (the "Conflict of Interest") that affects the
Bidding Process for a Package. Any Bidder found
to have a Conflict of Interest shall be disqualified.
In the event of disqualification, BSNL shall be
entitled to blacklist the Bidder from participation
in the tendering process for the work of Ministry
of Communications/Department of Telecom/any
public sector undertaking engaged in Telecom /
OFC business in India and any work under other
Centrally Sponsored Schemes for a period of one
year from the Bid Date, or forfeit and appropriate
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the Bid Security or Performance Security, as the
case may be, as mutually agreed genuine pre-
estimated loss and damage likely to be suffered
and incurred by BSNL and not by way of penalty
for, inter alia, the time, cost and effort of BSNL,
including consideration of such Bidder's proposal
(the "Damages") without prejudice to any other
right or remedy that may be available to BSNL
under the Bidding Documents and/or the MSA or
otherwise. Without limiting the generality of the
above, a Bidder shall be deemed to have a Conflict
of Interest affecting the Bidding Process, if:
(i) A constituent of such Bidder, for the Package, is
also a constituent of another Bidder, for the
Package; or
(ii) Such Bidder has the same authorized
representative for purposes of this Bid as any other
Bidder for the same Package; or
(iii) For the same Package, such Bidder, or any
Associate thereof has participated as a consultan to
BSNL in the preparation of any documents, design
or technical specifications of the Package.
Explanation: In case of Bidder is a Consortium,
then the term Bidder as used in the Clause 2.1
shall include each Member of such Consortium.
(d) The financial Eligibility parameters as under
would be consolidated parameters of the company.
(c) In case of be maximum three.
(e)In case of Consortium, the number of bidders
including Lead Bidder can be maximumn three
(f) As ISP/TSP license holder for an LSA shall be
ineligible to participate in the package comprising
of that LSA.”
22.6 It would appear that the BSNL had inter alia laid down a
conflict of interest clause which prohibits a prospective bidder
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from participating and whereas the conflict of interest as
mentioned at Clause (f) reveals the above condition as found at
3.1(10) of the present tender, which is with regard to an
ISP/TSP license holder for the License Service Area being
ineligible to participate. It would appear that having discussed
the objection by the BSNL, the BSNL had come to a conclusion
that the same is not required to be changed since it is as per
BSNL policy as any other ISP/TSP bidder will have a conflict
of interest. Thus, it would appear that the exclusion clause was
inserted to avoid any conflict of interest and whereas while it
has been submitted by the learned Counsel for the Petitioner
that the conflict of interest could be invoked only where the
BSNL was the Project Management Agency, yet in our
considered opinion, the issue is not as simple as that.
22.7 What appears to us is that the base of the BharatNet
Program is the existing optical fiber cable network
infrastructure of the BSNL. We find that in a note submitted to
the Cabinet by the Ministry of Communications, Department of
Telecommunications, copy of which had been supplied to the
learned advocates for the other side, it is clearly mentioned:
"BharatNet project is being implemented out of Universal
Service Obligation Fund (USOF). It provides optical fiber
connectivity to the rural areas. In the existing system,
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BharatNet picks up the connection from the block or the
nearest fiber of Bharat Sanchar Nigam Limited (BSNL) and lays
new fiber to the Gram Panchayats (GPs)."
22.8 We also find the same being reiterated in the tender
document itself at Section 2 Introduction, more particularly
Clause 2.1.1(a) to (e), more particularly Clause (e). The said
clauses are reproduced hereinbelow for benefit:
“2.1.1 BHARATNET PHASE I-PROJECT
BACKGROUND
a) BharatNet, led by Bharat Broadband Network
Limited (BBNL), is a broadband network that
provides broadband connectivity across the country
to 2.5 lakh Gram Panchayats (GPs), which are the
primary nodes for information collection and
dissemination, as well as service delivery points for
government services.
b) A phased approach was planned to connect
Gram Panchayats across India. The Telecom
Commission approved a 3-phase implementation of
this project.
c) The first phase envisages providing 1,00,000
Gram Panchayats with broadband connectivity by
laying OFC(Optical Fibre Cable) lines by March
2017 across the country. This was to be covered by
BBNL.
d) The implementation was done under Central
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Public Sector Units (CPSU) led model by M/s BSNL.
e) Under this implementation model, the network
infrastructure was deployed by leveraging BSNL's
existing Optical Fibre Cable (OFC) from Block to
Fibre Point of Interconnect (FPOI) and laying
incremental underground OFC from FPOI to GP
location (emphasis supplied)
22.9 It would thus appear to us that the conflict of interest
clause referred to by the BSNL could not be restricted to only
such States where the BSNL was the Project Management
Agency, rather the conflict of interest would be a larger issue,
more particularly since the BharatNet Program is implemented
by leveraging the existing optical fiber cable network of the
BSNL. It would thus to us appear to be a very sound rationale
when the existing optical fiber cable network of the BSNL is
used to enhance connectivity to Gram Panchayats, that the
BSNL as the Central Project Management Agency as approved
by the Union Cabinet would ensure that a competitor in the
License Service Area should be excluded from participating in
the tender.
22.10The next question would be as regards the State of
Gujarat. It would appear that the Respondent No. 1, which is
a Special Purpose Vehicle for implementation of the BharatNet
Program and thus being the Project Management Agency for
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the State of Gujarat, had floated a tender on 29.01.2025, in
which tender, the exclusion condition and the format were not
included. It would appear that while a total of nine bids were
received, after the technical evaluation had been completed,
the tender had not been taken forward. In this regard, we
have perused the minutes of meeting of the 29th Board
Meeting of the GFGNL as well as the 30th Board Meeting of
the said Company - Respondent No. 1 herein, and having
perused the same, it appears to us, more particularly upon
perusing Item 9 of the Agenda, and whereas, the Board had
been apprised of the situation where the RFP had been
published on 29.01.2025 and on the final date of bid
submission i.e. 01.05.2025, a total of nine bids were received
and of which technical evaluation of eight bidders had been
completed and whereas eight bidders had submitted their
technical presentations. It would appear that thereafter the bids
had not been taken any further on account of certain technical
and other issues, primarily being the aspect of inclusion of
ISP/TSPs. It is mentioned that as per the BSNL Central RFP
clause, an ISP/TSP license holder would be ineligible to
participate for the Licensed Service Area for which it holds the
ISP/TSP license. It also appears that Agenda No. 9 also
included a request to provide guidance as to whether the bid
of BharatNet Phase-III should be continued or canceled and re-
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tendered or any other course of action could be taken up for
ensuring administrative transparency, audit compliance and
more particularly alignment with the DBN/BSNL RFP
provisions.
22.11Perusing the minutes of the 30th Board Meeting held on
30.03.2026 of the Respondent No. 1, it would appear that in
Board Meeting dated 24.02.2026 i.e. the 29th meeting, the
Board of Directors had approved to constitute a Management
Committee for matters pertaining to execution, implementation
and routine operational activities of the Company and
overseeing and decide upon execution and operational matters
including tender finalization etc. The said Committee included
the Secretary, Department of Science and Technology and MD,
GFGNL as the Chairperson, Secretary (Expenditure), Finance
Department, Development Commissioner, Panchayat, Rural
Housing and Rural Development Department, Chief General
Manager (Telecom), BSNL Gujarat and Additional Director
General Telecom, Gujarat as Members. The Management
Committee was entrusted to review and decide upon existing
RFPs, more particularly as per Agenda Item Nos. 8 and 9 of
the 29th Board Meeting. It would appear that the Management
Committee had informed the Board as regards review of all
RFPs of GFGNL including the RFP in question and whereas the
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Committee had examined the same in context of the provisions
of the BSNL Central RFP, the in-principle approval of the DPR,
the DBN observations and the established best practices
adopted in similar national-level ABP procurements with the
objective of ensuring consistency, compliance and avoidance of
any conflict of interest that may result in an undue advantage
to specific bidders under the BharatNet Program. The
Committee, after deliberation, had decided to cancel the bids
and to proceed with re-tendering process after following due
approvals and prescribed procedures. The same had been taken
note of by the Board of Directors of the Respondent No. 1.
22.12Considering the above, it would clearly appear to us that
after tender dated 29.01.2025 had been published, and had
been taken forward till the stage of technical presentation of
the bidders, the GFGNL - Respondent No. 1 appears to have
noticed the inconsistency of RFP dated 29.01.2025 with the
BSNL Central RFP as regards the GFGNL RFP not containing
the clause regarding exclusion of TSPs/ISPs in the Licensed
Service Area. It would also appear that the issue had been
deliberated at the highest level of Respondent No. 1 and it was
decided that the clauses of the BSNL Central RFP may be
followed to ensure consistency and avoid any conflict of
interest to a specific bidder under the BharatNet program. The
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term 'consistency' to us appears to convey a meaning that the
tender ought to be consistent with the BSNL Central RFP and
consistent with similar national-level ABP tenders (referred to
as procurements).
22.13At this stage, it would be relevant to observe that the
BSNL Central RFP was to apply in 16 States of the Country
where the BSNL was the Project Management Authority and
whereas the RFPs would obviously include the TSP/ISP license
holder for the LSA being excluded clause. No other RFP
published by a State Project Management Agency in a State-led
model where the exclusion clause is not mentioned has been
brought to our notice. Thus, it would appeal to reason that the
GFGNL would not want the RFP published by it to be an
outlier from other RFPs published throughout the country for
the very selfsame project. The term 'consistency' used, to us, as
stated hereinabove, conveys the meaning that the GFGNL RFP
to be consistent with other similar RFPs published in other
States i.e. either the BSNL Central RFP or the State-led model
RFPs.
22.14Furthermore, the Respondent No. 1 had also in its Board
Meeting noted the reference of the Management Committee to
avoid any conflict of interest which would result in an undue
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advantage to a specific bidder. The conflict of interest issue
discussed hereinabove, to us, needs no repetition. It would
thus appear to us that the BSNL Central RFP, while including
the clause of TSPs/ISPs for the Licensed Service Area being
ineligible to participate, had a specific rationale i.e. of conflict
of interest and whereas, the decision of the Respondent No. 1
in canceling RFP dated 29.01.2025 and coming out with the
present RFP dated 04.06.2026 with the impugned conditions
was with the underlying rationale of maintaining consistency
and to avoid any conflict of interest resulting in undue
advantage to any bidder. It would thus appear that the tender
condition, embodying a discernible rationale, Issue No. 2 is
answered accordingly.
ISSUE NO. 3
23. Insofar as Issue No. 3, at the outset, it would be
profitable to refer to decision of the Hon’ble Supreme Court in
case of Budhan Choudhry vs. State of Bihar reported in AIR
1955 SC 191, had explained the concept of reasonable
classification. Paragraph No. 5 of the said decision being
relevant for the said purpose is reproduced herein below for
benefit:
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“5. The provisions of Art. 14 of the Constitution
have come up for discussion before this Court in a
number of cases, namely, 'Charanjit Lal V/s. Union
of India', 'State of Bombay V/s. F. N. Balsara',
'State of West Bengal V/s. Anwar Ali Sarkar' 'Kathi
Raning Rawat V/s. State of Saurashtra',
'Lachmandas Kewalram V/s. State of Bombay', and
'Qasim Razvi V/s. State of Hyderabad', and
'Habeeb Mohamad V/s. State of Hyderabad'. It is,
therefore not necessary to enter upon any lengthy
discussion as to the meaning, scope and effect of
the Article in question.
It is now well established that while Art. 14
forbids class legislation, it does not forbid
reasonable classification for the purposes of
legislation. In order, however, to pass the test of
permissible classification two conditions must be
fulfilled, namely, (i) that the classification must be
founded on an intelligible differentia which
distinguishes persons or things that are grouped
together from others left out of the group and (ii)
that that differentia must have a rational relation
to the object sought to be achieved by the statute
in question. The classification may be founded on
different bases; namely, geographical, or according
to objects or occupations or the like. What is
necessary is that there must be a nexus between
the basis of classification and the object of the Act
under consideration. It is also well established by
the decisions of this Court that Art. 14 condemns
discrimination not only by a substantive law but
also by a law of procedure. The contention now
put forward as to the invalidity of the trial of the
appellants has, therefore, to be tested in the light
of the principles so laid down in the decisions of
this Court.”
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23.1 While the above observation in the context of reasonable
classification for the purpose of legislation, in the considered
opinion of this Court, the proposition of law as laid down by
the Hon’ble Supreme Court would hold good even insofar as
classification by the State when questioned from the
perspective of Article 14 of the Constitution of India. The
Hon’ble Supreme Court has laid down that for being termed as
a reasonable or permissible classification, two conditions must
be fulfilled, namely, (i) that the classification should be
founded on an intelligible differentia which distinguishes
persons or things that are grouped together from the others
left out of the group and (ii) that the differentia must have a
rational relation to the object sought to be achieved. The
Hon’ble Supreme Court has further laid down that there may
be different type of classifications, but what would be
necessary is that there must be a nexus between the basis of
classification and the object sought to be achieved.
23.2 Considered from the perspective of the law laid down by
the Hon'ble Apex Court as hereinabove, the first question
would be that whether the classification is based upon an
intelligible differentia. In the instant case, the classification
that is sought to be made is as regards TSP/ISP
license/authorization holders being excluded from participating
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in the tender and furthermore, the bidders being required to
tender an undertaking on affidavit stating that neither the
bidder or a consortium partner is a subsidiary of a parent
company which is an ISP/TSP license holder in the Licensed
Service Area having at least 50% stake in the bidder or
consortium partner company and that the bidder and
consortium partners as a parent company do not have a
subsidiary where the bidder or consortium partner is having
50% stake and the bidder and consortium partner not being
subsidiary of a parent company which is an ISP/TSP license
holder in the Licensed Service Area.
23.4 In this regard, it would require mention here that the
RFP is published with the objective of laying down Optical
Fiber Cable network to connect Gram Panchayats with a robust
broadband connectivity. The tender also envisages upgrade of
the existing BharatNet Phase-I and Phase-II networks by
integrating, expanding and technologically upgrading the
existing networks. It also appears that in addition to laying
down the network infrastructure, the Project Implementing
Agency would also be required to integrate the BharatNet
Phase-I and Phase-II networks to establish a unified and
cohesive digital infrastructure network across the State. This
would necessarily imply that the Project Implementing Agency
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would be operating and maintaining the entire BharatNet
program infrastructure for the concerned State. The underlying
object of the tender, as discernible from the tender document
itself, being that the network infrastructure under the project
would be a national asset accessible on a non-discriminatory
basis to all eligible service providers to enable providing
internet services in rural areas.
23.5 The classification envisaged being that a TSP/ISP license
holder for the LSA, who or whose parent company or
subsidiary would be using the network as a service provider,
could not be entrusted with operating and maintaining the
network infrastructure to be laid under the Amended BharatNet
Program. Again, the tender, as noticed, is not for merely
laying down the Optical Fiber Cables to connect Gram
Panchayats with the existing broadband infrastructure, rather,
the Project Implementing Agency would operate and maintain
the entire BharatNet network of the State, i.e. including the
network which had been laid in the BharatNet Phase-I and
BharatNet Phase-II programs. It would bear repetition to state
that the Project Implementing Agency, who would operate and
maintain the network during the period of the contract, i.e.
for a period of 10 years including 3 years of implementation
and 10 years of operation and maintenance, as per Clause 19 -
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Contract Duration in the RFP, would also be either an end
user itself of the infrastructure or a company of which it is a
50% subsidiary or a company where it holds 50% stake, would
be using the network infrastructure, which is operated and
maintained by the PIA. The classification thus, is based on an
intelligible differentia, i.e. a company which would be directly
or indirectly an end user is classified from the rest of the
bidders who would directly or indirectly never be the end
users.
23.6 At this stage, it also requires to be emphasized that the
tender condition does not envisage ouster of every ISP/TSP
license holder in the country. Rather, the exclusion is specific
to the licensed service area commensurate to the license of the
ISP/TSP license holder. Thus, an ISP/TSP license holder is
eligible to participate in other tenders for the very selfsame
project for areas beyond which it holds a license. It would,
therefore, also be clear to us that the classification is founded
on an intelligible differentia.
23.7 The next aspect would be whether the differentia has a
rational relation to the object of the tender. As noticed, the
tender envisages two separate components, namely laying down
of Optical Fiber Cable network to 4400 Gram Panchayats and
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to operate and maintain the same and secondly, to integrate,
expand and technologically upgrade the existing BharatNet
Phase-I and Phase-II networks and integrate all the networks
into a cohesive digital infrastructure across the State and to
operate and maintain the same.
23.8 At this stage, while we are reminded of the observation
of the Hon'ble Apex Court in case of Tata Cellular (supra),
where the Hon'ble Supreme Court has, inter alia laid down
that Courts do not have the technical expertise to correct
administrative decision and whereas, we observe here that we
are delving into the technical part of the administrative
decision to appreciate whether the differentia has any rational
relation to the object sought to be achieved.
23.9 We would also observe here that the learned Senior
advocates appearing on behalf of the petitioner have inter alia
submitted that the petitioner has been a successful bidder for
one of the two parts of the State of Gujarat which was divided
into two packages and whereas they have successfully laid
down the OFC network exceeding 15,000 kms and have been
operating and maintaining the network without any complaint.
The learned senior advocates had also submitted that the
tender itself contains penalty clauses, and whereas in case of
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any digression by the Project Implementing Agency,
appropriate penalties are envisaged, thus negating any
apprehension of the petitioner getting away with any
malpractices. The learned senior advocates have also
submitted that the format is illogical since there is a cap of
50% stake, i.e. to say that if a parent company or a subsidiary
company has less than 50% stake, there would not be any
exclusion.
23.10As against the same, we have noticed the submission of
learned Advocate General and learned Government Pleader
appearing for the State as well as the Union that the condition
imposed, is not restricted to the State of Gujarat and whereas
the condition is a pan-India condition. While penalty clauses
are envisaged to ensure that the objective of the BharatNet
program is effectively fulfilled that the penalties envisaged
would also go to show that there is possibility of malpractice.
It has also been submitted that the cap of 50%, is drawn from
the Companies Act, 2013, inasmuch as the 50% cap recognizes
significant influence and also recognizes a calibrated approach
to ensure that a minority investment or remote association or
commercial relationship does not result in an exclusion.
23.11In our considered opinion, the submissions on behalf of
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the learned senior advocates for the petitioner would not merit
acceptance since a stellar past performance would not, in our
considered opinion, be a yardstick to declare a classification as
being unreasonable. The present tender being independent and
distinct from the earlier tender, though being part of the larger
BharatNet Program and also considering the object of
classification, i.e. to avoid any conflict of interest, to which we
will advert to in detail later on, could not be termed as
unreasonable merely because the petitioner has successfully
completed an earlier tender of the very same project. As
noticed, the exclusion clause, having a clear rationale which
had been arrived at after appropriate deliberation and
application of mind by the concerned authorities at the level of
the BSNL and at the level of the GFGNL - respondent No. 1,
therefore, we would not subscribe to the submission by the
learned advocate for the petitioner that the exclusion condition
is unreasonable.
23.12Furthermore, insofar as the penalties envisaged, while it
is true that the penalties would act as a safeguard, but in our
considered opinion, the preventive aspect of avoiding a conflict
of interest is conceptually distinct from the punitive aspect of
prescribing consequences for its occurrence. The Government,
as the tendering agency, would be well justified in stating that
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the exclusion clause is envisaged to avoid any conflict of
interest and whereas, the penalty clauses in the tender
document, in our considered opinion, signify the fact that
there is a possibility of a position where the integrity of the
networks could be compromised by the Project Implementing
Agency. The tender clause having been considered by technical
experts having experience in the scope of operation of the
tender, having taken a decision, to avoid any conflict of
interest, merely because there are penalty clauses envisaged,
we would not be persuaded to interfere with the exclusion
clause.
23.13In our considered opinion, the preventive aspect of
avoiding a conflict of interest, as observed by us hereinabove,
would be conceptually distinct from the punitive aspect of
prescribing consequences for its occurrence. While the former
is intended to operate prospectively by incorporating
appropriate safeguards and restrictions to ensure that the
process remains fair, transparent and free from any conflicting
interests, the latter operates consequentially by prescribing
penalties that may follow upon the occurrence of such conflict.
The two aspects, in our considered opinion, though may be
complementary, operate in distinct fields and serve different
purposes. The existence of a provision prescribing penal
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consequences cannot by itself be construed as a substitute for
adequate preventive safeguards. Equally, the incorporation of
preventive conditions does not necessarily dispense with the
need to prescribe consequences for the breach. A tender issuing
authority would be well justified to ensure that both the
aspects, find place in the tender, inasmuch as the preventive
aspect and the punitive aspect. In our considered opinion,
merely because a preventive aspect has been envisaged by
itself would not render a preventive aspect mentioned in the
tender being questionable on the ground of being unreasonable
and arbitrary.
23.14Insofar as the submissions with regard to the 50% cap,
we would note that such a contingency is not the case here
since it is not the case of the petitioner that it has only 50%
stake in its subsidiary, the case of the petitioner being that its
wholly owned subsidiary is an ISP provider in Gujarat LSA. As
such, in our opinion, we are not required to go into the issue
at all. Having observed as thus, in our opinion, the
submissions on behalf of the State appeal to reason that the
50% cap envisages a significant influence and is also envisaged
to ensure that a minority stake or a remote association or a
commercial relationship would not act as an exclusion in
participating in the tender. Thus, it would appear to us that
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the condition bears a rational nexus to the object of the
tender, more particularly on the ground of conflict of interest.
23.15At this stage, it would be relevant to refer to certain
paragraphs in the affidavit-in-reply by the Central Government
whereby the underlying rationale for the exclusion condition is
explained. Paragraphs 29, 30, 31 and 32 being relevant for the
present purpose is reproduced hereinbelow for benefit:
“29. The underlying rationale for the eligibility
condition is the structural distinction between a
common network infrastructure provider and the
downstream service providers who use that
infrastructure. BharatNet is intended to provide
access to multiple ISPS, TSPS, MSOS, LCOS and
other eligible users. The PIA, under the DBOM
model, is entrusted with development, creation,
operation and maintenance of the middle-mile
network, while encompassing the integration,
expansion and technological upgradation of Bharat
Net Phase II and Phase II of Networks and
consequently has continuing operational access to
the network and its management systems.
30. An ISP/TSP, on the other hand, is itself a
user of the BharatNet infrastructure for providing
services in the telecom/internet market. If the same
entity, or an entity under the prescribed controlling
relationship with such service provider, is
permitted to simultaneously develop, operate and
maintain the common network, it would occupy
two inherently competing positions: it would be a
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user and competitor in the downstream market
and, at the same time, the entity responsible for
the infrastructure upon which other competing
service providers depend.
31 Such a combination creates an inherent conflict
of interest. The PIA would have access to
operational systems, provisioning workflows,
network capacity and utilisation information, route
information, fault information and restoration
processes concerning the common network. The
concern is therefore not whether an ISP/TSP
possesses the technical ability to execute the work.
The concern is whether a downstream competitor
should simultaneously be entrusted with control
and continuing operational responsibility over the
common infrastructure which is required to be
made available to its competitors on non-
discriminatory terms.
32 The eligibility condition consequently serves the
legitimate objective of preserving institutional
neutrality, preventing conflict of interest and
ensuring a level playing field. It is a separation-of-
roles safeguard. It does not prohibit an ISP/TSP
licence holder from carrying on its telecom or
internet business; it only prevents the same service-
provider interest from simultaneously occupying the
PIA role for the relevant LSA where such
combination would compromise the neutrality of
the common infrastructure.”
23.16While the afore-quoted paragraphs explain the rationale
from the policy perspective, it would also be profitable to refer
to the reply of the GFGNL - respondent No. 1, where the
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aspect of rationale from the technical perspective has been
discussed in greater detail. Paragraphs 20.1, 20.2, 20.3, 20.4,
20.5, 20.6, 20.7, 21, 22, 23, 24, 25, 26, 27, 28, 29 and 30
being relevant for the present purpose are reproduced herein
for benefit:
“20.1. The RFP speaks of effective fibreisation and
identifies potential service and revenue uses such
as dark fibre for telecom and digital enterprises
internet peering, wireless broadband, enterprise
Virtual Private Network ("VPN") services and
community Wi-Fi. "Dark fibre" simply means fibre
which has been laid but is not yet electronically lit
or activated and which can thereafter be used or
leased for carrying communications. The tender
thus recognises from the outset that the common
fibre network will support multiple downstream
communications uses and users, including TSPs and
local ISPs.
20.2. The PIA is required to support bandwidth for
end-customer requirements and to create dark-fibre
connectivity for commercial provisioning. This
takes the PIA's role beyond physical construction.
The PIA becomes part of the process through
which the common infrastructure is made ready for
actual commercial and public use.
20.3 The S-NOC is expressly concerned with
network and service provisionine. The PIA has
responsibilities concerning NOC management,
configuration, security, authorised access and
logins, integration and operational monitoring. In
normal language, this means that the PIA will have
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authorised access to the systems which show what
is happening on the network and, within the
contractual framework, will participate in the steps
by which the network is configured and services
are made operational.
20.4. The O&M scope extends to existing and new
last-mile customer sites ("last mile" refers to the
final connectivity from the network towards the
actual customer or user location). The RFP
contemplates, in specified circumstances, transfer of
existing customer-connectivity services to the PIA;
end-user issues are routed through the PIA; and
service quality and customer impact carry
contractual consequences. These are continuing
service-facing responsibilities, not merely civil
engineering obligations.
20.5. The PIA is required to have network-
management visibility over active components,
alarms and performance and to coordinate
provisioning and activation, customer confirmation
and service reporting. Thus, the PIA can see
network conditions and is involved in the chain
through which a service request becomes an active
service.
20.6. Next, the RFP links performance assessment
to NMS/helpdesk information and customer
feedback. The PIA is required to migrate services,
configurations, alarms, performance information
and inventory and to maintain uninterrupted
service assurance to end customers. Migration not
merely physical relocation: it can require
movement of service configurations and operational
data from one network arrangement another
without disrupting the user.
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20.7. Most significantly, the RFP itself contains a
section titled "SERVICE PROVISIONING BY PIA
FROM S-NOC". The PIA is made responsible 13 for
end-to-end provisioning during migration, and the
RFP records thut service provisioning will remain
in the PIA's scope for the duration of the contract.
It is respectfully submitted that this one provision
by itsel demonstrates why the PIA cannot fairly be
characterised as a mere passive fibre contractor.
21. When the aforesaid clauses are read
together, the PIA's role covers a continues chain:
design and integration of the network; access to
the active network and its management systems;
service migration; configuration and activation
customer-site operations; continuous alarm and
performance visibility; fault and restoration activity;
and service assurance. The conflict issue arises
from the combination of these powers and
responsibilities, not from any one clause viewed in
isolation.
THE TECHNICAL AND PRACTICAL REASON FOR
THE ISP/TSP RESTRICTION
22. At this stage, Respondent No. I
respectfully submits that the restrictive covenant
which has been challenged in the present petition
is preventive in character and has its roots in
larger public interest. The impugned restriction has
been introduced in the RFP because a public
network should, as far as reasonably possible, be
designed so that the person who has the ability to
influence day-to-day network operations does not
simultaneously have a commercial reason to prefer
one downstream service provider over another.
23. The technical concern can be understood
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through two simple concepts ability and incentive.
The PIA has the "ability" because the RFP gives it
privileged access to network topology, capacity,
configurations, alarms, service requests,
provisioning workflows and operational priorities.
An affiliated ISP/TSP supplies the possible
Sincentive" because better information, faster
activation, preferential sequencing or arlier
restoration can have commercial value in the
downstream market. The tender seeks to remove
the overlap itself rather than attempt to investigate
motive after every operational decision.
24. For example, suppose two downstream
service providers seek activation of high-capacity
links for two enterprise customers. The formal
price and access policy may be identical for both.
Yet, if the PIA controls or materially participates in
the provisioning workflow, the order in which the
requests are processed, tested and activated can
matter commercially. A delay of a few days for
one provider and faster activation for an affiliated
provider may affect which provider is able to serve
a customer first. The conflict is therefore capable
of arising without any change in tariff and without
any express denial of access.
25. A second illustration concerns fault
restoration. A fibre cut or equipment failure may
affect connections used by more than one service
provider. Field teams, spare resources and
restoration sequences have to be prioritised. If the
PIA is affiliated to one downstream ISP/TSP, even
an allegation that the affiliated service was
restored first can undermine confidence in
neutrality. More importantly, because restoration
decisions often depend upon technical
circumstances and field availability, it ma be
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extremely difficult after the event to prove whether
the sequence was entirel technical or was
commercially influenced.
26. A third illustration concerns network
capacity and route information. Through
NMS/EMS/OSS access, the PIA may know which
routes have spare capacity, where congestion is
developing, where a new enterprise site is being
connected, when augmentation is planned and
which areas are likely to require additional
bandwidth. Such information can be commercially
valuable to a downstream service provider. An
affiliated ISP may be able to plan its own
marketing, customer acquisition or network
expansion with the benefit of information which a
competing ISP does not possess.
27. A fourth illustration concerns assignment
of ports, route diversity and maintenance windows.
Two providers may both be granted access, but the
quality and timing of that access can differ. One
may obtain a route with better redundancy, an
earlier maintenance slot, a quicker configuration
change or faster capacity augmentation. In
telecommunications, discrimination is therefore not
always visible as a refusal or a different price: it
can occur through small operational decisions
concerning timing, quality, sequencing and
information.
28. A fifth illustration concerns customer
migration, During migration of all existing service
to the Bharat Net network, the PIA may become
aware of the location, size, bandwidth requirement,
fault history and migration schedule of an
enterprise or public-sector customer. If the PIA is
part of the same economic group as a downstream
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ISP/TSP, that information may have competitive
value.
29. There is also a cyber-security and network-
governance dimension. The "management plane" of
a network means the privileged administrative
layer through which authorised personnel can see
device status, modify configurations, review logs
and alarms and manage the network. It is
deliberately protected more strictly than ordinary
end-user traffic. Basic cyber-security practice
therefore follows principles such as "least privilege"
- giving only the access necessary for a function
and "segregation of duties" avoiding concentration
of sensitive functions where one person or group
has both operational power and a conflicting
commercial interest. The impugned condition is
consistent with these elementary tele-
communications governance principles.
30. These technical aspects have not even been
cursorily discussed by the petitioner while foisting
the challenge in the captioned petition despite it
being an experienced contractor in the field;
definitely having clear knowledge of these aspects.
In fact, these unfair advantages and controls over
the entire Bharat Net ecosystem, more particularly
as Bharat Net Phase III comes to a close, is why
the present restrictive covenants have been
incorporated in the tender, as a National Policy
decision, as the right of the tendering authority.”
23.17It also requires mention here that the averments in the
affidavit of the respondent No. 1 - GFGNL have been
controverted by the petitioner in their affidavit-in-rejoinder,
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and whereas to understand the perspective holistically, the
response of the petitioner would also be required to be
mentioned here. Paragraphs No. 4 to 14 being relevant for the
present purpose is reproduced hereinbelow for benefit:
“4. Respondent No.1 has described the work
of the PIA as a "continuous chain". It is true that
the PIA will do provisioning. maintenance and will
provide staff for the control room of GFGNL (S-
NOC). However, at every step of this chain, the
control remains with GFGNL. Every request of a
service provider is entered in GFGNL's own
register (CRM) with date and time, and the service
provider can itself see its status. Provisioning is
done as per the guidelines of GFGNL and only
after its approval. GFGNL fixes the priorities and
approves changes. Complaints first go to the
helpdesk of GFGNL. The Central NOC can see the
entire network and can itself provision services.
The working procedure (SOP) is framed by GFGNL
and the IE. Thus, the PIA is only an executing
agency and has no discretion of its own which it
can use in favour of any service provider.
Relevant clauses of the RFP:
Relevant clauses of the RFP:
Clause and Page No. Contents of the clause
Annexure-I, Technical
Specifications of CRM,
Pg. 549-550 of
Petition
The CRM shall provide "a
unified interface for managing
interactions with Service
Providers". It "shall capture,
track and manage service
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requests, provisioning requests
and coordination issues" and
"stakeholders shall be able to
view service status, request
progress". The CRM shall act
as a coordination and
visibility tool and "not as a
sales or marketing platform".
Clause 5.19.1.4, Pg.
241
Configuration is to be "as per
SNOC / GFGNL provisioning
guidelines" and "the Bidder
shall coordinate with
GFGNL/SNOC for provisioning
and activation of services".
Clause 5.23.5.1 (f)
and (m), Pg. 276-277
"PIA shall provide all
necessary support and
facilitation to GFGNL and
designated service
provisioning agencies for
provisioning and monitoring
of services from NOC." "PIA
shall ensure all the services
provisioned or to be
provisioned to be tested,
validated with prior approval
from GFGNL/IE".
Clause 5.23.3 (VIII),
Pg. 274
The role of GFGNL is to
"approve change requests and
provide necessary technical
guidelines" and to
"communicate project
priorities and timelines for
change implementation".
Clause 5.15 (Change "Change request management
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Requests), Pg. 217 shall be conducted based on
request received from the
GFGNL."
Clause 5.19.1.1 (II),
Pg. 237 and Clause
5.23.8, Pg. 283
Any issue reported by the
end user "shall be reported to
centralized help desk of NOC
of State/GFGNL" and only
thereafter "forwarded to the
respective PIA".
Clause 5.15, Point 9,
Pg. 209
"The PIA shall give rights and
access of State NOC to
Central NOC or any other
person/ agency authorized by
Central NOC for provisioning
of OLT or any other
equipment/ services of ABP
network."
Clause 5.15, Point 48,
Pg. 214, Clause 5.23.7
(XVI), Pg. 283 and
Clause 5.23.11, Pg.
290
The PIA shall create
templates "defined in SOP by
IE or designated agency by
GFGNL". "Standard Operating
Procedure (SOP) will be
shared to selected bidder
once onboarded with
GFGNL."
Reply to the illustrations in Paras 24 to 29:
5. In response to para 24 (faster activation for group
company), it is submitted that the PIA does not decide
the order of work. Work orders are assigned by the
system on the basis of priority, Service Level Agreements
and due dates. The control room keeps a separate record
of bandwidth given to each service provider. The details
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of every service provisioned are also sent to the national
NOCs at Delhi and Bangalore. Delay beyond 48 hours
attracts penalty of Rs.10,000 per day. Apart from this,
the IE is specifically required to impose penalty if the
PIA fails to give equal access to all service providers.
Therefore, any delay to one provider and favour to
another would be on record and would be punished. It
will not go unnoticed. It is illogical and irrational that a
bidder applying for a mammoth tender of this scale will
engage into such practices knowing that it cannot go
unnoticed in view of extremely strict safeguards under
RFP. A bidder risking his entire business and reputation
for mere delay in service is again irrational.
Relevant clauses of the RFP:
Clause and Page
No.
Contents of the clause
Annexure-I,
Technical
Specifications (Field
Operation
Management), Pg.
542
The system shall "assign work
orders based on priority,
SLAs, due dates, required
skills, dependencies, and
location proximity to
resources".
Clause 5.15, Point
33, Pg. 212
The S-NOC shall maintain
records including "Bandwidth
allocations for service
providers" and "Faults and
rectification logs, service
provider-wise".
Clause 5.15, Point
46 and 48, Pg. 214
PIA must ensure that no
manual intervention is
required to calculate SLA
Module. The PIA shall
integrate with the UNMS
NOCS at Delhi and Bangalore,
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"providing GIS, inventory,
FCAPS, and service
provisioning details via APIs".
Clause 7.9.2.6, Pg.
341
Service provisioning from S-
NOC up to 48 hours: no
penalty. More than 48 hours:
"INR 10,000 per day".
Clause 5.24 (5)(d),
Pg. 298
The IE shall "validate and
assess penalty for default on
obligation of serving non-
discriminatory access to
BharatNet services".
6. In response to para 25 (repair of faults), it is
submitted that faults are detected by the system
automatically and alarms are generated on their own. The
SLA is calculated from these alarms without any manual
intervention. Fault logs are kept service provider-wise. A
complaint is closed only after the customer confirms.
Therefore, the contention that it will be "difficult to
prove" is incorrect. The record itself will prove it.
Relevant clauses of the RFP:
Clause and Page No. Contents of the clause
Annexure-I, Technical
Specifications of NMS,
Pg. 546
"The NMS shall automatically
detect network faults, outages
and degradation events and
generate alarms with severity
classification."
Clause 7.9.2.19, Pg. 349 "All above mentioned SLAs are
to be derived based on EMS
alarm system."
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Clause 5.15, Point 46,
Pg. 214
"The PIA must ensure that no
manual intervention is
required to calculate the SLA
module."
Clause 5.15, Point 33,
Pg. 212
"Faults and rectification logs,
service provider-wise".
Clause 5.19.1.4, Pg. 241 "A TT will be considered
closed only after confirmation
from the end customer."
Annexure-I, Technical
Specifications of CRM,
Pg. 550
"Complete audit trails
including timestamps, actions
taken and resolution outcomes
shall be maintained."
7. In response to para 26 (information about capacity and
routes), it is submitted that the same information is available
with GFGNL through the utilisation reports which the PIA has
to give. The PIA is barred from using any information of
GFGNL for competition. The staff of the PIA has to be
dedicated to this project only.
Relevant clauses of the RFP:
Clause and Page No. Contents of the clause
Clause 5.6 (d) and (e), Pg.
177
"The Selected PIA has to
submit the quarterly OFC
utilization report of each core
of the network." Fibre cores
used for customers "will be
counted with customer
name/ID".
Clause 9.4 (Format IV - The contractor "will not use
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Integrity Pact), Section 2(1)
(c), Pg. 386
improperly, for purposes of
competition or personal gain,
or pass on to others, any
information or document
provided by the Principal".
Clause 5.23.14 (Note), Pg.
296
"Agency must use dedicated
resource for this project. All
proposed manpower must not
be deployed other than this
project."
8. In response to para 27 (ports, routes and maintenance
windows), it is submitted that none of these is decided by the
PIA. Any planned downtime needs prior written permission of
GFGNL and must be informed to all users. Maintenance can be
done only during the approved window. Design and routes are
approved by GFGNL and the IE. Any change in the network
without written approval of GFGNL is a material breach.
Relevant clauses of the RFP:
Clause and Page No. Contents of the clause
Clause 7.9.2.19 (b), Pg. 349 "Any planned downtime for
maintenance shall be with prior
written permission from
TENDERER and must be
intimated to all users."
Clause 5.23.9, Pg. 286 "The preventive maintenance
should be carried out with prior
approval and during planned
shutdown/maintenance window
only."
Clause 5.6 (c), Pg. 177 and The protection path may deviate
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Clause 5.23.5.1, Pg. 277 only "after taking concern from
GFGNL/IE". Network
architecture, IP schema and
SOPs are submitted to GFGNL/IE
for approval.
Clause 5.19.2, Pg. 243 Changes are to be "undertaken
only with prior written approval
of GFGNL" and "unauthorized
tapping or alteration of the
network shall be treated as a
material breach of contract and
may result in penalties,
suspension, or termination".
9. In response to para 28 (migration of customers), it is
submitted that the data is migrated into GFGNL's own system
under its supervision. GFGNL can also take away the enterprise
work from the PIA at any time. Further, so far as Saurashtra is
concerned, the Petitioner has been maintaining that network
since 2018 and till now there has been no complaints of any of
this nature against the Petitioner despite its subsidiary
throughout having ISP license.
Relevant clauses of the RFP:
Clause and Page No. Contents of the clause
Clause 5.19.3 (xxii), Pg.
245
The PIA is responsible for
"seamless migration and
onboarding of all existing
active elements, services,
configurations, alarms,
performance parameters, and
inventory data from the
existing EMS and NMS
platforms" to the new
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platform.
Clause 5.19, Pg. 236 GFGNL may "allocate,
reallocate, transfer, or
withdraw the implementation
and/or O&M scope pertaining
to Enterprise Customer last-
mile connectivity from PIA,
either in whole or in part".
"The decision of GFGNL shall
be final and binding on the
PIA."
10. In response to para 29 (cyber security), it is submitted
that the RFP already provides role-based access, two-factor
login and audit logs. Every agency gets a separate login and
the PIA has to maintain the audit trail. "Segregation of
duties" is already there, because the PIA does the work,
GFGNL and the IE approve it and the Central NOC watches
it. It is not achieved by keeping bidders out on such
frivolous conditions. As stated above, the apprehensions of
Respondent No.1 are appropriately taken care in the RFP
and none of the cited illustrations are relevant to present
case.
Relevant clauses of the RFP:
Clause and Page No. Contents of the clause
Annexure-B (III), Technical
Specifications for EMS of
Routers, Pg. 461
"Role-based access control
(RBAC), multi-factor
authentication, audit logs,
and secure communication
using HTTPS and SSH."
Clause 5.15, Point 16, Pg.
210
"PIA shall be responsible to
provide separate logins
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(NMS/EMS, OSS+BSS+CRM,
Helpdesk etc.) for multiple
agencies and shall be
responsible for maintain
audit trail."
Clause 5.15, Pg. 229 NOC software hosted in the
State Data Centre with
"WAF, GSOC tools including
audit".
11. Moreover, all these situations were equally possible in
Phase-II, where the PIA was doing provisioning and
maintenance. None of them has happened in the last eight
years.
Penalties and why no bidder would take such a risk:
12. The RFP provides very strict consequences. If the PIA
harms any other TSP/ISP, the contract is terminated, the
PIA is banned for three years and losses are recovered.
Unauthorised sharing of dark fibre is treated as a corrupt
practice, for which the EMD and the performance bank
guarantee can be forfeited. The performance bank guarantee
can also be forfeited and the contract terminated for poor
performance. If an order of a dark fibre customer of GFGNL
gets cancelled due to gross negligence of the PIA, the full
order value is recovered from the PIA, even beyond the
penalty cap.
Relevant clauses of the RFP:
Clause and Page No. Contents of the clause
Appendix-1, Item 7, Pg.
135
If the vendor "adversely affects
the normal working of GFGNL
equipments and/or any other
TSP/ISP through GFGNL", the
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consequences are "Termination of
PO/WO", "Banning of business
for 3 years", "Recovery of any
loss incurred from its PG/SD"
and legal action.
Clause 4.49 (ii), Pg. 124 "Corrupt Practice" includes
"unauthorized activities such as
sharing dark fibre or
infrastructure space with third
parties without following the
prescribed approval process of
GFGNL", and the Tenderer "may
forfeit the EMD and/or
Performance Bank Guarantee".
Clause 5.19.3 (v), Pg. 243 "GFGNL reserves the rights to
forfeit the PBG of selected Bidder
and may initiate the process to
terminate the contract" if O&M
SLA performance is below 90%
for any 3 quarters.
Clause 7.9.2.14, Pg. 346 If GFGNL's dark fibre customer
order is cancelled due to gross
negligence of the PIA, "customer
order value shall be levied as a
penalty to PIA" and GFGNL may
apply it "beyond the CAP limit".
Clauses 7.9 to 7.9.2.19,
Pg. 333 to 349
Detailed SLAs and penalties for
the O&M phase, including service
provisioning, repair time, fibre
cuts, dark fibre, packet loss,
software and manpower.
13. It is pertinent to note that the amount at stake for the
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PIA is huge. The PIA has to furnish three performance bank
guarantees, each of 5%, on the CAPEX, on the existing O&M
of Phase I and II, and on the OPEX of the entire Phase-III
O&M period. Thus, the guarantees together come to 5% of
the entire value of the contract. As per Respondent No.1
itself, the CAPEX alone is about Rs.2,350 crores, the
guarantee on which alone would be about hundreds of
crores. The RFP itself estimates the guarantee on the
existing O&M at about Rs.29 crores. Together with the
guarantee on the Phase-III O&M, the total amount at stake
would be about Rs. 150-200 crores apart from the EMD of
Rs.50 crores.
Relevant clauses of the RFP:
Clause and Page No. Contents of the clause
Fact Sheet, Sr. No. 12,
Pg. 50
EMD "Rs. 50 Cr (Rupees Fifty
Crore only)".
Clause 4.38 (1st Bank
Guarantee), Pg. 110
"1st Bank Guarantee - Project
Implementation Phase ... equal
to 5% of the CAPEX". If the
quoted price is 15% or more
below GFGNL's estimate, the PBG
is 10%.
Clause 4.38 (2nd and
3rd Bank Guarantee),
Pg. 111
"2nd Bank Guarantee - O&M
Phase equal to 5% of the
Existing O&M (Phase I and Phase
II)", illustrated in the RFP itself
as about Rs.566 crores x 5% =
about Rs.29 crores. "3rd Bank
Guarantee - O&M Phase ... equal
to 5% of the OPEX value of the
entire O&M Phase III project
period."
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14. It is also pertinent to note that the PIA is paid only
fixed rates and fixed O&M charges by GFGNL on behalf of
DBN. Thus, by favouring one service provider, the PIA gains
nothing under the contract. On the other hand, it risks the
entire contract, guarantees of about 150-200 crores the EMD
and a ban of three years. No prudent contractor would take
such a risk for a few days' advantage on a single link, more
particularly when every act is on record and is bound to be
caught. Even otherwise the information apprehension of
Respondent No.1 that it may use information to design its
own pricing and system so as to harm other competitive ISP
as same apprehensions were already there since Phase II and
rationale for such condition being introduced only now is
not met by this argument.”
23.18In our considered opinion, having perused the above
averments, it would appear to us that the averments in the
affidavit of the Union Government as well as the State, while
they explain the rationale behind the policy of exclusion and
the possibility of conflict of interest in technical terms, what is
sought to be submitted by the petitioner in their rejoinder, are
provisions of the contract, which according to the petitioner,
circumscribes the role of the Project Implementing Agency as
well as the penalties which could be imposed for any possible
malpractices including severe financial loss being suffered by
the PIA in case of malpractices, which according to the
petitioner would be a clear and palpable protection against any
malpractice.
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23.19In the considered opinion of this Court, as discussed
above, while it is true that the tender itself envisages severe
consequences to be visited upon the Project Implementing
Agency in case of any malpractice, including poor
performance, yet, the underlying object of the exclusionary
clause, as noticed by us hereinabove, that is the preventive
aspect to avoid any possibility of any conflict of interest, could
not be ignored. As observed by us hereinabove, the preventive
and punitive aspects, though complementary with each other,
operate in distinct spheres and inclusion of one may not
necessarily render the other being redundant or being termed
as unreasonable. On the contrary, to us, it would appear that
inclusion of both the preventive and punitive aspects in the
tender, reflects sound application of mind by the authorities,
more particularly to ensure that the paramount consideration,
i.e. to subserve public interest, is well served. While the
petitioner may be justified in contending that the penalties
prescribed for any digression are so harsh that no PIA would
dare to commit any mischief since the loss caused would be
enormous, including cancellation of the tender. To us, that
would be but a consequence, which may be faced by the
project implementing authority. On the other hand, preventing
a possible conflict of interest which could result in the tender
itself being canceled, would be a sound decision, since
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canceling of tender in the midst of the contractual period may
result in severe financial consequences upon the project
management agency as well as upon the Government, which
would be required to undertake the tender process afresh for
the remainder of the work. One of the other consequences
would be such a project of national importance, getting
delayed due to cancellation of the tender. Again, the
authorities requiring to enter into a long-drawn litigation
which would negatively impact the project of national
importance, would be a consequence which could not be
ignored.
23.20Though this Court is not technically qualified to
understand, appreciate and opine on the technical nuances of
the possible manipulation, malpractice and corrupt practice
that could be undertaken by a Project Implementing Authority,
yet we would not be exceeding the limits of our understanding
when we observe that when technically qualified experts have
laid down penalties for possible manipulation, malpractice and
corrupt practice even when a TSP/ISP holder for the same LSA
would not be the PIA, then, the possibility of manipulation,
malpractice and corrupt practice would increase manifold when
a TSP/ISP holder, which either directly or indirectly would be
an end user of the same network, is given the responsibility as
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a PIA.
23.21This in our considered opinion, appreciating the conflict
of interest from the perspective of the objective of the tender,
that is accessibility on a non-discriminatory basis to all eligible
service providers to provide internet services in rural areas, the
exclusion, does have a clear and rational relation to the object
of the tender. Hence, in our considered opinion, the exclusion
clause, being a reasonable classification, would not fall foul of
Article 14 of the Constitution of India.
Hence, Issue No. 3 is answered accordingly.
ISSUE NO. 4
24. Now coming to the Issue No. 4 being whether the
impugned tender condition is actuated with mala fides. In our
considered opinion, while there is no allegation of any
personal malafides, more particularly such a contention not
being available against the State, what is meant to be alleged
is legal malice. We would in this regard rely upon observations
of the Hon'ble Supreme Court in case of State of Andhra
Pradesh vs. Goverdhanlal Pitti reported in 2003 (4) SCC 739,
Paragraph Nos. 12, 13, and 14 being relevant for our purpose
is reproduced hereinbelow for benefit:
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“12. The legal meaning of malice is "ill-will" or
spite towards a party and any indirect or improper
motive in taking an action". This is sometimes
described as "malice in fact". "Legal malice" or
"malice in law" means "something done without
lawful excuse". In other words, 'it is an act done
wrongfully and wilfully without reasonable or
probable cause, and not necessarily an act done
from ill feeling and spite'. It is a deliberate act in
disregard of the rights of others. (See Words and
Phrases legally defined in Third Edition. London
Butterworths 1989).
13. . Where malice is attributed to the State, it
can never be a ease of personal ill-will or spite on
the part of the State. If at all, it is malice in legal
sense, it can be described as an act which is taken
with an oblique or indirect object. Prof. Wade in
its authoritative work on Administrative Law
( Eighth Edition at page 414) based on English
decisions and in the context of alleged illegal
acquisition proceedings, explains that an action by
the State can be described mala fide if it seek to
'acquire land' 'for a purpose not authorised by the
Act'. The State, if it wishes to acquire land, should
exercise its power bona fide for the statutory
purpose and for none other'.
14. . The legal malice, therefore, on the part of
the State as attributed to it should be understood
to mean that the action of the State is not taken
bona fide for the purpose of the Land Acquisition
Act and it has been taken only to frustrate the
favourable decisions obtained by the owner of the
property against the State in the eviction and writ
proceedings.”
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24.1 The above observation, though in context of alleged
illegal land acquisition proceedings, yet, the proposition
explained in our considered opinion being that the State not
exercising its power bonafide for statutory purpose would
constitute a case of legal malice. In the instant case, there is
no specific allegation made against the State as regards the
powers being exercised not being bonafide, rather as analyzed
by us hereinabove, it would clearly appear that the impugned
exclusion clause contains a discernible rationale and that the
rationale underlying the classification is also reasonable, more
particularly having a rational relation to the object sought to
be achieved by the tender. We have also noticed that the
exclusion clause is not limited to the State of Gujarat; rather,
the exclusion clause, has been included in tenders for 16
different States by the BSNL and there has not been any
contrary submission as regards any other State not having
included the impugned exclusion clauses. That being the
position, to us, it would appear that the State has exercised its
powers bonafidely and whereas we don't find any malicious
design by the State to exclude the present petitioner from the
scope of the tender or the present petitioner being collateral
damage inasmuch as the exclusion clause was designed to
exclude a particular party not being the petitioner, more
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particularly for extraneous considerations and the petitioner
being similarly situated also facing the brunt of the exclusion.
Neither the same has been pleaded nor the same has been
argued.
24.2 For the above reasons, in our considered opinion, the
action of including the impugned exclusion clause, could not
be termed as an action actuated by legal malafides or legal
malice by the State respondents.
Issue No. 4 is answered accordingly.
ISSUE NO. 5
25. Insofar as Issue No. 5 - whether the petition ought not to
be entertained on the ground of delay and on the ground of
acquiescence, we would at the outset observe that both the
aspects are based on the selfsame foundational facts and hence
we are considering the said aspects jointly.
25.1 It requires to be observed here that the petitioner, had
participated in a tender published by the BSNL for the very
selfsame Amended BharatNet Program albeit for different
states, i.e. for implementation of the same in two packages,
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namely Package 10 Haryana and Package 11 NER-1 Mizoram,
Tripura and Meghalaya. It would appear that the petitioner
was a consortium partner of M/s. LC Infra Projects Pvt. Ltd.,
the L1 bidder for both the packages. It would also appear that
the condition impugned herein, that is 3.1(10), was part of the
tender conditions. It would appear that though the tender did
not contain the requirement of affidavit in format XX, yet, it
appears that in reply to pre-bid queries - clarification Nos.
1966, 1967 and 1971, the 50% stake, the BSNL had extended
the bar in Clause 2.1(f) to bidders holding more than 50%
stake in a ISP/TSP license holder. It would appear that though
the consortium of which the petitioner was a part, was the L1
bidder yet, the BSNL did not allot work in favour of the
consortium and had insisted on an affidavit as per the new
format. It appears that the petitioner had submitted an
affidavit, not as per format and whereas while the BSNL had
required the petitioner to submit an affidavit as per the
format, a representation had been sent by the petitioner. It
appears that the BSNL had thereupon ultimately, canceled the
tender for both packages on 26.06.2025 on the ground that the
bid of the consortium led by M/s. LC Infra as being non-
responsive. It appears that this action of the BSNL had not
been subjected to challenge by the petitioner.
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25.2 On the other hand, it would appear that the present
tender had been published on 04.06.2026 and whereas the last
date for submission of the tender, was as per the initial
decision 02.07.2026. It would appear that the petitioner had
submitted pre-bid query on 17.06.2026 seeking deletion or
modification of the impugned condition. The petitioner
thereafter had submitted a representation to GFGNL on
25.06.2026 seeking relaxation of the impugned condition. It
appears that thereafter the last date for submission of bids had
been extended to 10.07.2026, 20.07.2026 and 14.08.2026. In
the interregnum, on 04.08.2026, the GFGNL - respondent No.
1 had issued Corrigendum V submitting reply to pre-bid
queries and whereas the request of the petitioner for relaxation
etc. had been rejected. It appears that the last date for filling
up of the tender had been extended occasionally and whereas
lastly it had been extended up to 25.09.2025. In the
interregnum, the petitioner had made further representations
on 07.08.2026 and 18.09.2026. The petition had been preferred
on the penultimate day before the last date for bid submission.
Based upon the above chronology, it is submitted that the
petition ought to be rejected on the ground of acquiescence
and delay.
25.3 We would address the aspect as regards delay
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hereinbelow. From the chronology above, it would clearly
appear that while the petitioner had submitted certain
representations at the pre-bid stage, that is on 17.06.2026 and
25.06.2026, the same had been rejected vide Corrigendum V
by the respondent No. 1. The last date of bid submission at
that stage was 14.08.2026. In spite of the rejection, the
petitioner had not approached this Court and had continued
making representation firstly on 07.08.2026, a week before the
last date and thereafter, on 18.09.2026, that is approximately
41 days after the earlier representation and 44 days after the
rejection dated 04.08.2026. While it is a fortuitous
circumstance that the last date for submission of the bid had
been extended from time to time, yet it would appear that
after the representation of the petitioner on 07.08.2026, more
particularly after rejection dated 04.08.2026, the last date had
expired at that time on 14.08.2026, later on extended to
18.08.2026, 25.08.2026, 27.08.2026, 05.09.2026, 11.09.2026
and on 16.09.2026, i.e. extended for six times. There is no
justification provided by the petitioner for not having
questioned the decision of the respondent No. 1 dated
04.08.2026 immediately. As noticed, the petitioner had waited
till the 23.09.2026 to move the present petition when the last
date of extension had been fixed on 25.09.2026. Apparently,
the petition is moved after 59 days from the date of rejection
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dated 04.08.2026.
25.4 In this regard, it would be apposite to refer to
observations of the Hon’ble Apex Court in case of Utkarsh
Enterprises (supra), Paragraph Nos. 19, 20, 23, 24 and 25
being relevant for the present purpose.
“19.Before proceeding further, it would be crucial
to take note of the context in which matters
involving public procurement tenders are looked
at. The position of law is settled: delay in public
procurement, whether goods or services, is not just
to be measured against the calendar for the
purposes of limitation but as against the
progression of the process. Time is of extreme
essence in such cases for they involve a larger
public interest, and consist of multiple and
complex stages of evaluation. Judicial discretion,
therefore, must be exercised with extreme
circumspection to ensure that fence–sitters,
proxies, and unscrupulous litigants who bring a
challenge at an advanced stage, are not allowed to
disrupt an ongoing process.
20.Tender schedules operate within compressed
and purpose – bound timelines. Four months may
appear modest when viewed merely as a measure
of calendar time. In the life of a tender, however,
it may mark the distance between invitation and
evaluation, between evaluation and selection, and
between an open field and the crystallization of
competing interests. Delay in such matters is
therefore not assessed by counting days alone. It
must be assessed by reference to what has
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occurred during those days, whose interests have
arisen, and what public consequences would follow
from unsettling the process at that stage.
21.Having said that, we may now advert to the
tender schedule in the matter at hand.
Bid
Number
Published
on
Bid end
date
Description
and
estimated
value
GEM/
2025/B/
6926215
22.12.2025 13.01.2026 Sports
Equipment
approx Rs.
5.99 Crores
GEM/
2025/B/
6952429
22.12.2025 13.01.2026 Sports
Equipment
approx Rs.
5.99 Crores
GEM/
2025/B/
6955334
22.12.2025 13.01.2026 Sports
Equipment
approx Rs.
5.99 Crores
GEM/
2025/B/
6940348
22.12.2025 13.01.2026 Sports
Equipment
approx Rs.
5.98 Crores
GEM/
2025/B/
6950683
22.12.2025 13.01.2026 Sports
Equipment
approx Rs.
5.99 Crores
GEM/
2025/B/
6858594
13.11.2025 28.11.2025 Sports Kit
approx Rs.
6.46 Crores
GEM/ 23.01.2026 13.02.2026 Outdoor
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2025/B/
6984141
Gym
Equipment
approx Rs. 5
Crores
22.As discernible from the position tabulated
above, the Notice Inviting Tender (‘NIT’) for the
SETs was floated on 22.12.2025, with the last date
to bid being 13.01.2026 (extended from
06.01.2026). Concededly, the Writ Petition came to
be filed four months thereafter on 01.04.2026,
when one of the six SET tenders, dated
13.11.2025, as indicated above, already stood
awarded. Similarly, even the gym tender was
assigned to the successful bidder on 30.04.2026.
Further, by this time, in compliance with Clause
8.2 which contemplated a two – stage verification
process, the remaining SETs had undergone the
stage of document verification and had further
proceeded into part II of technical evaluation i.e.,
scheduled demonstration wherein physical samples
were to be analysed, and, where we currently
stand post dismissal of the Writ Petitions, the five
SETs have reached the stage of financial
evaluation.
23.The primary grievance, as raised by the
Appellants, is that the eligibility conditions
mentioned in the tender were arbitrary, irrational,
and exclusionary, thereby effectively barring
participation in the bidding. It is pertinent to note
that a challenge to a tender condition/eligibility
criterion, as distinct from a challenge to the
evaluation of a bid, or declaring a participatory
tenderer as non–responsive, accrues on the very
day the condition is published. Nothing further is
required to be discovered. Therefore, an entity
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which finds itself excluded or ineligible owing to a
condition that is perceived to be arbitrary or
unconstitutional, must at the earliest raise that
grievance by approaching the Court.
24.The doctrine of delay and laches here reflects
the equitable refusal of the Court to assist a
litigant whose conscious inaction has allowed the
legal and administrative landscape to change. The
Appellants herein did not lack knowledge of the
eligibility criteria. They lacked diligence in
challenging it.
25.The attempt to take refuge in the
representations and legal notices addressed to the
Authorities also does not enure to the Appellants’
advantage for they were aware since the very
inception that they do not qualify the multiple
tender conditions and are thereby ineligible to
participate.”
25.5 While we notice that the facts before the Hon’ble
Supreme Court inter alia indicated challenge to a tender
condition after three tenders stood awarded and the evaluation
of the tenders by the authorities had reached an advanced
stage, yet, the observations of the Hon’ble Supreme Court are
being relied upon by us since in our considered opinion, the
same would apply to the facts of the case where the
petitioner, a prospective tenderer, appears to have taken
disadvantage of a fortuitous circumstance i.e. of the last date
for bid submission being extended over a period of time by the
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respondent No. 1 GFGNL.
25.6 The Hon’ble Supreme Court observes that delay in public
procurement is not to be measured against the calendar for
purposes of limitation, but against progression of the process
since time is of extreme essence as such public procurement
involve larger public interest. In the instant case, as noticed by
us hereinabove, the project that is Amended BharatNet Project
is one of national importance whereby in addition to laying
Optical Fiber Cable Network to connect Gram Panchayat with
broadband internet connectivity, the existing BharatNet Phase-I
and BharatNet Phase-II network are to be integrated and a
single unified digital network is sought to be created. The
delay in evaluating the tender since the process has been
restrained as the present petition is pending, has resulted in
the project getting unduly delayed. We take judicial note of
the fact that tenders for the very selfsame purpose had been
issued by the BSNL in other states, as far as back in the
month of February, 2024. We also take note of the fact that
the earlier tender which had been scrapped since it was not
consistent with the BSNL Central RFP, had been floated in the
month of January, 2025 and had been canceled pursuant to
the board meetings of the GFGNL referred to hereinabove.
Thus, in our considered opinion, a tender which was otherwise
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delayed, has been further delayed, on account of the present
litigation since the petitioner had chosen to question the
impugned clause and the affidavit as per Format XX on the
penultimate day before bid submission.
25.7 The Hon’ble Supreme Court has inter alia further
observed hereinabove that a party, which is excluded from
bidding on account of a tender condition, must raise such a
grievance before a Court at the earliest. In the instant case, we
find that the petition has been preferred 59 days after the
rejection of request of the petitioner to exclude the condition
whereby the petitioner has been rendered ineligible.
25.8 The Hon’ble Supreme Court has further held that
representations and legal notices issued to the authorities
would not enure in favour of the party since the party would
know about their exclusion based upon the tender condition
from the inception of the tender process. Considered from the
perspective of the fact situation, it would appear that in
addition to the fact that the impugned condition was part of
the RFP, we also notice that the petitioner was aware about
the condition and the importance the tendering authorities
have attached to the condition at least from June, 2025 when
the bid of the petitioner along with M/s. LC Infra as the lead
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bidder, had been rejected on the ground of the same being
non-responsive as the affidavit in the required format which
was not even a tender condition, had been insisted upon by
the authorities. That being the scenario, it would clearly
appear to this Court that the petition preferred a day prior to
the last date for submission of the bid, was clearly delayed
and in our considered opinion, was but an afterthought by the
present petitioner.
25.9 Insofar as the aspect of acquiescence is concerned, the
doctrine of acquiescence has been explained by the Hon’ble
Apex Court in case of Union of India vs. N. Murugesan
reported in (2022) 2 SCC 25, Paragraph Nos. 24 and 25 being
relevant for the present purpose are reproduced hereinbelow
for benefit.
“24. We have already discussed the relationship
between acquiescence on the one hand and delay
and laches on the other. Acquiescence would mean
a tacit or passive acceptance. It is implied and
reluctant consent to an act. In other words, such
an action would qualify a passive assent. Thus,
when acquiescence takes place, it presupposes
knowledge against a particular act. From the
knowledge comes passive acceptance, therefore
instead of taking any action against any alleged
refusal to perform the original contract, despite
adequate knowledge of its terms, and instead
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being allowed to continue by consciously ignoring
it and thereafter proceeding further, acquiescence
does take place.
25. As a consequence, it reintroduces a new
implied agreement between the parties. Once such
a situation arises, it is not open to the party that
acquiesced itself to insist upon the compliance of
the original terms. Hence, what is essential, is the
conduct of the parties. We only dealt with the
distinction involving a mere acquiescence. When
acquiescence is followed by delay, it may become
laches. Here again, we are inclined to hold that
the concept of acquiescence is to be seen on a
case-to-case basis.”
25.10The Hon’ble Supreme Court in the above quoted decision,
has inter alia explained the term acquiescence as a tacit or
passive acceptance. A party, which is having knowledge about
a particular act and having chosen not to question the same,
and have permitted the same to continue, is stated to have
acquiesced to the said position. A party, which has acquiesced
to a particular position, would not be permitted to turn around
and question the very action, to which it had given tacit or
passive consent by not questioning the same.
25.11Considered in the present perspective, it would appear
that the petitioner, having participated in a tender for the very
selfsame purpose albeit for different states, had known about
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the principal exclusionary condition as regards the bidder not
being a TSP/ISP license holder for the LSA since such a
condition formed part of the said tender. It also appears that
later on, the tender issuing authority BSNL, had extended the
scope of exclusion by seeking the parties to submit affidavit
with the 50% stake clause and upon such affidavits not being
submitted by the petitioner and the lead bidder, the tender
had been canceled. Undoubtedly, the tender was not the
selfsame tender and undoubtedly, the tender was for a
different state, yet, what would be relevant to appreciate here
would be the fact that the tender was for the very selfsame
purpose that is for laying Optical Fiber Cables etc. for the
Amended BharatNet Project. While the tender had been issued
by the BSNL, yet, the conditions were the same and the
petitioner would stand to prejudice more since the petitioner
along with the lead bidder had been declared as the L1
bidders and it was only thereafter that the tender had been
canceled as the bids of the petitioner were declared non-
responsive. The petitioner having accepted the said condition
by passive assent, would now be treated as having acquiesced
to such a condition and ought not to be now permitted to
question the very selfsame condition though in a different
tender by a different tendering authority. Thus, in our
considered opinion, the petition is not required to be
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entertained both on the ground of delay and on the ground of
acquiescence.
ISSUE NO. 6
26. In sofar as Issue No. 6, whether the impugned tender
condition and the requirement of affidavit in Format XX is
required to be quashed and set aside.
26.1 At the outset of our analysis of the submissions of the
parties, after formulating the questions, we have referred to
judgments of the Hon’ble Supreme Court in Ramana Dayaram
Shetty (supra), Tata Cellular (supra), Air India Ltd. (supra), and
decision in case of Subodh Kumar Singh Rathour (supra). The
Hon’ble Supreme Court in the decisions, referred to
hereinabove, has inter alia held that the considerations that
should weigh with a Court while interfering in tender matters
would be on the ground that the decision of the Government
suffered from arbitrariness, irrationality, unreasonableness,
procedural impropriety, favouritism, and malafides.
26.2 As per the discussion hereinabove, we are of the
considered opinion that the impugned tender condition and the
requirement of affidavit as per Format XX would not suffer
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from any of the vices referred to hereinabove. We have also
noticed the observations of the Hon’ble Supreme Court in Tata
Cellular (supra), where the Hon’ble Apex Court has inter alia
laid down that the Court is required to review the decision-
making process and not the decision itself. The said
observation having been reiterated in the decision of Air India
Ltd. (supra). We have in the foregoing paragraphs reviewed the
decision-making process and again we have held that the
decision-making process is also not affected by any of the vices
referred to hereinabove i.e., arbitrariness, irrationality,
unreasonableness, procedural impropriety, and favouritism.
26.3 We have also noticed that the Hon’ble Supreme Court in
Tata Cellular (supra) as reiterated in Air India Ltd. (supra) that
the Government has to have freedom of contract, in other
words, a fair play in the joints, whereas even if some defect is
found in the decision-making process, the Court must exercise
its discretionary power under Article 226 of the Constitution of
India with great caution. We have also noticed the law laid
down by the Hon’ble Supreme Court in Air India Ltd. (supra),
where such interference by the Court, even if a defect is
found, is to be made only in furtherance of public interest and
not merely on making out a legal point.
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26.4 In this regard, we note that while there appears to be a
defect in the process, and while the defect permits the
petitioner to argue on a substantive legal issue, yet, we are of
the opinion that the defect is neither so gross as to be fatal to
the tender process nor would our interference subserve larger
public interest, which would be the underlying object for
interference. The defect being that the Respondent No. 1 vide
decision conveyed in Corrigendum No. V have rejected the
request of the petitioner for deleting the impugned
requirements on the ground of mandate by the DBN.
26.5 While we notice that there is no mandate of DBN as
produced before us, whereby the Respondent No. 1 has been
directed not to change the tender conditions, yet we are of the
considered opinion that reliance appears to be placed on a
note on the Amended BharatNet Program on the website of the
DBN, which inter alia states that "ABP also includes a state-led
implementation model, allowing execution through SPVs in
coordination with BSNL."
26.6 While the term co-ordination with BSNL could not be
stretched to read a mandate of DBN, yet in our considered
opinion, such a reply would not be fatal to the tender process,
since the substantive terms and conditions of the tender have
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not been in any manner modified by the reply. As noticed
hereinabove, the impugned condition, inter alia revealing a
discernible rationale and since we have held that the
classification on basis of the rationale, is based upon
intelligible differentia which has a rational relation to the
object sought to be achieved and since we are of the opinion
that interfering with the tender on the ground of the reply of
the GFGNL not reflecting the correct position, would not
subserve the larger public interest, therefore, in spite of the
defect noticed, we are not inclined to interfere. Hence, Issue
No. 6 is answered accordingly.
27. Learned senior advocate for the petitioner had also
referred to certain other judgments, yet, since we feel that the
proposition of law laid down in the said decisions, would not
advance the cause of the petitioner and since we have
addressed the substantive issues in our decision hereinafter, for
the sake of brevity, we are not addressing the same here any
further.
28. In conclusion, in our opinion, the Amended BharatNet
Program reflects an ambitious project of the Government,
whereby in addition to laying down Optical Fiber Cable
Network to connect 4,400 more villages with broadband
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internet connectivity in the State of Gujarat, the project also
encompasses integration, expansion, and technological upgrade
of BharatNet Phase-I and Phase-II networks to create a unified
digital network, whereby rural areas, which have been bereft
of internet connectivity, would be enabled with broadband
internet services.
29. At this stage, we also seek to refer to a recent decision
of the Hon'ble Apex Court in the case of Just Rights for
Children Alliance Vs. S. Harish, reported in 2020 INSC 1149.
Paragraph Nos. 287, 288, 289, 290, 291, 292 being relevant
for the present purpose, are reproduced herein below for
profit.
“287. The right to freedom of speech and
expression under Article 19(1)(a) of the Constitution
has never been understood as being confined to the
right to speak alone. It has always been construed
to include the right to know and to receive and
impart information and ideas. [See, Secretary,
Ministry of Information & Broadcasting v. Cricket
Association of Bengal, (1995) 2 SCC 161 ]
288. The internet is, without a doubt, the
marketplace of ideas, creative expression and
information. Its value is priceless, not merely in
the information it holds, but in the access it
affords, to adults and children alike. For many
children, particularly in remote areas, it is often
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the only source of learning and information.
Likewise for children with special needs, the
internet is often the only place where they are able
to find company in others like them.
289. In Anuradha Bhasin v. Union of India
reported in (2020) 3 SCC 637 , a three-Judge
Bench of this Court examined the legality of
suspension of internet services. It held that the
freedom of speech and expression and the freedom
to carry on any trade or business through the
medium of the internet is constitutionally protected
as a fundamental right under Article 19(1)(a) and
19(1)(g) of the Constitution.
290. Although, this Court in Anuradha Bhasin
(supra) refrained from expressing any view on
whether the right to access the internet is, by
itself, a fundamental right and left the question of
law open for future discourse, yet, this issue is no
longer res-integra.
291. In Pragya Prasun & Ors. v. Union of India
reported in 2025 INSC 599 , a two-Judge Bench of
this Court of which one of us (J.B. Pardiwala J.)
was part of, had the occasion to consider the
exclusion of persons with disabilities from the
digital KYC process. Holding such exclusion to be
violative of Article 21, this Court, speaking through
R. Mahadevan J., held that the right to digital
access is an intrinsic component of the right to life
under Article 21 of the Constitution and that it is
the obligation of the State to proactively design
and implement inclusive digital ecosystems that
serve not only the privileged but also the
marginalized, those who have been historically
excluded. The relevant observations read as under:
-
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"17. At this juncture, we may also wish to observe
that in the contemporary era, where access to
essential services, governance, education,
healthcare, and economic opportunities is
increasingly mediated through digital platforms, the
right to life under Article 21 of the Constitution
must be reinterpreted in light of these
technological realities. The digital divide -
characterized by unequal access to digital
infrastructure, skills, and content - continues to
perpetuate systemic exclusion, not only of persons
with disabilities, but also of large sections of rural
populations, senior citizens, economically weaker
communities, and linguistic minorities. The
principle of substantive equality demands that
digital transformation be both inclusive and
equitable. As already pointed out, persons with
disabilities encounter unique barriers in accessing
online services due to the lack of accessible
websites, applications and assistive technologies.
Similarly, individuals in remote or rural areas often
face poor connectivity, limited digital literacy, and
a scarcity of content in regional languages,
effectively denying them meaningful access to e-
governance and welfare delivery systems. In such
circumstances, the State's obligations under Article
21- read in conjunction with Articles 14,15 and 38
of the Constitution must encompass the
responsibility to ensure that digital infrastructure,
government portals, online learning platforms, and
financial technologies are universally accessible,
inclusive and responsive to the needs of all
vulnerable and marginalized populations. Bridging
the digital divide is no longer merely a matter of
policy discretion but has become a constitutional
imperative to secure a life of dignity, autonomy
and equal participation in public life. The right to
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digital access, therefore, emerges as an intrinsic
component of the right to life and liberty,
necessitating that the State proactively design and
implement inclusive digital ecosystems that serve
not only the privileged but also the marginalized,
those who have been historically excluded."
(Emphasis supplied)
292. In view of the foregoing, we have no
hesitation in saying that the right to access and
use the internet is a fundamental right of every
individual under Article 21 read with Article 19(1)
(a) of the Constitution. Our children, irrespective of
their age enjoy the same rights, and to deny the
same altogether would be as absurd as saying
children below a certain age do not have a
conscience worth protecting or a freedom of speech
worth expressing. The safety of our children and
their freedom are not at odds with each other. Our
children are entitled to both.” (emphasis supplied)
30. The Hon'ble Supreme Court in the above-quoted
paragraphs has inter alia laid down that the right to access
and use the internet is a fundamental right of every individual
under Article 21 r/w Article 19(1)(a) of the Constitution.
Considered from the said perspective, in our opinion, any
interference by us in the tender may result in citizens living in
the rural areas being delayed in enjoying the fundamental
right, of right to access and use the internet meaningfully. We
are of the opinion that though there is no reason for us to
interfere with the impugned tender conditions and the format
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of affidavit, yet, we observe that any interference by us at this
stage may have a cascading effect, the magnitude of which
being too technical and complex for us to appreciate, yet it is
certain that interference by us would not subserve larger public
interest since the same would impinge upon the fundamental
right of a large number of citizens. Under such circumstances,
in our considered opinion, we find no grounds to entertain the
present petition.
31. An amount of Rs. 5,00,000/-, deposited by the petitioner
in compliance of our order dated 24.09.2026 for the petitioner
to show their bonafides, since the petition was moved on the
penultimate date before the last date of bid submission, is
retained as costs for this petition, since we have held that the
petition is not required to be entertained on the ground of
delay. The said amount shall be transferred by the Registry to
the Legal Services Authority of the High Court.
32. With the above direction, the petition stands disposed of
as rejected.
(MANASH RANJAN PATHAK,ACJ)
(NIKHIL S. KARIEL,J)
SHRIJIT PILLAI
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FURTHER ORDER
33. After the pronouncement of the judgment, learned Senior
advocate Mr. Dhaval Vyas on behalf of the petitioner has
requested for extending the last date for submissions of the
bids for a few days.
34. In our considered opinion, since, we have upheld the
impugned tender conditions and the requirement to file
affidavit as per Format XX and furthermore since, one of the
aspects which weighed with us while rejecting the writ petition
was on the ground of delayed challenge to the tender, we do
not think appropriate to accede to the request. Hence, the
request is rejected.
(MANASH RANJAN PATHAK,ACJ)
(NIKHIL S. KARIEL,J)
SHRIJIT PILLAI
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