L&T’s bid remains ineligible despite later debarment abeyance, Allahabad High Court rules, rejecting its tender challenge

UPEIDA invited bids for an expressway project, with the bid due date fixed as 7 September 2026.

On that date, a debarment order against Larsen & Toubro Limited (L&T), issued by the U.P. Jal Jeevan Mission on 13 April 2026, remained in force.

L&T did not disclose the debarment with its bid.

After UPEIDA sought clarification, L&T disclosed that the debarment had been kept in abeyance from 14 September 2026.

On 25 September 2026, UPEIDA’s Technical Evaluation Committee rejected L&T’s bid as non-responsive, citing the debarment.

L&T challenged the rejection under Article 226, arguing, among other things, that the later abeyance and its declaration concerning catastrophic structural failure meant that it should have been treated as eligible.

It also relied on an asserted price difference of approximately ₹260 crore between its bid and the lowest bid.

1. Whether clause 2.1.18 of the RFP imposed an eligibility condition requiring bidders to be free from a subsisting governmental debarment on the bid due date.

2. Whether eligibility was to be assessed on the bid due date or the later date of technical evaluation, and whether the 14 September 2026 abeyance order operated retrospectively.

3. Whether the rejection was arbitrary or discriminatory because L&T was not permitted to cure its ineligibility, and whether the Court should intervene under Article 226.

In tender matters, judicial review examines the legality of the decision-making process, not the merits of the authority’s decision; intervention is warranted where the decision is arbitrary, irrational, mala fide or perverse, applying Tata Cellular v. Union of India and Jagdish Mandal v. State of Orissa.

The tender’s author is ordinarily best placed to interpret its terms, and that interpretation is respected unless unreasonable or perverse, as stated in Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. and Agmatel India Pvt. Ltd. v. Resoursys Telecom.

Essential tender conditions must be strictly complied with and cannot be selectively waived or cured after the deadline; ancillary conditions may be relaxed only consistently with fairness to other bidders, under Poddar Steel Corporation v. Ganesh Engineering Works, Central Coalfields Ltd. v. SLL-SML (Joint Venture Consortium) and related authorities.

A stay or suspension of an order does not quash or retrospectively erase it; it operates prospectively, under Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association.

The Court also applied the principles of a level playing field under Article 14 and the discretionary nature of relief under Article 226.

The Court held that clause 2.1.18 was an express threshold eligibility condition: it barred an entity from bidding where a governmental debarment subsisted on the bid due date.

Clause 2.2.2.10 concerned technical capacity and catastrophic construction failures, so compliance with it did not displace the separate debarment condition.

The RFP fixed 7 September 2026 as the relevant date; the 120-day bid-validity clause did not shift eligibility assessment to the date of evaluation.

Because the U.P. debarment was in force on 7 September and was only kept in abeyance from 14 September, L&T was ineligible on the stipulated date; the later order did not relate back.

The condition was essential and could not be cured by a post-deadline event.

The Court found that UPEIDA had sought clarification and considered L&T’s response, and that allowing L&T to proceed would disadvantage prospective bidders who relied on the same eligibility condition.

The asserted lower price did not create a right to have an ineligible bid considered.

The Court treated L&T’s late disclosure as relevant to discretionary relief, but expressly made no finding of fraud.

The writ petition was dismissed, with no order as to costs; any interim order was vacated.

The dismissal did not prevent L&T from pursuing remedies against the debarment orders before the competent forum.