Ownership of a local manufacturing unit is a valid eligibility condition for essential public welfare procurement.

The Petitioner challenged its technical disqualification from a tender floated by NAFED for the supply of recipe-based supplementary nutrition food (Take Home Ration - THR) under the ICDS Scheme in Uttar Pradesh

The disqualification was based on non-compliance with Clause A1 (requirement to own a manufacturing unit in UP) and Clause A12 (exclusion due to pending disputes relating to THR supplies)

The Petitioner contended that its unit, though held on a private lease from a sister concern, should be treated at par with Respondent Nos. 5 and 6, who operate on leasehold plots allotted by statutory bodies like UPSIDA/GIDA

This was the "second round" of litigation; a previous Coordinate Bench in Rasi Nutri Foods India Pvt Ltd v. NAFED (W.P.(C) 2761/2026) had already upheld the validity of Clause A1

1. Whether Clause A1 of the Tender Document survives challenge in light of the earlier judicial determination

2. Whether the Petitioner’s disqualification under Clause A12 on account of alleged disputes relating to THR supplies is legally sustainable

3. Whether the impugned disqualification or the tender process warrants interference within the limited scope of judicial review governing public procurement

The Court applied the principle of judicial discipline, holding that once a coordinate bench's decision is affirmed by the Supreme Court, the validity of a tender clause (Clause A1) is settled

It relied on Article 14 of the Constitution of India, clarifying that equality does not mandate treating unequal entities—such as private lessees and statutory industrial allottees—identically

Regarding Clause A12, the Court referred to the principle that invoking lawful contractual remedies like arbitration does not automatically constitute a disqualifying "dispute," a view supported by the Supreme Court’s observation in Kota Dall Mill v. NAFED

It emphasized the limited scope of judicial review in administrative contracts, where the tendering authority is the best judge of its requirements unless the process is arbitrary

The Court found that Clause A1 was previously upheld as a reasonable policy choice to ensure logistical feasibility and quality under the National Food Security Act, 2013

It rejected the Petitioner’s plea of discrimination, distinguishing between the Petitioner’s private lease (susceptible to termination) and the Respondents’ statutory allotments from UPSIDA/GIDA, which offer industrial permanence and state oversight

Regarding Clause A12, the Court reasoned that since the Petitioner’s arbitration resulted in an award in its favor and involved no recorded misconduct, it could not be used as a ground for disqualification

The Court determined that this finding on Clause A12 was academic; since the Petitioner failed the mandatory ownership requirement under Clause A1—an independent and essential condition—it remained ineligible regardless

Allegations of collusion were dismissed as fact-intensive matters belonging to the jurisdiction of the Competition Commission of India (CCI)

The Court dismissed the Writ Petition and Pending applications were also disposed of; the Court concluded that the Petitioner had no enforceable right to interfere with the tender process