Respondent to Defer Disqualification Decisions Pending Interim Arbitral Determination on Alleged Non-Performance under Section 17.

The Petitioner challenged the Respondent's decision dated 20.02.2026, which declared the Petitioner’s technical bids for two road construction projects in Arunachal Pradesh as "non-responsive".

The Respondent classified the Petitioner as a "deemed non-performer" based on Clause 2.1.14 of the RFP, stemming from a show-cause notice issued by the State of Rajasthan concerning a separate project.

The Petitioner contended that since the Rajasthan dispute was currently sub-judice before an Arbitral Tribunal under Section 17 of the Arbitration and Conciliation Act, and no final debarment order existed, the disqualification was premature.

Whether the Respondent can validly declare the Petitioner's bid as "non-responsive" and a "deemed non-performer" based on a pending show-cause notice from another state authority which is currently under arbitration.

Whether the Court should grant interim relief to prevent the opening of financial bids until the Arbitral Tribunal decides on the Petitioner's interim protection.

The court considered the procedural framework of the Arbitration and Conciliation Act, 1996, specifically Section 9 (interim measures by Court) and Section 17 (interim measures by Arbitral Tribunal).

It adhered to the principle of judicial restraint and administrative fairness, acknowledging that while an authority has the right to scrutinize bids, such decisions must account for pending judicial/quasi-judicial proceedings that directly affect the status of the bidder.

The Court noted that a learned Single Judge had previously directed that the Petitioner’s Section 9 petition be treated as a Section 17 application before an already constituted Arbitral Tribunal.

The Petitioner’s primary grievance was that the Respondent would open financial bids before the Arbitrator could hear the matter on 07.03.2026, effectively mooting their challenge.

The Respondent submitted that they were currently scrutinizing representations from disqualified bidders, including the Petitioner’s representation dated 24.02.2026.

To balance the interests, the Court determined that the Respondent must wait for the outcome of the immediate arbitration hearing before finalizing the disqualification, ensuring the Petitioner's right to be considered is not permanently extinguished by administrative haste.

This delay ensures that the Arbitral Tribunal can hear the Petitioner’s application for interim relief on 07.03.2026 before the Respondent proceeds with opening financial bids.

The Court clarified it expressed no opinion on the merits of the underlying dispute with the State of Rajasthan.