Quick answer: To challenge a government tender in India, a bidder first uses the grievance mechanism in the tender documents. It then files a writ petition under Article 226 before the High Court. Courts intervene only if the decision is arbitrary, mala fide, discriminatory or contrary to the NIT. They do not re-score bids.
Knowing how to challenge a government tender can save a lost bid, but only if you act fast. Courts review the decision-making process, not the commercial choice. This guide explains the grounds, the steps and the latest Supreme Court rulings.
When Can You Challenge a Government Tender?
A tender by a ministry, PSU or state authority is “State action”. Article 14 of the Constitution therefore binds it. As a result, the authority must act fairly, transparently and without favouritism.
The General Financial Rules, 2017 reinforce this duty. Rule 144 requires efficiency, economy, transparency and fair treatment of bidders. Moreover, Rule 173(iv) requires bidding documents to let a bidder question the conditions, the process or the rejection of its bid.
Common grounds that courts accept include:
- Rejection on a condition the NIT never imposed.
- Award to a bidder who fails the eligibility criteria.
- Relaxing a mandatory term for one bidder only.
- Rejection for reasons first raised in a counter affidavit.
- Mala fides, bias or a tailor-made qualification clause.
Steps to Challenge a Government Tender in India
- Collect the record. Download the NIT, corrigenda, pre-bid replies and the rejection letter.
- Ask for reasons. Write to the tendering authority and seek the reasons for rejection in writing.
- Use the internal grievance route. File a representation under the tender’s grievance clause. Where the tender has an Integrity Pact, you can also approach the Independent External Monitor.
- Move the High Court quickly. File a writ petition under Article 226 before the parties sign the contract or work starts. Delay often defeats relief.
- Seek interim relief carefully. Courts rarely stay infrastructure works. Therefore, ask for a narrow order, such as keeping one bid open or making the award subject to the result.
- Consider damages. If the work has progressed, a claim for compensation may be the realistic remedy.
Note that an arbitration clause usually does not help an unsuccessful bidder. No contract exists between that bidder and the employer, so the writ court is the main forum.
Limits on Courts: Judicial Restraint and Infrastructure Projects
Courts give the employer wide latitude. In particular, they defer to the employer’s reading of its own tender, because the author knows its needs best.
Parliament has added a statutory limit. Since the Specific Relief (Amendment) Act, 2018, Section 20A and Section 41(ha) restrict injunctions that would delay or impede an infrastructure project. Consequently, a stay on a highway, power or metro tender is now hard to obtain.
Key Case Law on Tender Challenges
N.G. Projects Ltd. v. Vinod Kumar Jain (2022). The Supreme Court held that writ courts should not substitute their view for the employer’s. It also warned against stalling road projects and pointed aggrieved bidders towards damages.
Banshidhar Construction v. Bharat Coking Coal Ltd. (2024 INSC 757). Here, the Court quashed an arbitrary rejection based on the notarisation of a power of attorney. It also faulted the authority for letting a rival file financial documents late. The Court ordered a fresh tender.
Kimberley Club v. Krishi Utpadan Mandi Parishad (2025 INSC 1276). The Court held that NIT terms must be clear. An authority cannot reject a bid on a requirement absent from the NIT. Nor can it rely on new reasons in its affidavit.
Steag Energy Services v. GSPC Pipavav Power (March 2026). By contrast, the Court reversed a High Court order that re-scored technical bids. A marginal score gap, it held, does not justify interference without arbitrariness or mala fides.
Micky Traders v. L.R.Y. Labour Contractor (September 2026). Finally, the Court confirmed that deference ends when the authority’s reading is patently contrary to the NIT. A higher financial offer cannot cure a bidder’s ineligibility.
For wider disputes on EPC, PPP and BOT projects, see our infrastructure and construction law practice.
FAQs
Can a rejected bidder file a writ petition against a tender?
Yes. A rejected bidder can file a writ petition under Article 226, since a public tender is State action. The court examines fairness and legality, not the merits of the bid.
On what grounds can a court set aside a tender?
Courts set aside tenders for arbitrariness, mala fides, bias, discrimination or departure from the NIT. A different view on technical merit is not enough.
Can courts stay an infrastructure tender?
Rarely. Sections 20A and 41(ha) of the Specific Relief Act restrict injunctions that would delay infrastructure projects. Courts therefore prefer narrow orders or damages.
Is there a time limit to challenge a tender?
No fixed statutory period applies to writs. However, courts refuse relief for delay, so file before the parties sign the contract.
Can a bidder claim damages for wrongful exclusion?
Yes. Where setting aside the award would harm the public, the Supreme Court has pointed bidders to compensation for wrongful exclusion instead.
Lex Pleaders advises contractors, employers, banks and NBFCs on tender challenges, Hotlisting, bid disputes and writ petitions before the High Courts and the Supreme Court. Write to us at lexpleadersindia@gmail.com to discuss your matter.
Disclaimer: This article offers general information only and does not constitute legal advice.