Kewal Canteen vs Union Of India - High Court Judgment

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M/S Kewal Canteen vs Union Of India & Ors on 23 March, 2026

Author: V. Kameswar Rao

Bench: V. Kameswar Rao, Manmeet Pritam Singh Arora

•    IN THE HIGH COURT OF DELHI AT NEW DELHI
  
                    %                                                      Judgment reserved on: 17.03.2026
                                                                          Judgment delivered on: 23.03.2026
                                                             Judgment uploaded on: As per Digital Signature~
  
                    +        W.P.(C) 2103/2026 & CM APPL. 10263/2026
  
                             M/S KEWAL CANTEEN                                                .....Petitioner
                                           versus
                             UNION OF INDIA & ORS.                                            .....Respondents
  
                    Advocates who appeared in this case
  
                    For the Petitioner                   :       Ms. Amrita Mishra, Mr. Raj Ranjay Singh
                                                                 and Ms. Mamta Tiwari, Advocates.
  
                    For the Respondents                  :       Mr. Rohan Jaitley CGSC, Mr. Akshay
                                                                 Sharma (GP), Mr. Dev Pratap Shahi Adv,
                                                                 Mr.Varun Pratap Singh Adv, Mr. Yogya
                                                                 Bhatia Adv. along with Dr. Manoj Kumar
                                                                 Jha Addl. MS.
  
                    +        W.P.(C) 2779/2026 & CM APPL. 13492/2026
  
                             PARIDA PHOTOCOPIER AND PCO BOOTH
                                                                                               .....Petitioner
                                           versus
                             UNION OF INDIA & ORS.                                             .....Respondents
  
                    Advocates who appeared in this case
  
                    For the Petitioner                   :       Mr. Nitin Mangla, Mr. Nitish Garg and Mr.
                                                                 Nishchay Kapoor, Advocates.
  
                    For the Respondents                  :       Ms. Iram Majid, CGSC, and Mr. Mohd
                                                                 Suboor, Advocate.
                                                                 Dr. Manoj Kumar Jha Addl. MS
  

Signature Not Verified
Signed By:PRADEEP WP(C) No.2103 and 2779 of 2026 Page 1 of 15
SHARMA
Signing Date:23.03.2026
15:55:26
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA

                                                            JUDGMENT V. KAMESWAR RAO, J.

1. The captioned two petitions have been filed by the respective petitioners challenging a tender bearing No. Esta-11/10/2023-Estate Section- Dr. RMLH dated 19.01.2026 and a tender bearing No.Esta-11/10/2023- Estate Section-Dr. RMLH dated 20.01.2026 along with corrigendum dated 14.02.2026, floated by the respondents, for three kiosks/shops in the premises of the A.B.V.I.M.S. & Dr. Ram Manohar Lohia Hospital, New Delhi (the respondent hospital).

W.P (C) 2103/2026

1.     The petitioner has been operating a round the clock kiosk/canteen
                     which known as Kewal's Canteen in the premises of the respondent hospital
                     since 28.10.1988 by the permission of the then president of Resident
                     Doctors Association of the hospital vide its letter dated 26.10.1988 which
                     was further extended till the year 1990 by the management of the respondent
                     hospital against rent worth Rs.600/- per month. Thereafter, vide allotment
                     letter No.13-83/DC/RMLH/Canteen/New Delhi/18464 dated 06.12.1990 the
                     said kiosk was allotted to the petitioner for sale of hot and cold beverages,
                     snacks and packed food items.
   

2.    On 06.03.2025, the petitioner requested the respondent No. 2 for
                     extension of the said allotment. The respondent No. 2 vide letter No. Esta-
   

11/2/2022-Estate Section-Dr. RMLH/360 dated 19.11.2025 granted
extension of the allotment of space from 01.04.2024 to 31.03.2026 on
payment of Rs.7181/- per month from 01.04.2025 to 31.12.2025 and
Rs.7637/- per month from 01.01.2026 to 31.03.2026 towards license fee
including all other charges.

1.    On 19.01.2026, the respondent No. 2 issued a notice bearing Tender
                     No. Esta-11/10/2023-Estate Section-Dr. RMLH for "Operating Kiosks-03
                     Nos." in the respondent hospital.
   

2.    The averment of the petitioner is that paragraph 7 (1) of the tender is
                     in violation of [Article 19 (1)(g)](https://indiankanoon.org/doc/935769/) and [Article 21](https://indiankanoon.org/doc/1199182/) of the Constitution of India,
                     as it restricts applicants like the petitioner from participating in the bidding
                     process due to it requiring a specific average annual turnover. The said
                     eligibility condition is reproduced as under:-
   

"7. Eligibility Criteria:

1. Average Annual Turnover of Rs. 50,00,000/- (Rs.Fifty
   Lac Only) or more during last three (3) financial years
   (2022-23, 2023-24 & 2024-25)

2. Minimum 3 years experience in running canteen/kiosk in
   a Corporate or Government Organization.

3. Valid registration with GST, PAN, EPF, ESI.

4. MSEs/Start-ups are exempted as per prevailing rules
   (subject to submission of valid proof/certificates)."

5.    The learned counsel for the petitioner stated that despite possessing all
                     necessary registrations, technical capabilities, and willingness to comply
                     with Government guidelines, the petitioner has been rendered ineligible to
   

                       participate in the tender/bidding process solely due to requirement of the
                      above criteria mandating prospective bidders to have a turnover of
                      Rs.50,000,00/- or more during the last three financial years (2022-23, 2023-
                      24 & 2024-25).

1.    That apart, it is stated that clause 3 of paragraph No.8 of the
                     impugned tender, containing the selection process prescribes that the tender
                     shall be awarded will be given to the highest license fee quoted (H-1
                     Bidder), subject to minimum reserved license fee of Rs. 450/- per square
                     foot per month. At present, the petitioner is paying Rs. 7200/- to the
                     respondents as rent. By Paragraph 8 of the tender dated 19.01.2026, the
                     respondent hospital also proposes to increase the monthly rent to
                     Rs.45,000/-, representing more than sevenfold enhancement from the current
                     rate of Rs.7200/- for a small kiosk with area of 10"x10". No justification,
                     valuation report or policy rationale has been provided for such an exorbitant
                     hike. This demand is particularly egregious considering that similarly
                     situated shops within the same compound which were excluded from the
                     tender continue to pay rent in the range of Rs.5,000/- to Rs.9,000/-. This
                     disparity further underscores the unequal and discriminatory treatment
                     meted out to the petitioner.
   

2.    It is further stated that there are eight authorized kiosks including the
                     petitioner‟s shop currently operating within the hospital premises providing
                     various essential services. On 20.01.2026, the respondent No. 2 and 3
                     floated the impugned tender bearing No. Esta-11/10/2023-Estate Section-Dr.
                     RMLH dated 20.01.2026 for re-allotment of three of the said eight kiosks
                     without disclosing any intelligible differentia, rationale or objective for
   
                      excluding the remaining five shops from the tendering process. The
                     impugned tender selectively targets only three shops for re-allotment, while
                     the rest of the said five shops continue to operate under their existing
                     arrangements.           This      selective   tendering   process     constitutes   hostile
                     discrimination and a patent violation of the principles of equality enshrined
                     under [Article 14](https://indiankanoon.org/doc/367586/) of the Constitution of India.
   

3.    Aggrieved by the above, the petitioner made a representation dated
                     30.01.2026 to the respondent No. 2 and requested to review the said clauses
                     of the tender and the upload the amended tender notice on official website of
                     the respondents to make eligible such vendors like the petitioner to
                     participate in the bidding process. However no reply or response was
                     received from the respondent No. 2 to the representation.
   

4.    It is submitted that the petitioner runs canteen/kiosk within the
                     premises of the respondent hospital on subsidised rates and earns his
                     livelihood without huge profits, as would be clear from its Income Tax
                     Returns filed during the last three financial years (2022-23, 2023-24 &
                     2024-25) which is less than Rs.6,00,000/-.
   

5.   The case of the petitioner is that the said conditions contradict the
                     principles of open and fair competition, inasmuch as they restrict the
                     petitioner and other potential bidders, with experience of more than 35 years
                     in running kiosks within the premises of the respondent hospital. As such,
                     paragraph 7 (1) of the impugned tender dated 19.01.2026 is discriminatory,
                     arbitrary and contrary to the principles of natural justice, and is in violation
                     of [Articles 14](https://indiankanoon.org/doc/367586/) [, 19 (1)(g)](https://indiankanoon.org/doc/935769/) and [Article 21](https://indiankanoon.org/doc/1199182/) of the Constitution of India.
   

6. It is contended that the impugned eligibility criteria is arbitrary as
   such high threshold creates a monopoly for large companies, violating Articles 14 and Article 19(1)(g) of the Constitution of India. The turnover
   criteria of Rs.50,000,00/- or more during last three financial years is
   unusually high for the vendors like the petitioner who have run government
   canteens for a long time at the respondent hospital on subsidised rates. The
   actions of the respondents go against Article 14 of the Constitution of India
   mandates that the State shall not deny equality before law or equal
   protection of laws.

7. In any case, such eligibility criteria has no rational nexus with the
   nature of the work, as specialised experience in food safety is more relevant
   than excessive annual turnover. Hence the said condition is absolutely
   arbitrary, unreasonable and suffers from the vice of mala fide and
   accordingly deserves to be quashed.

W.P.(C) 2779/2026

1. The petitioner herein is the operator of Parida Photocopier and
   STD/PCO booth, a small utility kiosk providing photocopying, printing and
   document services primarily to the patients, attendants and medical staff of
   the respondent hospital. The kiosk constitutes his sole source of income. The
   petitioner has been operating the said kiosk for almost ten years, pursuant to
   the permissions granted by the competent authorities of the respondent
   hospital.

2. The last extension for the petitioner‟s occupation was granted by a
   letter dated 19.11.2025, permitting the petitioner to continue the operations

                      till 31.03.2026 at a monthly license fee of Rs.4,144/-.
   

3. On 20.01.2026, the respondents no.2 & 3 arbitrarily floated the
   impugned tender No.Esta-11/10/2023-Estate Section-Dr. RMLH for re-
   allotment of three out of said eight kiosks without disclosing any intelligible
   differentia or objective for excluding the remaining five kiosks from the
   tender, which continue to operate under the existing arrangements.

4. The case of the petitioner herein is similar to that of the petitioner in
   W.P (C) 2103/2026, inasmuch as, the selective tendering process constitutes
   hostile discrimination and a patent violation of the principles of equality
   under Article 14 of the Constitution of India. A challenge is made to
   paragraph 7.1 of the tender dated 20.01.2026, which prescribes an eligibility
   condition that the average annual turnover of the bidder should be
   Rs.50,00,000/- or more during the last three financial years. The said
   requirement is stated to be unusually high for petitioner who runs a small
   photocopy shop at subsidised rates, and is arbitrary and in violation of the Articles 14 and 19(1)(g) of the Constitution of India.

5. The learned counsel for the petitioner stated that during the pendency
   of the W.P.(C) 2103/2026, the respondents issued an amendment by way of
   corrigendum dated 14.02.2026 whereby the aforesaid annual income criteria
   has been reduced from Rs.50,00,000/- to Rs.20,00,000/-. However, even
   this amended criterion is impracticable and unreasonable, as the shop in
   question is a small 10"x10" kiosk providing limited photocopy and printing
   services primarily for medical documents and identity proofs. By no stretch
   of imagination can a micro utility generate the mandated revenue.

6. Similar to W.P.(C) No.2103/2026, a challenge is also made to the
   selection process prescribed in paragraph no.8 of the tender, which proposes
   to increase the monthly rent from Rs.4144/- to Rs.45,000/-.

7. It is additionally submitted that the petitioner has a legitimate
   expectations of continued occupation and extension of the license based on
   the past practice of the respondents in granting extensions. The sudden and
   unreasoned departure from this established practice without issuing notice or
   affording the petitioner an opportunity to be heard violates the principles of
   legitimate expectation and the natural justice.

SUBMISSIONS ON BEHALF OF THE RESPONDENTS

1. The learned counsel for the respondents submitted that the allegation
                     of discrimination and violation of [Article 14](https://indiankanoon.org/doc/367586/) of the Constitution of India is
                     unmerited as the eight kiosks have been categorized into two distinct classes
                     based on intelligible differentia. Class A (5 kiosks) are operated by
                     cooperative societies/state PSUs to ensure the availability of quality
                     products at reasonable and regulated prices for thousands of patients. Class
                     B (3 kiosks) are „unreserved units‟ intended for the open market to ensure
                     transparency and fair competition, allotted through public tenders. The
                     petitioner being a private operator cannot claim parity with cooperative
                     societies/state PSUs.
   

2. It is also submitted that the determination of turnover criteria and
   minimum reserved license fee is within the exclusive domain of the
   tendering authority. The court does not sit in appeal over the commercial
   wisdom, unless the decision is found to be patently arbitrary or malicious.

3. It is stated that though the initial turnover criteria was Rs.50,00,000/-,
   following a representation from a prospective bidder, the competent
   authority reduced the same to Rs.20,00,000/- by way of a corrigendum dated
   14.02.2026 to encourage wider participation. This requirement is reasonable
   given the high daily footfall and the necessity of maintaining statutory
   compliances like, GST, EPF and FSSAI.

4.  With regard to the license fee of Rs.450/- per square foot, it is
                     submitted that the same is reasonable, and the New Delhi Municipal Council
                     (NDMC) has allotted similar shops along the adjoining boundary wall to
                     private vendors at a monthly rate of Rs.76,170/- which is significantly
                     higher than the base price fixed in the impugned tender. The petitioners‟
                     current rates being subsidised legacy rent rates do not reflect the current
                     market values, and as such the petitioners cannot insist on a right to continue
                     with the same.
   

5. The learned counsel for the respondents have also contested the
   submission of the petitioner with regard to having a legitimate expectation
   by stating that every extension granted to the petitioners carried the explicit
   caveat that they were valid till "the finalization of new tender". The
   petitioners having accepted these terms were fully aware that the
   nomination-based arrangement was temporary.

6. It is also stated that five Memorandum of Understanding (MoU) have
   been signed and entered into with certain cooperative societies namely,
   Mother Dairy, Jaipur Dairy, IIPMC Juice Corner, and Amul Milk Parlour,
   for allotment of Class A kiosks.

7. Much reliance is placed by the learned counsel for the respondents on
   the judgments in Axis Energy Ventures India (P) Ltd. v. Union of India:

2022 SCC OnLine Del 4677, Directorate of Education v. Educomp
Datamatics Ltd.: (2004) 4 SCC 19, Balaji Ventures (P) Ltd. V.
Maharashtra State Power Generation Co. Ltd.: 2022 SCC OnLine SC
1967 and Uflex Limited v. Government of Tamil Nadu & Others: (2022)1
SCC 165 to contend that interference of courts in tender/contract matters is
only warranted when the decision of the tendering authority is arbitrary,
unreasonable or actuated by mala fide, which is not the case herein.

CONCLUSION
28. Having heard the learned counsel for the parties, the short issue
which arises for the consideration is whether the respondents are justified in
prescribing an annual turnover of Rs. 50,00,000/- (later reduced to
Rs.20,00,000/-) as the eligibility condition for bidding in the tenders and
also whether the respondents are justified in including only three kiosks in
the tender, while reserving five kiosks to various cooperative societies.

1. At the outset, we may state that it is well settled that the tendering
   authority is best placed to judge its requirements and to interpret the terms of
   the tender. When a challenge is made to the conditions of a tender, it is
   incumbent upon the bidder/stakeholder raising the challenge to demonstrate
   that arbitrariness, unreasonableness, or mala fide is writ large in the action
   or decision of the tendering authority. The court does not sit in appeal over
   the commercial wisdom of the tendering authority. It is only when the action
   or decision is manifestly perverse by reason of discrimination, Wednesbury

                      unreasonableness or mala fide that the court will interfere with the tender.
                     The Supreme Court in [Directorate of Education](https://indiankanoon.org/doc/1111437/) (supra), while deliberating
                     the issue of judicial review in government tenders, observed as under:
   

"10. In Air India Limited v. Cochin International Airport
Limited [2000 (2) SCC 617], this Court observed:

"The award of a 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 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, 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."
(Emphasis supplied)

1. This principle was again re-stated by this Court in Monarch
   Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar
   Municipal Corporation and Others [2000 (5) SCC 287]. It was
   held that the terms and conditions in the tender are prescribed
   by the government bearing in mind the nature of contract and
   in such matters the authority calling for the tender is the best
   judge to prescribe the terms and conditions of the tender. It is

                                      not for the courts to say whether the conditions prescribed in
                                     the tender under consideration were better than the one
                                     prescribed in the earlier tender invitations.
   

2. It has clearly been held in these decisions that the terms of
   the invitation to tender are not open to judicial scrutiny the
   same being in the realm of contract. That the government must
   have a free hand in setting the terms of the tender. It must have
   reasonable play in its joints as a necessary concomitant for an
   administrative body in an administrative sphere. The courts
   would interfere with the administrative policy decision only if it
   is arbitrary, discriminatory, mala fide or actuated by bias. It is
   entitled to pragmatic adjustments which may be called for by
   the particular circumstances. The courts cannot strike down the
   terms of the tender prescribed by the government because it
   feels that some other terms in the tender would have been fair,
   wiser or logical. The courts can interfere only if the policy
   decision is arbitrary, discriminatory or mala fide."

3. We shall proceed to decide the present controversy within the
   contours of law, as enunciated above.

4. The respondents in paragraph no.7 of the counter affidavit filed in
   W.P.(C) No.2103/2016, have submitted that a representation was received
   from the petitioner dated 30.01.2026 seeking review and suitable
   amendment/relaxation of the turnover eligibility condition in the tender
   document, which was examined and considered by the concerned officials of
   the respondent hospital. In view of the request made by the petitioner, and to
   encourage wider participation and enhance competition, the requirement of
   average annual turnover during the last three financial years was reduced
   from Rs. 50,00,000/- to Rs.20,00,000/- and the dates of opening of the bids
   were also extended.

5. The reasoning provided by the respondents for justifying the
   eligibility criteria is that the reduced criteria of Rs. 20,00,000/- per annum
   translates to around 1.6 lakh per month, which is a standard figure for a
   high-footfall hospital kiosk. Further, the decision has been taken in view of
   the requirement of statutory compliances like, GST, EPF and FSSAI. It is
   contended that the state has the autonomy to set procurement standards and
   revise turnover requirements based on administrative experience to ensure
   service quality.

6. Be that as it may, during the course of the hearing, the learned counsel
   for the petitioners objected to the amended turnover criteria by stating that
   even the reduced turnover requirement of Rs. 20,00,000/- is unreasonably
   high for the petitioners. Though we put a specific query to the learned
   counsel for the petitioners, if not Rs.20,00,000/-, then what should be the
   appropriate amount to be prescribed as the annual turnover as per the
   petitioners, no answer was forthcoming. In other words, it appears that the
   petitioners may not be in a position to meet the annual turnover criteria,
   even if, it can be further reduced. A perusal of the Income Tax Returns filed
   by the petitioner in W.P.(C) No.2103 shows that the total annual income of
   the petitioner therein during each of the last three financial years (2022-23,
   2023-24 & 2024-25) was less than Rs.6,00,000/-, which hardly meets the
   threshold of the annual license fee. As such, even if the prescribed annual
   turnover of Rs.20,00,000/- is further reduced, the petitioners may not be able
   meet the same.

7. A related issue raised is that paragraph 8 of the impugned tender fixes
   the license fee at Rs.450/- per square foot, which for the kiosks measuring

                      10"x10" will come to Rs.45,000/- per month and Rs.5,40,000/- per annum.
                     The respondents have attempted to justify the same by stating that the
                     current license fee granted to the petitioners is on a subsidised basis, and
                     they do not have any right to claim such rates in perpetuity. It is also stated
                     that the prescribed rate of Rs. 450 per square foot is lower than the license
                     fee being charged by the NDMC for the shops adjoining the boundary walls
                     of the kiosks in question.
   

8. Insofar as the challenge to the decision of the respondents to not
   include 5 other kiosks in the tender is concerned, the contention is that the
   said 5 kiosks constitute a separate class, inasmuch as they have been
   reserved to be allotted to state PSUs/co-operative societies. The respondents
   have placed before us the note sheet wherein a decision has been taken by
   the competent authority to allot the said five kiosks to certain cooperative
   societies. The MoUs arrived at between the respondent hospital and Mother
   Dairy, Jaipur Dairy, IIPMC Juice Corner, and Amul Milk Parlour have also
   been placed on record. Such allotment of the five reserved kiosks to
   cooperative societies is a policy decision of the respondents and cannot be
   faulted.

9. Suffice it to state, prescription of terms and conditions of a tender
   document falls within the domain of the tendering authority, and since the
   petitioners have not shown any arbitrariness, unreasonableness or mala fide
   on part of the respondent hospital, the prayers sought for in these petitions
   cannot be granted.

10.    We are of the view that the present petitions lacks merit and the
    
                       same are liable to be dismissed. We order so accordingly.
    

11.  The pending applications are also dismissed.
    

V. KAMESWAR RAO, J

                                                           MANMEET PRITAM SINGH ARORA, J
                      MARCH 23, 2026
                      M