Rasi Nutri Foods vs National Agricultural Cooperative - Delhi High Court Case
Summary
The Delhi High Court has issued a judgment in the case of Rasi Nutri Foods India Private Limited vs. National Agricultural Cooperative Marketing Federation of India. The judgment was delivered on March 19, 2026, and involves multiple connected writ petitions concerning agricultural cooperative matters.
What changed
This document details a judgment from the Delhi High Court in a case involving Rasi Nutri Foods India Private Limited and the National Agricultural Cooperative Marketing Federation of India (NAFED), along with other related petitions. The judgment, delivered on March 19, 2026, by Justices V. Kameswar Rao and Manmeet Pritam Singh Arora, addresses matters pertaining to agricultural cooperative operations and contractual disputes.
The implications for regulated entities, particularly agricultural firms and cooperatives, are significant as the court's decision will set a precedent for similar cases. Compliance officers should review the full judgment to understand the specific rulings regarding NAFED's operations, contractual obligations, and any potential impact on procurement, distribution, or membership practices. While no specific compliance deadline is mentioned, the ruling itself is effective immediately and may require adjustments to existing business practices or contractual agreements.
What to do next
- Review full judgment for specific rulings impacting agricultural cooperative operations.
- Assess existing contracts and business practices for alignment with court's decision.
Source document (simplified)
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Rasi Nutri Foods India Private Limited vs National Agricultural Cooperative ... on 19 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: 10.03.2026 Judgment delivered on: 19.03.2026 Judgment uploaded on: As per Digital Signature~ + W.P.(C) 2761/2026 & CM APPL. 13466/2026 RASI NUTRI FOODS INDIA PRIVATE LIMITED .....Petitioner versus NATIONAL AGRICULTURAL COOPERATIVE MARKETING FEDERATION OF INDIA & ORS. .....Respondents + W.P.(C) 2839/2026 & CM APPL. 13780/2026 KOTA DALL MILL, KOTA & ANR. .....Petitioners versus NATIONAL AGRICULTURE COOPERATIVE MARKETING FEDERATION OF INDIA LIMITED .....Respondent + W.P.(C) 2984/2026 & CM APPL. 14419/2026 MARIYA MAHILA BACHAT GAT AUTHORIZING REPRESENTATIVE JANAK RAVINDER AGARWAL.....Petitioner versus NATIONAL AGRICULTURAL COOPERATIVE MARKETING FEDERATION OF INDIA LTD NAFED THROUGH SECRETARY & ORS ......Respondents Advocates who appeared in this case For the Petitioner : Mr. Rajiv Nayar, Senior Advocate with Mr. Paavan Awasthi, Ms. Manjira Dasgupta, Ms. Tanya Srivastava, Mr. Anmol Kheta, Mr. Naman Maheshwari, Ms Meghna Mishra, Mr Ankit Rajgarhia, Mr Prabhav Bahuguna, Mr Samar Singh, Mr Naman Maheshwari, Mr Siddhant Ahirwal, Advs.
Signature Not Verified
Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 1 of 42
SINGH
Signing Date:19.03.2026
14:41:05
Mr Jayant Mehta, Senior Advocate with Mr.
Karthik Sundar, Mr. Rajarshi Roy, Mr.
Anmol Agarwal, Mr. Julius Mera Smith,
Mr. Arsh Rampal, Mr. Amit Agarwal, Advs.
For the Respondents : Mr. Sandeep Sethi, Mr. Anil Airi Senior
Advocates with Mr. Aaditya Vijaykumar,
Ms. Akshita Katoch, Mr. Naman Garg, Mr.
Anirudh Anand, Mr. Krisna Gambhir, Ms.
Shreya Sethi, Harsh Gautam, Mr. Vishal
Tyagi, Advocates and Mr. Amit Goel and
Ms. Babita Dhawan AR from NAFED.
Ms. Radhika Bishwajit Dubey, CGSC with
Ms. Gurleen Kaur Waraich, Mr. Kritarth
Upadhyay, Mr. Amulya Dev Mishra, Advs
for UOI.
Mr Anil Mittal, Mr Shaurya Mittal Advs. for
R-2&3.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
JUDGMENT V. KAMESWAR RAO, J.
- As these three writ petitions have been filed seeking identical prayers challenging the tender bearing NIT No. NAFED/HO/ICDS/RECIPE/2025- 2026/01 dated 16.02.2026, they were heard together and are being decided by way of this common judgment.
FACTS AND SUBMISSION ON BEHALF OF THE PETITIONERS
W.P.(C) 2761/2026
At the outset, we may narrate a brief factual background of the case.
The Respondent No.1/National Agricultural Cooperative Marketing Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 2 of 42 SINGH Signing Date:19.03.2026 14:41:05 Federation of India ("NAFED") issued a Notice Inviting Tender (NIT)
No.NAFED/HO/ICDS/ RECIPE/2025-2026/01 dated 16.02.2026 for supply
of Recipe Based Supplementary Nutrition („RBSN‟) food items in the State
of Uttar Pradesh for Financial Year 2026-27 under Integrated Child
Development Services (ICDS) Scheme.The petitioner is a private limited company incorporated under the Companies Act, 2013. It was earlier registered as a partnership firm, and
later converted to a private limited company in the year 2021. The petitioner
and its predecessor in interest are engaged in the manufacturing and supply
of fortified food products and supplementary nutrition since the year 2004.The case of the petitioner/Rasi Nutri Foods India Private Limited as
contended by Mr. Rajiv Nayar, learned Senior Counsel, is as under:-
5.1 Clause A (1) of the Eligibility Criteria for Participation in the
Tender dated 16.02.2026 which mandates that, a bidder must
own a manufacturing unit in the State of Uttar Pradesh prior to
the floating date of the tender is arbitrary and violative of Articles 14 , 19(1)(g) and 21 of the Constitution of India and is
contrary to public procurement norms.5.2 Clause A (12) of the Eligibility Criteria for Participation in the
Tender, which stipulates that, "there should not be any
pending legal/criminal cases and/or any other cases/disputes
associated with THR supplies against them with any
State/Central/UT/State Level Agency on the date of submission
of this tender by the bidder(s)", is ex facie vague and arbitrary, Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 3 of 42 SINGH Signing Date:19.03.2026 14:41:05 inasmuch as it disqualifies a bidder merely on the ground of
pendency of any legal proceedings or disputes, irrespective of
their nature, gravity, stage or outcome. Such a stipulation
amounts to penalising a bidder exercising its statutory and
constitutional right to seek legal remedies and is contrary to
settled principles that, mere pendency of proceedings cannot
be equated with culpability and lacks intelligible differentia,
bears no rational nexus with the object of ensuring quality and
timely supply, and is liable to be struck down as arbitrary and
violative of Articles 14 , 19(1)(g) and 21 of the Constitution of
India.
Mr. Nayar submitted that the petitioner has a production capacity
exceeding 1450 metric ton/per day cumulatively across its two major
manufacturing units, thereby demonstrating its ability to meet the quantity
required under the tender. He also submitted that the petitioner was
entrusted with the responsibility of assisting Mahila Supplementary
Nutrition Production Centres ("MSPCs") across the State of Karnataka for
improving the quality and standardisation of nutrition supplied under ICDS
Scheme.He submitted that, in the earlier tender initiated by the State of Uttar
Pradesh on 22.12.2017, the petitioner was found eligible and was awarded
the contract for manufacturing and supply of ICDS food supplements in
various districts of the State. The petitioner had successfully undertaken the
manufacturing and supply of Energy Dense Weaning Food and allied
products in accordance with the prescribed specifications and no objections Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 4 of 42 SINGH Signing Date:19.03.2026 14:41:05 were raised with regard to deficiency in quality or shortage of supply during
the subsistence of the said Tender/contract and the petitioner had duly
completed the supply under the Tender.He submitted that the Tender of 2017, neither imposed any
requirement that the bidder must own a manufacturing plant within the State
of Uttar Pradesh nor was there any blanket disqualification on the ground of
pendency of legal proceedings or disputes. In the said tender, the eligibility
was determined on objective parameters relating to technical capacity,
financial standing, statutory compliance and quality certifications. In other
words, in the absence of any such restrictive geographical and litigation-
based disqualification in the earlier tender process coupled with the
successful execution of the contract by an out-of-State
manufacturer/petitioner without any recorded adverse findings, demonstrates
that the State Government itself did not consider such conditions necessary
for ensuring timely and quality supply. Therefore, the introduction of
restrictive stipulations in the impugned tender under Clause A (1) & A (12)
represents a material departure from past practice without any discernible
rational basis.
He submitted that the petitioner‟s Namakkal facility in the State of
Tamil Nadu has been in operation since 2004 and has been continuously
engaged in manufacturing food products for over two decades and has a
licensed production capacity of 1200 MT/per day (Manufacturer - General
Manufacturing) and 1300 MT per day (Proprietary Food). Similarly, it also
has a unit at Rudrapur, Uttarakhand, which has centralised FSSAI License
with a production capacity of 250 MT/per day (General Manufacturing & Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 5 of 42 SINGH Signing Date:19.03.2026 14:41:05 Proprietary Food) and there is no reason why the petitioner would be unable
to supply the Take Home Ration („THR‟, for short) to the Anganwadi
Centers for providing supplementary nutrition to children aged between 6
months to 6 years, pregnant women and lactating mothers from its unit at
Rudrapur, Uttarakhand, which is few kilometers away from Uttar Pradesh.
He also submitted that the petitioner is technically competent, financially
sound, statutorily compliant and experienced manufacturer of supplementary
nutrition food under Government schemes and satisfies all eligibility
conditions under the impugned tender except for the arbitrary geographical
restriction requiring prior ownership of a manufacturing unit in the State of
Uttar Pradesh as on the date of issuance of the tender.He submitted that the State of Uttar Pradesh was procuring and
distributing THRs through women based Self-Help Group ("SHG"), these
production centers were entrusted with manufacturing and supply of THRs
to Anganwadi Centers within specified districts. However, there had been a
continuing shortfall in supply vis-à-vis the nutritional demand of the
beneficiaries under ICDS. The production capacity of SHG-led THR plants
was not sufficient to meet the entire demand of the State. In view of such
shortfall and in order to ensure uninterrupted and adequate and quality
supply of supplementary nutrition to beneficiaries, the State of Uttar Pradesh
decided to engage respondent No.1/NAFED as an additional implementing
and procurement agency to meet the balance demand over and above the
supply being made by SHG-led THR plants.Mr. Nayar submitted that the estimated value of the tender is
approximately ₹2,768 Crores and the State has been divided into 9 clusters Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 6 of 42 SINGH Signing Date:19.03.2026 14:41:05 for the purpose of supply and distribution. The tender contemplates supply
of RBSN food items to Anganwadi Centers across Uttar Pradesh, intended
for children and women beneficiaries under ICDS.According to him, Clause A (1), stipulates pre-existing ownership of a
manufacturing unit in Uttar Pradesh as on 16.02.2026. This condition
renders all otherwise qualified and experienced manufacturers located
outside Uttar Pradesh ineligible, irrespective of their capacity, compliance,
certifications or prior ICDS experience. He also submitted that the
successful bidders may be permitted a reasonable period of 2-3 months to
establish and operationalise manufacturing units within the State of Uttar
Pradesh and the interim supply from existing FSSAI-compliant
manufacturing facilities, subject to due inspection and regulatory safeguards,
until such time as local units are established. He also submitted that the
tender itself contemplates establishment of NAFED‟s manufacturing unit
within six months, which demonstrates that manufacturing capacity can be
developed post-tender and not pre-exist.With regard to Clause A (12), he submitted that it is a settled principle
of law that mere pendency of legal proceedings does not constitute proof of
misconduct, wrongdoing or liability. He also submitted that the said Clause
lacks any rational nexus with the stated object of ensuring timely and quality
supply of nutrition, fails to distinguish between trivial, routine or technical
proceedings and serious allegations involving integrity, does not predicate
disqualification upon any adjudicated finding of guilt, misconduct or breach,
operates in a mechanical and disproportionate manner, without regard to the
nature or merits of the proceedings and fails to distinguish between Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 7 of 42 SINGH Signing Date:19.03.2026 14:41:05 proceedings by a bidder against the department and the proceedings initiated
by the department against the bidder. In effect, it penalises a bidder for
exercising its constitutional and statutory right to seek redress before courts
and tribunals. In this regard, he has relied upon the judgment of this Court
in Vision Diagnostic India Private Limited v. All India Institute of Medical
Sciences and Another, 2026 SCC OnLine Del 545.He also submitted that the pendency of arbitration proceedings
between the petitioner and the State of Uttar Pradesh arises directly from
contractual disputes relating to interpretation and compliance of delivery and
bar coding provisions under the Agreement dated 25.04.2018, and does not
involve any criminal proceedings, conviction, blacklisting, or adjudicated
finding of fraud or misconduct against the petitioner. The exercise of
arbitration rights by the petitioner is a lawful contractual remedy expressly
contemplated under the Agreement executed with the State of Uttar Pradesh.However, by virtue of Clause A (12) of the impugned tender
document, which disqualifies bidders having "any pending legal case or
dispute", the petitioner now stands to be rendered ineligible solely because it
exercised its contractual and statutory right to initiate arbitration against
arbitrary action of the State. The impugned Clause A (12), when applied in
the present factual matrix, operates punitively and discriminatorily against
the petitioner for having sought redressal of legitimate grievances arising out
of the State‟s own default. He also submitted that Clause A (12), therefore,
operates as a coercive mechanism to deter bidders from seeking judicial or
arbitral remedies against the State and is liable to be struck down as
arbitrary, unconstitutional and opposed to public policy and the right of Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 8 of 42 SINGH Signing Date:19.03.2026 14:41:05 access to justice and judicial review is an integral facet of Articles 14 and 21 of the Constitution of India and forms part of the basic framework of the
rule of law.He submitted that the tender also indicates that NAFED is in the
process of establishing its own manufacturing facility within Uttar Pradesh
and proposes to supply a portion (approximately 20%) of the total
requirement from its own unit within a stipulated period. The balance
requirement is to be met through empanelled private manufacturers selected
pursuant to the tender process.It the submission of Mr. Nayar that the requirement of ownership "on
the date of publication of the tender" bears no proximate nexus to the stated
objective of ensuring timely and quality supply. The same objective could
have been secured by permitting establishment of facilities within a
reasonable post award period, subject to strict performance safeguards. The
impugned condition, therefore, does not merely regulate eligibility but
substantially forecloses entry by new participants, and in doing so, restricts
competition in a manner inconsistent with the constitutional mandate of
fairness, transparency and equal opportunity in public procurement. The
impugned eligibility condition mandating prior ownership of a
manufacturing unit within the State of Uttar Pradesh as on the date of
floating of the tender is unconstitutional, arbitrary and violative of Articles
14 , 19 (1) (g) and 21 of the Constitution of India. He submitted that, by
excluding all out-of-State manufacturers at the very threshold and ab initio,
the respondents have effectively denied equal opportunity to a substantial
class of competent bidders, thereby distorting competitive neutrality and Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 9 of 42 SINGH Signing Date:19.03.2026 14:41:05 undermining the constitutional mandate of equality under Article 14 of the
Constitution. Such exclusionary stipulation operates not as a reasonable
classification based on intelligible differentia, but as an arbitrary barrier that
unfairly narrows the field of competition without lawful justification.He submitted that, Rule 144 of the General Financial Rules, 2017
("GFR, 2017", for short) (as amended up to 31.07.2024) mandates that
public procurement shall be conducted in a manner that promotes
competition, ensures fair and equitable treatment of bidders, and adheres to
the principles of transparency, reasonableness and non arbitrariness. The
condition restricting eligibility only to bidders having an owned
manufacturing unit within the State of Uttar Pradesh operates as a
geographical lock, thereby excluding otherwise eligible, technically
competent and financially sound bidders operating outside the State. No
such statutory compulsion, recorded reasoning, or demonstrable necessity is
reflected in the impugned tender which is thereof, is arbitrary, anti-
competitive and violative of Rule 144 of the GFR, 2017.He also submitted that, Rule 160 of the GFR, 2017 (as amended up to
31.07.2024) mandates that all procurements shall be processed through an e-
procurement portal, except in narrowly defined circumstances such as
national security or strategic confidentiality, and only upon due
authorisation and recorded reasons. The present tender, having regard to its
scale, subject matter and financial magnitude, does not fall within any of the
recognized exceptions contemplated under Rule 160 of the GFR, 2017.
Therefore, the stipulation permitting and requiring submission of bids
through email is ex facie contrary to Rule 160 of the GFR, 2017, and is Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 10 of 42 SINGH Signing Date:19.03.2026 14:41:05 therefore illegal, arbitrary and unsustainable in law.The Rule 159 of the GFR, 2017 (as amended up to 31.07.2024)
mandates compulsory e-publishing of all tender enquiries, corrigenda and
details of award of contract on the Central Public Procurement Portal
(CPPP), so as to ensure transparency, wider participation and public
accountability in procurement processes. It is evident that the tender
publication is stated to be on the official website of NAFED. However, there
is no disclosure or stipulation in the tender document indicating compliance
with the mandatory requirement of publication on the Central Public
Procurement Portal (CPPP), nor any reference to publication of bid award
details thereon. In the absence of any indication of publication on CPPP, the
tender process appears to be in deviation from the express mandate of Rule
159 of the GFR, 2017.Another submission of Mr. Nayar is that, Rule 161 of the GFR, 2017,
which mandates that, in respect of advertised tenders having an estimated
value of Rs. 50 lacs and above, the tender enquiry shall be compulsorily
published on the Government e-Marketplace ("GeM") as well as on the
Central Public Procurement Portal, in addition to the website of the
procuring organisation, so as to ensure wide publicity, transparency and
maximum competition, has not been complied.He relied upon the judgments in Vinishma Technologies Pvt. Ltd. v.
State of Chhattisgarh & Anr., 2025 INSC 1182, in support of his
contentions that the clauses being discriminatory need to be set aside.
W.P.(C) 2839/2026 Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 11 of 42 SINGH Signing Date:19.03.2026 14:41:05
The submissions made by Mr. Nayar in this writ petition are identical
to the submission in the above petition in as much as, the respondents had
floated impugned tender for supply of RBSN food items in the State of Uttar
Pradesh for FY 2026-2027 under ICDS Scheme in violation of the statutory
rules namely Integrated Nutrition Support Programme - Saksham
Anganwadi and Poshan (2.0) Rules, 2022 ("Rules of 2022") notified, vide
Notification dated 12.09.2022 under National Food Security Act, 2013 mandating that the State or Union Territory must introduce transparent
process for procurement.The challenge in this petition is to Clause A (1) of Eligibility Criteria,
Clause A (12) of Eligibility Criteria and Clause A (14) (iii) of Eligibility
Criteria of the impugned tender.According to Mr. Nayar, the petitioner no. 1 is a Registered
Partnership Firm duly engaged in the manufacturing & supply of
Supplementary Nutrition Food under ICDS Scheme since 2002 and has vast
experience in manufacture and supply of RBSN food items from its
manufacturing plant in Kota (Rajasthan) and supplies to various states
including State of Uttar Pradesh, State of Madhya Pradesh, Gujarat,
Jharkhand, Maharashtra and Rajasthan.He submitted that, earlier a tender was issued by the State of Uttar
Pradesh on 22.12.2017, wherein, the petitioner was successful bidder. An
Agreement dated 25.04.2018 was executed by the State of Uttar Pradesh.
The said work pertained to the manufacturing and supply of supplementary
Nutrition Food in Faizabad Division of Uttar Pradesh, which resulted into Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 12 of 42 SINGH Signing Date:19.03.2026 14:41:05 extension of the Agreement for a period of 4 months on account of
satisfactory performance vide extension order dated 27.05.2020.He submitted that the Government of India through Ministry of
Women & Child Development vide Gazette Notification dated 28.06.2021,
de-notified the Supplementary Nutrition Rules, 2017 in the light of
streamline guidelines dated 13.01.2021 followed by issuance of Office
Memorandum dated 29.06.2021 regarding de-notification of Rules, 2017
and emphasizing that States should ensure compliance to the streamlined
guidelines dated 13.01.2021 and that the THR as defined under the National
Food Security Act, 2013 is not to be misconstrued as Raw Ration.
Thereafter, the Government of India through the Ministry of Women &
Child Development has notified Integrated Nutrition Support Programme -
Saksham Anganwadi and Rules of 2022. Thus, the Rules of 2022 having
statutory force, the Guidelines dated 13.01.2021 merged in the said Rules.He submitted that, on account of non-compliance to the provisions of National Food Security Act, 2013 and Rules of 2022, Public Interest
Litigations bearing (PIL) No. 960 of 2024 and (PIL) No. 21609 of 2021
were filed before the Lucknow Bench of the Allahabad High Court wherein
various directions were issued by the High Court to the State. Pursuant to
the said directions the respondents issued the impugned tender.According to Mr. Nayar, the petitioner has been supplying the products to various State governments from its manufacturing unit at Kota. Even the State of Jharkhand had allowed the successful Bidder to install a unit in the State within 6 months. In the meanwhile, supplies from Kota Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 13 of 42 SINGH Signing Date:19.03.2026 14:41:05 (Rajasthan) are to continue till the petitioner installs its manufacturing plant in Bokaro (Jharkhand). He submitted that the petitioner is ready and willing to establish a unit once it is allowed to bid for the tender and it is awarded the same. He also stated, putting the impugned stipulation without granting any opportunity to the tenderer to put up a unit in the eventuality it is awarded, would be contrary to public interest for the reason that if the said condition is stipulated then more bidders could apply against the tender and also meet the requirement of having manufacturing units, which they can establish at the earliest from the date of award of the tender.He stated that, in furtherance of GFR, 2017, the Government of India
has also issued Manual for Procurement of Goods, which inter alia
prescribed in 4.2.1.1 that "there should be no restriction on participation by
prospective Bidder who meet the eligibility criteria". The pre-qualification
modes of procurement have been prescribed under Clause 4.6, which inter
alia include Clause 4.6.1.4, which prescribes that; "Pre-Qualification
Criteria: PQC should be unrestrictive enough not to leave out even one
capable vendor/contractor. Otherwise, it can lead to higher procurement/
works/services prices". He has also relied on Clause 3.4 (4) of "Uttar
Pradesh Procurement Manual (Procurement of Goods), 2016" to contend
that, "No Bidder should be denied pre-qualification/post-qualifications for
reasons unrelated to its capability and resources to successfully perform the
contract".The stipulation in the tender that there should not be any pending
legal/criminal case or any other cases/dispute associated with THR supplies
against them with any State/Central/Union Territory/State level agency on Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 14 of 42 SINGH Signing Date:19.03.2026 14:41:05 the date of submission of impugned tender by the bidder. Such a stipulation,
more so, in any commercial transaction bound to happen and a pendency of
litigation have no bearing on the eligibility and the competency of a tenderer
to execute the subject work, if awarded the contract. In support of his
submission, he has relied upon the judgments in Vision Diagnostic India
Pvt Limited (supra).He also contested the case of the respondents by stating that the Food
Corporation of India ("FCI") allocation is not restricted to Uttar Pradesh
inasmuch as:
a) Wheat and rice used in THRs are supplied by FCI from the
national food grain pool.b) The State Government merely raises its requirement, after
which FCI allocates the quantity.c) FCI has depots across the country, and allocation can be
made from any suitable depot depending on logistics.d) Historically also, bidders from outside Uttar Pradesh have
participated and supplied successfully lifted grains through
the FCI network.e) Similar supply mechanisms operate in national welfare
schemes such as Mid-Day Meal and Public Distribution
System (PDS).f) Therefore, the premise that, food grains must necessarily be Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 15 of 42 SINGH Signing Date:19.03.2026 14:41:05 lifted only within Uttar Pradesh is factually incorrect.
g) Without prejudice, the petitioner is also willing to lift grains
from U.P. The transportation, storage, processing and door-
to-door delivery are entirely the responsibility of the bidder
under the tender.
h) The petitioner is willing to undertake this at its own cost while
strictly adhering to the tender timelines.
He submitted that the petitioner requires approximately 2-3 months in
establishing its manufacturing unit within the State of Uttar Pradesh and
during this limited period, supply will be made from the petitioner's existing
operational manufacturing units at Kota (Rajasthan) which is already
complying with the tender specifications.He has also placed the impugned tender and the old tender dated
22.12.2017 to show similarity in clauses.
W.P.(C) 2984/2026
- The challenge in this writ petition is against the following clauses of the impugned tender:-
a) Clause 1 of the Eligibility Criteria for Participation.
b) Clause 2 of the Eligibility Criteria for Participation
requiring annual turnover of Rs. 75 crores exclusively from
take home rations.
Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 16 of 42 SINGH Signing Date:19.03.2026 14:41:05
c) Clause 11 of the Eligibility Criteria for Participation
requiring all bidders to submit a non-compete declaration.d) Clause 5(b) of the Scope of Work impugned tender
reserving 20% of the tender amount for respondent no.1.
36. Mr. Jayant Mehta, learned Senior Counsel appearing for the petitioner
would submit that the impugned tender pertains to supply of THRs, which
are nutritionally fortified ready-to-eat processed food items meant for
children between 0-6 years of age, pregnant women and lactating mothers
through Anganwadi Centers under the Supplementary Nutrition Programme
(SNP) under the ICDS.
He stated that the petitioner is a cooperative society registered as
medium enterprises under the Micro, Small and Medium Enterprises
Development Act, 2006 (" MSMED Act "). The petitioner has a registered
license from the FSSAI for its manufacturing unit in Maharashtra, and is a
large and established player in the market. He stated that, Rule 5 of the
Rules of 2022 mandates procurement of THRs must be in compliance with
the GFR, 2017.According to Mr. Mehta, the Clauses A (1) and (2) which contemplate that the bidder should have its own manufacturing units in Uttar Pradesh before the date of floating of the impugned tender and the bidder should have minimum annual turnover of Rs. 75 crores from THR supplies for each year for the last three financial years, are arbitrary, irrational and has no nexus with the objective sought to be achieved. He submitted that the requirement of bidders to have prior license manufacturing units in Uttar Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 17 of 42 SINGH Signing Date:19.03.2026 14:41:05 Pradesh is contrary to the other eligibility condition in the impugned tender, which permits the bidder to be eligible in case they have successfully supplied THRs across the country and not in Uttar Pradesh.It is his submission that the condition requiring manufacturing units to
be established in the State of Uttar Pradesh prior to the floating of the tender
tailor made to favour certain prior suppliers of respondent No.1. This,
according to him, becomes apparent from the fact that, prior to 2025, only
20 percent of the requirement of THRs in Uttar Pradesh was being met from
the manufacturing unit established within the State while the sharp shortfall
was being met by supply of Fortified Rations by respondent no. 1.He submitted that the impugned tender has been issued in the
backdrop of a severe shortage of THRs in the State of Uttar Pradesh and as
per the admitted position, the SHGs entrusted with the responsibility of
manufacturing THRs in the State were able to produce only about 20% of
the required quantity. In view of the said shortfall, respondent no. 3
subsequently designated respondent no. 1 as the authority responsible for
procuring THRs on its behalf in the state. Therefore, the tendering process
ought to have been structured in a manner that promotes wider participation
and ensures adequate and timely supply of THRs to meet the nutritional
requirements of beneficiaries.Mr. Mehta submitted that, even the Clause A (11) of the eligibility
criteria requiring all bidders to submit a non-compete declaration, is ex-facie
arbitrary for the reason that the respondent No.1 cannot abuse its dominant
position as procuring authority in Uttar Pradesh to undermine the Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 18 of 42 SINGH Signing Date:19.03.2026 14:41:05 competition it faces across the country from the other bidders. It is the
respondent no.1‟s intent to abuse its dominance by imposing anti-
competitive restraints not only on supplies which are under the ambit of the
impugned tender, but even on supply of raw food materials, which are not
even the subject matter of the impugned tender. There is no underlying
rationale on part of the respondent No.1 for imposing such onerous anti-
competitive constraints in the impugned tender. Such a clause undermines
competition in the market.According to Mr. Mehta, the impugned clauses needs to be set aside
and the respondents should issue a fresh tender in accordance with GFR,
2017, so that there is participation by the petitioner and the best parties are
selected. He has relied upon the judgment in Shipra Devi v. State of Uttar
Pradesh., Public Interest Litigation (PIL) No.960/2024 decided on
01.08.2025, of High Court of Allahabad.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS
On the other hand, Mr. Sandeep Sethi, learned Senior Counsel for the
respondent/NAFED in the three writ petitions, would submit that, it is a
settled law that the tender can only be challenged when the tender does not
create a level playing field for everyone. It is the mandate of the Supreme
Court that, Constitutional Courts must refrain from rewriting the eligibility
criteria. He also submitted that the petitioners have failed to show as to how
the level playing field has been diluted in any manner, whatsoever. The
tender is open to all tenderers‟ who meet the eligibility criteria. Allowing
these petitions would effectively amount to rewriting the eligibility criteria, Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 19 of 42 SINGH Signing Date:19.03.2026 14:41:05 which would run contrary to the law laid down. He submitted that the supply
under the tender has to begin by 01.04.2026 and any change or variation in
the terms of the tender would adversely affect the implementation of the
tender and will affect the manner in which National Food Security Act, 2013 is to be implemented as the tender is for a period of 1 year and it would not
be in the benefit of the public at large to allow any prayers in these writ
petitions.He stated that the challenge to Clause 1 of the tender condition relates
to owning a manufacturing unit in the State of Uttar Pradesh and that the
Department of Child Development and Nutrition has provided detailed
guidelines to the Director, Child Development Services and Nutrition,
through Government Letter No. 4363 dated 24.12.2025, regarding supply of
RBSN food items in accordance with Saksham Anganwadi and Nutrition
2.0, and Schedule 2 of the National Food Security Act, 2013, which inter-
alia contemplates that, supplementary nutrition is to be provided to children
between 6 months to 6 years, pregnant and lactating women, and adolescent
girls between 14 and 18 years (only for aspirational districts) at Anganwadi
Centers in the state. The participation of the Government of India and the
State Government in the Supplementary Nutrition Scheme is fixed at 50-50
percent.According to Mr. Sethi, the RBSN food items will be manufactured
through the following production units on the cost norms of the year 2017
till it is revised by the Government of India and will be supplied to the Child
Development Projects, in the following manner:-
Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 20 of 42 SINGH Signing Date:19.03.2026 14:41:05
i. Recipe based supplementary nutrition manufactured through
204 production units of Uttar Pradesh State Rural Livelihood
Mission by getting it supplied to 288 Child Development
Projects in 43 districts of the state.
ii. In districts/projects other than those for which demand for
manufacturing and supply of recipe based supplementary
nutrition will be sent by Uttar Pradesh State Rural Livelihood
Mission (UPSRLM). The services of NAFED will be availed
for providing recipe based supplementary nutrition under
interim arrangement on the cost norms of the year 2017 till it
is revised by the Government of India.
- In accordance with the guidelines received from the government, vide Directorate Letter dated 02.01.2026, instructions have been given to ensure arrangements regarding new supply shall be in compliance with Saksham Anganwadi and Nutrition 2.0 and Schedule-2 of National Food Security Act -2013 dated 30.12.2025 of the Department of Child Development and Nutrition. As per the said decision, NAFED shall ensure the arrangements regarding the new supply as under:-
"1. NAFED will supply recipe based supplementary
nutrition as per the details mentioned in Government Order
No. 4363/58-1-2025-54-2099/12/2022 (Part-1) (C-
1899543), dated 24-12-2025, regarding which NAFED has
been informed by Directorate Letter No. C-4103, dated 26-
12-2025.
- NAFED will supply recipe based supplementary nutrition directly to Anganwadi Centers at the cost norms of the year 2017. Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 21 of 42 SINGH Signing Date:19.03.2026 14:41:05
NAFED will provide the supply rates for the respective
quarter 15 days before the commencement of the quarter.Supply of new recipe requires huge investment, for which,
keeping in view the need for assured business to NAFED
and other investors, supply of new recipe based THR will be
procured from the suppliers selected by NAFED for a
period of one year.NAFED will ensure that the supplier is financially and
technically competent, capable of making timely and quality
supplies and does not have any dispute or litigation pending
with the department.Under the new arrangement, NAFED will directly supply
THR to Anganwadi centers of rural projects, just like in
urban projects, for which NAFED should ensure necessary
logistics, storage, etc. arrangements.Packaging of recipe based supplementary nutrition will
be done by NAFED, for which a separate design will be
provided to NAFED.For the new arrangement, a draft MoU will be prepared
between the department and NAFED, in which the quality
and timeliness of supply and all other conditions required
as per the new arrangement will be clearly included.Proper arrangements should be made for supplier
selection, capacity assessment, availability of raw
materials, storage, packaging and labeling.The FRS system has been implemented in the
department, and it will be essential to implement it 100%
from the next financial year. Therefore, appropriate
arrangements should be made so that supplies can be made
in the month for which the supply order is issued.All backlogs should be cleared in any case before
NAFED starts supplying new recipes."He submitted that, as per the guidelines of the Government of India
dated 30.05.2025, the distribution of supplementary nutrition in the
department has been mandated to be done through Facial Recognition
System (FRS) in which the supply is required to be done in a timely manner, Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 22 of 42 SINGH Signing Date:19.03.2026 14:41:05 For the timely supply of supplementary nutrition, the wheat and rice
subsidised by the Government of India are lifted by NAFED from the depot
of FCI, Uttar Pradesh.
Mr. Sethi submitted that the supplementary nutrition is provided to approximately 16 million beneficiaries of the department, including every pregnant women, lactating mother and child (for six months after birth) and from six months to six years of age. He submitted that the terms and conditions of the tender have been made by NAFED in the interest of State government. There is no basis for any discrimination in it. He has made a reference to Shipra Devi (supra), wherein a direction was issued to the State for complete compliance of the mandate set out in [Section 4](https://indiankanoon.org/doc/194568054/) and [5](https://indiankanoon.org/doc/80427142/) of the National Food Security Act, 2013 in a time bound manner. It is also mandated that the State shall ensure procurement of THRs, strictly as per the Rules formulated in the year 2022 and as per the procurement procedure under the GFR, 2017.According to Mr. Sethi, keeping in view the aforesaid decision and directions, the respondent/NAFED floated the impugned tender. The petitioners herein had challenged the terms of the tender, which stipulates that:-
i. Bidder(s) should have owned a manufacturing unit of recipe
based supplementary nutrition food items in the State of Uttar
Pradesh by providing unit ownership, title deed, factory license,
electricity connection proof and FSSAI certificate as a proof of
ownership of the unit.
Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 23 of 42 SINGH Signing Date:19.03.2026 14:41:05
ii. Bidder(s) should neither be blacklisted nor debarred, nor should
there be any pending legal/criminal cases and or any other
cases/disputes associated with THR supplies against them with
any State Central/UT/State Level Agency on the date of
submission of this tender.iii. The condition of turnover of Rs. 75 crores, is illegal without
any objection sought to be attained.iv. The stipulation of non-competent clause is arbitrary.
50. According to Mr. Sethi, all these challenges have no basis. Insofar as
the stipulation that the tenderer must have a manufacturing unit within the
State is concerned, the stipulation is in consonance with the order in Shipra
Devi (supra), which urged the State to have adequate infrastructure within
the State.
According to him, the said clause is justified because the successful
bidder would be provided raw materials like Wheat and Rice by the State. It
is strictly stipulated that the raw material of wheat and rice shall mandatorily
be provided at a highly subsidised rate on ex-godown basis, which the stock
is allocated to the State government by the Government of India. It is
logistically impossible, economically disastrous and highly prone to
pilferage to permit an out-of-State bidder to transport thousands of metric
tons of wheat and rice (Central Government allocated, subsidised U.P.
quota) to an alternate state, process it and then transport the highly
perishable finished THRs for daily doorstep delivery to Uttar Pradesh
Anganwadis. Since, time is of the essence in this contract and local Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 24 of 42 SINGH Signing Date:19.03.2026 14:41:05 manufacturing is strictly physical and operational imperative, is not an
arbitrary geographical barrier.According to him, it has to be borne in mind that, RBSN food items
have limited shelf life of about three (3) months. This implies that, it would
be necessary to utilise the raw ingredients, process the same, transport it to
the respective anganwadis with an element of immediacy and give the
respective anganwadis adequate time for distribution to various households.
He stressed on the fact that, at least a lead time of about one (1) month is
required by the anganwadis for this process. If the manufacturing facility is
outside the state, the time would be utilised just for transportation of the raw
ingredients, processing the ingredients and transporting the same to the
State. The entire purpose of distribution of RBSN with high nutritional value
to various age groups would be lost on this account.That apart, it is his submission that, having a manufacturing unit
within the State would also ensure that the preparation of RBSN food items
and the ultimate product, distributed are fit for consumption. This entire
process can be supervised by the respondents, and the State of Uttar Pradesh
and the Government could also, if required, can carry out inspection of
RBSN food items, packaging and other associated works. This was a
perennial problem which was observed by the respondents after the order of
the Allahabad High Court in Shipra Devi (supra).According to Mr. Sethi, ensuring that, a manufacturing unit is within
the state would reduce the cost of transportation of the bidder, at the same
time, it is complying with the cost norms of 2017. Accordingly, the Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 25 of 42 SINGH Signing Date:19.03.2026 14:41:05 respondents would get the most commercially viable bid on this account.According to Mr. Sethi, the objection of the petitioner that it is not
necessary for a bidder to own the manufacturing unit to carry out the tender
is absurd because if the manufacturing unit is not owned by the bidder, there
can be multiple issues, such as disputes with landlords, repeated change in
statutory licenses, change in quality and quantity parameters, issues in
respect of supervision and inspection, delays in restarting production and
issues of limitation of liability. If a bidder during the period of the tender is
required to change its address, then it would take time for the bidder to
relocate to an alternate manufacturing unit and to setup a unit to meet the
respondent's requirement. All of these issues would be at the cost of delay in
supplying RBSN food items to various households.Mr. Sethi stated that, it is only keeping in view the aforesaid position,
the tender conditions were insisted upon the bidder to have a manufacturing
unit within the state. That apart, the manufacturing unit within the state
would simultaneously create employment, generate revenue and have the
twin effect of benefiting the workmen as well as providing for the families
of the workmen and the public at large. It is his submission that even if the
petitioners does not have a manufacturing unit now, surely they can consider
having such a unit if they wishes to become eligible for future tenders.According to him, insofar as the challenge to the stipulation that the
bidder should not have been blacklisted or debarred and should not have any
pending legal and criminal cases in courts with regard to THR supplies
against them is concerned, the respondents obviously do not wish to deal Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 26 of 42 SINGH Signing Date:19.03.2026 14:41:05 with an agency that has been barred by an alternate government agency.
This has no correlation with there being a level playing field or not rather
the covenant only ensures that the credibility of the tenderer does not come
into question. He lays stress on the fact that the eligibility requirement is
extremely specific and only relate to disputes over THR supplies. If a bidder
has defaulted in the past relating to these activities of public importance, the
respondents should not be awarding a contract to such a bidder. Similarly, if
a bidder, in the past, has a criminal case associated with THR supplies,
awarding a tender to such a bidder would only give a premium to
dishonesty, and that the stipulation is justified.He submitted that, even the challenge in W.P.(C) No.2984/2026 to the
condition that the bidder should have annual turnover of Rs.75 crores from
THR supplies for each year for the last three financial years is concerned, he
would justify the same by referring to the fact that the total tender value is
Rs.2,768 crores and the whole of the State of Uttar Pradesh have been
divided into 9 clusters with two tenderers getting awarded for each of the
clusters. Given the magnitude of the tender value and contract awarded to
two tenderers in each district would be around Rs. 600 crores, each tenderer
would get approximate contract value of Rs.300 crores and surely, if the
insistence of the tender is for a tenderer having the annual turnover of Rs. 75
crores for THR supplies for each year for the three financial year, is not an
onerous stipulation and there is no arbitrariness in the said stipulation and
should not be interfered by this Court.That apart, it is his submission that the Clause 11 of the Eligibility
Criteria which requires all bidders to submit a non-competent declaration is Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 27 of 42 SINGH Signing Date:19.03.2026 14:41:05 not directed against the petitioners herein.Mr. Sethi in support of his submissions has relied upon the following
judgments and seeks dismissal of these petitions:
a. Directorate of Education and Others v. Educomp Datamatics
Ltd. and Others, (2004) 4 SCC 19;b. Association of Registration Plates v. Union of India and
Others, (2005) 1 SCC 679;c. Municipal Corporation, Ujjain and Another v. BVG India
Ltd. and Others, (2018) 5 SCC 462;d. Montecarlo Ltd. v. National Thermal Power Corporation Ltd.,
(2016) 15 SCC 272;
e. Rishi Kiran Logistics Pvt. Ltd. v. Board of Trustees of Kandla
Port Trust and Others, (2015) 13 SCC 233;
f. Raunaq International Ltd. v. I. V. R. Construction Ltd. and
Others, (1999) 1 SCC 492; and
g. Haffkine Bio-Pharmaceutical Corporation Ltd., A
Government of Maharashtra undertaking through Manager v.
Nirlac Chemicals through its Manager and Others & connected
matters, (2018) 12 SCC 790.
- Mr. Anil Mittal appearing for State of Uttar Pradesh adopt the arguments advanced by Mr. Sethi and seeks dismissal of these petitions.
ANALYSIS AND CONCLUSION
- Having heard the learned counsel for the parties, we shall examine whether the clauses which have been challenged by the petitioner need to be set aside for the grounds as urged by the petitioners.
Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 28 of 42 SINGH Signing Date:19.03.2026 14:41:05 63. For this purpose, we deem it appropriate to reproduce Clauses no.1, 2,
11 & 12 of Section A of the General Terms and Conditions of the impugned
tender, which are as follows:-
"1. Bidder(s) should have owned manufacturing unit of
recipe based supplementary nutrition food items in the State
of Uttar Pradesh, complying with all the Statutory
requirements. The bidder(s) should provide unit ownership
title deed, factory license, electricity connection proof and
FSSAI certificate as a proof of ownership of the unit. The
unit ownership title deed should be dated before the floating
date of this tender. (Factory License and FSSAI issuing date
should be before the date of floating of tender).
- The bidder(s) should have minimum annual turnover of Rs.75 Crore from THR supplies for each year for last 3 financial years) (2022-23, 2023-24 & 2024-25). The bidder(s) is required to submit a CA certificate, with a valid UDIN, for turnover along with copies of audited balance sheets and profit & loss accounts as supporting document.
Interested bidder(s) shall submit Undertaking for Non-
compete clause C.10. of this tender on letterhead of firm
duly stamped & signed (Format attached as Annexure-6 of
this tender).The bidder(s) should neither be blacklisted or debarred,
nor should there be any pending legal/criminal cases and or
any other cases/disputes associated with THR supplies
against them with any State/Central/UT/State Level Agency
on the date of submission of this tender by the bidder(s).
Bidder(s) to provide an affidavit (on the stamp paper of
Rs.100) for the same."At the outset, we may state here that the Clause no.1 contemplates
that the bidder should own manufacturing unit of RBSN food items within
the State of Uttar Pradesh. The reasoning given by the respondents for this
can be found in paragraph no.17 of the reply, as reproduced hereunder:-
Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 29 of 42 SINGH Signing Date:19.03.2026 14:41:05
"17. As far as Clause A (1) of the tender is concerned, the
objection is ill founded because the requirement of a
manufacturing unit in the State of U.P was in consonance
with the order of the Allahabad High Court dated
01.08.2025, which urged the State Government to have
adequate infrastructure within the State of U.P. Petitioner's
challenge to Clause A (1) i.e. the requirement of a pre-
existing local manufacturing unit in U.P. is absurd and
ignores the reality of the scheme. Under the Scope of Work,
the successful bidder would be provided raw materials like
Wheat and Rice from U.P. It is strictly stipulated that the
raw material of wheat and rice shall mandatorily be
provided at a highly subsidized issue rate on ex-godown
basis, which is the stock allocated to the State Govt. by the
Government of India. It is logistically impossible,
economically disastrous and highly prone to pilferage to
permit an out-of-state bidder to transport thousands of
metric tons of Central Government allocated, subsidized
U.P quota wheat and rice to an alternate state, process it
and then transport the highly perishable finished Take-
Home Ration for daily doorstep delivery to U.P.
Anganwadis. Time is essence of this contract and local
manufacturing is strict physical and operational imperative,
not an arbitrary geographical barrier."
(emphasis supplied)
The above being the reason, the incorporation of the said clause in the
tender notification cannot be contested.We also find merit in the submission of Mr. Sethi that, after the
judgment in Shipra Devi (supra), it was found that the limited supplies with
longer shelf life made by various agencies operating within the State of
Uttar Pradesh, (but manufactured in other States and transported to the State
of Uttar Pradesh) under the National Food Security Act, 2013 were found
not fit for consumption, which led to the requirement for infrastructure to be Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 30 of 42 SINGH Signing Date:19.03.2026 14:41:05 created within the State for RSBN, as the same requires constant supervision
and inspection.Another, the submission of Mr. Nayar is that the petitioners in
W.P.(C) No.2761/2026 and W.P.(C) 2839/2026, have the capacity to bid for
the tenders, but because of the stipulation of owning the manufacturing unit,
they have been ousted for even applying for the tender, and petitioners
require at least a period of 2-3 months to establish its manufacturing unit in
the State of Uttar Pradesh and the petitioners must be allowed to bid for the
tender, so that, if the contract is awarded to them, they would be in a
position to establish a manufacturing unit within the State and during the
interregnum period, supply will be made from the petitioners‟ existing
operational manufacturing units, which are in compliance with the tender
specifications. This submission is not appealing, because the contract
contemplates that the supply should be made from the State of Uttar Pradesh
if permission as sought by Mr. Nayar is granted, surely, that would be
contrary to the tender conditions where the manufacturing unit must be
permanent in nature and existing on the date when the bidder is applying for
the tender/contract. That apart, it is expected that the supplies are to be made
within a period of 15 days from the date of the award of the tender/contract
and no later than 01.04.2026, even such stipulation would not be fulfilled by
the petitioners, as any supply which the petitioners intended to do, if they are
awarded the contract, shall be from outside the State of Uttar Pradesh.We note, it is the stand of the respondents that, under the scope of
work, the successful bidder would be provided raw material like wheat and
rice at a highly subsidised issue rate on ex-godown basis, allocated by the Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 31 of 42 SINGH Signing Date:19.03.2026 14:41:05 Government of India to the State Government, and if an out-of-State bidder
is permitted to transport thousands of metric tons of raw materials subsidised
under the State Government quota, process it and then transport the highly
perishable finished THRs for daily door step delivery to U.P. Anganwadis,
would be prone to pilferage. Further, the shelf life of the RBSN food items
are three months, therefore, it would be necessary to utilise the raw material,
process it and transport the same to the respective anganwadis with three
months and anganwadis would require a lead period of one month for
distributing of THRs. In the eventuality, where the manufacturing facility is
established outside the State, the time would be utilised simply in
transportation of raw material, processing the raw materials and transporting
the material back to the State of Uttar Pradesh, whereas when the
manufacturing is within the State of Uttar Pradesh, the entire process can be
supervised by the respondent No.1 and if the need arises, the State of Uttar
Pradesh and the Government of India could also carry out inspection of the
RBSN for packaging and associated works, which was perennial problem,
observed by the respondents pursuant to the judgment in Shipra Devi
(supra). This stand of the respondents in support of the Clause A (1) of the
Eligibility Criteria shows that the condition is not arbitrary but has been
incorporated to achieve timely and quality controlled supplies.The petitioners contention that physical inspection of the
manufacturing unit(s) is not necessary for supervision/quality check and the
same can be achieved through electronic monitoring by referring to Section
B(8) of the General Terms and Conditions fails to persuade us to exercise
the powers of judicial review so as to interfere with the impugned tender Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 32 of 42 SINGH Signing Date:19.03.2026 14:41:05 conditions. It cannot be disputed that physical supervision for achieving
quality may be desirable and would be feasible for respondent and the State
of Uttar Pradesh if the unit(s) are located in the State of Uttar Pradesh as
opposed to another State. We therefore find the reasons given by the
respondent for prescribing this condition to be reasonable. Another
submission of Mr. Sethi is that, if the manufacturing unit is not owned by
the successful bidder, there may arise multiple issues including dispute with
landlords, which may lead to the bidder relocating to the alternative
manufacturing unit thereby requiring change in the statutory licenses in
quality and quantity parameters, delay in restarting the production, issues
relating to limitation of liability and issue in respect of supervision and
inspection, which would ultimately affect the timely delivery of RBSN food
items. We find that the reasons advanced by Mr.Sethi that the stipulation
under Clause A (1) of the impugned tender that the bidder should own the
manufacturing unit of RBSN food items within the State of Uttar Pradesh, is
not arbitrary, keeping in view the timelines of delivery and the essential
nature of the service so as to require interference.The submission of Mr. Sethi is that one of the reasons for insisting the
bidder to own manufacturing unit within the State of Uttar Pradesh, also
flows from the National Food Security Act, 2013. The obligation is on the
part of the State Government to provide supplementary nutrition foods to all
the stake holders regularly without any interruption. In that sense, the State
Government was of the view that the bidder, who ultimately would be
awarded the contract for supply of RBSN food items must have a
permanency and shall commence supply within a period of 15 days of the Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 33 of 42 SINGH Signing Date:19.03.2026 14:41:05 award of the contract and no later than 01.04.2026. This stand of the
respondent as canvassed by Mr. Sethi is also appealing.In any case, it is the prerogative of the State to stipulate such
conditions as they deem appropriate. More so, in a tender of this nature,
which has been floated to comply with the provisions of the National Food
Security Act, 2013 and also in view of the directions of the Allahabad High
Court in the case of Shipra Devi (supra), Mr. Sethi is justified in contending
that prescription of the tender conditions is the prerogative of the employer
and the Court cannot substitute the view of the employer with its own view.The plea of Mr. Mehta is that the condition in Clause 11 of the
Eligibility Criteria for Participation in the tender document that, an
undertaking is sought to be taken for non-compete with NAFED in future
shall result in abuse of dominant position of the respondent no.1 as
procuring authority in the State of Uttar Pradesh and undermine the
competition it faces across the country from other bidders. During the course
of submissions, Mr.Sethi has stated that said clause is not applicable to the
petitioners in these cases. In view of the said submission, the challenge to
that extent shall fail.Though Mr. Mehta has raised an issue that, Clause 5(b) of the Scope
of Work in the impugned tender reserving 20% of the tender amount for
respondent no.1 is arbitrary and contrary to the Rules of 2022 in these facts,
we do not see any illegality to the same.In so far as the challenge raised by Mr. Mehta to the prescription of
annual turnover of Rs.75 crores from THR supplier for each year for the last Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 34 of 42 SINGH Signing Date:19.03.2026 14:41:05 three financial years, is concerned, it is contended by Mr. Sethi that the
entire State of Uttar Pradesh has been divided into 9 clusters and one bidder
can be allotted upto 2 clusters each and average estimated tender value of
each cluster is Rs. 300 crores (approximately); thus the successful bidder
could potentially be awarded the contract to the extent of Rs.600 crore
(approx.) for two clusters. Since the tender is specifically for the large
quantity and value of THR supplies of RBSN food items, it is important to
ensure that the bidder can undertake the required quantity and uninterrupted
supply. Therefore, the rationale behind the respondents‟ seeking annual
turnover of Rs.75 Crores for the three preceding years in supplying the
THRs is to ensure that the bidder possesses the experience and the financial
capacity to successfully carry out the tender. This stipulation cannot be said
to be arbitrary or tailored in favor of certain suppliers of the respondent no.1.During the course of his submissions, Mr. Mehta has relied upon the
judgment in Shipra Devi (supra) to state that the same is required to be
followed. We do not see any ground to hold that the said judgment of the
High Court is not being followed. In fact, the action which is sought to be
taken is in furtherance thereof.In so far as the challenge to Clause 12 of the Eligibility Criteria for
Participation in the tender, which mandates that the bidder should neither be
blacklisted/debarred, nor should there be any pending legal /criminal cases
and or any other cases/disputes associated with THR supplies against them
with any State/Central/UT/State Level Agency on the date of submission of
the tender and to provide an affidavit in that respect, is concerned, it is clear
that the same is relatable to legal/ criminal proceedings associated with THR Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 35 of 42 SINGH Signing Date:19.03.2026 14:41:05 supplies only, with which the tender is concerned.Mr. Sethi has submitted that, in the earlier tender process, the
petitioner/ Rasi Nutri Food India Pvt. Limited was awarded the contract for
manufacturing and supply of ICDC food supplements for the period 2017-However, a violation, i.e., supplying the THRs without bar code, led to
doubtfulness of supply of supplementary nutrition to the beneficiaries, such
as children between 6 months to 6 years, pregnant and lactating mothers,
which led to recovery of an amount of Rs.27,79,78,240.56. The issue is
pending adjudication.According to Mr. Sethi, Clause 12 Eligibility Criteria for Participation
has been prescribed as the respondents do not wish to deal with any agency
that has been barred by any alternative government agency and same is
specific to THR supplies. The justification is that, if a bidder has defaulted
in the past activities of public importance, the respondents would not award
any contract to such a bidder.However, Mr. Nayar appearing on behalf of Rasi Nutri Food (in W.P.(C) 2761/2026) submitted that the petitioner has initiated arbitration proceedings for recovery of its dues wrongfully withheld by the client. He stated that, Arbitral Tribunal has been constituted and statement of claim has been filed. He states that there is no finding by any competent authority on the allegation of any deficiency in supply. He states that in the absence of adjudication by the competent authority, the petitioner cannot be precluded from participating in this tender.Similarly, Mr. Nayar appearing on behalf of Kota Dall Mill, Kota (in Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 36 of 42 SINGH Signing Date:19.03.2026 14:41:05 W.P.(C) 2839/2026), during oral submissions stated that the petitioner
herein has an award in its favor against State of Uttar Pradesh and it is the
respondent who has filed a petition under Section 34 of Act1. He stated that,
therefore, the petitioner cannot be excluded from the tender on the basis of
the pendency of the said proceedings.We note at the outset that none of the petitioners have been blacklisted or debarred. The issue arising for consideration is whether a bidder can be debarred only on the basis of the pendency of legal proceedings between the bidder and its client/employer for recoveries under a contract in respect of THR supplies.Prima facie the submission of Mr. Nayar is appealing, as the above reveals that the petitioner in W.P.(C) 2839/2026 has an award in its favour and it would be unjust for the respondents to disqualify a bidder on the basis of pendency of a petition under [Section 34](https://indiankanoon.org/doc/3769937/) of the Act. Similarly, there is no finding of any competent authority against the petitioner in W.P.(C) 2761/2026 holding that the services rendered by it were indeed deficient. But the fact is, as the petitioners fail to comply with the mandatory conditions of Clause A(1) of the tender, this issue has become academic.Mr. Sethi is justified in replying upon the judgments:-
a) In Directorate of Education and Others (supra) the Supreme
Court has held as under:-"12. It has clearly been held in these decisions that the
terms of the invitation to tender are not open to judicial 1 Arbitration and Conciliation Act, 1996 Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 37 of 42 SINGH Signing Date:19.03.2026 14:41:05 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."
b) In Association of Registration Plates (supra) the Supreme Court
held as under:-"38. In the matter of formulating conditions of a tender
document and awarding a contract of the nature of
ensuring supply of high security registration plates,
greater latitude is required to be conceded to the State
authorities. Unless the action of tendering Authority is
found to be malicious and misuse of its statutory
powers, tender conditions are unassailable. On
intensive examination of tender conditions, we do not
find that they violate the equality clause under Article
14 or encroach on fundamental rights of a class of
intending tenderer under Article 19 of the Constitution.
On the basis of the submissions made on behalf of the
Union and State authorities and the justification shown
for the terms of the impugned tender conditions, we do
not find that the clauses requiring experience in the
field of supplying registration plates in foreign
countries and the quantum of business turnover are
intended only to keep out of field indigenous
manufacturers. It is explained that on the date of
formulation of scheme in rule 50 and issuance of Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 38 of 42 SINGH Signing Date:19.03.2026 14:41:05 guidelines thereunder by Central Government, there
were not many indigenous manufacturers in India with
technical and financial capability to undertake the job
of supply of such high dimension, on a long term basis
and in a manner to ensure safety and security which is
the prime object to be achieved by the introduction of
new sophisticated registration plates."
c) In Municipal Corporation, Ujjain and Another (supra) the
Supreme Court held as under:-"61. The authority concerned is in the best position to
find out the best person or the best quotation
depending on the work to be entrusted under the
contract. If a bidder had faced a number of show-cause
notices from various municipal corporations in the
matter of non-performance of door to door collection
of garbage etc., the Court cannot compel the authority
to choose such undeserving person/company to carry
out the work. Ultimately, the public interest must be
safeguarded. The public would be directly interested
in the timely fulfilment of the contract so that the
services become available to the public expeditiously
and effectively. The public would also be interested in
the quality of work undertaken. Poor quality of work
or goods can lead to tremendous public hardship and
substantial financial outlay either in correcting
mistakes or in rectifying defects or even at times in re-
doing the entire work."
(Emphasis supplied)
d) In Montecarlo Limited (supra) the Supreme Court held as
under:-
"61.We respectfully concur with the aforesaid
statement of law. We have reasons to do so. In the
present scenario, tenders are floated and offers are
invited for highly complex technical subjects. It
requires understanding and appreciation of the nature Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 39 of 42 SINGH Signing Date:19.03.2026 14:41:05 of work and the purpose it is going to serve. It is
common knowledge in the competitive commercial field
that technical bids pursuant to the notice inviting
tenders are scrutinized by the technical experts and
sometimes third party assistance from those
unconnected with the owner's organization is taken.
This ensures objectivity. Bidder's expertise and
technical capability and capacity must be assessed by
the experts. In the matters of financial assessment,
consultants are appointed. It is because to check and
ascertain that technical ability and the financial
feasibility have sanguinity and are workable and
realistic. There is a multi-prong complex approach;
highly technical in nature. The tenders where public
largesse is put to auction stand on a different
compartment. Tender with which we are concerned, is
not comparable to any scheme for allotment. This
arena which we have referred requires technical
expertise. Parameters applied are different. Its aim is
to achieve high degree of perfection in execution and
adherence to the time schedule. But, that does not
mean, these tenders will escape scrutiny of judicial
review. Exercise of power of judicial review would be
called for if the approach is arbitrary or malafide or
procedure adopted is meant to favour one. The
decision making process should clearly show that the
said maladies are kept at bay. But where a decision is
taken that is manifestly in consonance with the
language of the tender document or subserves the
purpose for which the tender is floated, the court
should follow the principle of restraint. Technical
evaluation or comparison by the court would be
impermissible. The principle that is applied to scan
and understand an ordinary instrument relatable to
contract in other spheres has to be treated differently
than interpreting and appreciating tender documents
relating to technical works and projects requiring
special skills. The owner should be allowed to carry Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 40 of 42 SINGH Signing Date:19.03.2026 14:41:05 out the purpose and there has to be allowance of free
play in the joints."
(Emphasis supplied)
e) In Haffkine Bio-Pharmaceutical Corporation Ltd., A
Government of Maharashtra undertaking through Manager
(supra) the Supreme Court has held as under:-
"16. It has been urged by Mr. Banerji, learned senior
counsel that Haffkine has about 550 employees and at
the time of floating of tender it had virtually no orders.
Therefore, it wanted that the bulk supplier should be
able to give some commitment with regard to
repurchase of the finished products, that is, oral polio
vaccine. Therefore, this condition was incorporated and
since Nirlac did not fulfil this condition, its tender was
not found to be technically qualified. We find merit in
this submission. It is for the party issuing a tender to
decide what conditions should be incorporated in the
tender. The party floating a tender is the best judge of its
own requirements and there is nothing wrong if Haffkine
wanted that the successful tenderer, who supplied the
raw material, should take responsibility to sell or
generate business for sale of some portion of the
finished product."
84. Insofar as decision of the Supreme Court in the case of Vinishma
Technologies Pvt Limited (supra) is concerned, the challenge in this case
was with regard to the tender condition no.4, as encapsulated in paragraph
no.13 of the decision, which we reproduce as under:-"13. We have considered the rival submissions and have
perused the record. For the facility of reference the impugned
tender condition is extracted below :"(4) Past Performance Restriction : Bidders must have
supplied sports goods worth at least Rs.6.00 crores
(cumulative) to State Government agencies of Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 41 of 42 SINGH Signing Date:19.03.2026 14:41:05 Chhattisgarh in the last three financial years (2021-22,
2022-23, 2023-24 or 2022-23, 2023-24, 2024-25)."
85. The stipulation in that case, that the bidder must have supplied sport
goods worth Rs.6.00 crore to State Government Agency of Chhattisgarh in
the last three financial years was held to be bad. But the facts in the cases at
hand clearly demonstrate that there is no such stipulation in the tender in
question. The prescriptions are primarily that the manufacturing unit must be
situated in the State of Uttar Pradesh. The justification thereof has already
been given by the State of Uttar Pradesh and NAFED for prescribing such a
condition. Hence, the said judgment has no applicability to the facts in these
cases.
In view of our above discussions, we are of the view that these petitions lack merit and are liable to be dismissed. It is ordered accordingly.The pending applications are also dismissed.
V. KAMESWAR RAO, J
MANMEET PRITAM SINGH ARORA, J
MARCH 19, 2026/sr Signature Not Verified Signed By:SAGAR WP(C) No.2761/ 2026 and connected matters Page 42 of 42 SINGH Signing Date:19.03.2026 14:41:05
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