Subsequent Abeyance Of Debarment Can't Retrospectively Make Bidder Eligible On Bid Due Date: Allahabad High Court

The Allahabad High Court has held that where a tender document declares an entity ineligible to bid if a governmental debarment subsists on the bid due date, an order later keeping that debarment in abeyance operates only from the date it is passed and does not relate back to make the bidder eligible on the due date.

Clause 2.1.18 of the Request for Proposal provided that an entity barred by the Central or State Government, or by an entity controlled by it, from participating in any project would not be eligible to submit a bid where the bar subsisted as on the bid due date.

The bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary held,

“That letter dated 14.09.2026 merely kept the debarment in abeyance with effect from 14.09.2026, seven days after the bid due date. An order suspending the operation of a debarment operates prospectively. It does not erase the debarment or makes it non-existent for any period prior to its passing.”

The Uttar Pradesh Expressways Industrial Development Authority (UPEIDA) invited e-tenders on 22.06.2026 for development of the Jewar Airport to Ganga Expressway via Bulandshahar Link Expressway (Package-I). The bid due date was 07.09.2026, on which date Larsen and Toubro Limited bid along with 11 others. An order of the Jal Jeevan Mission, U.P. dated 13.04.2026 debarring the company was then in force. The company did not disclose it, and furnished only the declaration under clause 2.2.2.10 regarding the absence of catastrophic failure of structures or highways due to construction defects in the preceding five years.

When information in the public domain came to UPEIDA's notice during evaluation, a clarification was sought. Replying on 22.09.2026, the company disclosed for the first time that the Mission had kept the debarment in abeyance by letter dated 14.09.2026, and also a further debarment by the State of Madhya Pradesh, said to be under challenge at Jabalpur. The bid was declared non-responsive on 25.09.2026.

Senior Advocates Mukul Rohatgi and J.N. Mathur submitted that clause 2.2.2.10 was the only debarment-related requirement in the tender and that clause 2.1.18 merely described who could apply. Relying on clause 1.2.2, under which bids remained valid for 120 days, they urged that eligibility ought to have been tested on the date of evaluation, by when the debarment stood in abeyance. Other participants, it was pleaded, had been allowed to cure deficiencies, and the company's price was more than Rs. 252 crores lower than the L-1 price.

Senior Advocate Gaurav Mehrotra for UPEIDA submitted that eligibility fell to be tested on the bid due date, on which the company was admittedly debarred.

Additional Advocate General Pritish Kumar added that relief would deny a level playing field to entities that read clause 2.1.18, found themselves ineligible and stayed away.

The Court held that a clause declaring who would not be eligible to submit a bid is by its nature an eligibility condition, whatever the heading under which it appears.

“An eligibility bar operates by its own force. A bidder is presumed to know whether it is barred and must bid only if it is eligible. The absence of a prescribed format for declaring debarment does not license a barred entity to participate. If it did, an ineligible bidder could sidestep the bar simply by remaining silent.”

Clause 2.2.2.10, the Court held, tests the bidder's construction record and is an attribute of technical capacity, while clause 2.1.18 goes to the right to bid at all. A bidder with a spotless record could still be barred for altogether different reasons, and the company's reading would render clause 2.1.18 otiose, held the Court.

“..both of them operate in different hemispheres and are independent of each other..”

The Court held that Clause 1.2.2 only fixes how long a bidder is held to its offer, the Court held, and a validity clause cannot displace an express provision fixing the date on which eligibility is tested.

Clause 2.1.18 was held to be an essential condition that no authority may waive and no bidder may cure after the due date. It was held that the company could claim no parity with bidders allowed to rectify lapses such as an unsigned page, since what it sought was a change in its own status, from barred to not barred, by reference to a later event.

On the price differential, the Court held that financial competitiveness is examined only for bidders who clear the eligibility stage, and a lower quote by an ineligible bidder confers no right to be considered.

The non-disclosure of a subsisting debarment, unexplained until the company was confronted, was held to weigh against relief under Article 226 of the Constitution of India, though the Court recorded no finding of fraud. It declined to rest on the Madhya Pradesh debarment, which was not a ground of the impugned order.

Accordingly, the Court dismissed the writ petition clarifying that the company is not prevented from pursuing its remedies against the debarment orders before the competent forum.