High Court Upholds Delhi Jal Board's Tender Clause Disqualifying Bidders Facing FIRs, Charge Sheets In Corruption Cases

The Delhi High Court has upheld the Delhi Jal Board's tender condition disqualifying bidders if they are facing FIRs, charge sheets or criminal proceedings relating to corruption, fraud or economic offences, even in the absence of a conviction.A Division Bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul observed, “It is well settled that participation in a tender or compelling the Government to enter into a business relationship with an individual is not a fundamental right…The presumption of innocence sought to be relied upon is attracted only in the context of criminal trials and criminal proceedings…the issue of eligibility is distinct from the principles governing criminal law…it is always open to the respondents to adopt principles of preventive governance and to take decisions based on risk assessment.”The Court thus dismissed the writ petitions filed by two companies, challenging the eligibility condition introduced in a January 2026 tender floated by the Delhi Jal Board for construction, operation and maintenance of decentralised sewage treatment plants.The impugned clause renders bidders ineligible if an FIR had been registered or a charge sheet filed against the company or its directors in connection with offences involving corruption, fraud or financial irregularities linked to DJB contracts. The petitioners, facing charges under the Prevention of Corruption Act and PMLA, argued that such a condition amounted to pre-conviction punishment, violated the presumption of innocence under Article 21 of the Constitution, and ran contrary to Rule 151 of the General Financial Rules, 2017, which permits debarment only after conviction.Rejecting these submissions, the Court held that there was no embargo on the tendering authority framing additional eligibility conditions beyond the minimum standards prescribed under the 2017 Rules, provided they were not arbitrary, discriminatory or mala fide. It observed,“The fact remains that the provisions contained in the GFRs, particularly Rule 151, as well as those in the Central Vigilance Commission Manual, can be termed as basic requirements. However, there is no embargo created by the aforesaid rule on the right of the respondents to frame additional tender conditions which suits its requirement.”The Court reiterated that tendering authorities and technical experts are the best judge of the project requirements and the Courts should be slow in causing interference.It further observed that Petitioners had allegedly engaged in activities prejudicial and detrimental to the interests of the DJB and it is not the case of the petitioners that the respondents have sought to victimize them, or that there was any mala fide approach on the part of the respondent in filing a false complaint against them.In the case at hand, since any disarray would directly affect the sewage project and in turn the pollution levels of river Yamuna, the Court said the DJB is justified in adopting a cautious approach.“…the purpose of execution of the work in question, which is of great public importance and directly impacting health and sanitation conditions, they are required to exercise due caution and preventive measures in the matter of selection of the tenderer…In case the work is not executed within the stipulated time and with the utmost quality, it would directly affect sewage treatment outcomes, the quality of groundwater being getting polluted and adversely impact the pollution levels of the Yamuna River, which will have a large-scale effect on the public health of the urban population.”It added, “The decision of respondent to implement and execute the project is to safe-guard and guarantee Fundamental Rights of the citizens. To maintain adequate public health, sanitation, and sewage facilities is a part of the constitutional obligation of the respondents, as can be read from Articles 21 and 47 of the Constitution of India. The said work under the tender has a direct impact on environmental safety. In such an eventuality, the contractor who is required to execute the work should be a person of integrity and capable of discharging the duties, which are to be entrusted under the tender in question.”As such, the Court refused to interfere with the tender process and dismissed both petitions.Appearance: Mr. Amit Sibal, Senior Advocate with Mr. Sanjeev Mahajan, Mr. Harsh Bora and Ms. Simran Rao, Advocates for Petitioner; Mr. Tushar Sannu, Standing Counsel with Mr. Priyankar Tiwary, Ms. Pulak Gupta, Ms. Shambhavi Vatsa, Ms. Rajbala and Ms. Fajallu Rehman, Advocates. Mr. Pankaj Kumar, EE, Mr. Ravinder Kumar, AE and Mr. Anil Kharb, JE, officers of DJB. Mr. Dinesh Malik, Panel Counsel with Mr. Puneet Jain, Advocate for Respondent No.2 Case title: M/S Dhanvine Engineering Pvt. Ltd. v. DJBCitation: 2026 LiveLaw (Del) 206Case no.: W.P.(C) 1019/2026Click here to read order

High Court Upholds Delhi Jal Board's Tender Clause Disqualifying Bidders Facing FIRs, Charge Sheets In Corruption Cases

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