Delhi HC Upholds Hospital Tender, No Arbitrariness Found

A bench of Justice V. Kameswar Rao and Justice Manmeet Pritam Singh Arora heard challenges to two tenders floated by A.B.V.I.M.S. & Dr. Ram Manohar Lohia Hospital for re-allotment of three kiosks, and considered whether the eligibility criteria and selective reservation of kiosks violated Articles 14 and 19(1)(g) of the Constitution.

The court dismissed both petitions, holding that the prescription of tender terms fell within the domain of the tendering authority and the petitioners failed to demonstrate arbitrariness, mala fide or discriminatory conduct warranting judicial interference. The court noted that interference in tender matters was limited and reiterated that "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 Court, in its reasoning, observed: "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. 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."

Background
The petitions arose from two separate applicants: M/s Kewal Canteen, which had operated a hospital kiosk since 1988 under allotments and extensions, and Parida Photocopier and PCO Booth, which ran a utility booth for about ten years. The hospital issued tenders dated 19 and 20 January 2026 for re-allotment of three of eight kiosks. Paragraph 7(1) of the tenders initially required an average annual turnover of Rs.50,00,000 for the preceding three years; following a representation, respondents issued a corrigendum dated 14 February 2026 reducing the threshold to Rs.20,00,000. Paragraph 8 fixed selection by highest license fee subject to a minimum reserved license fee of Rs.450 per sq. ft., which would raise rent for a 10'x10' kiosk to about Rs.45,000 per month. The petitioners contended that the turnover requirement and selective tendering were arbitrary, discriminatory and violative of Articles 14, 19(1)(g) and 21, and that the sudden rent escalation and exclusion of five kiosks (reserved for cooperative societies/state PSUs) violated legitimate expectations and equal protection.

Respondents defended classification of kiosks into Class A (five reserved units allotted to cooperative societies/PSUs under MoUs) and Class B (three unreserved units for open tender), maintained that setting turnover and reserve fee fell within commercial and policy discretion, and pointed to the corrigendum lowering the threshold and extension of bid dates to encourage participation. They relied on precedents including Directorate of Education v. Educomp Datamatics Ltd. and other decisions establishing limited judicial review in tender matters.

Applying settled principles, the court observed that the tendering authority was best placed to frame terms and that courts would intervene only if the decision-making process was shown to be vitiated by mala fide, unreasonableness or arbitrariness. The petitioners did not demonstrate such vice; the record showed consideration of representations, production of MoUs for reserved kiosks, and administrative rationale for the eligibility criteria. The bench found that the petitions lacked merit and dismissed both writ petitions and pending applications.

Case Details:
Case No.: W.P.(C) 2103/2026 & W.P.(C) 2779/2026
Case Title: M/s Kewal Canteen v. Union of India & Ors.; Parida Photocopier and PCO Booth v. Union of India & Ors.
Appearances:
For the Petitioner(s): Ms. Amrita Mishra, Mr. Raj Ranjay Singh, Ms. Mamta Tiwari; Mr. Nitin Mangla, Mr. Nitish Garg, Mr. Nishchay Kapoor (Advocates)
For the Respondent(s): Mr. Rohan Jaitley, CGSC; Ms. Iram Majid, CGSC; Mr. Akshay Sharma (GP); Mr. Dev Pratap Shahi (Adv.); Mr. Varun Pratap Singh (Adv.); Mr. Yogya Bhatia (Adv.); Mr. Mohd Suboor (Adv.); Dr. Manoj Kumar Jha (Additional Medical Superintendent)

Source: 2026 CaseBase(DEL) 146