Administrative Suspension Short Of Formal Blacklisting Does Not Warrant Judicial Interference In Technical Tender Evaluations: Allahabad High Court
The Court held that suspension pending inquiry is not blacklisting but State may reject bids based on reasonable concerns about past performance & credibility.
The Allahabad High Court while upholding rejection of a bidder, suspended in other State, has clarified that a temporary suspension order issued by one state government, while not constituting a "civil death" or formal blacklisting, can still serve as a valid basis for another state to disqualify a bidder from a technical procurement process. The Bench noted that administrative authorities must be allowed free play in the joints when evaluating the reliability of equipment intended for critical public functions, such as police communications, provided the decision is not malafide, arbitrary and irrational.
The Bench further noted that the scope of judicial review in contractual matters is severely limited, particularly when an expert body like a Technical Evaluation Committee has made a bona fide assessment of a firm's credibility. The Court held that even if a suspension order is later clarified by the Supreme Court to have no bearing on other states, the initial decision to disqualify based on that suspension does not automatically become arbitrary if it was rooted in legitimate concerns over product quality and after-sales service.
Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary observed, “…time and again the Courts have held that there is a certain degree of latitude and freedom granted to the tenderer/owner in choosing its equipment and its supplier. The Courts have always taken a consistent stand that tender process should not be interfered with until and unless specific grounds of malafide, arbitrariness and irrationality has been pleaded and/or displayed by the party effected. We do not find any such grounds having been pleaded or demonstrated by the petitioner in the present petition”.
Senior Advocate Jaideep Narain Mathur and Shailendra Kumar Singh, Chief Standing Counsel appeared for the respondent.
For the facts, in the matter when Vertel Digital Pvt. Ltd. challenged the rejection of its technical bid for supplying wireless equipment to the Uttar Pradesh Police department, the dispute began. The rejection, dated January 23, 2026, was triggered by a suspension order from the Government of Maharashtra, which had found the petitioner’s equipment substandard and its warranty response unsatisfactory in a similar tender.
Although the petitioner argued that the Maharashtra order was merely a suspension pending inquiry and not a formal blacklisting, the U.P. authorities rejected their representation, citing the need to maintain a level playing field and ensure the transparency of the procurement process.
After the initial rejection in Uttar Pradesh, the petitioner unsuccessfully sought interim relief from the Bombay High Court. Subsequently, the Supreme Court, in a Special Leave Petition filed on February 9, 2026, clarified that the Maharashtra suspension should be confined to that state’s tenders and should not have a bearing on other states.
Armed with this clarification, the petitioner approached the Allahabad High Court, which initially stayed the finalisation of the contract on February 24, 2026. However, by that time, M/S Mobile Communications (India) Pvt. Ltd. had already been declared the lowest (L-1) bidder.
The Court found that the Respondent-State acted on a "bona fide assumption", and citing the Supreme Court’s precedents in Montecarlo Ltd. v. NTPC Ltd. reported in (2016) 15 SCC 272 and Tata Motors Ltd. v. Brihan Mumbai Electric Supply & Transport Undertaking (BEST), (2023) 19 SCC 1, reiterated that courts lack the technical expertise to substitute their judgment for that of a specialised committee.
“…this court finds that although in the present facts & circumstances, it can be well argued that a suspension order is a step before the blacklisting order, however this court has no hesitation in holding that any suspension order by itself may not amount to an order of blacklisting as normally the process of blacklisting has the principles of natural justice ingrained in it as held in a catena of Judgments passed by the Hon'ble Supreme Court and the High Courts. Apparently, the principle of natural Justice has not been followed before the passing of the suspension order by the Government of Maharashtra and as such this court fails to equate and place the suspension order and a Blacklisting order on an equal pedestal. Furthermore, a simpliciter order of suspension with regard to some work order could be a result of various reasons and the same may not amount to a blacklisting per se”, it noted.
“…the order of suspension that is subject to inquiry does not amount to a blacklisting order, keeping in mind the long chain of precedents, which have held that any blacklisting order carries grave and serious consequences and at times has been even termed to be a civil death of an entity by the constitutional courts. Thus, any order of suspension, of the kind in the present matter, cannot be casually & liberally interpreted to also mean a blacklisting order, as is being sought to be done in the present case”, it noted further.
The Court ultimately disposed of the writ petition, vacating the previous interim stay and allowing the state to proceed with the contract. It issued a specific direction that the State of U.P. shall not treat the Maharashtra suspension order as a blacklisting order in future tenders, thereby preserving the petitioner’s right to participate in subsequent procurement cycles in accordance with law.
Cause Title: Vertel Digital Pvt. Ltd. v. State of U.P. and 3 others [Neutral Citation: 2026:AHC-LKO:22927-DB]
Appearances:
Petitioner: Jaideep Narain Mathur, Senior Advocate, Anupras Singh, Mudit Agarwal, Advocates.
Respondents: Shailendra Kumar Singh, Chief Standing Counsel, Pankaj Khare, Rahul Kapoor, Akshat Kumar and Anantika Singh, Shantanu Sharma, Utkarsh Singh, Sukrit Singh and Siddharth Mishra for the Intervenor.
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