Delhi Jal Board Can Exclude Bidders Facing Corruption, PMLA Proceedings: Delhi High Court Upholds Preventive Tender Clause
Presumption of innocence in criminal law does not confer a right to participate in public tenders; public health projects justify heightened scrutiny
The Delhi High Court has upheld the validity of an eligibility clause in a Delhi Jal Board (DJB) tender disqualifying bidders against whom FIRs or charge-sheets have been registered for corruption, fraud, or economic offences linked to DJB contracts. The Court held that such a condition, framed as a preventive measure in public interest, cannot be termed arbitrary merely because it operates prior to conviction.
The Court expanding on the principle, said that participation in a government tender is not a fundamental right and that the presumption of innocence applicable in criminal trials does not bar a procuring entity from adopting risk-based eligibility standards. Where the project concerns public health and environmental protection, the authority is entitled to exercise heightened caution in selecting contractors.
A Division Bench of Justice Nitin Wasudeo Sambre and Justice Ajay Digpaul while hearing connected matters challenging Clause 16 of a tender floated by the DJB for a high-value public health and sanitation project, observed, “The claim that the decision to frame tender clause no. 16 amounts to blacklisting the petitioners, in our opinion, cannot be accepted, for the reason that as already observed that the petitioners cannot claim any fundamental right to participate in the tender process or to carry on business with the respondents. We have equally observed that it is within the realm of respondent to frame the tender conditions which are suited to it”.
“In our opinion, the decision taken by the respondent in framing clause no. 16 is not a targeted one and is a bona fide decision taken in the public interest, which does not warrant any interference. Apart from above, the specific work of public importance, like that of essential public services in relation to the water supply, will always have overriding public interest”, the bench further observed.
Senior Advocate Amit Sibal appeared for the petitioner and Tushar Sannu, Standing Counsel appeared for the respondent.
The petitioners, in the present matter were the civil infrastructure companies, who assailed the newly introduced eligibility condition which rendered bidders ineligible if an FIR or charge-sheet had been filed against them or their key managerial personnel in relation to fraud, corruption, or economic offences connected with DJB contracts.
The challenge arose after the first round of bidding was withdrawn and fresh conditions were incorporated in January 2026.
The petitioners and their directors were accused in an FIR registered by the Anti-Corruption Branch, Delhi, for offences under the Prevention of Corruption Act and IPC in relation to augmentation of sewage treatment plants, and were also facing proceedings under the Prevention of Money Laundering Act pursuant to an ECIR.
Before the Court, the petitioners contended that Rule 151 of the General Financial Rules, 2017 permits debarment only upon conviction and after affording an opportunity of representation. They argued that pre-conviction exclusion violated Article 21 of the Constitution of India, reversed the presumption of innocence, and amounted to indirect blacklisting.
Rejecting these submissions, the Bench held that the GFR provisions represent baseline norms and do not fetter the authority of a tendering body to frame additional eligibility conditions suited to its requirements.
The Court emphasized that the impugned clause created an intelligible differentia by classifying bidders facing investigation arising from DJB’s own vigilance complaints as a separate category. Given the high-value public health nature of the project, involving sewage treatment and environmental safeguards affecting groundwater and the Yamuna river, the authority was justified in adopting a prophylactic approach.
Therefore, the Bench held that the clause was preventive and not punitive, and did not amount to blacklisting. The Court while dismissing the writ petitions, concluded that no case for interference under Article 226 of the Constitution of India was made out.
Cause Title: M/s Dhanvine Engineering Pvt. Ltd. v. Delhi Jal Board & Anr [Neutral Citation: 2026:DHC:1164-DB]
Appearances:
Petitioner: Amit Sibal, Senior Advocate, Sanjeev Mahajan, Harsh Bora and Simran Rao, Advocates.
Respondent: Tushar Sannu, Standing Counsel, Priyankar Tiwary, Pulak Gupta, Shambhavi Vatsa, Rajbala and Fajallu Rehman, Dinesh Malik, Panel Counsel with Puneet Jain, Advocates.