Authority: High Court at Calcutta (Constitutional Writ Jurisdiction)
Order Date: 12 August 2026
Case Overview
- Petitioners: M/s. P.P. Industries Private Limited & Anr. (represented by Mr. Pranit Bag) versus the Union of India & others, including West Bengal State Electricity Distribution Company Ltd (WBSEDCL) (represented by Mr. Abhratosh Majumder, Sr. Adv).
- The writ petitions (WPA No. 26004 of 2025 and WPA No. 5195 of 2026) challenge Clause 14 of WBSEDCL’s revised purchase policy introduced by Office Order No. 2518 dated 8 September 2025. Clause 14 requires every bidder to submit Form‑XI declaring that no legal litigation or arbitration is pending against WBSEDCL by the bidder, its sister concerns, directors, partners or proprietors; otherwise the bid may be rejected or the contract terminated.
- Petitioners argued that the clause violates Sections 10, 23 and 28 of the Indian Contract Act, 1872, is contrary to public policy, restrains legal proceedings, and impairs their right to conduct business under Article 19(1)(g) of the Constitution. They relied on Supreme Court judgments in Vinishma Technologies Pvt. Ltd. v. State of Chhattisgarh (2025 SCC OnLine SC 2119), Erusian Equipment & Chemicals Ltd. v. State of West Bengal (1975 1 SCC 70), and Kimberley Club Pvt. Ltd. v. Krishi Utpadan Mandi Parishad (2025 SCC OnLine SC 2323).
- WBSEDCL contended that the clause is an economic decision aimed at assessing the litigation history of bidders to ensure smooth execution of works and protection of public exchequer. It cited Manohar Lal Sharma v. Union of India (2013 6 SCC 616), Bhagyanagar Energy & Telecom Ltd. v. Bharat Sanchar Nigam Ltd. (2003 (2) A.P.L.J. 431), and Bajaj Hindustan Ltd. v. Sir Shadi Lal Enterprises Ltd. (2011 1 SCC 640) to argue that courts do not interfere with policy decisions unless they are arbitrary, unconstitutional, or violative of statutory provisions.
- The Court examined the applicability of the cited sections of the Contract Act, noting that an invitation to tender is not an offer and no contract exists at the stage of tender submission. Consequently, Sections 10, 23 and 28, which govern the validity of agreements, were held inapplicable.
- The Court further observed that the clause serves a legitimate purpose of risk mitigation, ensuring that a contractor does not simultaneously sue WBSEDCL while executing a public infrastructure project. It found no arbitrary or discriminatory intent, and the clause is consistent with similar requirements imposed by other power utilities.
- The Court distinguished the petitioners’ reliance on Vinishma Technologies (which dealt with a financial capacity condition) and Kimberley Club (which concerned unwritten disqualification criteria), concluding that those precedents do not apply to the present factual matrix.
Final Outcome
- The High Court dismissed both WPA 26004 of 2025 and WPA 5195 of 2026, thereby upholding Clause 14 of WBSEDCL’s purchase policy.
- Parties may obtain certified copies of the judgment from the official court website upon compliance with requisite formalities.
Topics: Judicial Review, Procurement Policy, Contract Law