Authority: High Court at Calcutta, Civil Appellate Jurisdiction

Order Date: 25.06.2026

Case Overview

  • Appeal No. FMA 241 of 2026 (with CAN 1 of 2026) filed by Steel Authority of India Limited (SAIL) against the judgment and order dated 08.01.2026 passed by the Learned Single Judge in WPA 29996 of 2025.
  • Respondent: Shree Jagdamba Coke Industries Private Limited (along with other respondents) challenged Clause 5(2)(b) of SAIL’s tender document, which required bidders to have supplied a minimum of 24,500 MT of coke breeze by rail to any Central/State Government/PSU/Public Limited Company in any consecutive 12‑month period during the last five financial years (or 15,750 MT for DSP market).
  • The tender sought bids for supply of 92,500 MT of coke breeze for six months to SAIL’s steel plants at IISCO, Rourkela and Durgapur.
  • The Single Judge had held the rail‑only condition arbitrary, alleging it favoured a particular supplier (Maha Laxmi Wellman Fuel) and directed the tender to proceed without the condition.
  • The appellants argued the condition was a legitimate operational requirement to avoid pilferage, ensure cost‑effective bulk transport, preserve material quality, and guarantee uninterrupted production.
  • The court examined extensive submissions, including SAIL’s justification that rail transport reduces pilferage (estimated loss Rs 13,000 crore annually), minimizes breakage, offers larger single‑load capacities (3,000‑4,000 t per rake), and aligns with safety and quality standards.
  • Jurisdictional arguments were addressed: although the tender was floated from Rourkela (Odisha), the supply points included Durgapur Steel Plant in West Bengal, giving the Calcutta High Court territorial jurisdiction.
  • The court reviewed precedents (e.g., Meerut Development Authority v. Association of Management Studies, Vinishma Technologies v. State of Chhattisgarh, Silpi Constructions Contractors v. Union of India, Balaji Ventures Pvt. Ltd.) and affirmed that while tendering authorities have wide discretion, courts may intervene only when conditions are arbitrary, discriminatory, or mala‑fide.
  • Finding that SAIL’s justification was reasonable and not tailor‑made, the court rejected the allegation of favouritism and held the eligibility clause to be within the permissible scope of the authority.

Final Outcome

  • The appellate bench allowed FMA 241 of 2026 and disposed of CAN 1 of 2026.
  • The judgment and order dated 08.01.2026 passed by the Learned Single Judge were set aside.
  • The contested tender condition (Clause 5(2)(b) requiring prior rail‑based supply) was upheld.
  • The tender process shall proceed in accordance with the original terms, including the rail‑only eligibility requirement.

Topics: Tender Eligibility, Judicial Review of Public Procurement