Level Playing Field Means No Closed Doors: Supreme Court Strikes Down Chhattisgarh’s ‘Local-Past-Performance’ Tender Bar

“The State cannot ‘close the market to outsiders without just cause’—Article 14 and 19(1)(g) offended” - On October 6, 2025, the Supreme Court of India delivered a significant ruling in Vinishma Technologies Pvt. Ltd. v. State of Chhattisgarh & Anr., setting aside a tender condition that restricted eligibility to bidders who had supplied sports goods within Chhattisgarh in the preceding three financial years. The Court ruled that the condition was arbitrary and discriminatory, violating Articles 14 and 19(1)(g), and reaffirmed the doctrine of a “level playing field” in public procurement, opening the gates of competition to all equally placed bidders.

The case concerned three Samagra Shiksha tenders dated July 21, 2025, for supply of Sports Kits to students in government schools across Chhattisgarh; the High Court had upheld the impugned eligibility clause, but the Supreme Court reversed, quashing both the High Court’s orders (August 11–12, 2025) and the tender notices themselves.

Vinishma Technologies, a company with prior supplies to multiple State departments and the GNCTD, was rendered ineligible by an additional term: a “Past Performance Restriction” demanding cumulative supplies worth ₹6 crore to “State Government agencies of Chhattisgarh” over specified recent years. A representation by the bidder went unanswered; writ petitions before the High Court were dismissed despite partial deletion of other conditions by corrigendum during pendency. The tender contemplated delivery to 5,540 cluster resource centres across all 33 districts, with values of ₹15.24 crore, ₹13.08 crore, and ₹11.49 crore. The impugned clause read: “Bidders must have supplied sports goods worth at least Rs.6.00 crores (cumulative) to State Government agencies of Chhattisgarh in the last three financial years…”.

The central constitutional question was whether the “local past performance” bar satisfied the tests of reasonableness and non-arbitrariness, or whether it excluded otherwise competent bidders in breach of Articles 14 and 19(1)(g). The appellant argued that the condition “discourages wider participation and fosters cartelisation,” while the State contended it was tailored to Chhattisgarh’s geography and security concerns, ensuring timely, quality-compliant delivery; the State also warned that interference would forfeit a substantial portion of the academic year.

Reiterating settled principles, the Court emphasized that while the Government enjoys latitude in framing tender criteria, judicial review intervenes where conditions are arbitrary, discriminatory, or mala fide, and that procurement must be guided by fairness, equality, and rational nexus to the object sought to be achieved.

The Bench, speaking through Justice Alok Aradhe, anchored its reasoning in the doctrine of level playing field under Article 19(1)(g), explaining that procurement criteria must “encourage wider participation” and “safeguard the public exchequer.” “The eligibility criteria… should be framed in a manner which encourages wider participation and secures the best prize for the State”. The Court found that tying eligibility to local past supplies created an “artificial barrier” against otherwise financially sound and technically competent bidders, “skewing the market… by erecting artificial barriers”.

In a crisp articulation that will resonate across procurement regimes, the Court held: “To confine the eligibility to participate in the tender, within one State is not only irrational but is also disproportionate to the goal of ensuring effective delivery of Sports Kits”. The Court added that such a restriction “cannot be justified as reasonable within the meaning of 19(6),” and that “the State… cannot exercise that power in a manner that infringes upon constitutional guarantees, by closing the market to outsiders without just cause”.

Answering the State’s security/topography rationale, the Court was categorical: “the tender in question is not for security sensitive equipment,” only some districts are Maoist-affected, and unfamiliar bidders can “engage a local supply chain” for last-mile delivery. The Court concluded that the condition “operates as a closed door to outsiders,” restricts competition, and “has the impact of promoting cartelisation”.

Summing up, the Court declared the impugned condition “arbitrary, unreasonable and… discriminatory” with no rational nexus to the procurement object, thereby offending Articles 14 and 19(1)(g).

The operative order quashed the High Court’s August 11–12, 2025 judgments and the July 21, 2025 tender notices, while granting liberty to the State to issue fresh tenders compliant with constitutional norms.

By striking down a parochial “local past performance” gatekeeping clause, the Supreme Court has reaffirmed that public tenders must maximize competition, prize, and public interest—not protectionism. As the Court put it, “the doctrine of level playing field requires that gates of competition be opened to all who are equally placed,” not just those with prior dealings inside one State.

Date of Decision: October 6, 2025