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Locus to Challenge Tender Conditions after Participation in Tender Process

Summary: As per settled legal jurisprudence, there are limited grounds available for a participating entity to raise challenges to a tender process and/ or its terms after participation. Barring such limited grounds, any challenge in respect of a tender must be raised before participation in the tender process. This blog focusses on the Supreme Court’s decision in National Highways Authority of India v. Gwalior-Jhansi Expressway Limited (2018) 8 SCC 243, which, in a specific factual matrix, held that an entity which did not participate in the tender process, did not have the locus to challenge the tender and thereby claim a substantive right arising therefrom. However, in subsequent High Court decisions, the aforesaid rationale has been applied in an overbroad manner, dehors its underlying factual matrix, effectively treating it as a general rule that non-participating entities lack locus to raise challenges in respect of tenders.

Introduction

In Indian legal jurisprudence, there are narrowly circumscribed situations wherein an unsuccessful bidder can raise challenges in respect of a tender after participating in the process. The said grounds for judicial interference have been delineated by the Supreme Court in various cases,[1] including in Shanti Construction (P) Ltd. v. State of Odisha,[2] which held that the ‘heart beat of fair play’ in tender matters is non-arbitrariness and fairness in State action and as such, judicial interference is only warranted if decision making process is shown to be arbitrary, irrational, mala fide or contrary to public interest.

Barring such circumstances, the Supreme Court in National High Speed Rail Corporation Ltd. v. Montecarlo Ltd. (“Montecarlo”),[3] held that any challenge to a tender condition must be raised before bid submission, specifically noting that “if the original writ petitioner was aggrieved either it would not have participated and/or ought to have challenged such clauses before participating in the tender process”.

Further, for a specific factual matrix, the Supreme Court, in National Highways Authority of India v. Gwalior-Jhansi Expressway Limited (“NHAI Case”),[4] held that an entity would not have locus to challenge tender conditions without having participated in the process first. Notably, the finding rendered in the NHAI Case is in the context of its facts, yet dehors its factual matrix, several High Courts are reading it in an incorrect and overbroad manner — as a general proposition that non-participating entities to a tender process have no locus to challenge the same.

The NHAI Case: What It Actually Decided

The NHAI Case addressed a narrowly defined factual matrix. It involved a situation where the original concessionaire, whose contract had been terminated on account of slow progress, was granted an opportunity to match the lowest bid, i.e. exercise a right of first refusal (“ROFR”), if found eligible under the tender issued for the balance work.

However, despite the express language of the tender mandating participation in the tender process as a prerequisite to claim ROFR, the original concessionaire challenged the issuance of the letter of award to the successful bidder and claimed ROFR, without having participated in the tender process.

It was in this specific context that the Supreme Court held that “having failed to participate in the tender process and more so, despite the express terms in the tender documents, the validity whereof had not been challenged”, a party cannot claim any substantive right, including ROFR, and that “only the entities who participate in the tender process pursuant to a tender notice can be allowed to make grievances about the non-fulfilment or breach of any of the terms and conditions of the tender documents”.[5]

The ruling was, therefore, narrow in its compass. It was directed solely at a party seeking to claim a substantive benefit (ROFR), without having participated in the tender process, despite express terms mandating the same. The NHAI Case did not, and was never intended to, lay down any general proposition crystallising participation as a pre-requisite for challenging tender processes. 

Subsequent Judicial Interpretations

Following the NHAI Case, several High Courts have denied locus to non-participating entities to raise challenges in respect of tenders. For instance, in Primatel Fibcom Ltd. v. Indian Oil Corporation Ltd.,[6] locus was denied to an intended supplier of an unsuccessful bidder and who did not itself participate in the tender process, on grounds that an entity that had not even participated in the tender process had no locus to challenge the same.

Further, in R.B. Constructions Proprietorship Concern v. State of Karnataka,[7] locus was denied to a non-participating entity which had challenged the tender after closing of the bid submission date. Similarly, in Maisur Projects Pvt. Ltd. v. State of NCT of Delhi,[8] it was noted that no interference is warranted at the instance of a non-participating entity, especially when the letter of award had already been issued and work had subsequently commenced.

In another such case, Praxair India (P) Ltd. v. Central Vigilance Commissioner,[9] locus was denied to an entity that had repeatedly demanded extensions of time for bid submission, and incorporation of favourable terms in the tender, but ultimately failed to submit a bid. It was held that such conduct, which had caused undue delay to the project, disentitled the entity from raising grievances.[10]

These cases involved non-participating entities raising belated challenges after closing of the bid or whose conduct had caused substantial project delays. Denial of locus to such entities prevents the tender process from being derailed at the instance of third parties, ensuring that only those parties that are directly affected by the tender process retain locus to raise grievances.

However, some courts have extended the NHAI Case into broader territory. In Larsen and Toubro Ltd. v. Karnataka Power Corporation Ltd. (“L&T Case”),[11] the entity concerned raised challenge before closing of bid submission date and thereby did not submit its bid while the writ petition was pending. The Karnataka High Court applied the NHAI Case rationale as a general rule and held that a non-participating entity cannot raise challenges in respect of tenders.

Further, in Rotoffset Corporation v. Security Printing and Minting Corporation of India Ltd. (“Rotoffset”),[12] the Delhi High Court, while correctly holding that a non-participating entity must raise challenges within a reasonable period, went ahead and held that even those entities which have participated in the tender process may be entitled to raise challenges within reasonable time.[13]

Implications of a General Application of the NHAI Case

A bare perusal of the aforesaid cases rendered subsequent to the NHAI Case, including the L&T Case and Rotoffset, gives the impression that participation is a pre-requisite to raise challenges in respect of tenders. While limited grounds exist to enable bidders to raise challenges after participation, the same cannot act as a general license to entitle disgruntled unsuccessful bidders to raise belated challenges.

As such, these cases ignore the aspect that a prospective bidder is not precluded from raising challenges before the submission of its bid. However, raising any such challenge after participating in the tender process is in teeth of the ratio laid down in Montecarlo.

Pertinently, a bidder that participates in a tender does so with complete knowledge and acceptance of its terms and cannot be permitted to challenge the same thereafter. This settled position is reinforced by the Supreme Court’s decision in Uflex Ltd. v. State of T.N.,[14] which cautioned against attempts by unsuccessful tenderers to invoke judicial review on tenuous grounds driven by imaginary grievances or business rivalry. The said reasoning has been followed consistently across various decisions,[15] including the recent ruling of the Gauhati High Court in SPS Construction India Pvt. Ltd. v. Union of India,[16] where, relying on Montecarlo, the Court held that an unsuccessful bidder cannot assail tender conditions after having submitted its bid with full knowledge and acceptance of those very terms.[17]

Conclusion

Judicial review in tender matters must remain anchored to its core purpose, ensuring fairness, transparency, and absence of arbitrariness, without permitting belated challenges to the terms themselves.

Given the significant public interest at stake, such delayed challenges carry tangible consequences in the form of project delays, escalated costs, and disruption to public administration. The decision in the NHAI Case, when read in its proper and narrow factual context, does not dilute the settled principle, nor does it create a general avenue for unsuccessful bidders to raise post-participation challenges.

Ultimately, a broader interpretation would erode the certainty and integrity of public procurement by incentivising speculative participation followed by litigation, which is completely at odds with the consistent judicial policy of restraint in tender matters.

[1] Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, @Pr. 22, 26; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd.,(2016) 16 SCC 818, @Pr. 11-15.

[2] 2025 SCC OnLine SC 2368, Pr. 9-10.

[3] (2022) 6 SCC 401.

[4] (2018) 8 SCC 243.

[5] Para 20.

[6] 2024 SCC OnLine Del 4278.

[7] 2025 SCC OnLine Kar 9749.

[8] W.P. (C) No. 5133 of 2024.

[9] 2022 SCC OnLine Cal 466.

[10] Writ Appeal being M.A.T No. 588 of 2022 has been disposed off affirming the decision of the Ld. Single Judge denying locus to the petitioner; however, the appeal was allowed to the limited extent to expunge adverse remarks from the Ld. Singh Judge’s order against the said entity, and exemption from payment of costs imposed. 

[11] W.P. No. 5304 of 2024; the said decision has been affirmed by a division bench in WA No. 381 of 2024, and by the Hon’ble Supreme Court in SLP (C) Diary No.19294 of 2024.

[12] W.P. (C) No. 11016 of 2025; SLP being SLP No. 38317 of 2025 filed against the said judgment has been dismissed by the Hon’ble Supreme Court vide order dated 07.01.2026.

[13] The Rotoffset case also relied on Subir Ghosh v. State of West Bengal, 2020 SCC OnLine Cal 2213.

[14] (2022) 1 SCC 165.

[15] Moksh Innovations Inc. v. State of U.P., 2021 SCC OnLine All 206; Avani Paridhi Energy & Communications (P) Ltd. v. State of U.P., 2025 SCC OnLine All 651; Opaque Infrastructure Pvt. Ltd. v. Union of India, 2015 SCC OnLine Del 8396.

[16] W.P.(C) No. 6625 of 2025; The Writ Appeal being Writ Appeal No. 79 of 2025 against this judgment has been dismissed by the Hon’ble High Court by way of the order dated 01.04.2026.

[17] Para 43-45.

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From Compliance to Crime: Investigating CSR Misuse and Corporate Accountability in India

Summary: Corporate Social Responsibility (CSR) fraud has emerged as a significant and growing area of corporate misconduct in India, triggering a wave of internal investigations across organisations. This article examines India’s mandatory CSR framework, the patterns of fraud that have surfaced since its enactment and the consequent rise of corporate internal investigations as an essential governance tool.

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Personality Rights in India in the Age of AI

Summary: In India, personality rights, protecting an individual’s control over the commercial use of their identity, have primarily evolved through judicial pronouncements. However, the rise of artificial intelligence, including deepfakes and voice cloning, has significantly intensified the threat of identity misappropriation, prompting Indian courts to expand the scope of these rights. In recent times, the Delhi and Bombay High Courts have granted injunctions restraining AI-driven misuse of celebrities’ names, images and likenesses. Yet, despite this judicial recognition, the existing statutory framework remains fragmented, and comprehensive legislative intervention has now become essential to ensure consistent and effective protection of personality rights in the AI age.

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Beyond Strategic Autonomy: Is a Blocking Statue the Need of the Hour in the Age of Extraterritorial Sanctions

Summary: China’s recent invocation of its Blocking Rules against U.S. sanctions marks a significant moment in the evolving landscape of global sanctions law. As nations increasingly push back against the extraterritorial reach of unilateral sanctions, the question arises:  What does this mean for India? This article examines China’s move, its implications for the global sanctions regime, and what a potential Indian blocking statute could look like in practice.

Introduction

On May 2, 2026, China’s Ministry of Commerce (“MOFCOM”) issued a prohibition order (“Prohibition Order”) under its Rules on Counteracting Unjustified Extraterritorial Application of Foreign Legislation and Other Measures (“Blocking Rules”),[1] marking the first operational deployment of this mechanism since it came into force in 2021. The Prohibition Order declares that the sanctions imposed by the United States of America (“U.S.”) against five Chinese oil refineries, including Hengli Petrochemical (Dalian) Refining Co., shall not be recognised, enforced, or observed within the Chinese jurisdiction. More than merely sending a diplomatic signal, this marks one of the most significant instances of a major economy, after the European Union (“E.U.”), converting a counter-sanctions legislative framework into an enforceable legal instrument.

China’s Prohibition Order – Key Takeaways

The novelty of MOFCOM’s prohibition order lies in its direct engagement with the domestic law dimension of international sanctions enforcement. A third party, whether a financial institution, technology provider, or logistics operator, withdrawing services from a sanctioned Chinese entity covered under a prohibition order is no longer simply exercising contractual discretion. Within the Chinese jurisdiction, such conduct can now be characterised as non-compliance with a domestic prohibition order.

Notably, Article 9 of the Blocking Rules further confers on affected Chinese persons a right to seek compensation from parties causing loss to them by prioritising foreign sanctions compliance over contractual performance.[2] This is the Chinese mechanism’s most practically significant feature insofar as it does not merely prohibit recognition of foreign sanctions in the abstract; instead, it shifts focus to the contractual pathways through which extraterritorial sanctions are privately enforced. Accordingly, a sanctions-triggered termination clause may, in certain circumstances, expose the invoking party to liability under Chinese law insofar as the Prohibition Order provides that the U.S. sanctions, asset freezes, and transaction prohibitions shall not be recognised, enforced, or observed.

Indian Government’s Stance and Lessons from the Nayara Episode

Like China, India’s stance on unilateral sanctions is publicly established. The Ministry of External Affairs, Government of India, has stated that India does not subscribe to unilateral sanctions regimes and recognises only those measures authorised by the United Nations Security Council.[3] This reflects India’s broader doctrine of strategic autonomy, particularly in the context of its trade relationships with countries subject to U.S. and E.U. designations.

However, India’s policy position has not yet been translated into domestic legislation. In the absence of a formal blocking or counter-sanctions statute as seen in China and the E.U., Indian companies have limited legal recourse when counterparties invoke third-country sanctions as grounds for suspending or terminating contractual obligations. The gap between India’s stated inter-governmental position and the legal remedies available to Indian entities at the commercial level remains significant and commercially consequential.

The practical dimensions of this gap are illustrated by the experience of Nayara Energy Limited (“Nayara”), India’s second-largest private refiner, in which Rosneft holds approximately 49 per cent ownership stake. Following Russia’s invasion of Ukraine, Nayara was designated under the E.U. sanctions regime. Consequently, technology service providers, including SAP India Pvt. Ltd. (“SAP”), curtailed services to Nayara by invoking their contractual clause that limited SAP’s liability for suspension/termination due to applicable export control laws.

This illustrates a structural vulnerability for Indian companies. Sanctions-related termination clauses permit counterparties to exit contractual relationships when a foreign government designates sanctions, often leaving the sanctioned Indian party without a corresponding remedy. Consequently, the Indian entity bears the commercial loss, with no domestic legal framework to fall back on.

The Road Ahead – Designing India’s Counter-Sanctions Architecture

Drawing on the Chinese and E.U. frameworks as reference points, the Government of India is understood to be actively considering a domestic blocking or counter-sanctions statute, with the Ministries of External Affairs and Commerce engaged in inter-ministerial deliberations.[4] If well designed, such legislation would materially alter the commercial landscape for Indian entities exposed to third-country sanctions.

A domestic blocking statute would operate at two levels. At the regulatory level, it would render foreign sanctions measures inapplicable within Indian jurisdiction, preventing their domestic recognition or enforcement. At the commercial level, it would provide Indian entities with enforceable legal remedies against counterparties that unilaterally suspend or terminate contractual obligations on the basis of third-country designations. Coupled with a potential civil compensation right for affected Indian entities, it would impose genuine legal risk on counterparties seeking to exit contracts governed by or performed within India.

Additionally, the adoption of such a domestic blocking statute would also place India on a comparable footing with other major economies, including China and the E.U., that have already operationalised such frameworks. This would reduce the asymmetry in bargaining power that Indian entities currently endure in cross-border commercial relationships.

Weighing the Implications – Evaluating the Cons of a Domestic Blocking Statute

However, a blocking statute is not without risks, as Indian companies heavily reliant on the U.S. financial system or conducting transactions in U.S. dollars may face a compliance bind, with the real risk of being cut off from international correspondent banking networks. Such a blocking statute could also invite retaliatory measures or heightened scrutiny from sanctioning jurisdictions, particularly the U.S., potentially adversely affecting bilateral trade and investment flows.

Two further structural gaps compound the problem. First, international marine and trade insurance is overwhelmingly controlled by European and American insurers who will refuse to cover Office of Foreign Assets Control (“OFAC”)-sanctioned transactions. Without coverage, no transaction can proceed, regardless of what a domestic law mandates, and India’s reinsurance market lacks the scale to substitute. Second, any diplomatic cushion India enjoys through the Quad and Indo-Pacific architecture operates solely at the government-to-government level and affords no legal protection to Indian companies facing active OFAC enforcement.

Separately, enforcement of a blocking statute requires robust institutional capacity, including a designated authority empowered to assess, on a case-by-case basis, which foreign measures warrant prohibition orders. Without such calibration, the framework risks being either over-inclusive or under-utilised. Any legislative design must, therefore, carefully calibrate the scope of the blocking mechanism to mitigate these risks while preserving its core protective function.

Conclusion

China’s invocation of its Blocking Rules is a watershed in the international law of sanctions, transcending beyond legislative dormancy to an active, enforceable, and commercially consequential instrument. India, which shares a comparable policy stance on unilateral sanctions, now faces a clear precedent. The absence of a domestic legislative framework leaves Indian entities commercially exposed in ways Chinese businesses no longer are. Whether India will translate its stated policy position into a comparable legislative instrument, and if it does, whether the framework will prove sufficient to recalibrate the commercial asymmetry that Indian businesses currently confront remains to be seen.

[1] China invokes anti-sanctions law to counter US blacklisting of refiners | Reuters, available here.

[2] MOFCOM Order No. 1 of 2021 on Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures, January 9, 2021, available here.

[3] Official Spokesperson’s response to media queries regarding recent EU sanctions (July 18, 2025) | Ministry of External Affairs, available here

[4] Govt explores EU-like law to safeguard firms against third countries’ sanctions | The Indian Express, available here.

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Liberty Ends Where Fraud Begins: Supreme Court Signals Recalibration of Standards for Bail for Habitual Economic Offenders

Summary: Bail is the rule, jail is the exception, is an axiom. A tight rope between individual liberty and public interest, bail jurisprudence in India has evolved to err on the side of liberty. However, heinous offences are a slight exception to this rule and bail is often denied in such matters, considering the nature of the offence and larger societal interest.  The Hon’ble Supreme Court’s judgment in Rakesh Mittal v Ajay Pal Gupta and Anr., marks an interesting development in this exception to ordinary bail jurisprudence. Applying precedents dealing with bail in heinous offence matters, the Court held that the same principles would also apply to grave pecuniary offences, especially when committed by habitual offenders. Accordingly, overturning an order of bail granted by the Hon’ble Allahabad High Court on the ground of parity with other accused, the Court also considered factors such as criminal antecedents of the accused, including a long history of fraud, absconding, and misuse of bail in other matters. Whether this is a unique exception or signals a change in jurisprudence remains to be seen.

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After the Gavel Falls: Can the Losing Party Still Seek Interim Relief under Section 9?

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Summary: This blog examines two recent decisions, Rajiv Gaddh v. Subodh Prakash (Supreme Court) (2026 INSC 302) and Nalin Vallabhbhai Patel v. Atharva Realtors (Bombay High Court)(2026:BHC-OS:7780), which reinforce a practical message for businesses: If a party lets an arbitration lapse through its own inaction (or withdraws a Section 11 request without liberty), courts are unlikely to allow a “reset” by filing a fresh Section 11 application for the same disputes under the Arbitration and Conciliation Act, 1996.

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Homebuyers under the Code: Judicial Calibration Between Protection and Process

Summary: Recent judicial developments in India are reshaping the treatment of homebuyers under the Insolvency and Bankruptcy Code, 2016. Courts have moved beyond merely recognising homebuyers as financial creditors to substantively distinguishing genuine homebuyers from speculative investors, ensuring the Code is not misused as a recovery tool. While admission into insolvency remains a narrow enquiry of debt and default, broader homebuyer protection is addressed within the resolution process through prospective directions, equitable exceptions for belated claims, and judicial intervention against third-party actions that threaten project viability  Alongside, consumer protection remedies under RERA and the Consumer Protection Act continue to offer parallel avenues for redressal. The evolving framework seeks to balance procedural discipline with fairness, ensuring genuine homebuyers are not left without effective remedies.

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Summary: A key procedural question in Indian arbitration law concerns the trigger for the commencement of the limitation period under Section 34(3) of the Arbitration Act, where a party files a Section 33 application before challenging an arbitral award. Conflicting judicial precedents had created uncertainty on whether an application that was misconceived in scope, or unsuccessful in outcome, could nonetheless shift the limitation trigger from the date of receipt of the award to the date of disposal of the Section 33 request. The Supreme Court in Geojit Financial Services v. Sandeep Gurav (2025) has resolved this conflict by holding that any proper and timely Section 33 application, regardless of outcome or scope, defers limitation to the date of its disposal.

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Sanctions Compliance Beyond the 50% Rule: A Practical Guide for Indian Businesses

Summary: The 50% ownership rule has always been the cornerstone of sanctions compliance offering apparent certainty to entities navigating complex cross-border transactions. However, in recent years, global regulators have started looking beyond the ownership percentage, scrutinizing effective control and influence to determine sanctions exposure. This piece examines the evolving sanctions landscape across the US, UK & EU and provides Indian businesses with a practical, risk-based compliance framework to align with international enforcement expectations.

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