Court dismisses plea against MCD's tender conditions for toll collection project, citing rational nexus with project objectives.
In a significant decision, the Delhi High Court has dismissed the writ petition filed by Skylark Infra Engineering Pvt Ltd, challenging the eligibility criteria set by the Municipal Corporation of Delhi (MCD) for a major toll collection project. The court, comprising Justices Anil Kshetarpal and Shail Jain, delivered the judgment on July 20, 2026, reinforcing the discretionary power of the tendering authority in setting eligibility conditions.
The case revolved around the Notice Inviting Tender (NIT) issued by the MCD on June 5, 2026, for a project involving the collection of Toll Tax and Environment Compensation Charge (ECC) at Delhi’s border points, integrating an advanced Multi Lane Free Flow (MLFF) system. The contentious eligibility criteria required bidders to have prior experience of managing at least 122 toll lanes under a single contract for two years, a condition Skylark Infra contended was arbitrary and anti-competitive.
Skylark Infra argued that the eligibility criteria lacked a rational nexus with the project's technological objectives, particularly the transition to an MLFF system. The company claimed its extensive experience operating the same toll points in a joint venture with Sahakar Global Ltd should suffice for eligibility. However, the court found this argument untenable, emphasizing the importance of experience in handling large-scale, integrated projects under a single contract.
The court highlighted that judicial intervention in tender processes is limited to instances of arbitrariness, mala fide, discrimination, or irrationality. It found the MCD’s criteria justified, given the project's scale involving 154 toll plazas and the technological integration required. The judgment underscored that managing multiple independent contracts does not equate to the expertise needed for a single integrated project of such magnitude.
Moreover, the court noted that the tender conditions were established following recommendations from the Commission for Air Quality Management and directions from the Supreme Court to implement the MLFF system by October 2026, underscoring the public interest in timely project execution.
The court dismissed claims that the criteria were anti-competitive, pointing out that three other bidders met the eligibility requirements, with several infrastructure projects across India involving similar conditions. The judgment stressed that public interest in procurement lies in efficient project execution rather than merely expanding competition.
In conclusion, the Delhi High Court affirmed the rational basis for the MCD's eligibility criteria, ruling them neither arbitrary nor violative of constitutional rights under Articles 14 and 19(1)(g). The petition by Skylark Infra was dismissed, reinforcing the tendering authority’s discretion in setting project-specific conditions to ensure effective and timely infrastructure development.
Bottom line:-
Tender conditions prescribed by the tendering authority, including eligibility criteria, must exhibit a rational nexus with the objective of the tender and are not amenable to judicial review unless shown to be arbitrary, mala fide, or discriminatory.
Statutory provision(s): Article 14, Article 19(1)(g) of the Constitution of India
