Bombay High Court Upholds ₹1,198 Crore Indian Oil Tender, Says CVC's 80% Rule Cannot Apply Mechanically

The Bombay High Court on 21 August upheld Indian Oil Corporation Limited's (IOCL) Rs. 1,198 crore all India tender for Retail Visual Identity (RVI) works, noting that the Central Vigilance Commission's (CVC) guideline referring to 80% of the estimated cost cannot be mechanically applied to the aggregate value of a tender.

A Division Bench of Acting Chief Justice Ravindra V. Ghuge and Justice Gautam A. Ankhad rejected challenges to the requirement that bidders must have completed a single similar work worth at least Rs. 37.50 lakh. It observed:

"In the present case, the all-India Tender of Rs.1,198 crores prescribing value of Rs. 37.50 lakhs for similar works permits the widest possible participation. The value of work may fluctuate depending on the quotes in the price band of (-)20% and (+)5%. Hence, the 80% reference in the CVC Circular cannot be applied mechanically by comparing it with the aggregate value of all works which may potentially be awarded under the Tender. We, therefore, find no inconsistency between the impugned tender conditions and the CVC Office Memorandum dated 17th December 2002."

The tender, estimated at Rs. 1,198 crore, was challenged by Denish Jasubhai Sankhala, Gulshan Kumar and Retail Impact Pvt Ltd. Sankhala and Kumar submitted a representation to IOCL on 26 March 2026, reiterated their objections at the pre-bid meeting on 8 April and received IOCL's response on 15 April. They submitted another representation on 1 May, while the writ petition was filed on 4 May, before the 6 May bid submission deadline.

The petitioners argued that the Rs. 37.50 lakh requirement for similar work was inconsistent with the CVC's 80% guideline. They also contended that using annual turnover as a tie-breaker unfairly disadvantaged Micro, Small and Medium Enterprises (MSME) bidders.

IOCL maintained that the tender conditions were not designed to favour any bidder and that the turnover criterion operated only in limited tie-breaking circumstances.

The Court noted that the tender covers 16 State Offices and 109 work orders for 4,730 RVIs. It held that the annual turnover requirement does not determine eligibility but operates only as a final tie-breaker between otherwise qualified bidders quoting the same price.

It further held that the CVC Office Memorandum dated 17 December 2002 is illustrative rather than mandatory and does not prescribe a fixed formula requiring every tendering authority to adopt 80% of the estimated cost as the minimum value of similar work. The judges held:

"We are also unable to accept the submission of Mr. Chaudhary that the tender condition in Clause 21(I) of a bidder having done Similar Works for Rs. 37.50 lakhs violates the CVC Circular dated 17th December, 2002. The submission proceeds on the assumption that the figure of 80% mentioned in the said Circular constitutes a mandatory eligibility requirement."

The Bench reiterated that judicial review in tender matters is limited and that courts should not substitute their commercial assessment for that of the tendering authority unless the decision is arbitrary, irrational, discriminatory or mala fide.

Accordingly, the High Court dismissed both writ petitions, finding no arbitrariness, discrimination or mala fides.

For Petitioners: Ravi Kadam, Senior Advocate with Jitendra Chaudhary, I/by Shavez Mukri, Jitendra Chaudhary with Aaryan Aachra, i/by Ketan Dhavle

For Respondents: D.N. Mishra, Milind Sathe, Senior Advocate, with Sunil Gangan, Swapnil Shikhare, Manav Chetwani, Advocates, i/by RMG Law Associates, Varun Singh with Prakhar Tandon, Parijat, Urvashi Chauhan and Rachit Rawat