Introduction

This Division Bench decision of the Delhi High Court addresses a recurring and strategically significant question in public procurement: when, and by whom, can a government tender be challenged under writ jurisdiction, especially where the tender is issued on the basis of a Proprietary Article Certificate (PAC) and participation is structurally restricted to a single source? The petitioner, Rotoffset Corporation—an MSME with a prior contract for a specialized excise adhesive label printing machine—sought to quash PAC-based tenders issued by Security Printing and Minting Corporation of India Ltd. (SPMCIL), alleging that the successful entity (Respondent No. 3) was a shell company with no legitimate OEM lineage to the legacy “Rotatek” brand.

Beyond challenging the PAC tenders dated 07.03.2025 (Tender Nos. 24/SY‑15‑13(07)/2025 and 23/SY‑15‑13(08)/2025), the petitioner also asked for a stay on their execution and sought directions for an investigation by agencies such as the CVC, CAG and CBI into alleged procurement irregularities dating back to 2012. The respondents countered on maintainability, locus standi, and delay, noting that the petitioner neither participated in the impugned tenders nor promptly challenged their terms, and that its earlier contract cancellation was already the subject of arbitration.

The decision is pivotal for clarifying the locus and timing requirements for judicial review of tenders—particularly PAC procurements—and for underscoring the judiciary’s reluctance to derail ongoing projects after contractual rights accrue to third parties.

Summary of the Judgment

• The writ petition was dismissed on the threshold ground of maintainability.
• The Court held that a party that did not participate in the tender process lacks locus to challenge the award or the terms of the tender, relying on the Supreme Court’s decision in National Highways Authority of India v. Gwalior‑Jhansi Expressway Ltd. (2018) 8 SCC 243 and recent Division Bench rulings of the Delhi High Court.
• Crucially, the Bench articulated a timeline principle: entities aggrieved by tender conditions—including PAC-based restrictions—must challenge those terms within a reasonable time, preferably before the last date for bid submission or at least before techno‑commercial evaluation, to avoid prejudice to third-party rights and public interest.
• Allegations of fraud, OEM succession disputes, and policy-based claims (e.g., Make in India) were not examined on merits because the petition itself was not maintainable and such issues involved disputed facts unsuitable for writ adjudication in the circumstances.
• The ongoing arbitration over the prior contract’s termination had no causal link to the subsequent PAC tender and did not confer standing to challenge it.

Analysis

A. Precedents Cited and Their Influence

The Court’s reasoning rests squarely on established procurement jurisprudence, sharpened by recent High Court elaborations:

• NHAI v. Gwalior‑Jhansi Expressway Ltd., (2018) 8 SCC 243: The Supreme Court held that only entities that participate in a tender process can challenge the process; those who stay out acquire no rights and cannot complain about the terms or outcome. The case underlines two cardinal principles: (i) participation as a precondition for locus, and (ii) public interest in transparent, competitive, and timely procurement. The Delhi High Court lifted para 20 verbatim to emphasise that non-participation forecloses grievance redressal through writ.
• Primatel Fibcom Ltd. v. IOCL (Delhi HC DB, Neutral Citation 2024:DHC:4657:DB): Reaffirmed Gwalior‑Jhansi by holding that a non-participating party lacks locus, even if it had business arrangements with a bidder. A “commitment letter” to a bidder does not make one a bidder. The present judgment cites Primatel as a recent application of the Supreme Court principle.
• Maisur Projects Pvt. Ltd. v. State of NCT of Delhi (Delhi HC DB, 11.07.2025): Cited for continuity of the locus doctrine and timing discipline in tender challenges. Although the present judgment does not extract Maisur in detail, it is presented as part of a consistent line of authority.
• Brijesh Kumar v. Union of India (Delhi HC, 17.07.2025): Stressed that once the tender progresses without challenge and third‑party rights accrue, belated interference is impermissible. Courts disfavor disruption causing delay and increased public costs. This case is invoked to highlight the public interest dimension of finality and timeliness.

These authorities collectively drove the High Court’s conclusion that non-participation plus delay is fatal. The petitioner’s attempt to carve out a PAC exception—i.e., that structural exclusion from a single-source PAC tender should relax the locus rule—was expressly rejected.

B. The Court’s Legal Reasoning

1. Locus standi hinges on participation or timely challenge: The Bench distilled and restated the law in paragraph 17 with a practical timeline rule:
   • Entities aggrieved by tender conditions must challenge them “within a reasonable period,”
   • “preferably before the last date” for submission of bids,
   • or “at least before the date of evaluation of the techno‑commercial bid.”
   This articulation is notable for its procedural precision. It applies across the board, including to PAC tenders where participation is restricted to a pre-identified source. The remedy for structural exclusion is not a post‑award writ but a pre‑bid or early-stage challenge.
2. Delay and accrual of third‑party rights: The petitioner was aware of the 07.03.2025 PAC tender but waited until 03.07.2025 to file the writ—by which time the contract had been awarded and Respondent No. 3 had begun execution. The Court emphasized that late-stage interference wastes public resources, escalates costs, and is contrary to public interest, particularly in time-sensitive projects.
3. Segregation of disputes and forum propriety: The petitioner’s earlier contract termination (January 2025) is under arbitration. The High Court found no “causal link” between that dispute and the subsequent PAC tender. Arbitration over termination does not confer standing to challenge a different tender or undo a later procurement. This preserves the distinctness of contractual and public law phases and prevents forum shopping.
4. Non-adjudication of disputed factual allegations: Allegations that Respondent No. 3 was a shell company lacking OEM succession, supported by references to BORME and EUIPO records, were treated as hotly contested facts. Given the maintainability failure, and the writ court’s limited fact-finding role—especially post‑award—these issues were left unexamined. The Court thus avoided pronouncing on OEM lineage, intellectual property transfer, or the validity of PAC issuance on merits.
5. Deference to procurement structuring: The procuring entity’s choice to proceed via PAC was not substantively reviewed. Respondent No. 1’s submission that Rotatek-linked supplies had a long procurement history since 1999 was noted, but the Court resolved the matter on locus and delay, not on procurement design or OEM merits.

C. What This Judgment Does—and Does Not—Decide

• Decides: The maintainability rule and timeline for tender challenges; confirmation that non-participants lack locus; and that even in PAC tenders, the proper route is an early, pre‑bid judicial challenge if at all.
• Does not decide: Whether Respondent No. 3 is the lawful OEM successor to Rotatek S.A.; whether PAC issuance complied with GFR; whether the cancellation of the petitioner’s earlier contract was justified (that is sub judice in arbitration); or whether larger policy preferences (Make in India/Atmanirbhar Bharat) were breached on facts.

D. Impact and Forward-Looking Implications

The decision has multi-layered implications for bidders, procuring entities, and courts:

• For bidders (including MSMEs):
  • Do not wait. If a tender condition (e.g., a PAC restriction) allegedly violates procurement norms, challenge promptly—ideally before bid submission; at the latest before techno‑commercial evaluation.
  • Non-participation without a timely legal challenge eliminates standing. Business relationships, letters of comfort, or past dealings do not create locus.
  • Allegations of fraud or OEM misrepresentation should be marshalled early and presented in a timely writ to secure threshold scrutiny; post‑award writs will almost certainly be dismissed.
• For procuring entities:
  • While this judgment insulates concluded PAC procurements from late-stage writs, it does not immunize PAC decisions from scrutiny. Maintain robust PAC justifications under GFR and preserve decision records.
  • Pre‑bid transparency (e.g., publishing PAC justifications and inviting queries) can reduce litigation risk and foster confidence in single‑source decisions.
  • Once third‑party rights accrue, the courts’ reluctance to interfere increases substantially, aligning with project efficiency and public interest.
• For the courts:
  • The Bench consolidates a pragmatic timeline doctrine, curbing last‑minute or post‑award challenges and preserving procurement certainty.
  • It signals judicial restraint from delving into complex factual disputes (fraud, OEM succession, cross‑border insolvency outcomes) when maintainability is absent or the project is underway.
• On PAC jurisprudence:
  • The judgment does not create a PAC-specific exception; on the contrary, it applies the standard locus/timeliness rules to PAC tenders as well.
  • Advocates of domestic preference schemes must incorporate these arguments into timely pre‑bid challenges rather than post‑award litigation.

E. Complex Concepts Simplified

• Proprietary Article Certificate (PAC): A formal certification used in public procurement to justify single‑source purchase when the goods/services are proprietary to a specific manufacturer or when standardization requires sourcing from one brand/vendor. Under the General Financial Rules (GFR), PAC procurement must be carefully justified and documented.
• Locus standi in tender law: The legal capacity to maintain a writ petition against a tender. As a rule, only participating bidders—or those who promptly challenge restrictive conditions pre‑bid—have locus. Non‑participants who remain silent until after award generally cannot be heard.
• Techno‑commercial evaluation: The stage where technical compliance and commercial terms are scrutinized to determine responsive bids. The Court’s timeline rule anchors the latest permissible moment for a challenge to “at least before” this evaluation occurs.
• Third‑party rights: Contractual rights that accrue to the successful bidder upon award and commencement of performance. Courts avoid disturbing such rights absent compelling circumstances, especially where the challenger slept on their rights.
• L‑1 and ROFR: L‑1 refers to the lowest priced responsive bidder. ROFR (Right of First Refusal) is sometimes provided to certain stakeholders but is contingent on participation; the Supreme Court in Gwalior‑Jhansi clarified that even such rights depend on engaging with the tender process.
• Arbitration v. Writ: Contractual disputes (e.g., termination, performance) proceed to arbitration if the contract so provides. Public law challenges to tender design or award are addressed by writs—but must satisfy locus, timeliness, and justiciability thresholds.
• OEM succession and cross‑border insolvency: Whether a foreign buyer “steps into the shoes” of a liquidated manufacturer can involve complex foreign law and evidence (e.g., Spanish insolvency outcomes). Such fact-intensive issues are rarely resolved in writs, especially after award and absent maintainability.

F. Practical Guidance Arising from the Judgment

• File pre‑bid queries and, if unresolved, move court before the bid due date or, at the very latest, before techno‑commercial evaluation.
• When alleging fraud or OEM misrepresentation in single‑source contexts, assemble primary evidence (registries, IP transfers, corporate filings) and present it early; do not rely on post‑award relief.
• If a prior contract is terminated and is under arbitration, treat any subsequent tender as a separate legal event; do not assume the arbitration provides a platform to challenge the new tender.
• Procuring entities should document PAC justifications, approvals, and historical procurement patterns; publish sufficient information to withstand early challenge, thereby reducing late-stage litigation risk.

Conclusion

The Delhi High Court’s decision in Rotoffset Corporation v. SPMCIL crystallizes a clear and operational rule for procurement challenges: objections to tender conditions—including PAC-based single‑source restrictions—must be brought at the inception of the process, preferably before the bid submission deadline, and in any event before techno‑commercial evaluation. Parties that do not participate and do not timely challenge the tender lack locus to assail the award ex post facto.

By anchoring maintainability to participation and timeliness, and by prioritizing project continuity and public interest, the Court strengthens procurement certainty. The Bench deliberately avoids adjudicating complex disputes on OEM succession, PAC propriety, or large‑scale fraud where maintainability is absent and facts are contested—leaving such issues to the appropriate forum and procedural stage.

Key takeaways:

• Non‑participants cannot challenge tenders post‑award; locus requires participation or a timely pre‑bid challenge.
• A bright‑line timing guidance now exists: challenge before bid submission or, at the latest, before techno‑commercial evaluation.
• Allegations of fraud or policy violations do not overcome maintainability hurdles when raised belatedly.
• Arbitration over a past contract termination does not create standing to contest a new tender.

In sum, the judgment consolidates a robust procedural framework that promotes early scrutiny of restrictive tender terms (including PAC) and curbs disruptive, late-stage litigation—serving both procurement integrity and public interest.