Bombay High Court
Thakur Infraprojects Pvt Ltd vs State Of Maharashtra Thr Directorate Of … on 7 March, 2026
Author: M. S. Karnik
Bench: M.S. Karnik
2026:BHC-AS:11253-DB
Bhogale WP-10537-2025.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 10537 OF 2025
Thakur Infraprojects Private Limited
1st Floor, Om Sadnika Building, Plot No.256/1,
Panvel Uran Road, Panvel,
Navi Mumbai - 410206 ... Petitioner
Versus
1. State of Maharashtra Through
Directorate of Industries
New Administrative Building,
2nd Floor, Madame Cama Road,
Opp. Mantralaya, Mumbai - 400032
[email protected]
2. City and Industrial Development
Corporation of Maharashtra
Through its Vice-Chairman and
Managing Director
CIDCO Bhavan, CBD-Belapur,
Navi Mumbai - 400614
[email protected]
3. OJSC Euro Asian Construction
Corporation "EVRASCON"
402, Geetanjali Sujay, Plot no.08,
Sector 34 C, Kharghar
Navi Mumbai - 410210
4. M/s. PNC - Aakshya Joint Venture
Having its office at PNC Tower,
3/22-D, Civil Lines,
Bypass Road, NH-2,
Agra, Uttar Pradesh - 282008
5. State of Maharashtra Through
Urban Development Department
Madam Kama, Hutatma Rajguru
Chouk, Mantralaya,
Mumbai - 400032
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6. Union of India through Ministry of
Home Affairs
Ministry of Home Affairs, North
Block, New Delhi - 110001 ... Respondents
WITH
INTERIM APPLICATION (ST) NO. 35929 OF 2025
IN
WRIT PETITION NO. 10537 OF 2025
Thakur Infraprojects Private Limited
1st Floor, Om Sadnika Building, Plot No.256/1,
Panvel Uran Road, Panvel,
Navi Mumbai - 410206 ... Applicant
IN THE MATTER OF :
Thakur Infraprojects Private Limited
1st Floor, Om Sadnika Building, Plot No.256/1,
Panvel Uran Road, Panvel,
Navi Mumbai - 410206 ... Petitioner
Versus
1. State of Maharashtra Through
Directorate of Industries
New Administrative Building,
2nd Floor, Madame Cama Road,
Opp. Mantralaya, Mumbai - 400032
[email protected]
2. City and Industrial Development
Corporation of Maharashtra
Through its Vice-Chairman and
Managing Director
CIDCO Bhavan, CBD-Belapur,
Navi Mumbai - 400614
[email protected]
3. OJSC Euro Asian Construction
Corporation "EVRASCON"
402, Geetanjali Sujay, Plot no.08,
Sector 34 C, Kharghar
Navi Mumbai - 410210
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4. M/s. PNC - Aakshya Joint Venture
Having its office at PNC Tower,
3/22-D, Civil Lines,
Bypass Road, NH-2,
Agra, Uttar Pradesh - 282008
WITH
REVIEW PETITION NO. 130 OF 2025
IN
WRIT PETITION NO. 13976 OF 2024
M/s. PNC - Aakshya Joint Venture
Having its office at PNC Tower,
3/22-D, Civil Lines,
Bypass Road, NH-2,
Agra Uttar Pradesh - 282008 ... Petitioner
IN THE MATTER OF :
Thakur Infraprojects Private Limited
1st Floor, Om Sadnika Building, Plot No.265/1,
Panvel Uran Road, Panvel,
Navi Mumbai - 410206 ... Original Petitioner
Versus
1. State of Maharashtra
Through its Government Pleader
Civil Appellate Side,
Bombay High Court
2. City and Industrial Development
Corporation of Maharashtra Ltd,
Through its Chairman
CIDCO Bhavan, CBD - Belapur,
Navi Mumbai - 400 614
3. M/s. PNC - Aakshya Joint Venture
Having its office at PNC Tower,
3/22-D, Civil Lines,
Bypass Road, NH-2,
Agra Uttar Pradesh - 282008
4. M/s. Ashoka - Aakshya Joint Venture
Having its office at Sr No.861,
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Ashoka House, Ashoka Marg,
Ashoka Nagar, Vadala, Nashik-422011
Maharashtra, India ... Respondents
------------
Shri C. A. Sundaram, Senior Advocate a/w Shri Zal Andhyarujina, Senior
Advocate, Adv. Dhrupad Vaghani, Adv. Gayatri Mohite, Adv. Rohini
Musa, Adv. Shivaji Jadhav, Adv. Akanksha Agarwal, Adv. Aswath Reddy,
Adv. Radhika Kabra i/b. Anchorstone Legal, for the petitioner in WP
No.10537 of 2025 and original petitioner in RPW No.130 of 2025.
Shri Chetan Kapadia, Senior Advocate a/w Adv. Rahul Sinha, Adv. Soham
Bhalerao, Adv. Harshit Tyagi, Adv. Yuvraj Singh i/b DSK Legal, for the
respondent - CIDCO.
Shri Vikas Singh, Senior Advocate a/w Shri Ashish Kamat, Senior
Advocate a/w Adv. Chirag Shah, Adv. Utsav Trivedi, Adv. Deepeika Kalia,
Adv. Jay Sanklecha, Adv. Harsh Moorjani, Adv. Aman Saraf, Adv. Ekta
Dalvi, Adv. Bhavya Shah i/b Adv. Ekta Dalvi, for the respondent No. 4
and petitioner in RPW.
Shri Anil Singh, Additional Solicitor General a/w Adv. Aditya Thakkar,
Adv. Shruti Vyas, Adv. D. P. Singh, Adv. Dhaval Sethia, Adv. Rama Gupta,
Adv. Sachit Bhogle, for the respondent No. 6-UOI .
Mrs. Neha Bhide, GP a/w Mr. O. A. Chandurkar, Addl. GP, Mrs. G. R.
Raghuwanshi, AGP, Mrs. Apurva Thipsay, 'B' Panel, for the respondent-
State.
------------
CORAM : M.S. KARNIK &
SHARMILA U. DESHMUKH, JJ.
RESERVED ON : 5th MARCH, 2026
PRONOUNCED ON : 7th MARCH, 2026
JUDGMENT (PER M. S. KARNIK, J.) :
(A) THE CHALLENGE.
1. Since common issues are involved and as the issues are
interconnected, the Writ Petition and Review Petition are heard
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together. For ease of reference we refer to the facts as set out in the
Writ Petition.
2. The present Writ Petition is filed by the petitioner – Thakur
Infraprojects Private Limited under Article 226 of the Constitution of
India as the lead partner of M/s. Thakur- EVRASCON JV inter alia
challenging the action of respondent No.2-City and Industrial
Development Corporation of Maharashtra (“CIDCO”, for short) in
seeking security clearance from the respondent No.6-Union of India
through the Ministry of Home Affairs (“Union of India”, for short). The
security clearance is sought after M/s. Thakur- EVRASCON JV has been
declared as the lowest bidder in respect of 2 (two) tenders, which is
alleged to be contrary to the Notice Inviting Bids (“NIB”, for short)
dated 23rd July 2024. The petitioner – Thakur Infraprojects also seeks to
set aside the letters dated 16th June 2025 and 2nd July 2025 issued by
CIDCO which seek documents from the petitioner for obtaining
security clearance pursuant to the NIB.
3. During the pendency of this Writ Petition, CIDCO addressed
a letter dated 10th November 2025 informing the petitioner that the
Competent Authority of the Government of India had denied security
clearance to respondent No.3 (“EVRASCON”, for short). In view
thereof, the petitioner amended the Writ Petition by adding
respondent No.5 (Urban Development Department, State of
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Maharashtra) and Union of India as parties thereto. The petitioner also
sought further reliefs in the nature of restraining CIDCO from taking
any coercive steps against the petitioner on the ground of denial of the
security clearance in respect of EVRASCON, to call upon the State of
Maharashtra and Union of India to disclose the reasons and grounds for
denial of security clearance, and to call for all the records pertaining to
the denial of the security clearance to EVRASCON and after examining
the legality of the same to quash and set aside the said denial of the
security clearance.
4. The following tenders form the subject matter of the
present Writ Petition :-
(a) Notice inviting bids for Integrated Infrastructure
Development of 20M and above wide Roads, Construction of
Various Major and Minor Structures (viz. Flyover, Minor
Bridges, VUPS, PUPs etc.) and Allied Electrical Works (Street
Light) in TPS 10 and 11 (“Tender 1”);
(b) Notice inviting bids for Integrated Infrastructure
Development of 20M and above wide Roads, Construction of
Various Major and Minor Structures (viz. Flyover, Minor
Bridges, VUPS, PUPs etc.) and Allied Electrical Works (Street
Light) in TPS 8, 9 and 12 (“Tender 2”).
(B) THE MATERIAL FACTS.
5. The brief facts are that on 23rd July 2024 , CIDCO issued NIB for
Tender 1 and Tender 2 for Town Planning Schemes (“TPS”, for short)
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TPS 8, 9, 10, 11 and 12 –
(i) TPS 10 and 11 vide Tender 1 amounting to
Rs.1568,86,38,074.87 (Excluding GST) ; and
(ii) TPS 8, 9 and 12 vide Tender 2 amounting to Rs.1908,
83,17,416.79 (Excluding GST).
6. The petitioner submitted its bid in Tender 1 and Tender 2 on
9th September 2024. The CIDCO rejected the technical bid of the
petitioner on 8th October 2024. The petitioner therefore filed the Writ
Petition No.13976 of 2024 in this Court on 9th October 2024
challenging the rejection of its technical bid by CIDCO. CIDCO opened
the financial bids in Tender 1 and Tender 2 on 9 th October 2024.
Respondent No.4 – M/s. PNC-Aakshya Joint Venture (“PNC Aakshya JV”,
for short) was declared as the successful bidder in Tender 2. By an
interim order dated 10th October 2024 this Court stated that “In the
meantime, it is provided that in case any work order is issued pursuant
to the subject tender, the same shall be subject to further orders which
may be passed on this Writ Petition. This Court allowed the
intervention of respondent No.4 – PNC Aakshya JV in Writ Petition No.
13976 of 2024 on 22nd October 2024. PNC Aakshya JV filed online RTI
on 19th March 2025 seeking information on the rejection of the security
clearance of EVRASCON in a tender invited by National Highways
Authority of India (“NHAI”, for short) in Kanpur, Uttar Pradesh. The
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NHAI in its reply dated 17th April 2025 to the RTI informed PNC Aakshya
JV that the security clearance of EVRASCON was denied by the
Ministry of Road, Transport and Highways (“MoRTH”) vide its letter
dated 12th March 2025 based on national security and public interest
perspectives.
7. This Court vide order dated 6th May 2025 declared the
petitioner as technically eligible, and directed CIDCO to consider the
petitioner’s financial bid along with the other eligible bidders and take
a decision afresh to award the contracts in the subject tenders. PNC
Aakshya JV filed SLP(C) No.13562 of 2025 before the Hon’ble Supreme
Court on 8th May 2025 challenging the order of this Court dated 6 th May
2025. CIDCO reopened the financial bid of the petitioner along with
the other bidders on 9th May 2025. The petitioner’s bid was declared as
the lowest (L1) bidder among all bidders in Tender 1 and Tender 2. The
Hon’ble Supreme Court vide its order dated 14 th May 2025 stated that
they were not inclined to interfere with the order dated 6 th May 2025
passed by this Court in Writ Petition No.13976 of 2024. The order
dated 14th May 2025 has a significant bearing and therefore needs to
be reproduced, which reads thus :-
“1. While we were not inclined to interfere with the order
passed by the High Court, Dr. Abhishek Manu Singhvi and Mr.
Gaurav Agarwal, learned Senior Advocates appearing for the
petitioner have submitted that as the High Court has not
considered their submission based on the applicability of Clause
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3(T) of the Tender document coupled with the letter dated
12.03.2025, they will approach the High Court invoking its review
jurisdiction. While we have not expressed any opinion on this
submission of the learned counsels, we permit them to withdraw
the Special Leave Petition.
2. Special Leave Petition is dismissed as withdrawn with
liberty to approach this Court against the main as well as the
review order if any and if so advised.”
8. The National Highways and Infrastructure Development
Corporation Limited issued a letter dated 6 th June 2025 denying the
security clearance of EVRASCON in respect of the Construction of
Intermediate Lane Road with Hard Shoulder from Km 0+000 to Km
13+080 of Tuting-Zido Section on NH-913 (Frontier Highway) in
Arunachal Pradesh. The denial of security clearance to EVRASCON in
the submission of Shri Sundaram, learned Senior Advocate for the
petitioner was in the context of the project being located in a
strategically sensitive border area, as is expressly recorded in the said
order itself.
9. On 16th June 2025 CIDCO addressed a letter requesting the
petitioner to share details of its foreign JV partner, EVRASCON to
obtain the security clearance certificate from the Government of India
as per Clause 3(t) of the NIB. Clause 3(t) of the NIB reads thus :-
“Clause 3(t) of the NIB
In case of JV Partner is foreign company, the Govt. of India
Security Clearance certificate shall be considered as mandatory
requirement during bid evaluation. For those bidders, who
become eligible for evaluation, of Technical Packet B as9 of 55
Bhogale WP-10537-2025.docspecified under ITB clause 43 the Employer/CIDCO shall apply
to the Govt. of India for such clearance certificate to the
concerned department. Such bidders shall submit all necessary
information and documents to CIDCO for obtaining security
clearance.
The Employer shall not be responsible if the Govt. of India and/or
any of its departments or agencies do not accord security
clearance to the bidder and shall have right to reject such
bid/bidders.”
10. There is a debate in respect of the highlighted portion which
according to CIDCO is inadvertently a part of Clause 3(t) of the NIB
which we shall advert to later. The petitioner relied upon Clause 43 of
the Instructions To Bidders (“ITB”, for short) which reads thus :-
“Clause 43 of the ITB
43. e-Tender Submission Opening
43.1. In case of a foreign bidder (Bidder not of Indian origin) the
Bidder should submit the security clearance from central
government before award of the work. If the foreign Bidder has
already been awarded/executing any project (either as a single
entity or as a JV partner) in India for any Govt/Semi-govt/ Public
undertaking, then the Security Clearance is not required. The
clearance should be obtained before opening of packet C. CIDCO
shall assist for getting security clearance from Government of
India.”
11. Shri Sundaram, learned Senior Advocate for the petitioner
laid much emphasis on Clause 43 of the ITB to contend that the said
clause carves out a specific exemption where such foreign bidder has
already been awarded or is presently executing, any project in India
(either as a single entity or as a JV partner) for any Government, Semi-
Government body, or Public Sector Undertaking, in which case, the
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requirement of obtaining a security clearance stands waived.
12. CIDCO again addressed a follow up letters to the petitioner
on 16th June 2025 and 20th June 2025. The petitioner responded to the
aforesaid letter on 23rd June 2025, submitting that Clause 3(t) of the
NIB makes security clearance a mandatory requirement only at the
stage of bid evaluation. Furthermore, the petitioner pointed out that
(i) this Court vide its order dated 6 th May 2025 had already declared the
petitioner’s JV as technically eligible and (ii) upon opening of the
financial bids, the petitioner’s JV emerged as the lowest (L1) bidder in
both Tender 1 and Tender 2. Therefore, the bid process stood
concluded, and Clause 3(t) had no applicability at this belated stage.
13. By a letter dated 23rd June 2025 CIDCO informed M/s.
Ashoka-Aakshya Joint Venture that pursuant to the order dated 6 th
May 2025, this Court had quashed and set aside the Letter of
Acceptance dated 10th October 2024 in Tender 1. CIDCO informed PNC
Aakshya JV that pursuant to the order dated 6 th May 2025, this Court
quashed and set aside the Letter of Acceptance dated 10 th October
2024, and the Work Order dated 15th October 2024 in Tender 2.
14. By the impugned letter dated 2nd July 2025 CIDCO rejected
the petitioner’s submissions and reiterated its demand for documents
relating to EVRASCON. By a letter dated 7 th July 2025 addressed by the
petitioner to CIDCO, the petitioner sought an extension to obtain legal
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advice. The CIDCO addressed a letter dated 8 th July 2025 to the State
of Maharashtra seeking security clearance of EVRASCON and
requested to forward the proposal to the Union of India for issuance of
security clearance. The petitioner sought clarification from CIDCO
regarding the applicability of Clause 43 of the ITB, which was referred
to in Clause 3(t) of the NIB vide it’s letter dated 11th July 2025.
15. Shri Sundaram, learned Senior Advocate submitted that it
was always the case of the petitioner that Clause 43 of the ITB is not a
part of Tender 1 or Tender 2. Clause 43 of the ITB is a part of NIB for
the Design, Construction and Commissioning of Kharghar -Turbhe
Tunnel Road (KTLR) for Direct Connectivity to International Corporate
Park (ICP) at Kharghar, Navi Mumbai. The petitioner addressed a letter
dated 22nd July 2025 to CIDCO reiterating that obtaining a security
clearance certificate at this belated stage is ex facia contrary to the
terms of the NIB. Further, the petitioner submitted that EVRASCON
has already been awarded projects in India for various governments
and public sector undertakings. Therefore, there is no requirement for
a fresh security clearance certificate as per the terms of the tender,
especially the exemption contemplated under Clause 43 of the ITB.
16. As an alternative, the petitioner submitted that Clause 3(o)
of the NIB stipulates that the constitution of the JV may be changed at
the sole discretion of CIDCO. The clause stipulates that any such
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modifications shall be at the sole discretion of CIDCO and shall not be
permitted for post bid submission, except in circumstances where the
change becomes inevitable, such as in matters arising from succession
laws, etc provided further that the minimum eligibility criteria remain
satisfied and the lead member continues to act in that capacity.
17. The petitioner filed the present Writ Petition on 29 th July
2025 being aggrieved by the actions of CIDCO in unilaterally initiating
the process of security clearance without consideration of the
petitioner’s letter dated 22nd July 2025. The State of Maharashtra on
30th July 2025 addressed a letter to the Union of India requesting to
examine the issue of granting the security clearance in favour of
EVRASCON.
18. PNC Aakshya JV filed Interim Application (L) No.26489 of
2025 on 31st July 2025 in the present Writ Petition seeking intervention
and impleadment. By an order dated 31 st July 2025 this Court tagged
the present Writ Petition and the Review Petition filed by PNC Aakshya
JV. The Review Petition is filed by PNC Aakshya JV for review of the
order dated 6th May 2025 passed by this Court in Writ Petition
No.13976 of 2024 pursuant to the liberty granted by the Hon’ble
Supreme Court vide order dated 14th May 2025 quoted hereinbefore.
By an order dated 25th August 2025, this Court allowed the
intervention application and directed impleadment of PNC-Aakshya JV
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as respondent No.4 to this Writ Petition. On 7th November 2025, CIDCO
informed this Court that a TOP SECRET communication had been
received from the State of Maharashtra/Union of India informing that
the security clearance of EVRASCON was denied by the Union of India.
CIDCO was directed by this Court to communicate the denial of
security clearance of EVRASCON to the petitioner and that the
petitioner was to take appropriate steps in furtherance thereof.
19. By the impugned letter addressed by CIDCO to the
petitioner on 10th November 2025, CIDCO informed the petitioner that
the security clearance of EVRASCON was denied by the Union of India.
The petitioner therefore filed the application for amendment which
came to be allowed.
(C) THE SUBMISSIONS OF SHRI SUNDARAM, LEARNED SENIOR
ADVOCATE FOR THE PETITIONER.
20. Article 77 of the Constitution of India governs the conduct
of the business of the Government of India. Under Article 77(3) of the
Constitution of India, the President is empowered to make rules for the
more convenient transaction of the business of the Government and
for allocation of such business among the Ministers. In pursuance
thereof, the Government of India (Transaction of Business) Rules, 1961
(“Rules of Business”) have been framed. Rule 4 thereof provides that
where the subject matter of a case concerns more than one
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department, no decision shall be taken or order issued unless all such
departments have concurred, or in the absence of such concurrence,
the matter has been decided by or under the authority of the Cabinet.
Rule 6 further provides for the constitution of Standing Committees of
the Cabinet as set out in the First Schedule to the Rules of Business.
The First Schedule inter alia provides for the constitution of the
Cabinet Committee on Security, which is entrusted with the matters
relating to defence, law and order, internal security, and policy matters
concerning foreign affairs having internal or external security
implications, including issues pertaining to agreements with foreign
countries on security-related matters.
21. The present case involves multiple departments of the
Government of India, including inter alia the Ministry of Home Affairs,
Ministry of External Affairs, Ministry of Road Transport and Highways,
and the Ministry of Finance. Therefore, any decision relating to the
grant or denial of security clearance ought to have been taken only
after obtaining the concurrence of all the concerned departments in
accordance with Rule 4 of the Rules of Business.
22. It is well settled that the Rule of Business framed under
Article 77(3) of the Constitution of India are mandatory in nature and
not merely directory. Non-compliance with the said Rules vitiates the
decision taken in violation thereof. In the absence of compliance with
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the mandatory requirement of consultation and concurrence of the
concerned Departments, the denial of security clearance cannot be
said to be a decision taken in accordance with law. The impugned
action of denial of security clearance is therefore vitiated for failure to
adhere to the mandatory procedure prescribed under Article 77 of the
Constitution of India and Rule of Business.
23. Union of India has submitted that the issue of security
clearance is a matter of policy and not a question of law. However, no
such policy has been placed on record to justify the denial of security
clearance in the present case. On the contrary, State of Maharashtra
has stated in its Affidavit in Reply that Union of India, by its letter
dated 25th September 2025, merely opined that “considering
Azerbaijan’s stance on the Kashmir issue and its strategic alliance with
Pakistan and Turkey, it may not be prudent from a security point of
view to get this strategic project executed through a joint venture that
has EVRASCON as a partner.” The denial of security clearance to
EVRASCON is thus founded on the opinion expressed in the said letter
and is not shown to be based on any policy or decision taken after
consultation with, or concurrence of, the relevant departments of the
Government as required under the aforesaid Rules.
24. The bilateral relations between the Republic of India and the
Republic of Azerbaijan are not shown to be strained, and commercial
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and trade relations between the two countries continue to subsist.
There is no policy decision, notification, circular, or directive placed on
record indicating that the participation of entities from the Republic of
Azerbaijan in infrastructure or strategic projects in India is prohibited
or restricted. In the absence of any such policy framework, the
impugned denial of the security clearance appears to be founded
solely on the opinion expressed in the letter dated 25 th September
2025. There is nothing on record to demonstrate that such a decision
was taken after consultation with, or with the concurrence of, the
relevant Departments of the Government of India as mandated under
Rule 4 of the Rules of Business. The impugned action is therefore
contrary to the procedure prescribed under Article 77 of the
Constitution and is liable to be set aside on this ground alone.
25. The denial of security clearance to EVRASCON cannot be
justified as a policy decision of the Government of India. It is settled
law that while matters of policy ordinarily fall within the domain of the
executive, the existence of such policy must be demonstrable from the
record. In the present case, Union of India has not placed on record any
policy, notification, circular, guideline or decision of the Government of
India indicating that the entities from the Republic of Azerbaijan, or
joint ventures involving such entities, are prohibited or restricted
from participating in infrastructure or strategic projects in India. On
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the contrary, the material placed on record indicates that the denial of
security clearance is founded solely on the contents of the letter dated
25th September 2025. The expression of such an opinion, in the
absence of any declared policy framework or decision taken in
accordance with the applicable Rules of Business, cannot be equated
with a policy decision of the Government of India.
26. Clause 3(t) of the NIB makes a cross reference to ITB Clause
43. The said clause does not independently stipulate any requirement
for obtaining a fresh security clearance but only refers to the
provisions contained in the ITB. CIDCO vide Letter dated 2 nd July 2025
reproduced Clause 3(t) of the NIB and accordingly, requested for
submissions of the documents. However, the said communication did
not clarify the scope, applicability or the precise requirement under the
ITB Clause 43. In view of the ambiguity in the aforesaid communication,
the Petitioner vide Letter dated 11 th July 2025, requested for a copy of
the relevant ITB Clause 43 mentioned in Clause 3(t) of the NIB.
27. CIDCO failed to provide any clarification regarding the
applicability of ITB Clause 43. The Petitioner after identifying the
relevant ITB Clause 43 vide Letter dated 22 nd July 2025 submitted that
there was no requirement for obtaining a fresh security clearance in
lieu of the provision because EVRASCON was already executing
projects in India for Govt./Semi-Govt./Public undertakings. The
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insistence on a fresh security clearance is wholly misconceived and
contrary to the terms of the NIB read with the ITB.
28. CIDCO, for the first time in its Affidavit in Reply, has sought
to contend that the reference to ITB Clause 43 in Clause 3(t) of the NIB
was a typographical error. Such a contention is clearly an afterthought
and is wholly untenable, particularly at this stage, considering the
magnitude and value of the projects involved in the present tender.
CIDCO cannot now conveniently disown or disclaim the reference to
ITB Clause 43 contained in the NIB.
29. The Petitioner vide its Letter dated 22 nd July 2025 in order to
avoid any delay in the execution of the said project and to ensure that
the work progressed without any impediment, and particularly in light
of the geopolitical tensions with Republic of Azerbaijan at the relevant
time, expressed its willingness to substitute EVRASCON in terms of
Clause 3(o) of the NIB. The said proposal was made bonafide and
without prejudice to the Petitioner’s contention that the tender
conditions did not mandate any fresh security clearance. The Petitioner
proposed such substitution purely as a measure to address any
concerns that may have arisen and to ensure the timely execution of
the project in the larger public interest. However, CIDCO failed to
consider the said proposal for substitution. The Petitioner has further
undertaken that it will execute the project itself; that no manpower
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under the direct or indirect control of EVRASCON will be deployed for
the purpose of the project. The Petitioner has also stated that there
will be no transfer of technology from the Petitioner to EVRASCON
and that no services or technical resources or support of any nature
will be sourced or imported from Azerbaijan.
30. In view of the above undertakings, there existed no
impediment for Respondent No. 2 to consider the Petitioner’s proposal
for substitution in terms of Clause 3 (o) of the NIB.
31. Clauses 3(k), 3(l) and 3(s) of the NIB require a joint
venture/consortium to declare the Lead Partner in the MoU and to
identify the person authorized to sign the bid and the contract. The
Lead Partner is designated as the single point of contact on behalf of
the joint venture and is responsible for all communication in relation to
the bid process. Accordingly, all related communications, which are to
be addressed to the authorized member of the joint venture. This
Court, by its Order dated 6th May 2025, has already considered and
decided the issue of the Petitioner’s locus standi. This Court held that
the tender conditions expressly permit authorization on behalf of the
joint venture and that the Petitioner, being the Lead Member, is duly
authorized to submit the bid on behalf of the joint venture. It was
further held that the present Petition has been filed by the Petitioner
on behalf of the joint venture. The said Order was affirmed by the
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Hon’ble Supreme Court on 14th May 2025, thus attaining finality.
32. A mere invocation of “national security” does not itself
exclude the applicability of the principles of natural justice. Union of
India has contended that this Court ought not to entertain the present
Petition solely because the issues raised therein concern the national
security of the country.
33. It is well settled that where the State seeks to withhold
disclosure of material on the ground of national security, it must
nevertheless satisfy the Court that there exists sufficient material
which justifies such non-disclosure. The State is required to
demonstrate, at the very least before the Court, that the decision is
founded on relevant material and that the claim of privilege is bona
fide and not a device to avoid judicial scrutiny.
34. In this regard, the Hon’ble Supreme Court in Madhyamam
Broadcasting Limited vs. Union of India and Others 1 and Manohar
Lal Sharma vs. Union of India and Others2 has held that while
considerations of national security may justify limited non-disclosure of
sensitive material, the State must nevertheless place sufficient
material before the Court so that the Court may satisfy itself that the
decision making process is not arbitrary, mala fide, or based on
irrelevant considerations.
1 (2023) 13 SCC 401
2 (2023) 11 SCC 401
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35. Accordingly, Union of India must satisfy this Court that there
existed sufficient material which warranted non-disclosure and that
the claim of national security is legitimately attracted in the facts of
the present case. Mere reliance on the phrase “national security”,
without demonstrating the underlying basis before the Court, cannot
be permitted to defeat judicial review.
36. EVRASCON is presently executing a project with Respondent
No. 2, inter alia, the Kharghar-Turbhe Tunnel Road Project (“Kharghar
Project”) after having been granted the requisite security clearance.
The Kharghar Project is valued at approx. Rs.2000 Crores and is
situated in close proximity to the Navi Mumbai International Airport
(“NMIA”).
37. The Affidavit in Reply filed by State of Maharashtra, records
that Union of India, vide its letter dated 25 th September 2025, opined
that it would not be prudent, from a security standpoint, to have the
subject “strategic” project executed through a joint venture involving
an Azerbaijani partner, particularly in view of Azerbaijan’s stance on the
Kashmir issue.
38. Union of India has thus denied security clearance to
EVRASCON in the present tender on the purported ground that the
project is “strategic” and situated near the NMIA. However, the present
project is situated at a far greater distance from the NMIA than the
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Kharghar Project which is presently being executed by EVRASCON with
the knowledge and approval of the Respondents. The denial of security
clearance in the present case is therefore manifestly inconsistent with
the Respondent’s own conduct in permitting EVRASCON to execute
the Kharghar Project. The impugned decision is therefore arbitrary and
suffers the non-application of mind.
39. The inconsistent treatment meted out to EVRASCON in
respect of two projects involving the same authority and similar
security considerations demonstrates that the decision to deny
security clearance in the present case is neither based on any cogent
material nor guided by any discernible principle.
40. Reliance is placed on the following decisions in support :-
(1) Ashoka Smokless Coal India (P) Ltd. and Ors vs. Union of
India & Ors.3
(2) Union of India and Ors. vs. Agricas LLP and Ors.4
(3) Delhi International Airport Limited vs. International
Lease Finance Corporation and Others5.
(D) Submissions of Shri Anil Singh, learned Additional Solicitor
General.
41. Shri Anil Singh, learned Additional Solicitor General
appeared on behalf of the Union of India, Ministry of Home Affairs and
3 (2007) 2 SCC 640
4 (2021) 14 SCC 341
5 (2015) 8 SCC 446
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made submissions justifying the denial of the security clearance. The
project for which the tenders are issued is of considerable strategic
importance. The proposal for security clearance was denied by the
Ministry of Home Affairs in respect of EVRASCON and the same was
conveyed to the Government of Maharashtra vide MHA OM dated 25 th
September 2025. The Ministry of Home Affairs examine such proposals
in the interest of national security. The denial of security clearance is
based on inputs which are secret and sensitive in nature. The Union of
India undertakes to produce the confidential records in sealed cover, if
so desired by the Court. However, in the matter of denial of security
clearance, the Ministry of Home Affairs claims privilege to the
confidential reports which are sensitive in nature. This Court may not
allow argument over the reasons for denial of security clearance as the
Ministry of Home Affairs examines such proposals in the interest of
security of State and it’s establishment. The denial of security
clearance is based on intelligence inputs. Reliance is placed upon the
press communication to submit that policy guidelines have been
framed by the Ministry of Home Affairs in the matter of consideration
of grant of security clearance and therefore the argument of Shri
Sundaram, learned Senior Advocate that such security clearance is in
breach of Article 77 of the Constitution of India is without any
substance.
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(E) SUBMISSIONS OF SHRI CHETAN KAPADIA, LEARNED SENIOR
ADVOCATE FOR CIDCO.
42. The security clearance in the matters of such strategic
importance is mandatory. Our attention is invited to the detailed
affidavit-in-reply filed on behalf of CIDCO while justifying it’s stand
that since the petitioner did not take any steps to seek security
clearance, it is CIDCO who had to make an application to the Union of
India through the State of Maharashtra seeking security clearance. It is
stated that the orders impugned in this Writ Petition are in terms of
the mandate of law and the conditions of the tender documents.
(F) SUBMISSIONS OF SHRI VIKAS SINGH, LEARNED SENIOR
ADVOCATE FOR THE PNC-AAKSHYA JV.
43. The Review Petition has been filed pursuant to the liberty
granted by the Hon’ble Supreme Court. It is open for the PNC- Aakshya
JV to seek a review on all permissible grounds. The petitioner has
misconstrued the order of the Hon’ble Supreme Court to mean that
only on the aspect of Clause 3(t) in its application to the security
clearance having been denied to EVRASCON in respect of other
projects, that the review could be sought. This Court has committed an
error apparent on the face of record while allowing the Writ Petition
earlier filed completely ignoring the vital aspect that the security
clearance in respect of two other projects with EVRASCON as a partner
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has been refused. The security clearance of EVRASCON was already
refused in respect of other tenders, on the self same ground the Writ
Petition filed by EVRASCON ought to have been dismissed by this
Court and therefore, the Review Petition is filed. Extensive submissions
are made on lines similar to those advanced by Shri Anil Singh and Shri
Chetal Kapadia.
44. Learned Additional Solicitor General and learned Senior
Advocates for CIDCO, PNC-Aakshya relied upon the following decisions
in support of their submissions :-
(1) Ex. Armymen’s protections Services P. Ltd. Vs. Union of
India and Others6.
(2) SCOD 18 Networking Pvt. Ltd. Vs. Ministry of Information
& Broadcasting and Others7.
(3) DIGI Cable Network (India) Private Limited vs. Union of
India and Ors.8
(4) Akbar Travel of India (Pvt) Ltd. vs. Union of India and Ors.9
(5) JMC Projects (India) Limited and Others vs. National
Highways Authority of India and Others10.
(6) Indo-China Steam Navigation Co. Ltd. vs. Additional
6 [2014] 3 S.C.R. 359
7 2015 SCC OnLine Bom 6570
8 (2019) 4 SCC 451
9 Writ Petition (L) No.656 of 2009 decided on 10th June 2009.
10 2022 SCC OnLine Del 353
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Collection of Customs, Calcutta and Others11.
(7) Narangs International Hotels Private Limited and Another
vs. Union of India and Others12.
(8) Bycell Telecommunications India Pvt. Ltd. and Anr. vs.
Union of India and Ors.13
(9) Coastal Marine Construction & Engineering Limited and
Anr. vs. Bharat Petroleum Corporation Ltd. and Ors.14
(10) Celebi Airport Services India Private Limited vs. Union of
India and Others15.
(11) JMC Projects (India) Ltd. and Another vs. National
Highways Authority of India and Others16.
(12) Madhyamam Broadcasting Ltd. (supra)
(13) Ex-Armymen’s Protection Services Private Limited vs.
Union of India and others17.
(14) Alankit Assignments Ltd. vs. Union of India and
another18.
(15) Poddar Steel Corporation vs. Ganesh Engineering Works
and others19.
11 1964 SCC OnLine SC 42
12 2011 SCC OnLine Bom 727
13 2011 SCC OnLine Del 5295
14 Writ Petition (L) No.6003 of 2025 decided on 22nd April 2025.
15 2025 SCC OnLine Del 4755
16 2022 SCC OnLine Del 4798
17 (2014) 5 SCC 409
18 2023 SCC OnLine Del 8696
19 (1991) 3 SCC 273
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(16) Vidharbha Irrigation Development Corporation and
others vs. Anoj Kumar Agarwala and others20.
(17) The Zamora21
(18) Secretary of State for the Home Department vs.
Rehman22.
(19) Afcons Infrastructure Limited vs. Nagpur Metro Rail
Corporation Limited and another23.
(20) Agamatel India Private Limited vs. Resoursys Telecom
and Others24.
(21) Prakash Asphaltings and Toll Highways (India) Limited vs.
Mandeepa Enterprises and Others25.
(22) Tata Motors Limited vs. Brihan Mumbai Electric Supply &
Transport Undertaking (BEST) and others26.
( 23) Union of India and another vs. International Trading Co.
and another27
45. We have heard learned counsel for the parties. We have
perused the memo of the Writ Petition, the Review Petition, the
relevant exhibits relied upon by the learned counsel and the materials
20 (2020) 17 SCC 577
21 [1916] 2 AС 77 (PC)
22 (2003) 1 AC 153 [UK House of Lords]
23 (2016) 16 SCC 818
24 (2022) 5 SCC 362
25 2025 SCC OnLine SC 1959
26 2023 SCC OnLine SC 671
27 (2003) 5 SCC 437
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on record.
(G) CONSIDERATION.
The Tender 1 and 2 for which the parties bid
46. Tenders 1 and 2 pertain to publicly critical and vital
infrastructure works for the Navi Mumbai Airport Influence Notified
Area (“NAINA”, for short). These tenders pertain to infrastructural
works which are critical for the development of the NAINA area and for
which the State foresees a heavy outlay of over Rs.3400 crores. NAINA
enjoys proximity of Navi Mumbai and has influence of Navi Mumbai
International Airport, Jawaharlal Nehru Port Trust and proposed
transport corridors viz. Multi-Modal corridor, Mumbai Trans Harbour
Link, dedicated freight corridor, Spur etc.
47. Even the petitioner has in paragraph 52 of the Writ Petition
set out the fact that the estimated value of the two tenders
demonstrates the scale and strategic relevance of the project. The
works contemplated are central to the development and
operationalization of the NAINA region, and any delay, arbitrariness, or
irregularity in the tendering process directly compromises the urban
planning, connectivity, and socio-economic upliftment of the area. It is
further relevant to refer to paragraph 53 of the Writ Petition where
the petitioner submits that the project forms the backbone of civic
mobility and infrastructure in one of the fastest growing urban
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corridors in the State of Maharashtra, any procedural impropriety,
discrimination, or lack of transparency in the awarding of these tenders
will not only result in severe financial implications but also cause
irreparable harm to public interest. It is thus the petitioner’s case that
the delay or derailment of such an essential infrastructure initiative,
due to arbitrary rejection of eligible bidders in awarding contracts, will
adversely affect thousands of residents, stakeholders, and commuters.
48. The petitioner participated in the tendering process through
consortium with EVRASCON, a company from Azerbaijan. Both the bids
submitted by the petitioner’s consortium were assessed on the
qualification of the consortium. In the earlier round of litigation filed
in this Court by the petitioner, this Court vide order dated 6 th May 2025
directed CIDCO to consider the financial bid of the petitioner’s JV, PNC-
Aakshya JV, M/s. Ashoka-Aakshya Joint Venture as well as other
eligible bidders and take a fresh decision to award the contract in
question. In furtherance of the said order, the financial bid was opened
on 9th May 2025 wherein the petitioner JV came out as the lowest
bidder. The petitioner JV was found eligible subject to it being in
compliance of the mandatory eligibility criteria that is subject to
security clearance being obtained for its JV partner EVRASCON.
49. Shri Sundaram, learned Senior Advocate heavily relied on
Clause 3(t) of the NIB in support of the petitioner’s case. According to
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Shri Chetan Kapadia, learned Senior Advocate for CIDCO, the
highlighted portion in Clause 3(t) is an inadvertent inclusion, since the
actual tender document contains no such clause. Shri Kapadia submits
that moreover, there is no technical “B Packet” in the tenders
concerning the present Petition.
50. Shri Sundaram, learned Senior Advocate was at pains to
point out that CIDCO is required to apply to the Government for
security clearance certificate only for bidders to become eligible for
valuation of the technical Packet B as specified under Clause 43 of the
ITB. The argument of Shri Sundaram is that there is no need for a
security clearance in case of EVRASCON, since EVRASCON as a JV
partner is already executing several projects of importance in India.
Our attention is invited to the averments made in the Writ Petition.
51. Clause 43 of the ITB did not form part of the NIB and tender
documents made available to the petitioner and that the same is from
the tender documents relating to a project which involved a
construction of tunnel road for Direct Connectivity to International
Corporate Park at Kharghar, Navi Mumbai which is relating to a project
not concerned with the subject tenders. It is thus the submission of
CIDCO that the petitioner cannot be allowed to interpret a
typographical remnant of a certain Clause 43 from an unrelated bid
documents/ITB to the subject tenders and seek exemptions/benefits
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arising therefrom.
52. We find substance in the submission of learned Senior
Advocate for CIDCO that the petitioner is placing reliance on a certain
Clause 43 from an unrelated bid document, that is the ITB, and claiming
that the petitioner is entitled to be exempted from the strict
requirement of Clause 3(t) of the NIB.
53. Moreover, the tenders pertain to works under NAINA
project. The project work pertains to areas where vital installations and
infrastructure related to a new airport are constructed or would be
constructed. It is not possible for us to ignore the submission of Shri
Anil Singh, learned Additional Solicitor General and the learned Senior
Advocate for CIDCO that there are impelling geopolitical
considerations impinging upon the safety of the Country that are also
involved. Thus, we find substance in the submission of CIDCO that the
bid documents/NIB concerning this project is a complete document
with mandatory requirements and conditions and the same is a
separate document distinct from the other ITB relied upon by the
petitioner. Clause 43 of ITB relied upon by Shri Sundaram is not
applicable to the subject tenders.
54. Learned Senior Advocates appearing for the contesting
respondents made exhaustive submissions that the petitioner has no
locus to challenge the decision of rejection of security clearance taken
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by the competent authority of the Central Government with respect to
EVRASCON. It is the submission that the decision is pertaining to
EVRASCON only and not to the petitioner. It is therefore urged that
only EVRASCON has a right or locus, if at all, to challenge the decision.
55. The issue of locus need not detain us for long. Even in the
earlier round of litigation viz. Writ Petition No.13976 of 2024, the same
was filed by the very same petitioner viz. Thakur Infraprojects Private
Limited. An objection was raised that the JV had not challenged the
validity of the tender conditions. The Writ Petition was entertained at
the instance of the petitioner being a lead partner upon analysis of the
relevant clauses of the tender document. This Court in paragraph 30
observed that it is evident that the same permit authorisation of one
of the members of the JV to deal with the bid, sign the agreement or
enter into contract in respect of the said bid etc. It is further observed
that a member of the JV can also be authorised to act as single point
contact and be responsible on behalf of the JV. We therefore are not
impressed with the objection to the locus of the petitioner to maintain
the present Writ Petition and the same is stated to be rejected.
56. The most important issue to be decided in this Writ Petition
is the aspect of security clearance certificate from the Union of India.
To deal with this issue it is necessary to repeat a few relevant facts for
considering this issue in proper perspective. As indicated earlier, this
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Court by the order dated 6th May 2025 in Writ Petition No.13976 of
2024 allowed the Writ Petition filed by the petitioner. Accordingly, the
decision dated 8th October 2024 of the Tender Committee of the
CIDCO was quashed and set aside; work order dated 15 th October 2024
issued in favour of PNC-Aakshya JV for Tender 2 was quashed and set
aside; the action of approval of financial bid of M/s. Ashoka – Aakshya
Joint Venture for Tender 1 was quashed and set aside; CIDCO was
directed to consider the financial bids for M/s. Thakur- EVRASCON JV,
PNC-Aakshya JV and M/s. Ashoka – Aakshya Joint Venture as well as
other eligible bidders and take decision afresh to award the contracts
in question.
57. PNC-Aakshya JV filed SLP before the Hon’ble Supreme Court
challenging the order dated 6th May 2025. On 7th May 2025 Azerbaijan
issued a stern statement opposing India in India’s war with Pakistan
and stood in solidarity with Pakistan. On record is an Article dated 7 th
May 2025 published by Caliber (An Azerbaijan based publisher)
criticizing India’s military response of Operation Sindoor.
58. During the pendency of the SLP, CIDCO in compliance of the
directions given by this Court, re-opened the financial bids of all
eligible bidders in Tender 1 and Tender 2 on 9 th May 2025. M/s. Thakur-
EVRASCON JV stood as lowest (L1) bidder for Tender 1 and Tender 2.
The Hon’ble Supreme Court vide order dated 14 th May 2025, in the SLP
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filed by PNC-Aakshya JV challenging this Court’s order dismissed the
SLP as withdrawn. In view of the observations made by the Hon’ble
Supreme Court, PNC-Aakshya JV filed the Review Petition in this Court
on 15th May 2025 which is tagged along with this Writ Petition.
59. In compliance of the order passed by this Court, CIDCO on
16th June 2025 requested the petitioner to submit certain documents
pertaining to EVRASCON in connection with obtaining a security
clearance certificate from Government of India as per Clause 3(t) of the
NIB. CIDCO on 20th June 2025 called upon the petitioner to submit the
said documents by 23rd June 2025, failing which CIDCO would initiate
the process of obtaining security clearance directly from Government
of India.
60. The petitioner took a stand vide letter dated 23 rd June 2025
addressed to CIDCO that as the bid evaluation process had already
concluded and hence, Clause 3(t) had no applicability at this belated
stage. By a communication dated 2 nd July 2025 CIDCO rejected the
petitioner’s submissions that security clearance was not necessary and
reiterated its demand for documents relating to EVRASCON. Vide
letter dated 7th July 2025 the petitioner sought extension from CIDCO
to obtain legal advice and conveyed its intent to submit a
comprehensive reply within the week.
61. CIDCO by a letter dated 8th July 2025 forwarded a request
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with available bid documents to the State Government for seeking
security clearance of EVRASCON through the Government of
Maharashtra. By the letter dated 11 th July 2025 the petitioner sought
clarification from CIDCO regarding applicability of Clause 43 of ITB,
which was referred to in Clause 3(t) of NIB. Vide letter dated 22 nd July
2025 the petitioner requested CIDCO to consider and accord its
approval for the proposed reconstitution of the JV in accordance with
Clause 3(o) of NIB.
62. The Government of Maharashtra issued a letter dated 30th
July 2025 to the Ministry of Home Affairs seeking issuance of security
clearance for EVRASCON. The Ministry of Home Affairs denied security
clearance in respect of EVRASCON by stating “…considering
Azerbaijan’s stance on the Kashmir issue and its strategic alliance with
Pakistan and Turkey, it may not be prudent from a security point of
view to get this strategic project executed through a joint venture that
has EVRASCON as a partner”.
63. Shri Sundaram was at pains to point out that EVRASCON has
nothing to do with the diplomatic relationship between India and
Azerbaijan. EVRASCON is a commercial entity carrying out various
infrastructure projects in different countries. It is his further
submission that assuming the relationship between these two
countries are strained is no reason to prohibit EVRASCON executing an
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infrastructure project in India. Shri Sundaram submitted that in any
case the trade between India and Azerbaijan is ongoing and presently
the relations are normalised. It is further submitted that there is no
policy in place governing the issue of security clearance and therefore
the decision rejecting the security clearance falls foul of Article 77 of
the Constitution of India.
64. In our considered opinion, and from the materials on record,
we have no hesitation in observing that the tenders pertain to publicly
critical and vital infrastructure works for NAINA. The security clearance
has to be regarded as a mandatory requirement. We have carefully
examined the decisions relied by learned Senior Advocates. The
concept of national interest occupies a central place in governance.
The States bears the primary responsibility of safeguarding the
sovereignty, security and stability of the nation. The decisions relating
to national security are therefore accorded the highest importance, as
they directly concern the safety and welfare of the country and its
citizens. In matters involving national interest, the protection of the
nation is the paramount consideration. We find favour with the
submissions of Shri Anil Singh, learned Additional Solicitor General that
national security assessment frequently involve complex evaluations
based upon intelligence inputs, strategic considerations and
confidential information available to the executive authorities. Such
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matters require specialised knowledge, continuous monitoring of
potential risks, and access to sensitive material which is ordinarily not
available in the public domain. For this reason, the executive branch of
the Union of India is considered best equipped to assess such concerns
and take appropriate decisions in the larger public interest.
65. Security evaluations undertaken by the Government often
rely upon inputs gathered from specialised intelligence and security
agencies such as the Intelligence Bureau and the Research and Analysis
Wing. These agencies operate within a confidential framework and
frequently rely upon classified material, diplomatic communications
and strategic assessments which cannot be publicly disclosed without
jeopardising national interests. Consequently, the decision-making
process in such matters is necessarily founded upon sensitive
information and strategic considerations that cannot be open to
judicial scrutiny.
66. In projects of strategic or infrastructural importance, the
Government is free to adopt such measures as it considers necessary to
safeguard national security. Even where commercial interests are
involved, considerations of national security must take precedence.
Economic gains or contractual expectations cannot override concerns
relating to the safety and integrity of the Nation. The larger interest of
the country must prevail over private or commercial considerations. In
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matters of such nature, this Court would ordinarily refrain from
examining the merits of security related decisions taken by the Union
of India. We have no hesitation in following the principle of judicial
restraint since we are satisfied that present is a case which would be
exclusively within the domain of the Union of India having regard to
the vital ramifications regarding national security, strategic policy and
diplomatic relations. The stand of the Union of India is on record. We
must bear in mind the doctrine of separation of powers propounded by
the Constitution of India allowing the Union Executive to operate
without judicial encroachment in these critical areas.
67. It is equally well settled that issues concerning foreign
relations and diplomatic posture fall within the domain of executive
policy. The evaluation of the relationship between sovereign States,
including the assessment of whether a particular country maintains
association or cooperation with entities inimical/hostile to India’s
security interests, is fundamentally a matter within the domain of the
executive government. The Government while assessing the security
risks may take into account the geopolitical alignments and strategic
conduct of foreign nations such as Azerbaijan and their interactions
with countries like Pakistan. Such evaluations may not always be
reflected in publicly declared policies or formal designations of
hostility. Nonetheless, the absence of an express declaration does not
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preclude the Government from forming a security perception based on
intelligence inputs and diplomatic assessments. The scope of judicial
review in matters touching upon national security is therefore limited.
Courts do not ordinarily substitute their own opinion for that of the
executive in matters involving strategic, security or diplomatic
considerations. Judicial review may extend only to examining whether
the decision-making process is vitiated by mala fides, arbitrariness or
gross illegality. It is not open for this Court to undertake a substantive
re-evaluation of the intelligence inputs or security assessments
forming the basis of the decision, for such an exercise would require
the Court to enter into the domain of the executive which has the
capacity and the expertise to form such an opinion.
68. No doubt this Court has to perform its constitutional duty in
ensuring that the governmental action confirms to the constitution and
the rule of law. Intervention may be warranted in exceptional
circumstances where the action is shown to be arbitrary, mala fide,
irrational or contrary to law. Beyond this limited scrutiny, courts
ordinarily refrain from examining the sufficiency or adequacy of the
materials on the basis of which the Government forms its opinion. The
scope of judicial review further narrows down when it comes to
examining the decisions pertaining to national security.
69. In national interest the executive always has the latitude to
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take timely and effective measures in the interest of national security.
Thus, in matters concerning national security and the larger public
interest, the interest of the nation remains the highest consideration.
Undoubtedly it is the duty of the constitutional Court to preserve the
rule of law while respecting the constitutional domain of the executive
in areas where security considerations require informed and sensitive
decision-making.
70. Several decisions have been relied upon by learned Senior
Advocate on this aspect of National Security. In Ex. Armymen’s
protections Services P. Ltd. (supra), Their Lordships in paragraph 16
observed that what is in the interest of national security is not a
question of law. It is a matter of policy. It is not for the court to decide
whether something is in the interest of State or not. It should be left to
the Executive. The decision whether something is or is not in the
interest of national security are not a matter for judicial decision. They
are entrusted to the executive. Depending on the facts of the
particular case, it will however be open to the court to satisfy itself
whether there were justifiable facts, and in that regard, the court is
entitled to call for the files and see whether it is a case where the
interest of national security is involved. Once the Union of India has
taken the stand that the issue of national security is involved, it is not
necessary to disclose the reasons to the affected party.
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71. We have also gone through the decision of the Delhi High
Court in Celebi Airport Services India Private Limited (supra). His
Lordship has in depth discussed the law regarding the security
clearance in national interest. Learned Single Judge of the Delhi High
Court in JMC Projects (India) Limited and Others (supra) has held that
security clearance is a mandatory and independent pre-condition for
participation in, for award of, a public contract, and a bidder cannot
claim such clearance as a matter of right. Its grant or denial depends on
security and contemporaneous security and international relations
considerations. Prior clearances on ongoing contract do not create any
entitlement to automatic clearance for subsequent projects. The view
of the learned Single Judge in JMC Projects (India) Limited and Others
(supra) has been upheld by the Division Bench of the Delhi High Court
in JMC Projects (India) Limited and Others.
72. In Celebi Airport Services India Private Limited (supra) it is held
that once national security clearance has been cancelled/revoked, it is
not for the Court to “second-guess the same”. No doubt, the principles
of natural justice are sacrosanct; however, national security will take
precedence over enjoyment of commercial rights. Prior clearances on
ongoing contracts do not create any entitlement to automatic
clearance for subsequent projects.
73. Shri Sundaram, learned Senior Advocate submitted that
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there is no policy governing grant of security clearance and therefore
the same falls for foul of Article 77 of the Constitution of India.
Article 77 of the Constitution of India reads thus :-
“77. Conduct of business of the Government of India.
(1) All executive actions of the Government of India shall be
expressed to be taken in the name of the President.
(2) Orders and other instruments made and executed in the name
of the President shall be authenticated in such manner as may be
specified in rules to be made by the President, and the validity of
an order or instrument which is so authenticated shall not be
called in question on the ground that it is not an order or
instrument made or executed by the President.
(3) The President shall make rules for the more convenient
transaction of the business of the Government of India, and for the
allocation among Ministers of the said business.”
74. Shri Anil Singh, learned Additional Solicitor General
submitted that the argument relating to Article 77 of the Constitution
of India is raised for the first time by way of a rejoinder and a specific
case is not pleaded in the Petition. Shri Sundaram, learned Senior
Advocate in response submitted that the case is pleaded by the
petitioner that the decision rejecting the security clearance is arbitrary
and in support of this submission the relevant provisions of law are
being relied upon which exercise is permissible.
75. In our opinion, the issue of national security is a dynamic
concept. It may not be possible to foresee a situation as to what act
constitute a threat to the national security. The executive must have
the latitude and necessary flexibility to take decisions which are in
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national interest. We do not intend to put fetters on the decision-
making by the executive by going into the dispute as to whether the
denial of security clearance was a policy mandating compliance of
Article 77 of the Constitution of India in the peculiar facts of this case.
In any case Shri Anil Singh, learned Additional Solicitor General has
placed on record a press communication dated 27th December 2017
which reads thus :-
“MHA has formulated detailed policy guidelines for assessment of
proposals received from various ministries from the perspective
of national security. Based on the inputs received from the
agencies, MHA takes decision to grant or deny security clearance
with reference to core national security i.e. unity, integrity and
sovereignty of the country. MHA has not delegated the decision
of granting/denying the security clearance that affect core
parameters of national security i.e. unity, integrity and
sovereignty of the country. However, other inputs are shared with
the concerned administrative ministries to enable them to take
appropriate decision, as deemed fit, in accordance with their
rules, policy, procedure, guidelines, tender/contract conditions
etc.This was stated by the Minister of State for Home Affairs, Shri
Hansraj Gangaram Ahir in a written reply to question in the Rajya
Sabha today.”
(emphasis supplied by us)
76. We therefore do not find any merit in the submission of Shri
Sundaram, learned Senior Advocate on the decision-making process of
refusing security clearance.
77. Shri Sundaram, learned Senior Advocate then urged that
since a decision has been taken referring security clearance and
informed to the petitioner, this Court should call for the concerned
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files and satisfy itself that the decision is based on tangible materials.
Shri Anil Singh, learned Additional Solicitor General opposed such a
course and submitted that in cases of such a nature involving foreign
policy and diplomatic relations between the countries, this Court
should not call for the files which are confidential documents. The
Union of India claims privilege. However, in all fairness to the
Additional Solicitor General and considering the stance of the Union of
India in the affidavit-in-reply, it is submitted that should the Court call
for the files, the Union of India has no hesitation in presenting the
same in a sealed cover for the perusal of this Court. Without laying
down any precedent, considering the stand taken in the affidavit-in-
reply and the willingness on the part of the Union of India to produce
the files for perusal of this Court, for our satisfaction we have gone
through the confidential file. Suffice it to observe that we are satisfied
with the stand of the Union of India in rejecting the security clearance.
78. Thus, our task in the exercise of powers under Article 226 of
the Constitution of India is to balance a private commercial interest of
EVRASCON, a foreign entity, a JV partner of the petitioner; as against
the safety and security of the entire country; so also a private
commercial interest of the petitioner as against relations of India with
other countries in the context of the national security. It is well settled
that Union of India is a domain expert when it comes to aspect of
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national security and security of the nation. The matters of national
security have been judicially recognised as the matters of policy. It is
trite that this Court would not normally interfere in the matters of
policy especially where it concerns the safety and security of the
nation. This Court cannot examine or sit in appeal over the reasons for
rejection of the security clearance. Judicial review is extremely limited
and in a narrow domain considering that these matters are best left to
the Union of India which has the expertise and best equipped to deal
with such matters of national security.
79. The Union of India in its affidavit-in-reply which is on record
has specifically taken a stance that the denial of security clearance is
based on intelligence inputs and that the same is based on inputs
which are stated as sensitive in nature. The State of Maharashtra in its
affidavit-in-reply has stated that “considering Azerbaijan’s stance on
the Kashmir issue and its strategic alliance with Pakistan and Turkey, it
may not be prudent from a security point of view to get this strategic
project executed through a joint venture that has EVRASCON as a
partner.”
80. Security and threat perceptions are dynamic in nature. The
timing of the clearance sought, the nature of project for which the
clearance has been sought, the location of the project for which the
clearance has been sought are all crucial and paramount factors which
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would arise for consideration while taking a decision.
81. The argument of Shri Sundaram is that since EVRASCON has
been granted security clearance in the past and it is already executing
infrastructure projects in India, there is no need for fresh security
clearance. The further submission is that once the petitioner JV has
been found to be the L1 bidder, the stage of getting the security
clearance is over and therefore, it is not necessary to get a security
clearance. This is an argument which can only be stated to be rejected.
It is not possible for us to interpret Clause 3(t) of the tender document
in the manner learned Senior Advocate for the petitioner wants us to
construe. We have no hesitation in coming to the conclusion that
CIDCO was justified in insisting for a security clearance. That the
petitioner JV is L1 bidder is no ground to do away with the mandatory
requirement of security clearance insisted upon by CIDCO.
82. We are in agreement with the submission of Shri Anil Singh,
learned Additional Solicitor General that grant of security clearance to
a foreign entity depends on various factors including international
relations at the relevant time with the country concerned, which keeps
changing from time to time. There cannot be a straight-jacket formula
that because the foreign entity is executing a project in India would
result in automatic clearance in every project. These are matters best
left to the authorities in charge of the security of the nation. The
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agencies act in public interest and when no malafides are alleged
against them, it is not possible for us to interfere with the impugned
decision. The persuasive submission of Shri Sundaram that denial of
security clearance to EVRASCON only because the company is based in
Azerbaijan with whom India has strained relations, and hence such
perception is arbitrary, does not commend us. These matters of
perception are best left to the executive. It is not possible for us to
substitute our opinion for that of the Union Executive.
83. Thus, we have no hesitation in holding that the contention of
Shri Sundaram that Clause 3(t) of the bid document/NIB shall not be
applicable to the petitioner as it only pertains to requirements during
“bid evaluation” whereas the petitioner JV’s bid has crossed the stage
of “bid evaluation” since the order of this Court has already declared
the petitioner JV to be technically eligible, is without any merit.
84. We are inclined to agree with the submission of Shri Chetan
Kapadia, learned Senior Advocate for CIDCO that “bid evaluation” is a
continuous long drawn process and can only be completed after
issuance of the allotment letter in favour of the lowest bidder. The
term “bid evaluation” cannot be interpreted to mean that the
tendering authority i.e. CIDCO is injuncted from raising bid document
requirements after a specific date/stage. The evaluation of the
technical bid and financial bid are only parts of the overall “bid
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evaluation”. In terms of Clause 3(t), CIDCO had every right to raise the
requirement pertaining to security clearance certificate even after
deeming the petitioner to be technically eligible. The order passed by
this Court dated 6th May 2025 is very clear in as much as the challenge
was to the rejection of the bid of the petitioner on technical grounds
which this Court interfered with. The security clearance is “Mandatory
Eligibility Criterion” which the CIDCO rightly insisted the petitioner JV
to comply. Upon reading of the order dated 6 th May 2025 passed by
this Court, it is not possible for us to conclude that the findings
rendered in the context of eligibility of the petitioner amounted to
waiving of the requirement of the mandatory eligibility criterion of
security clearance altogether.
85. Now let us consider the submission of Shri Sundaram as
regards considering the proposal dated 22 nd July 2025 for substitution
of EVRASCON in terms of clause 3(o) of NIB. For the facility of
convenience, clause 3(o) of the NIB is extracted, which reads thus:-
“(o) Approval for change of constitution of JV firm shall be at the
sole discretion of the CIDCO. The constitution of the JV form shall
not be allowed to be modified after submission of the bid by the
JV firm except when modification become inevitable due to
succession laws etc. and in any case the minimum eligibility criteria
should not get vitiated. In any case, the Lead Member should
continue to be the Lead Member of the JV firm. Failure to observe
this requirement would render the offer invalid.”
86. From a bare perusal of clause 3(o) it is obvious that any
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approval pertaining to change of constitution cannot be allowed after
submission of the bid. Only exception is when the modification
becomes inevitable due to succession laws etc. and in any case the
minimum eligibility criteria should not get vitiated. Thus, the scope of
the said Clause 3(o) is restricted to allowing changes only in specific
scenario of re-submission of bid. The petitioner was declared as L-1
bidder. The tenders are at an advanced stage of bid
evaluation/allotment i.e. post submission of the bid. The request made
by the petitioner, therefore, does not fall within the ambit of the first
criterion i.e. modification of the petitioner JV before the submission of
the bid.
87. Further, the modification sought to be made is not because
it has become inevitable due to succession laws. The petitioner wants
a complete new entity to replace EVRASCON as a partner of the JV.
We are therefore in agreement with the submission of learned Senior
Advocate for CIDCO that if the parameters of Clause 3(o) of the bid
document/NIB are disregarded on the basis of the petitioner’s plea,
the same would give rise to a situation wherein the CIDCO shall then
have to re-evaluate the bid of the petitioner in its entirety. The CIDCO
would then be required to scrutinize the JV partner of the petitioner
proposed to be substituted and all ancillary requirements surrounding
the same. There is definitely substance in the submission of learned
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Senior Advocate for CIDCO that the petitioner’s prayer for substitution
is accepted, the same advantage would have to be given to all other
bidders to maintain parity and CIDCO, being a State entity, will have to
undertake an extensive exercise of assessing the eligibility of every
bidder and co-relate the same with the requirements of the tender
documents before any bid is confirmed. This would be also unfair to
other bidders who may have chosen to avail the same route as the
petitioner i.e. to reconstitute the JV after submissions of bid. The
prayer made by the petitioner for substituting EVRASCON with
another entity, therefore, deserves to be rejected.
88. We now briefly refer to the decisions relied upon by Shri
Sundaram in support of his submissions. Ashoka Smokeless Coal India
(P) Ltd. (supra) is a case where the validity and or legality of a scheme
framed by Coal India Ltd. for sale of coal by electronic auction (E-
auction) was in question. Their Lordships held in paragraph 163 that,
“E-Auction is not a policy decision of the Central Government. Such a
policy decision on the part of the executive of the Central Government
must be strictly construed in terms of Article 77 the Constitution of
India.” We find that the decision in Ashoka Smokeless Coal India (P) Ltd.
(supra) is distinguishable in facts, as the question of national security
was not involved.
89. Again the decision relied upon in Delhi International Airport
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Ltd. (supra) and in Union of India & Ors. Vs. Agricas LLP & Ors. (supra) is
not in the context of national security. Hence, distinguishable on facts.
Shri Sundaram then placed reliance on the decision in Madhyamam
Broadcasting Limited Vs. Union of India & Ors. (supra) where the law
regarding the scope of administrative action has been summarised. The
Hon’ble Supreme Court observed that confidentiality and national
security are legitimate goals recognised by the Constitution for the
purpose of limiting procedural rights and that the burden is on the
State to prove through cogent material that confidentiality and
national security concerns to protect national interest, would be
served by non-disclosure. It is held that the Court must determine if
the purpose is legitimate in the light of constitutional values and
dynamic socio-political context. The Hon’ble Supreme Court held that
reports of Intelligence agency impact decision on life, liberty and
profession and absolute immunity from disclosure would be
antithetical to transparency and accountability. Document claimed to
be related to state affairs must be disclosed, if on a preliminary inquiry
court opines that it does not relate to affairs of state.
90. In the facts of the case, the Supreme Court was of the view
that the denial of security clearance to operate a news channel is a
restriction on the freedom of press, and such restriction is
constitutionally permissible only on the grounds stipulated in Article
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19(2) of the Constitution. Their Lordships have observed that the
expression national security does not have a fixed meaning, but the
Courts do not resort to a hands-off approach when it is claimed that
national security implications are involved. It is imperative for the
State to prove through the submission of cogent material that non-
disclosure is in the interest of national security. It is the Court’s duty to
assess if there is sufficient material for forming such an opinion. A
claim cannot be made out of thin air without material backing for such
a conclusion. The Court must determine if the State makes the claim in
a bona fide manner. The Court must assess the validity of the claim by
determining (i) whether there is material to conclude that the non-
disclosure of the information is in the interest of national security; and
(ii) whether a reasonable prudent person would arrive at the same
conclusion based on the material. The reasonable prudent person
standard which is one of the lowest standards to test the
reasonableness of an action is used to test national security claims by
courts across jurisdictions because of their deferential perception
towards such claims. This is because courts recognise that the Union of
India is best placed to decide if the interest of national security would
be served. The court allows due deference to the Union of India to
form its opinion but reviews the opinion on limited grounds of whether
there is nexus between the material and the conclusion. The Court
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cannot second-guess the judgment of the Union of India that the
purpose identified would violate India’s national security. It is the
executive wing and not the judicial wing that has the knowledge of
India’s geopolitical relationships to assess if an action is in the interest
of India’s national security.
91. The stand of the Union of India for refusing the security
clearance in the present case is considering Azerbaijan’s stance on the
Kashmir issue and its strategic alliance with Pakistan and Turkey and
hence it may not be prudent from a security point of view to get this
strategic project executed through a joint venture that has EVRASCON
as a partner. We see no reason to interfere with the impugned decision.
Consequently, we do not find any merit in the Writ Petition. The Writ
Petition is dismissed.
92. So far as the Review Petition is concerned, since the issues
are interrelated, the Review Petition was heard along with the present
Writ Petition. We do not find any error apparent on the face of the
record in the Order dated 6th May 2025 of this Court to warrant
interference in the exercise of the review jurisdiction of this Court.
While dealing with the present Writ Petition, we have already held that
the Security Clearance Certificate is required of bid evaluation, not just
technical and financial evaluation. The security clearance to EVRASCON
has been refused by the Union of India. In view of the observations
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made in the Writ Petition, nothing further survives for consideration in
the Review Petition on the aspect of security clearance. The Review
Petition is rejected.
93. All Interim Applications are disposed of.
[SHARMILA U. DESHMUKH, J.] [M.S. KARNIK, J.]
94. After the judgment is pronounced, a request for stay of this
order is made. In the facts and circumstances of the present case, we
refuse to grant such a request. The request is rejected.
[SHARMILA U. DESHMUKH, J.] [M.S. KARNIK, J.]
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Signed by: Pradnya Bhogale
Designation: PA To Honourable Judge
Date: 07/03/2026 18:40:01