THAKUR INFRAPROJECTS PVT LTD v. STATE OF MAHARASHTRA THR DIRECTORATE OF INDUSTRIES AND ORS
Judicial Restraint in National Security Matters - Denial of Security Clearance to Foreign JV Partner and Impermissibility of Post-Bid Partner Substitution.
Court: Bombay High Court
Citation: 2026:BHC-AS:11253-DB
Decision Date: 07-03-2026
List of Laws
Constitution of India, Article 226; Constitution of India, Article 77; Government of India (Transaction of Business) Rules, 1961; Administrative Law - Judicial Review and National Security; Public Tender Law - Mandatory Eligibility Criteria
- Facts: The petitioner, Thakur Infraprojects Private Limited, as a lead partner in a joint venture (JV) with EVRASCON (a foreign entity from Azerbaijan), emerged as the lowest bidder (L1) for two major infrastructure tenders issued by CIDCO for the NAINA project. CIDCO sought a security clearance for EVRASCON from the Ministry of Home Affairs (MHA) as per the Notice Inviting Bids (NIB). During the pendency of the litigation, the Union of India denied the security clearance, citing Azerbaijan’s geopolitical stance on the Kashmir issue and its strategic alliance with countries inimical to India’s interests. The petitioner challenged this denial and sought to substitute its JV partner under Clause 3(o) of the NIB to save the bid.
- Procedural Posture: The petitioner filed a Writ Petition under Article 226 of the Constitution of India challenging CIDCO’s demand for security clearance and the subsequent denial by the Union of India. Simultaneously, a rival bidder (PNC-Aakshya JV) filed a Review Petition against an earlier court order that had declared the petitioner technically eligible. Both matters were heard together by the Bombay High Court.
- Issue: Whether the court can interfere with the executive's decision to deny security clearance on grounds of national security and foreign policy; and whether a bidder can substitute a JV partner after the submission of bids to circumvent such a denial.
- Holding: No, the court cannot substitute its opinion for that of the executive in matters of national security; and no, the substitution of a JV partner at a belated stage is not permissible as it would violate the parity of the tendering process.
- Reasoning: The Court reasoned that national security is a matter of executive policy and the Union of India is best equipped to assess geopolitical risks based on intelligence inputs. Following the principle of judicial restraint, the Court held that unless a decision is proved to be mala fide or grossly arbitrary, it should not be "second-guessed". Regarding the substitution of the JV partner, the Court found that Clause 3(o) of the NIB only allowed modifications in inevitable circumstances like succession, not to replace an entity that failed a mandatory eligibility criterion. Allowing such substitution would require a fresh evaluation of the entire bid and would be unfair to other bidders.
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