Contractor cannot be disqualified solely for having work in hand above Rs 100 crore, says Himachal High Court

2 min readShimlaUpdated: Jul 16, 2026 10:13 PM IST

The high court issued notice to the State and listed the matter for further hearing on August 18. (File Photo)

The Himachal Pradesh High Court on Thursday observed that a government contractor cannot be disqualified solely on the ground of having ongoing works worth more than Rs 100 crore, while adding that the state is at liberty to assess a bidder’s performance capabilities before awarding contracts.

The observation came from a Division Bench comprising Chief Justice Gurmeet Singh Sandhawalia and Justice Bipin Chander Negi while hearing a writ petition filed by Una-based government contractor M/s Om Prakash Sharma and Sons challenging the cancellation of a tender.

Opposing interim relief, the State argued that the petitioner had failed to complete several ongoing projects and was already overburdened with work.

The high court issued notice to the State and listed the matter for further hearing on August 18.

Earlier, the petitioner contended that the tender was cancelled through an order dated July 2 after only two bidders participated and the firm was declared ineligible because it had ongoing works valued at over Rs 113.57 crore.

According to the petition, the disqualification was based on government instructions issued on October 29, 2025, which barred contractors having more than two works exceeding Rs 20 crore each or cumulative awarded works above Rs 100 crore. The petitioner argued that these instructions were modified on May 30, 2026, limiting the criterion to the balance value of ongoing works rather than the total awarded value.

The Bench also took note of a similar matter pending before the high court where the legality of restricting larger contractors from participating in tenders is under consideration.

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The petitioner further submitted that the same work relating to the construction of a new block for the CBT Examination Hall of the Rajya Chayan Aayog in Hamirpur has been re-advertised, making the firm liable to be disqualified again on identical grounds.