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Delhi HC: No Roadblock to New Tenders Just Because Old Contracts Linger
In a significant ruling for government procurement, the has affirmed that authorities can float fresh tenders for future periods even while existing contracts run their course. A of Justices Anil Kshetrapal and Amit Mahajan dismissed by two empanelled chemists challenging a e-tender for "Local Chemist Empanelment Service" covering , calling the challenge premature and speculative.
The decision, pronounced on , underscores the limits of judicial interference in administrative policy choices, particularly in essential services like medicine supply to wellness centres.
From Bulk Supplies to Indent Indignities: The Backstory
The saga revolves around the ), which primarily procures medicines in bulk but relies on empanelled Authorised Local Chemists (ALCs) for indented supplies when needed. Petitioners M/s Kaushik Medical Store and M/s Grownbury Pharmaceuticals Pvt. Ltd., successful bidders under earlier tenders ( and ), were empanelled for various Delhi wellness centres with tenures stretching to or even in one case.
Enter the impugned , e-tender via the , issued under a revamped Drug Procurement Policy 2026 and SOP dated . This new framework shifts focus to branded medicines, surgical consumables, digital integration via HMIS/myCGHS, and stricter compliances—prompting bids for even as old deals hummed along.
Petitioners, current suppliers with infrastructure and securities in place, saw this as a direct threat to their operations.
"Honour Our Contracts!" vs. "Future-Proofing Public Health"
Petitioners, represented by , argued the tender was arbitrary under , creating "overlapping" obligations and breaching . They highlighted investments in manpower, logistics, and securities, warning of supply chain chaos and financial duress from dual bidding demands. Dismissing the policy shift as illusory, they insisted no fresh process until existing "Service End Dates" expired.
Respondents, including and , countered that the tender was purely prospective, aligned with SOP mandates to start processes 3-4 months early for seamless transitions. Empanelment being contingent (indent-only, no assured volume), they stressed no interference with ongoing contracts—no terminations, no overlaps planned. Participation remains open, and policy evolution in public interest trumps contractor expectations.
Bench Draws Line: Policy Power Prevails Over Private Pacts
The court meticulously navigated judicial review's narrow lanes in tender matters, refusing to second-guess administrative wisdom absent arbitrariness or . Key to its reasoning: the tender implements a substantive policy overhaul, not mere continuity, and advance initiation is an "administrative necessity" to avert service disruptions in medicine supply.
No exist in policy regimes or contract renewals, the bench held, citing settled law that contractors can't claim immunity from future tenders. Empanelment's contingent nature further dilutes claims to exclusivity.
On "overlap" fears: purely hypothetical, as no parallel operations are evidenced or intended. stops short of fettering State policy powers, and constitutional pleas faltered—no discrimination, no unreasonable trade restrictions.
Crucially, the challenge was deemed premature: subsisting contracts remain untouched, so no legal right infringed yet.
Punchy Pronouncements from the Podium
The judgment packs potent quotes:
"The mere initiation of a tender process for a subsequent period does not, in itself, amount to an interference with, or curtailment of, subsisting contractual rights, so long as the existing contracts are permitted to run their full course in accordance with their terms."
"It is well-settled that no bidder or contractor has a vested right in the continuance of a particular policy regime."
"The under is not intended to be invoked on the basis of ."
"Public procurement, particularly in sectors involving essential services such as supply of medicines, cannot be undertaken in a vacuum or at the last moment."
As echoed in legal commentary, this reinforces that courts won't entertain "" over imagined overlaps.
Petitions Tossed: Path Cleared for Continuity
The petitions were dismissed, pending applications closed. No stay on the tender; petitioners can re-approach if future actions breach contracts.
Implications? A green light for proactive procurement planning, shielding essential services from last-minute hitches. Contractors must brace for policy flux, but safeguards persist against premature ousters. In 's vast network, this ensures unbroken medicine access for beneficiaries, balancing efficiency with equity.
