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2025 Supreme(Online)(GAU) 943
GAUHATI HIGH COURT
Devashis Baruah, J
MAHALAXMI ENTERPRISES – Appellant
Versus
THE STATE OF ASSAM AND 5 ORS – Respondent
WP(C) 3832 / 2024
Important Points
Subject
Administrative Law - Public Procurement and Tender Law
Act Referred
General Financial Rules, 2017: R.173
Assam Public Procurement Act, 2017: S.3, S.22, S.23
Assam Public Procurement Rules, 2020: R.22
Indian Contract Act, 1872: S.28
Headnote
(B) Transparency in Procurement - Modification to bidding documents - Procedure for amendment - Any material change to terms and conditions must be published via formal corrigendum in the same manner as the initial bid document; mere insertion of remarks in an online portal is insufficient to amend essential eligibility criteria. (Paras 43, 44, 49)
(C) Judicial Review - Right to challenge tender cancellation - Exclusionary clauses in tender documents do not bar judicial review when state action is found to be arbitrary, unreasonable, or lacking a valid factual basis. (Para 58)
Facts of the case:
A public department invited bids for equipment procurement. Eligibility criteria were initially set, but later modified via an online remark without formal amendment. After opening financial bids and identifying the lowest bidder, the department decided to cancel the entire process and re-tender, claiming internal errors in evaluation concerning the modified criteria.
Findings of Court:
The procedure for modifying technical specifications through an online remarks column failed to meet statutory transparency requirements. Consequently, the original bidding terms remained active and valid, rendering the cancellation decision, which was based on the premise of modified terms, factually incorrect and legally unsustainable. (Paras 50, 51)
Issues: Whether the amendment of tender conditions via an online remark portal followed mandatory transparency procedures; whether the decision to annul the tender based on these conditions was arbitrary or unreasonable; and whether the petitioner could challenge the cancellation despite clauses granting wide discretion to the authority.
Ratio Decidendi: Discretionary power in public procurement is constrained by the duty to act fairly and reasonably. When a procurement authority modifies material tender conditions without following the prescribed formal procedure of issuing a corrigendum, the modification is invalid. A decision to annul a tender process based on non-existent or misapplied material is arbitrary and violates constitutional mandates for fairness.
Result: Tender cancellation set aside; authority directed to conclude the process according to original tender terms.
For the Appellants/Petitioners: D. Das, B. Gogoi
For the Respondents: M.M. Kataky
JUDGMENT AND ORDER (ORAL)
The decision to cancel the tender process and to go ahead with the fresh tender process is the subject matter of consideration before this Court in the present writ petition.
2. Heard Mr. D Das, the learned Senior Counsel assisted by Mr. B Gogoi, the learned counsel appearing on behalf of the petitioner and Ms. M.M. Kataky, the learned Standing Counsel appearing on behalf of the Animal Husbandry and Veterinary Department of the Government of Assam.
3. None has appeared on behalf of the private respondent Nos. 4, 5 and 6, although due notice was affected upon them.
4. The facts leading to the filing of the instant writ petition are narrated infra. The Director of Animal Husbandry and Veterinary Department floated an e-Tender dated 13.02.2024 in the GeM portal for procuring 367 Nos. of Ice Lined Refrigerators (ILR). The said notice inviting tender stipulated that the last date for submission of the tender was on 05.03.2024 by 12 P.M. and the date and time for bid opening was on the same date at 12.30 P.M. It was also mentioned that the time allowed for technical clarification during the technical evaluation was 2(two) days and the evaluation method prescribed was very formal “Total Value-wise Evaluation”
5. Before further narrating on the aspect of the tender process, it would be relevant to take note of that the said tender process was initiated on a sponsored scheme of the Government of India, Ministry of Fisheries, Animal Husbandry and Dairying Department of Animal Husbandry and Dairying. This aspect of the matter is clear from the communication dated 28.03.2022 issued by the Joint Secretary of the Government of India, Ministry of Fisheries, Animal Husbandry and Dairying Department of Animal Husbandry and Dairying. In the said communication, it was categorically mentioned that a guidance document had been prepared for model infrastructure specifications so as to enable their procurement for optimal utilization within the budget sanctioned. It was also mentioned that eventually based on the requirement at various levels- districts, blocks, villages, States/UTs may strategize procurement and placement of these equipments. The advisory enclosed to the said communication as an Annexure specifically dealt with the Ice Lined Refrigerators (ILR) of the size and its description. The commercial terms were also mentioned in the said advisory. In terms with Clause 1.6 of the commercial terms, it was mentioned that the cold chain products may be tested at ISO-17025 accredited laboratories.
6. In the backdrop of the above, it is now relevant to take note of the tender conditions. To the said tender conditions, there is a Specific Additional Terms and Conditions wherein the technical specifications of the Ice Lined Refrigerators (ILR) have been duly mentioned. Further to that, the eligibility for participating in the bid/tender had also been mentioned in the Specific Additional Terms and Conditions. Amongst the various conditions for eligibility for participating in the bid/tender, it was mentioned that the cold chain products may be tested at ISO-17025 accredited laboratories which was in tune with the advisory issued by the Government of India, Ministry of Fisheries, Animal Husbandry and Dairying Department of Animal Husbandry and Dairying. This Court further finds it relevant to take note of the Check List which was a part of the Specific Additional Terms and Conditions. The Check List was both for Original Equipment Manufacturer (OEM) as well as for authorized dealers/agents/distributors etc. In Clause 6 of the Checklist for Original Equipment Manufacturer (OEM), the Product Tested Certificate at ISO-17025 approved laboratories / WHO PQS Code was mentioned. Similarly in the case for authorized dealers/agents/distributors etc. at Sl.No.7, the Product Tested Certificate at ISO-17025 approved laboratories /WHO PQS Code was mentioned.
7. Before further proceeding, this Court further finds it relevant to again refe
