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2026 Supreme(Guj) 1225

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
N.S.Sanjay Gowda, J.L. Odedra, JJ.
Sonastar Healthcare LLP - Petitioner
Versus
State Of Gujarat & Anr. – Respondents
R/Special Civil Application No. 2124 of 2026
Decided On : 08-04-2026

Advocates Appeared:
For the Petitioner:Mr. Karan Bhosle, Advocate With Shashvata U Shukla, Advocate With Mr. Heet Jhaveri, Advocate With Ms. Aishwarya Mohan, Advocate
For the Respondent:Mr. G. H. Virk, Government Pleader, With Ms. Dharitri Pancholi, Agp Mr. G. H. Virk, Government Pleader With Mr Dhawan M Jayswal, Advocate With Prashanth S. Undurti, Advocate With Ms. Devanshee Kariel, Advocate, Ms Vidita D Jayswal

Judicial review in public procurement is limited to ensuring transparency and fairness. Courts will not substitute their judgment for that of the tendering authority regarding eligibility criteria or technical specifications, provided such conditions are rationally connected to the requirement of ensuring reliability and quality in the procured goods.

Headnote:(A) Constitutional Law - Power of judicial review under Article 226 - Public Procurement - Tender process - Scope of judicial interference - Courts cannot sit in judgment over technical specifications or eligibility conditions set by an authority for its requirements unless they are demonstrably arbitrary, irrational, or malafide. (Para 9)

(B) Government Contracts - Discretion of authority - Conditions for reliability - A procurement entity acts as a purchaser with the right to prescribe conditions it deems necessary for product reliability, particularly for sensitive or critical equipment - A potential bidder cannot insist that tender conditions be modified to accommodate its own lack of experience or capacity. (Paras 17, 19, 21)

Facts of the case:
A recently established manufacturing entity filed a petition challenging tender conditions concerning financial turnover and past performance experience for the procurement of medical equipment. The petitioner argued that these stringent requirements, which they could not meet, were unreasonable and hindered their ability to compete under industrial policies designed to encourage domestic manufacturing.

Findings of Court:
The court observed that the petitioner was a new entrant who had only recently started manufacturing operations. The purchasing authority justified the strict criteria by citing the critical nature of the diagnostic equipment and the necessity of ensuring reliability through proven performance in the market. The court concluded that the conditions were not designed to favor any specific entity but were reasonable prerequisites for a high-stakes public procurement process.

Issues: The central issues included whether the court should intervene in the framing of tender conditions for commercial transactions and whether the requirement for past three-year manufacturing and sales experience is inherently arbitrary or designed to exclude emerging entities.

Ratio Decidendi: Judicial interference in tender matters is narrow and restricted to ensuring that the process adheres to principles of fairness. A government entity is allowed the necessary flexibility to set conditions for the goods it intends to procure to guarantee quality and operational success. Since the conditions were standardized and not tailored to favor a single participant, there was no ground for judicial intervention.

Result: Petition dismissed.

Table of Content
1. factual background and challenge to tender exclusionary criteria. (Para 1 , 2 , 3 , 4 , 5)
2. parties' contentions on tender flexibility versus market competition. (Para 6 , 7)
3. evaluation of petitioner standing and reasonableness of public procurement conditions. (Para 8 , 9 , 10 , 11 , 12 , 15 , 17 , 18 , 19 , 20 , 21)
4. precedent-based analysis of tender validity and administrative discretion. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28)
5. formal dismissal of the writ petition. (Para 29)

ORDER :

N.S.SANJAY GOWDA, J.

[1] The petitioner, a company incorporated under the provisions of the Limited Liability Partnership Act, 2008, has filed this petition seeking quashing of two tender notifications which were issued for the supply of Ultrasound Machines. A prayer is also made to direct the 2nd respondent, Gujarat Medical Services Corporation Limited (hereinafter referred to as "the Corporation"), to re-frame Clause No. 2.1 sub-clause (ii) of the additional terms and conditions relating to turnover and work experience.

[2] The Corporation, in February 2025, had issued a notification and floated tenders for the purchase of 108 and 63 Ultrasound Machines. The petitioner had participated in both the tenders, but the tender of the petitioner was rejected on the ground that he did not fulfill certain eligibility criteria. Consequently, the petitioner preferred Special Civil Application No.15493 of 2025 before this Court. During the pendency of this writ petition, the petitioner asserts that he came to know from the official website of the Government e-Marketplace portal (i.e., the "GeM portal") that the said tenders had been cancelled, and in view of the said cancellation, he withdrew the writ petition that he had filed.

[3] It will be pertinent to state here that in this tender of February 2025, the petitioner had submitted a bid as a reseller.

[4] On 03.02.2026, the Corporation, through the GeM portal, floated two tenders, one in respect of supply of 260 Ultrasound Machines and another in respect of 66 Ultrasound Machines.

[5] The petitioner has filed this petition on 13.02.2026 contending that the criteria prescribed for minimum eligibility in respect of the minimum average financial turnover of the bidder for the past three years, the OEM turnover criteria, and the past performance criteria are illegal and are therefore required to be quashed; consequently, the tender itself is required to be quashed, or, in the alternative, the said criteria are to be reframed.

[6] Shri Karan Bhosle, learned counsel basically sought to challenge the tender clauses relating to the necessity of having three years’ experience in the manufacturing and selling of Ultrasound Machines, and the past performance clause, which required the petitioner to have supplied 10% of the bid quantity in the last three years. Shri Bhosle, also contended that the requirement of the bidder having a minimum average annual financial turnover of four times the bid value, or the actual production of the bidder being at least twice the bid value, was unreasonable. It was sought to be contended that these clauses ran counter to the 'Make in India' policy and, therefore, the same would have to be quashed.

[6.1] Shri Bhosle, learned counsel also indicated that the petitioner could not have consciously participated in the bid process knowing fully well that his bid would be rejected as being non-compliant with the tender conditions, and therefore he had filed the writ petition challenging the very clauses which excluded him from making his bid and which had created an uneven playing field. Shri Bhosle, also pointed out that the terms of the impugned tenders varied vastly from the earlier tenders for the very same product, and this was also to basically eliminate him from competing. He argued that just to ensure that the petitioner was eliminated from the entire process, unnecessary and unnecessarily high parameters were set.

[7] Mr. G. H. Virk, learned Government Pleader, o

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