Sanchayita Lahkar

The High Court of Gauhati Single Bench of Justice Kaushik Goswami has set aside the issuance of a fresh tender through Government e-Marketplace (GeM) for dietary services in Assam Medical College Hospital, Dibrugarh. The court held that the fresh tender was issued in violation of statutory provisions under the Assam Public Procurement Act, 2017 and the Assam Public Procurement Rules, 2020, and lacked proper reasoning and independent decision-making by the procuring entity. The court directed that the third re-tender process, in which the petitioner had emerged as the lowest qualified bidder, be treated as valid. Consequently, the authorities were instructed to act upon the financial bid results of the said third re-tender.

The case pertained to the awarding of a contract for providing dietary services to patients admitted in Assam Medical College Hospital, Dibrugarh. The petitioner, a government-registered 1st Class Contractor, challenged the cancellation of a re-tender where he was declared the lowest bidder and the subsequent issuance of a fresh tender through the GeM portal.

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The first tender was floated on 03.10.2023 under Notice No. MCH/2023/25858. Three bidders, including the petitioner, participated. Though the petitioner qualified the technical bid, his financial bid was never opened. A second re-tender was issued on 16.11.2023 via Notice No. MCH/2023/29988. In this round, four bidders participated, including the petitioner, but all technical bids were rejected.

A third re-tender followed through Notice No. MCH/2024/948 dated 09.01.2024. Both the petitioner and another bidder were found technically qualified. Financial bids were opened, and the petitioner was the lowest bidder. However, on 08.03.2024, a new tender was floated through the GeM portal by Bid Document No. GEM/2024/B/4755482.

The petitioner challenged this move, arguing that under Section 26(3) of the Assam Public Procurement Act, cancellation of procurement must be accompanied by immediate communication of reasons to all bidders. He asserted that this was not done. The petitioner also claimed that the procuring entity, the principal-cum-Chief Superintendent of AMCH, had not independently applied its mind and merely endorsed the tender committee's recommendation without recording reasons, in violation of Section 28 and Rule 24 of the Procurement Rules.

He relied on judicial precedents including Ajantha Industries v. CBDT [(1976) 1 SCC 1001], C.B. Gautam v. Union of India [(1993) 1 SCC 78], and Nazir Ahmad v. King-Emperor [(1935-36) 63 IA 372], to argue that procedural mandates and communication of reasons are core to natural justice.

The respondents, represented by the Additional Advocate General of Assam, submitted that the move to GeM was based on an Office Memorandum dated 08.01.2024, which made it mandatory for procuring entities to use GeM for procuring goods and services available on the platform. The State argued that the decision was made in public interest and with reference to this Office Memorandum, which was in line with Rule 24(I)(2)(iv) of the Procurement Rules.

Records were submitted showing that the tender committee, on 12.02.2024, noted limited participation in the third re-tender and recommended fresh tendering through GeM. Based on this, the authorities proceeded to issue a new tender.

The court examined the relevant provisions of the Assam Public Procurement Act and Rules. It recorded: "Reading Section 3 of the Procurement Act, it is clear that the procuring entity means, among others, any department of the state government or its attached or subordinate office."

Referring to Section 26, the court noted: "The procuring entity is empowered under the provision of the Procurement Act to cancel the procurement process; however, under subsection 3 of Section 26, the decision of the procuring entity to cancel the procurement and the reasons for such decision are required to be communicated to all bidders that participated in the procurement process immediately."

It further referred to Section 28(3), observing: "Every procuring entity shall follow the detailed procedure in respect of the relevant method of procurement as may be prescribed in the rules made under this Act."

The court scrutinised the affidavit filed by respondent No.4 and found: "Except for the aforesaid bold defence, nothing further is discernible from the said affidavit-in-opposition filed by the respondent No.4. That apart, the respondent No.4 is also silent as regards the manner in which the impugned decision has been taken."

Upon reviewing the Office Memorandum dated 08.01.2024, the court noted: "The Finance Department has directed all the procuring entities to procure goods and services available in GeM... However, while taking the decision of availing the facility of the GeM... the procuring entity is bound by the provisions of the Procurement Act and Rules made thereof, and the guidelines that may be notified in this regard."

The court found that the recommendation of the tender committee to float a fresh tender was endorsed by the procuring entity without recording reasons as mandated. "It is the procuring entity that has been given the discretion under the statute... In such an event, it is imperative under the provision of the rule that... reasons and circumstances for choosing an exception... are specifically recorded in writing."

The court also relied on Supreme Court precedents on judicial review in tender matters. Citing Tata Cellular v. Union of India [(1994) 6 SCC 651], it reiterated: "The court does not sit as a court of appeal but merely reviews the manner in which the decision was made."

On the discretionary power of public authorities, it quoted Union of India v. Dinesh Engineering Corporation [(2001) 8 SCC 491]: "They are bound to follow the norms recognised by courts while dealing with public property... within the four corners of the requirements of law, especially Article 14 of the Constitution."

The court, after examining the statutory framework and the decision-making process, held: "Hence, the writ petition succeeds."

It ordered: "Accordingly, the decision-making process of the respondents in not finalizing the subject third e-Tender dated 09.01.2024 as well as the decision inviting fresh tender for the subject work through the GeM are hereby set aside and quashed."

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The court directed: "Resultantly, the respondent authorities, more particularly the respondent Nos. 2, 3, 4 and 5 are directed to finalize the subject third e-Tender process pertaining to e-Tender bearing No. MCH/2024/948 dated 09.01.2024 for the subject e-Procurement for providing annual job contract of dietary services to the patient admitted in Assam Medical College Hospital, Dibrugarh, in accordance with law."

It concluded: "With the above observations and directions, the writ petition stands allowed and disposed of. Send back the case records."

Advocates Representing the Parties:

For the Petitioner: Mr. S. Sarma, Senior Counsel, assisted by Mr. A. Gautam.

For the Respondents: Mr. B. Gogoi, Additional Advocate General, Assam.

Case Title: Sri Ranjit Baruah vs. State of Assam & Ors.

Neutral Citation: 2025: GAU-AS:8031

Case Number: WP(C) No. 1597/2024

Bench: Justice Kaushik Goswami

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