Jharkhand High Court Quashes Tender Award In MGM Hospital Diet Case | Terms Local Experience Clause Arbitrary And Discriminatory
Sanchayita Lahkar
The High Court of Jharkhand Division Bench of Chief Justice M.S. Ramachandra Rao and Justice Rajesh Shankar held that a tender condition awarding additional marks to bidders with experience in the State of Jharkhand was "arbitrary and violates Article 14 of the Constitution of India." The Court set aside the declaration of the existing contractor as the lowest bidder and directed a fresh tendering process without imposing such a condition in future.
The Division Bench ordered the respondent authorities to initiate a new tender for supplying diet food to patients in MGM Hospital, Jamshedpur, without the condition giving preference to those with experience in Jharkhand government hospitals. The Court concluded that the impugned tender condition had no nexus with the objective of providing nutritious food to inpatients and was designed to favour the existing contractor. The Court directed the process to be completed within two months and permitted the existing contractor to continue in the interim to avoid inconvenience to patients.
The petitioner, a partnership firm operating under the Indian Partnership Act, 1932, challenged a condition in the Very Short Notice Inviting Tender (NIT) dated 07.05.2025 issued by the Superintendent of MGM Medical College Hospital, Jamshedpur. The firm objected to the allocation of 10 additional technical evaluation marks to bidders with prior experience in government hospitals of Jharkhand having more than 500 beds.
It was contended that the condition was unreasonable, discriminatory, and designed to favour local entities, particularly the incumbent contractor, M/s The Jana Enterprises. The petitioner alleged that this clause lacked any logical nexus with the tender’s objective of selecting a competent food supplier for hospital inpatients.
Prior to this, another tender had been issued on 05.05.2025 for the same service, but it was abruptly cancelled on 07.05.2025. The new tender, also issued on 07.05.2025, removed the scheduled pre-bid meeting and compressed the timeline for finalization to 16.05.2025. Additionally, the contract duration was vaguely specified to be "until further orders."
The petitioner submitted that such ambiguity, combined with the experience-based preference for local contractors, placed it at a disadvantage despite having similar experience in other Indian states. The firm filed the writ petition on 12.05.2025. A Vacation Bench on 13.05.2025 allowed the petitioner to participate in the tender process.
On 22.05.2025, the Court directed the official respondents to file a counter affidavit and scheduled the matter for 13.06.2025. In their response, the respondents cited an emergency caused by a building collapse at the old MGM Hospital site on 03.05.2025, which led to a directive to shift operations to the new facility at Dimna. The tender was allegedly floated urgently to ensure uninterrupted diet supply services.
The 3rd respondent argued that the additional marks for Jharkhand-based experience were included to verify the authenticity of prior work easily. They claimed no bias or favouritism, and stated that the petitioner had participated in the process.
In reply, the petitioner filed evidence including a previous RIMS Ranchi e-Tender notice dated 09.10.2024, which lacked any similar clause favoring local experience. It asserted that only two entities had bid—its firm and the existing contractor—and the only difference in technical scores was due to the 10 additional marks given for Jharkhand-based experience.
The Court stated in its reasoning: "Supply of food to the patients in a hospital has actually nothing to do with the place where the contractor had experience in doing such work." It found no connection between experience in Jharkhand and the tender’s objective of providing nutritious food.
The Court further stated: "There is no value addition to the quality of work by the mere fact that a tenderer is doing it in the State of Jharkhand. Every person doing such activity of supplying foods to inpatients in hospitals in 500 bedded Government hospitals anywhere in India has the same experience."
It found that the preference based on Jharkhand-specific experience lacked intelligible differentia and nexus with the stated objective.
The Court noted: "These constitutional guarantees to all the citizens of the country cannot be nullified by allowing the State to adopt a parochial attitude towards local persons or businesses unless permitted by a valid law."
Regarding verification of experience, the Court recorded: "In the prevailing era of fast electronic communications, any experience certificate produced by bidder from even outside the State can be easily and quickly verified by contacting the Health Department of that particular State by email or whatsapp or fax."
Concerning the vague contract duration, the Bench observed: "The absence of prescription of a ‘period of work’ in the Very Short Notice Inviting Tender dt. 07.05.2025... is itself suspicious, and is arbitrary and unreasonable violating Art.14 of the Constitution of India."
"Any work order has to be for a reasonable period of time and cannot be ‘till further orders.’" the Court added.
On the conduct of the 3rd respondent, the Court recorded: "Taking advantage of the absence of the petitioner... the respondents... selected the existing contractor... by awarding him the extra 10 marks..."
It also noted: "There is no such imminent urgency to hold the technical evaluation on 05.06.2025... as the existing contractor... was anyway giving food to the inpatients."
The Court concluded that the 3rd respondent's conduct demonstrated a "malafide manner to favor the existing contractor."
The Court declared: "Accordingly, the Writ Petition is allowed and the declaration dt. 05.06.2025 of respondents of existing contractor, M/s. The Jana Enterprises, as L-1 for the subject tender by the respondents, is set aside."
It directed the respondents as follows: "The respondents are directed to initiate a fresh tendering process for the purpose of supplying diet food to the patients in the MGM Hospital, Jamshedpur at Dimna without imposing such a condition in future."
The Bench specified a timeline: "This exercise shall be commenced immediately and concluded within two months from today."
To ensure continuity of patient care, the Court ordered: "In the interregnum period i.e., till the new tenderer takes up the work after completion of the tendering process pursuant to the fresh tender to be issued, the existing contractor M/s The Jana Enterprises shall be permitted to continue, so that there is no inconvenience caused to the inpatients in the MGM Hospital, Jamshedpur."
The Court also noted: "Pending Interlocutory Application (I.A. No.7024 of 2025) also stands disposed of."
Advocates Representing the Parties:
For the Petitioner: Mr. Sankalp Goswami, Advocate
For the Respondents: Mr. Sachin Kumar, A.A.G.-II
Case Title: M/s Sonar Bangla Caterer v. State of Jharkhand & Ors.
Neutral Citation: 2025: JHHC:15633-DB
Case Number: W.P. (C) No. 2599 of 2025
Bench: Chief Justice M.S. Ramachandra Rao, Justice Rajesh Shankar
[Read/Download order]
