M/S Indira Enterprise And Anr vs. The State Of Assam And 4 Ors

Facts

M/s Indira Enterprise (Petitioner) challenged the Minutes of Meeting dated 18.12.2024, wherein the Tender Evaluation Committee decided to issue a work order to M/s The Jana Enterprise (Respondent No. 5) for outsourcing patient dietary services at Tezpur Medical College Hospital. The Notice Inviting Tender (NIT) dated 27.11.2024 stipulated that while being L1 (lowest bidder) does not guarantee an award, quality service is paramount, and abnormally low rates might not be considered. The Petitioner quoted Rs. 144/- per patient per day (without GST), while Respondent No. 5 quoted Rs. 111/-. The Petitioner contended that the decision ignored the award criteria. The respondents, in their affidavit, stated that an estimated rate of Rs. 138/- was fixed internally, and Respondent No. 5's bid was accepted to lower the financial burden on the government, with a caveat to award to the L2 bidder if standards were not met.

Held

The Court held that the decision of the Tender Evaluation Committee, as recorded in the Minutes of Meeting dated 18.12.2024, was contrary to the Award Criteria set out in the Notice Inviting Tender. The primary reason for outsourcing the service was to ensure good, healthy, and nutritious food for patients' recovery, making quality the foremost consideration. The Court found that awarding the contract solely to lessen the financial burden, despite the explicit stipulation that being L1 does not guarantee an award and that abnormally low rates might not be considered, was arbitrary, unreasonable, and irrational, violating Article 14 of the Constitution. The Court noted that the Minutes of Meeting themselves showed uncertainty about Respondent No. 5's ability to maintain standards at the quoted rate, with a recommendation to award to the L2 bidder if standards were not met. The Court set aside the impugned Minutes of Meeting and granted liberty to the authorities to decide afresh, prioritizing quality of food for patients.

Key Issues

1. Whether the Tender Evaluation Committee's decision to award the contract to Respondent No. 5, despite the Petitioner being L1 and the award criteria emphasizing quality over the lowest rate, is arbitrary and unreasonable, violating Article 14 of the Constitution? Petitioner's Arguments: The Petitioner argued that the Tender Evaluation Committee failed to adhere to the Award Criteria stipulated in the NIT. Specifically, they contended that the Committee prioritized the financial burden reduction by awarding the contract to the L1 bidder (Respondent No. 5) without adequately considering the mandate that being L1 does not confer an automatic right to the contract and that quality of service is the foremost consideration. They asserted that the decision was arbitrary and irrational. Revenue/State's Arguments: The Respondent authorities, through their affidavit, attempted to justify the decision by stating that an internal estimated rate was fixed prior to the tender. They claimed that Respondent No. 5's lower bid was accepted to reduce the financial burden on the government exchequer, and that the Committee did not accept the confidential preconceived price index provided by the Tender Inviting Authority. They also mentioned that the L2 bidder could be awarded the contract if the L1 bidder failed to maintain service standards.