Case Note & Summary
The dispute arose from the State of Manipur's failure to issue fresh tenders for transportation contracts under the Wheat Based Nutrition Programme (WBNP) and Supplementary Nutrition Programme (SNP), leading to continued interim arrangements since 2017-18. The appellant, M/s B.K. Enterprises, challenged the High Court's order that directed fresh tender issuance but allowed interim arrangements to continue. The core legal issue was whether such indefinite continuation without fresh tenders, causing financial loss, was permissible. The appellant argued it was the lowest bidder and should be awarded contracts, while the State cited administrative difficulties and sought time. The Supreme Court analyzed the facts, noting the State's lethargy had caused huge loss to the public exchequer by maintaining old rates. It emphasized that contracts cannot be prolonged on interim bases without fresh tenders. The Court directed the State to issue a fresh NIT within 10 days, conduct a fair, transparent, nationwide e-Tender process within six weeks, and continue interim arrangements only until December 31, 2021, to avoid beneficiary inconvenience. It mandated a compliance report and warned of serious consequences for non-compliance, thereby disposing of the appeal with specific directives to ensure timely and transparent procurement.
Headnote
A) Administrative Law - Public Procurement - Duty to Prevent Loss to Public Exchequer - Not mentioned - The Supreme Court deprecated the State Government's lethargy in not inviting fresh tenders for transportation contracts under nutrition programmes, which caused huge financial loss to the state and public exchequer by continuing interim arrangements at outdated rates. Held that contracts cannot be continued indefinitely without finalizing tender processes or issuing fresh tenders, and such inaction is unacceptable. (Paras 2.1, 4, 5) B) Contract Law - Tender Process - Mandatory Fresh Invitation - Not mentioned - The Court found that the State of Manipur had failed to issue fresh Notice Inviting Tender (NIT) since 2017-18, continuing contracts solely on interim arrangements, which was improper. Directed the State to issue fresh NIT within 10 days and complete the entire tender process within six weeks through fair and transparent e-Tender, with nationwide invitation to prevent cartelization and ensure maximum price realization. (Paras 3, 4, 6) C) Constitutional Law - Judicial Directions - Compliance and Monitoring - Not mentioned - To address administrative delays and ensure beneficiary convenience, the Supreme Court modified the High Court's directions by extending the interim arrangement for transportation under SNP till 31.12.2021 and mandated the State to submit a compliance report. Warned that any lapse or non-compliance would be viewed seriously. (Paras 6, 7)
Issue of Consideration
Whether the continuation of a transportation contract under the Wheat Based Nutrition Programme (WBNP) and Supplementary Nutrition Programme (SNP) on an interim arrangement basis without fresh tenders, causing financial loss to the state, is permissible and what directions are warranted
Final Decision
The Supreme Court disposed of the appeal by directing the State to issue fresh NIT within 10 days, conduct fair and transparent e-Tender nationwide within six weeks, continue interim arrangements till 31.12.2021, and submit a compliance report, with warning for non-compliance.
Law Points
- Public procurement must be fair
- transparent
- and timely
- contracts cannot be continued indefinitely on interim arrangements without fresh tenders
- state authorities have a duty to prevent loss to the public exchequer
- courts can issue specific directions to ensure compliance and transparency in tender processes
