M/S INDIAN MEDICINES PHARMACEUTICALS CORPORATION LTD versus KERALA AYURVEDIC CO OPERATIVE SOCIETY LTD. & ORS.

M/S INDIAN MEDICINES PHARMACEUTICALS CORPORATION LTD versus KERALA AYURVEDIC CO OPERATIVE SOCIETY LTD. & ORS.

Paragraph 4(vi)(b) of the National AYUSH Mission Operational Guidelines places IMPCL and other Central/State PSUs, pharmacies under State Governments and cooperatives on an equal footing; the State's procurement of Ayurvedic medicines exclusively from IMPCL by nomination without inviting tenders was arbitrary and violative of Article 14. Procurement must ordinarily be through a transparent process such as tenders; deviation from tendering is permissible only in exceptional circumstances supported by cogent material.

Parties
Appellant: M/S INDIAN MEDICINES PHARMACEUTICALS CORPORATION LTD; First Respondent: KERALA AYURVEDIC CO OPERATIVE SOCIETY LTD.
Jurisdiction
India
Judgment Date
03 January 2023
Procedural Posture
Civil Appeal / Appeal Decided by Supreme Court (judgment Dated January 03, 2023)
Outcome
Appeals dismissed
Legal Topics
Article 14, Tendering, State Largesse, Judicial Review of Government Contracts, National AYUSH Mission Operational Guidelines
Constitutional Law Administrative Law Public Procurement Government Contracts Article 14 Tendering State Largesse Judicial Review of Government Contracts +1 more

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Parties

M/S INDIAN MEDICINES PHARMACEUTICALS CORPORATION LTD

Appellant

KERALA AYURVEDIC CO OPERATIVE SOCIETY LTD.

First Respondent

Procedural Posture

Civil Appeal / Appeal Decided by Supreme Court (judgment Dated January 03, 2023)

Legal Issues

  1. 1 Whether procurement of Ayurvedic medicines solely from IMPCL without inviting tenders violated Article 14 of the Constitution
  2. 2 Whether paragraph 4(vi)(b) of the National AYUSH Mission Operational Guidelines permits nomination of a single supplier without a transparent process
  3. 3 Extent and ambit of judicial review of government contracts and when deviation from tender/auction is permissible

Ratio Decidendi

Paragraph 4(vi)(b) of the National AYUSH Mission Operational Guidelines places IMPCL and other Central/State PSUs, pharmacies under State Governments and cooperatives on an equal footing; the State's procurement of Ayurvedic medicines exclusively from IMPCL by nomination without inviting tenders was arbitrary and violative of Article 14. Procurement must ordinarily be through a transparent process such as tenders; deviation from tendering is permissible only in exceptional circumstances supported by cogent material.

Court Disposition

Appeals dismissed

Orders

  • Appeals dismissed
  • Appellant (State / procuring agency) directed henceforth to procure Ayurvedic medicines by a free and transparent procedure such as inviting tenders; deviation from tendering/auction route permitted only in exceptional circumstances demonstrated by cogent material