Assam HC Sets Aside MSME Bidder’s L1 Declaration, Says Procurement Preference Alone Cannot Excuse Mandatory Tender Shortfalls

The petitioner and respondent No. 5, M/s Vidur’s, participated in a tender for establishing a Material Recovery Facility and Waste-to-Compost plant at Makum Municipal Board, with an estimated value of ₹3,65,10,000.

The NIT required bidders to have completed two similar works in Assam during the preceding three years and to have a minimum average annual turnover of ₹7.50 crore over the specified financial years.

The Tender Evaluation Committee declared both bidders technically qualified and, after opening the financial bids, declared respondent No. 5 L1 and the petitioner L2.

The petitioner challenged respondent No. 5’s qualification, arguing that it did not meet the NIT’s mandatory turnover and experience requirements.

The State relied on the Assam Procurement Preference Policy, 2021 and a Central Government MSME circular concerning relaxation of prior turnover and experience criteria.

Under Sections 7 and 14(6) of the Assam Public Procurement Act, 2017, qualification requirements must be stated in the bidding documents, applied uniformly, and used as the exclusive criteria for bid evaluation.

Rules 14(v), 15(2) and 15(3) of the Assam Procurement Rules, 2020 require evaluation solely by the disclosed criteria, prohibit waiver of technical criteria, and limit financial-bid evaluation to qualifying bids; Rule 23(14)(iv) prohibits substantive changes to qualification information.

The Assam Procurement Preference Policy, 2021 does not, absent express provision, convert procurement preference into an exemption from minimum qualification requirements.

The Ministry of MSME circular dated 10.03.2016 contemplates relaxation by Central Ministries, Departments and Central Public Sector Undertakings, and does not automatically extend to State procuring entities.

Judicial review of tender decisions is restrained, but permits intervention where the process is arbitrary, irrational, mala fide, or contrary to the tender terms or governing law, as reflected in *Jagdish Mandal v. State of Odisha*, (2007) 14 SCC 517, and *Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation*, (2016) 16 SCC 818.

The undisputed technical checklist recorded respondent No. 5’s annual turnovers as ₹157.158 lakh, ₹104.878 lakh and ₹206.352 lakh, averaging approximately ₹1.56 crore against the NIT minimum of ₹7.50 crore; it also identified only one qualifying similar work, although two were required.

These were substantial failures of mandatory qualification criteria, not minor irregularities.

The State’s reliance on MSME status and the 2016 circular could not cure those deficiencies because the State policy did not provide a general exemption and the State had not shown that it adopted the circular’s relaxation.

Treating respondent No. 5 as qualified therefore departed from the NIT and the statutory procurement framework.

It set aside the Committee’s decision dated 21.06.2026 to that extent and the consequential declaration of respondent No. 5 as L1.

The matter was left to the procuring authority to conduct a fresh evaluation under the original NIT, applying the criteria uniformly, or, if legally justified, to cancel the procurement by recording and communicating reasons in accordance with Section 26 of the 2017 Act.

The petition was allowed to that extent, with no order as to costs.