Express tender relaxations for Micro and Small Enterprises cannot be diluted or ignored during the evaluation stage.

The Petitioner, a women-led Self-Help Group and registered Micro and Small Enterprise (MSE), challenged a tender process (Bid No. GEM/2025/B/7032239) for dietary services at District Hospital, Jashpur.

The tender conditions required a minimum annual turnover of Rs. 50,00,000/- but expressly provided complete relaxation from "Experience Criteria" and "Bidder Turnover" for MSEs.

Despite the Petitioner providing valid Udyam Registration, the Respondents awarded only 10 marks for the turnover component instead of granting the full relaxation.

Consequently, following a tie in the financial bid with Respondent No. 6, the Petitioner was relegated to 'H2' status due to lower technical marks.

The Petitioner’s representation via the GeM portal was rejected by the authorities on the grounds that the Petitioner did not fulfill the turnover criteria, ignoring the MSME relaxation clause.

1. Whether the respondent authorities acted arbitrarily and in violation of the tender conditions by failing to grant the prescribed MSME relaxation during the technical evaluation.

2. Whether the rejection of the Petitioner’s representation and the subsequent evaluation process violated the principles of fairness and non-arbitrariness under Article 14 of the Constitution.

The principle of non-arbitrariness and equality under Article 14 of the Constitution of India, which requires State instrumentalities to act fairly and transparently in public procurement.

The doctrine that once specific relaxations (such as those for MSEs) are incorporated into a tender document, they cannot be ignored, diluted, or selectively applied at the evaluation stage.

Judicial review under Article 226 is warranted when State action in contractual matters is found to be arbitrary, contrary to tender conditions, or reflects a non-application of mind.

The Court observed that the Petitioner was a registered MSE and thus entitled to the "complete relaxation" regarding turnover and experience expressly stipulated in the bid document.

By awarding only 10 marks for turnover, the Respondents rendered the relaxation "illusory" and acted in direct contravention of their own tender terms.

The Court found the rejection of the Petitioner's representation to be legally infirm because it relied on the very turnover criteria from which the Petitioner was supposed to be exempt, demonstrating a "complete non-application of mind".

Additionally, the Court noted the inconsistency in turnover requirements compared to similar tenders elsewhere (Rs. 50 Lakhs vs. Rs. 15 Lakhs), suggesting a lack of rational basis.

The Court reasoned that since the illegal technical evaluation directly determined the 'H1' status in a tie-break scenario, the entire selection process was vitiated.

The Court held that the evaluation was patentably arbitrary and violative of Article 14.

The Respondent authorities were granted liberty to initiate a fresh tender process, with a specific direction to ensure meaningful compliance with relaxation provisions for MSEs to maintain a level playing field.

No order as to costs was made.