Subsistence of existing contracts does not preclude initiation of fresh tenders for future procurement periods.

The Petitioners, existing empanelled chemists for the Central Government Health Scheme (CGHS) under tenders issued in 2023 and 2024, challenged a new E-tender dated 18.03.2026 issued for the "Local Chemist Empanelment Service" for the financial years 2026–2028.

The Petitioners’ current contracts have "Service End Dates" extending to late 2026 and, in one instance, June 2027.

They alleged that the fresh tender for the same Wellness Centres, issued while their contracts were still subsisting, created an impermissible "overlap" and violated their contractual rights.

The Respondents contended the tender was prospective, necessitated by the revised CGHS Drug Procurement Policy, 2026, and the Standard Operating Procedure (SOP) dated 06.02.2026, which mandates initiating empanelment processes at least four months prior to the expiry of existing contracts.

1. Whether the Respondents are precluded from initiating a fresh tender process for empanelment for a future period during the subsistence of earlier contracts.

2. Whether the initiation of the fresh tender violates the doctrine of legitimate expectation or Articles 14 and 19(1)(g) of the Constitution of India.

3. Whether the challenge to the Impugned Tender is premature in the absence of termination of existing contracts.

The court primarily applied the principle that judicial review in tender matters is limited to the decision-making process and interference is only warranted in cases of manifest arbitrariness, mala fides, or irrationality.

It relied on the constitutional mandate of Article 14, requiring the State to act fairly even in contractual matters, balanced against the State's authority to revise policies in the public interest.

The court noted that no bidder has a vested right in the continuation of a particular policy regime.

The doctrine of legitimate expectation cannot fetter the State’s power to alter policy for public interest.

Article 19(1)(g) does not encompass a right to demand continuation of a specific contractual arrangement with the State.

The Court observed that the Impugned Tender was not a mere continuation of the old regime but was issued to implement the revised CGHS Drug Procurement Policy, 2026, which introduced substantive changes like digital integration and focus on branded medicines.

The Court found that initiating a tender process for a future period does not per se interfere with subsisting contracts, provided the existing contracts are permitted to run their full course.

The Respondents’ SOP specifically required initiation four months in advance to prevent disruptions in the supply of essential medicines, which the Court deemed an administrative necessity rather than an arbitrary act.

Regarding the "overlap," the Court held the Petitioners' fears were speculative as no contracts had been terminated, and the Respondents intended to align the commencement of new contracts with the expiry of old ones.

Furthermore, since empanelment is a contingent, indent-based arrangement, the Petitioners possessed no vested right to a fixed volume of business or the exclusion of future procurement exercises.

The Court concluded that the challenge was premature as the Petitioners’ existing contracts remained intact and no adverse action or termination had occurred.

The Court granted liberty to the Petitioners to avail remedies only if the Respondents prematurely terminate or interfere with subsisting rights in the future.

All pending applications were closed.