United Air Express vs Sanjay Kumar Agarwal & Ors.

Arjun Ray Mukherjee, J.

This appeal is directed against an order dated September 1, 2026 passed in WPA 6836 of 2026. By the said order, the learned Single Judge allowed the writ petition, filed by one Sanjay Kumar Agarwal / respondent no. 1 [hereafter ‘writ petitioner’], proprietor of Metal Traders Processing Company.

The writ petitioner is an enterprise within the meaning of the Micro, Small and Medium Enterprise Development Act, 2006 having an UDYAM registration certificate, engaged in the business of handling and processing of slag and scrap for major steel plants in India.

The respondent no. 2 / Steel Authority of India Limited [hereafter ‘SAIL’] floated a notice inviting tender [hereafter ‘the said tender’] on December 5, 2025 through a portal, namely, Government e-Marketplace [hereafter ‘GeM’] for handling, processing and management of raw material / scrap / slag and for other miscellaneous job at the ISSCO Steel Plant. One of the conditions of the said tender was as follows:

The writ petitioner duly participated in the said tender. GeM, by an email dated 25.02.2026, invited the writ petitioner to participate in a reverse auction process. It is relevant to mention here that upon opening of the financial bids, each and every technically qualified bidder was invited to participate in the reverse auction process through the GeM portal except the H1 bidder.

Upon completion of the reverse auction process, SAIL declared the list of seven bidders who qualified financially and the names of the first three bidders with the price quoted by them and their respective ranks are set out herein below:

Name Price Rank [i] United Air Express Rs. 1552683638.14 L1 [ii] FSNL Private Limited Rs. 1552916575.50 L2 [iii] Metal Traders Processing Co. Rs. 1553401218.49 L3

According to the writ petitioner, their financial bid was within 15% of both United Air Express [L1] and FSNL Private Limited [L2] and as such they, being an MSME, was entitled to be declared as the lowest bidder or at least to be given an opportunity to match the price of the L1 bidder.

It was the case of the writ petitioner that although he was willing to match the L1 price in terms of the tender conditions of the said tender, no such opportunity was extended either by GeM or by SAIL. In the writ petition the following reliefs were prayed for:

The writ petition was taken up for consideration by the learned Single Judge on April 9, 2026 and His Lordship directed the writ petitioner to implead United Air Express, being the successful bidder, as a party respondent. The writ petition was thereafter taken up by His Lordship on April 27, 2026 and His Lordship, inter alia, passed the following order:

The said writ petition was finally taken up for consideration by the learned Single Judge and by a judgment and order dated September 1, 2026, His Lordship, inter alia, passed the following:

United Air Express / the added respondent [hereafter ‘the appellant’], being aggrieved by the judgment and order dated September 1, 2026, has preferred this appeal.

Mr. Dutta, learned counsel appearing for the appellant submitted that the scope of judicial review under Article 226 of the Constitution of India was limited and that a writ court should not interfere with the decision of the buyer not to opt for the MSE/MII purchase preference in respect of a particular tender. Such decision was within the buyer’s permissible discretion. It was submitted that the learned Single Judge changed the terms of the bidding process by imposing the new mechanism which was beyond the basis for conclusion of the reverse auction. The learned Single Judge could not have taken into consideration the discovered price of the appellant and use the said price as the base for the writ petitioner to match. The learned Single Judge could not have used the appellant’s contract price, to order price matching, thereby, directing the respondent Nos. 2 to 4 to allow the writ petitioner to match the said price, manually. The appellant had already mobilised resources and had incurred heavy overhead costs on a daily basis. The learned Single Judge ignored the said fact and also ignored the right that had vested in the appellant to execute the work. The learned Single Judge could not have destroyed the sanctity of the competitive bidding process by directing the L3 bidder to match the L1 bidder’s price, thereby vitiating the close reverse auction already conducted through the GeM portal.

Mr. Jishnu Chowdhury, learned Senior Advocate appearing for the SAIL, referred to Rule 149 of the General Financial Rules, 2017 which is reproduced herein below:-

Rule 149. Government e-Market place (GeM). Government of India has established the Government e-Marketplace (GeM) for common use Goods and Services. GeM SPV will ensure adequate publicity including periodic advertisement of the items to be procured through GeM for the prospective suppliers. The Procurement of Goods and Services by Ministries or Departments will be mandatory for Goods or Services available on GeM. The credentials of suppliers on GeM shall be certified by GeM SPV. The procuring authorities will certify the reasonability of rates. The GeM portal shall be utilized by the Government buyers for direct on-line purchases as under:

He further submitted that from the documents on record, it appeared that the GeM portal treated the appellant as a non-MSME or a regular bidder due to some technical issue and therefore SAIL should not be held liable in any manner.

Mr. Sakya Sen, learned Senior Advocate for the writ petitioner submitted that there was no infirmity in the order passed by the learned Single Judge and as such the appeal was liable to be dismissed.

The question which falls for our consideration is whether SAIL, by not treating the writ petitioner as an MSME and further by not extending an opportunity to them to match the L1 price in spite of their willingness, committed any procedural impropriety.

Before considering the issue in question, it is relevant to reproduce the applicable terms and conditions of the said tender:

A bare perusal of the aforesaid terms and conditions clearly shows that the writ petitioner had a right to be treated as an MSME and had a further right to match the L1 price provided their quoted price was within L1+15%.

In order to ascertain whether SAIL or GeM extended such opportunity to the writ petitioner, it will be prudent to refer to the three communications between SAIL and GeM.

The first e-mail dated March 3, 2026 is reproduced herein below:

The second e-mail dated March 3, 2026, sent by SAIL to GeM, reads as follows:

The third e-mail dated March 5, 2026 is reproduced herein below:

It is clear from the aforesaid correspondences that on the GeM portal the bids purchase preference for MSMEs was not available and under such circumstances it was suggested by GeM to SAIL, to complete the price matching process offline. Such communication was received by SAIL on a query of SAIL whether it could proceed offline for the price matchup. Unfortunately, such opportunity was not afforded to the writ petitioner. In any event, no legally protected right of the appellant has been violated. The appellant, having participated in the said tender process knowing fully well of the ‘price matching term’ applicable to MSMEs, is estopped from raising any demur in this regard.

The terms and conditions of the tender were framed by SAIL and it was SAIL’s duty to adhere to such terms and conditions. Any deviation from the terms and conditions which infringes the rights of a bidder is liable to be set aside. The writ petitioner did not get a chance to match the L1 price due to a technical issue in the GeM portal. Despite a query having been made by SAIL to complete the process offline, the said process was not explored for the reasons best known to them. Under such circumstances, we have no hesitation in holding that a gross procedural infirmity was committed by the respondent authorities.

We are mindful of the law settled by the Hon’ble Apex Court that, in a tender matter, the court while exercising the power of judicial review, can interfere if there is an infirmity in the decision-making process. [See: Tata Cellular Vs. Union of India, reported in 1994 [6] SCC 651 and Silppi Constructions Contractors Vs. Union of India and Anr., reported in 2020 (16) SCC 489].

We agree with His Lordship that the tendering authority had erroneously granted the contract in favour of the appellant without complying with the tender conditions. The MSME/the writ petitioner, who had qualified upon fulfilment of the eligibility criteria, was required under the tender conditions to be given an opportunity to match the price of the L1 bidder. This process was not followed by the tendering authority.

The GeM portal had clarified that their system did not provide for such price matching mechanism and had asked the respondent tendering authority to manually allow such price matching in the offline mode. Such clarification was given by GeM upon a query raised by SAIL. This query raised by SAIL would indicate that SAIL was also conscious that the tender conditions provided for such price matching and the same should be made available to the successful MSME.

In spite of knowing that the tender conditions would be breached, if the price matching was not allowed to the MSME/writ petitioner, the contract was awarded in violation of the tender conditions. Thus, the award of the tender by the tendering authority in favour of the appellant was vitiated. No right could be created in favour of the appellant to execute the work on the basis of a contract which was awarded in violation of the terms. Such violation was ex facie available from a bare perusal of the tender document.

However, with regard to the contention of Mr. Dutta that the appellant has suffered loss on account of mobilization of resources and recurring overhead charges, we are of the view that the appellant, at best has a remedy by way of damages. He can always approach the civil court, but the writ court did not commit any error of jurisdiction as alleged by the appellant.

In view of the above, we do not find any infirmity in the judgment and order dated September 1, 2026. The learned Single Judge correctly addressed the issue and decided it in accordance with the tender terms. The writ petitioner could not have been made to suffer either due to the inability of GeM to upgrade its portal or the failure on the part of SAIL to have a more robust system so that tender terms could be adhered to.

We were informed by the learned counsel appearing for the writ petitioner that pursuant to the order passed by the learned Single Judge, the writ petitioner was given an opportunity by SAIL to match the L1 price. The writ petitioner, by a letter dated September, 2, 2026 expressed their unconditional consent to match the L1 price. The order of the learned Single Judge is upheld.

The appeal is dismissed along with the connected application.

Urgent Photostat certified copies of this judgment, if applied for, be supplied to the parties upon fulfilment of requisite formalities.

After pronouncement of the judgment the learned counsel appearing for the appellant seeks stay of operation of the judgment.

Same is considered and rejected.