NDLI: M/s Indian Medicines Pharmaceuticals Corporation Ltd Vs. Kerala Ayurvedic Co Operative Society Ltd. & Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Constitution of India Art.14 Transparent and non-arbitrary method to be adopted by the Government Government Contractsm
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Constitution of India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Constitution of India: Art. 14 – Government Contracts –Transparent and non-arbitrary method to be adopted by the Government – Decision of the government regarding purchase of the Ayurvedic Drugs only from the IMPCL (the appellant) – Challenged on the ground that selection of IMPCL by the government is arbitrary and illegal by virtue of Art. 14 – High Court held that by virtue of Para 4(vi)(b) of the Operational Guidelines, the government was to invite supply of the drugs from various pharmacies and PSU listed therein so as to foster competition and quality of medicines and the practice adopted by the government to purchase Ayurvedic drugs only from IMPCL is illegal – Aggrieved IMPCL filed instant appeal – Held: Government Contracts involve expenditure out of the public exchequer, therefore, the moneys expended must not be spent arbitrarily – The State does not have absolute discretion while spending public money and, therefore, all government actions including government contracts awarded by the State must be tested on the touchstone of Art. 14 – The government can deviate from the route of tenders or public auction for the grant of contracts, but such deviation must not be discriminatory or arbitrary – Deviation from the tender route has to be justified and such a justification must comply with the requirements of Art. 14 – Administrative Law.Constitution of India: “Social Welfare” – State Largesse – Largesse is term used to describe a “generous donation” – Welfare State aims at realising socio-economic rights which are recognised by the Constitution – Social Welfare Benefits provided by the State, which is a constitutional mandate is commonly understood in the language of largesse and therefore terming all actions of government as government largesse results in doctrinal misconception – Therefore government action targeted for the well-being of citizens cannot be termed as largesse as use of such terminology belittles the sanctity of the social contract that the ‘people of India’ entered into with the State to protect and safeguard their interests.Constitution of India: Government Contracts – Judicial Review – Extent and Ambit – The scope of judicial review in matters of government contract is limited – But the government does not have unlimited discretion in granting the State Largesse and it must act in fairness – It is a settled proposition of law under Constitution that the government cannot act arbitrarily while dealing with the public, whether it is while giving jobs or entering into contracts. Constitution of India: Tender – Constitutional Requirement – Inviting tenders and conducting public auctions are considered to be preferred methods of allocation for two reasons – Firstly procurement can be made at the best price and secondly, allocation is through a transparent process – However, if the purpose of allocation by the State is not revenue maximization, the State could award contracts through other methods, provided it is non-arbitrary and meets the requirements of Art. 14.
Judge	Hon'ble Dr. Justice D.Y. Chandrachud
Neutral Citation	2023 INSC 7
Petitioner	M/s Indian Medicines Pharmaceuticals Corporation Ltd
Respondent	Kerala Ayurvedic Co Operative Society Ltd. & Ors.
SCR	[2023] 1 S.C.R. 473
Judgement Date	2023-01-03
Case Number	6693

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M/s Indian Medicines Pharmaceuticals Corporation Ltd Vs. Kerala Ayurvedic Co Operative Society Ltd. & Ors.

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