SC sets aside Himachal Pradesh HC order, upholds govt’s cancellation of ePoS tender

New Delhi, Nov 25 (PTI) The Supreme Court has allowed the Himachal Pradesh government's plea to cancel the award of tender to a private firm for supplying upgraded electronic Point-of-Sale (ePoS) devices for Fair Price Shops in the state.

Writing the first judgement as Chief Justice of India, Justice Surya Kant, on Monday held that the state government was well within its rights to cancel a Letter of Intent (LoI) issued to private firm OASYS Cybernetics Pvt. Ltd. It set aside a May 2024 order of the Himachal Pradesh High Court, which had restored the LoI in favour of the Chennai-based company.

CJI Kant, in the 40-page judgement, said there were two issues for adjudication, and they were whether the LoI of September 2, 2022, created any binding or enforceable rights in favour of the firm.

The second issue was whether the decision of the state to cancel the LoI was “arbitrary, unreasoned, or violative of the principles of natural justice”, thereby warranting interference? The bench concluded that the LoI did not "culminate into a concluded contract and that its cancellation on June 06, 2023, was a lawful exercise of administrative discretion." Consequently, the HC verdict directing continuation of the LoI was unsustainable in law as well as on facts, it held.

“The Appellant-State shall be at liberty to issue a fresh tender for supply, installation and maintenance of ePoS devices for Fair Price Shops across the State forthwith, in accordance with law and the applicable financial and procurement rules, apart from the requisite technical specifications. The Respondent-company shall be free to participate in such tender process, subject to uniform eligibility and compliance with the prescribed conditions,” it held.

The litigation stems from the Himachal Pradesh government’s attempts to modernise its Public Distribution System (PDS) by upgrading existing ePoS devices with Aadhaar-enabled biometric, IRIS-scanning and weighing-scale integration capabilities.

The firm had approached the High Court, which quashed the cancellation as arbitrary and contrary to natural justice, directing the state to proceed with implementation of the LoI.

Himachal Pradesh then moved the top court. PTI SJK RHL