Supreme Court Directs Manipur Government to Conduct Fresh Tender for Supplementary Nutrition Programme

The Supreme Court of India has delivered a crucial judgment in the case of M/s B.K. Enterprises vs. The State of Manipur & Another, addressing irregularities in the tender process for transportation of food grains and micronutrients under the Wheat Based Nutrition Programme (WBNP) in Manipur. The Court found that the state government failed to issue fresh tenders for years, causing substantial financial loss to the public exchequer. The judgment mandates a transparent tender process and warns the state against further lapses.

Background of the Case

The State of Manipur, through the Director of Social Welfare, issued a Notice Inviting Tender (NIT) on June 22, 2017, for transporting rice and micronutrients under the WBNP from Food Corporation of India (FCI) depots to Child Development Project Officers’ offices. The Higher Tender Committee reviewed bids and, on December 16, 2017, recommended awarding Route No. 8 to one contractor and re-tendering the remaining routes.

However, instead of following the Committee’s recommendations, the Director of Social Welfare awarded contracts for all routes to one firm, RK & Co., on an interim basis. The petitioner, M/s B.K. Enterprises, a bidder who claimed to be the lowest eligible bidder for routes 1, 3, 5, and 9, challenged this decision before the Manipur High Court, arguing that the contract was arbitrarily awarded.

High Court Proceedings

The High Court initially directed the government to proceed with a fresh tender process. However, the Division Bench, on November 4, 2020, modified the order and directed the Social Welfare Department to:

Issue a fresh NIT for transportation of food grains and micronutrients within 10 days of receiving the judgment.
Complete the tender process and issue work orders within 20 days of issuing the fresh NIT.
Continue the existing transportation arrangement until the completion of the tender process.

Dissatisfied with the High Court’s ruling, M/s B.K. Enterprises approached the Supreme Court.

Petitioner’s Arguments (M/s B.K. Enterprises)

The petitioner argued that:

The state government failed to conduct a fair and transparent bidding process.
The extension of the interim arrangement since 2017 without fresh tenders caused financial loss to the public exchequer.
The Social Welfare Department violated the principles of competitive bidding by awarding contracts without considering lower bidders.
The failure to implement the High Court’s directive for fresh NITs within the stipulated timeframe demonstrated administrative negligence.

Respondent’s Arguments (State of Manipur)

The State of Manipur and its Social Welfare Department countered that:

The delay in issuing fresh tenders was due to administrative difficulties and logistical constraints.
The department was prepared to float the tender within 10 days and complete the entire process within two months.
Continuing with existing contractors ensured uninterrupted food supply to beneficiaries.
The fresh tender process would be conducted fairly and transparently through e-tendering.

Supreme Court’s Observations

1. Unjustified Delay in Issuing Fresh Tenders

The Court noted that since 2017-18, contracts for transportation of rice and micronutrients were continued without inviting fresh tenders. This led to severe financial loss to the state and a violation of procurement norms.

“The action of the state government in continuing the contract without fresh tenders and without entering into any permanent contract is highly deprecated.”

2. Government’s Failure to Implement High Court Orders

The Court criticized the Manipur government for failing to implement the High Court’s directive to conduct a fresh tender process within 20 days. It stated:

“The inaction of the state and its officials in not implementing the High Court’s orders is unacceptable and reflects administrative negligence.”

3. Loss to Public Exchequer

The Supreme Court highlighted that continuing old contracts at outdated rates of 2017-18 caused tremendous financial loss to the state. The Court observed:

“There appears to be a complete lack of interest in issuing fresh NITs, raising serious concerns over transparency and governance.”

Final Judgment

The Supreme Court directed:

The State of Manipur and its Social Welfare Department must issue a fresh NIT within 10 days from the judgment.
The tender process must be conducted in a fair and transparent manner through e-tendering, with wide publicity.
The entire tender process, including issuance of work orders, must be completed within six weeks of the e-tender issuance.
The government must ensure there is no cartelization by contractors and that the highest competitive rates are received.
The existing arrangement shall continue only until December 31, 2021, after which the new contracts must take effect.
The state must submit a compliance report to the Supreme Court.

Impact of the Judgment

The judgment has wide-ranging implications:

Ensures Transparency: Government contracts must follow transparent bidding processes to prevent favoritism.
Prevents Financial Loss: The ruling prevents revenue loss due to outdated contracts and unchecked interim arrangements.
Strengthens Judicial Oversight: Government departments must adhere to court directives or face judicial scrutiny.
Improves Governance: The judgment underscores the importance of timely and fair government procurement processes.

Conclusion

The Supreme Court’s ruling in M/s B.K. Enterprises vs. The State of Manipur reinforces the need for fair and competitive bidding in public contracts. By directing the government to issue fresh tenders and prevent cartelization, the judgment strengthens financial accountability and administrative transparency. This landmark decision ensures that procurement in essential services, such as the transportation of food grains and nutrition supplies, is handled efficiently and without favoritism.

Petitioner Name: M/s B.K. Enterprises.
Respondent Name: The State of Manipur & Another.
Judgment By: Justice M.R. Shah, Justice A.S. Bopanna.
Place Of Incident: Manipur.
Judgment Date: 12-11-2021.

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