Ayurvedic medicine procurement process must be transparent and non-arbitrary. Appeals dismissed, intervention applications denied.

The appeals against the High Court judgment were dismissed. The procurement of Ayurvedic medicines must be transparent and non-arbitrary, typically through tenders. Applications for intervention were also dismissed for seeking to expand the scope of the Special Leave Petition beyond the interpretation of Paragraph 4(vi)(b).

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Issues Involved:
1. State Largesse: conflation of power and duty
2. Judicial review of government contracts: extent and ambit
3. Tender: a constitutional requirementRs.
4. Interpretation of Paragraph 4(vi)(b) of the Operational Guidelines
5. Validity of award of Government contract to IMPCL

Detailed Analysis:

1. State Largesse: conflation of power and duty
The judgment discusses the role of the welfare State in aiding the realization of socio-economic rights recognized by the Constitution. It emphasizes that government actions aimed at ensuring the well-being of citizens should not be perceived as 'largesse' but rather as a duty entrusted by the Constitution to ensure the well-being of citizens. The use of the term 'largesse' belittles the sanctity of the social contract between the people and the State.

2. Judicial review of government contracts: extent and ambit
The judgment reviews the extent of judicial scrutiny in government contracts. It notes that while the government has discretion in awarding contracts, this discretion is not unfettered and must conform to Article 14 of the Constitution, ensuring fairness and non-arbitrariness. The judgment cites various precedents where the Supreme Court has held that government contracts must be awarded through a transparent process, typically involving public tenders, unless exceptional circumstances justify deviation.

3. Tender: a constitutional requirementRs.
The judgment elaborates that while inviting tenders is a preferred method for awarding government contracts to ensure transparency and fairness, it is not a constitutional requirement. However, any deviation from this method must be justified on grounds of non-arbitrariness and fairness. The judgment cites previous cases where the Supreme Court has upheld the necessity of transparency in government contracts and the limited circumstances under which private negotiations may be permissible.

4. Interpretation of Paragraph 4(vi)(b) of the Operational Guidelines
The judgment interprets Paragraph 4(vi)(b) of the Operational Guidelines, which stipulates that at least 50% of the grant-in-aid must be used to procure medicines from IMPCL or other PSUs, State Government pharmacies, and cooperatives. The judgment clarifies that the use of the term 'or' places all these entities on an equal footing, and there is no gradation or preference for IMPCL over other entities. The judgment also notes that previous circulars and notifications have evolved to allow procurement from multiple sources, not just IMPCL.

5. Validity of award of Government contract to IMPCL
The judgment examines the validity of awarding the contract to IMPCL without inviting tenders. It notes that the justification provided by the appellant, citing the unique challenges in the procurement of Ayurvedic medicines, is not substantiated by cogent material. The judgment concludes that the action of awarding the contract solely to IMPCL is arbitrary and violative of Article 14. It mandates that henceforth, the procurement of Ayurvedic medicines must be through a transparent process such as tenders, unless exceptional circumstances justify deviation.

Conclusion:
The appeals against the judgment of the High Court are dismissed. The procurement of Ayurvedic medicines must be conducted through a transparent and non-arbitrary process, typically involving tenders. The applications for intervention are also dismissed as they seek to enlarge the scope of the Special Leave Petition beyond the interpretation of Paragraph 4(vi)(b).

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