Supreme Court Grants Himachal Government Authority to Cancel Disputed PoS Machine Tender. The court stated that the cancellation of the LOI was a valid exercise of administrative discretion and the state can issue a new tender.
New Delhi: The Supreme Court has allowed the Himachal Pradesh government to cancel the disputed tender related to the procurement of electronic Point-of-Sale (e-PoS) machines for fair price shops. This dispute was linked to the state's effort to modernize its public distribution system, which was to include features such as Aadhaar-based biometric and iris scanning in the e-PoS machines.
This is Justice Surya Kant's first judgment as Chief Justice. The Supreme Court clarified that the state government has the full right to withdraw the Letter of Intent (LOI) issued in favor of the private company Oasis Cybernetics Private Limited.
High Court Order Quashed
The apex court quashed the Himachal Pradesh High Court's order of May 2024, which had reinstated the LOI. There were two main issues in this case. The first was whether the LOI issued on September 2, 2022, created any binding rights in favor of the company. The second was whether the state government's decision to cancel the LOI was arbitrary or against the principles of natural justice.
The Supreme Court stated that the LOI had not, under any circumstances, transformed into a full contract. Therefore, its cancellation on June 6, 2023, was considered a ‘valid exercise of administrative discretion’. The court clarified that there was no basis for interference.
Himachal Government Permitted to Issue New Tender
The Supreme Court directed the state government that it is free to issue a new tender related to the supply and maintenance of e-PoS machines for fair price shops. The court also stated that Oasis Company can participate in this new tender under the prescribed eligibility conditions.
This decision will not hinder the government's efforts to modernize its public distribution system, and new tenders can be issued while ensuring technical standards.
Importance of e-PoS Machines
Himachal Pradesh's plan aimed to ensure digital and secure transactions in government shops. The e-PoS machines included Aadhaar-based biometric verification, iris scanning, and other security features. This will ensure that beneficiaries receive the designated government commodities on time and correctly.
Court Upholds Administrative Discretion as Valid
In its judgment, the Supreme Court stated that the cancellation of the LOI was a judicious decision by the state government. The court also clarified that the LOI did not amount to a contract under any circumstances, and therefore there was no legal obligation in its cancellation.
