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IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION

APPELLATE SIDE

BEFORE :-

THE HON’BLE JUSTICE SHAMPA SARKAR

&

THE HON’BLE JUSTICE ARJUN RAY MUKHERJEE

MAT 1491 of 2026

with

CAN 1 of 2026

United Air Express

vs.

Sanjay Kumar Agarwal & Ors.

For the Appellant : Mr. Siddhartha Datta, Adv.

Ms. Suhani Dwivedi, Adv.

Ms. Trisha Mukherjee, Adv.

Mr. Chetan Kr. Kabra, Adv.

For the Respondent No. 1 : Mr. Sakya Sen, Sr. Adv.

Mr. Ankan Rai, Adv.

Mr. Sarasij Dasgupta, Adv.

Mr. Ratnesh Kr. Rai, Adv.

Ms. Sakshi Kejriwal, Adv.

Ms. Vipra Gang, Adv.

Ms. Nabanita Manna, Adv.

For the Respondent : Mr. Jishnu Chowdhury, Sr. Adv.

Nos. 2 to 4 Mr. Mohit Dang, Adv.

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For the Respondent No. 5 : Mr. Ayan Podder, Adv.

Mr. Soham Dutta, Adv.

Ms. Anjali Shaw, Adv.

Judgment reserved on : 07.09.2026

Judgment pronounced on : 17..09.2026

Judgment uploaded on : 17.09.2026

Arjun Ray Mukherjee, J.

1. This appeal is directed against an order dated September 1, 2026

passed in WPA 6836 of 2026. By the said order, the learned Single Judge

allowed the writ petition, filed by one Sanjay Kumar Agarwal /

respondent no. 1 [hereafter ‘writ petitioner’], proprietor of Metal Traders

Processing Company.

2. The writ petitioner is an enterprise within the meaning of the

Micro, Small and Medium Enterprise Development Act, 2006 having an

UDYAM registration certificate, engaged in the business of handling and

processing of slag and scrap for major steel plants in India.

3. The respondent no. 2 / Steel Authority of India Limited [hereafter

‘SAIL’] floated a notice inviting tender [hereafter ‘the said tender’] on

December 5, 2025 through a portal, namely, Government e -Marketplace

[hereafter ‘GeM’] for handling, processing and management of raw

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material / scrap / slag and for other miscellaneous job at the ISSCO

Steel Plant. One of the conditions of the said tender was as follows:

“Other Terms:

The bid cannot be split. Number of sources of procurement shall

be 1 (One) only. In case L-1 is non-MSE and preference is to be

given as per MSE/MII guidelines, 100% order shall be placed on

the eligible MSE/MII vendor as per the extant guidelines.

Purchase preference as per the extant MSE policy and Make In

India (MII) guidelines shall be applicable. Fifteen (15) %

Relaxation on Financial Turnover shall be applicable to verified

MSE and verified Start-ups. Registered companies may submit a

copy of their Certificate of Incorporation. Other Bidders should

submit a copy of a current valid Trade License/ Certificate of

Enlistment/Certificate of Registration/ Self attested copy of

declaration for non-applicability of Trade License. If Trade

License is not applicable, please provide a signed declaration

explaining the valid reason for the same.”

4. The writ petitioner duly participated in the said tender. GeM, by an

email dated 25.02.2026, invited the writ petitioner to participate in a

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reverse auction process. It is relevant to mention here that upon

opening of the financial bids, each and every technically qualified bidder

was invited to participate in the reverse auction process through the

GeM portal except the H1 bidder.

5. Upon completion of the reverse auction process, SAIL declared the

list of seven bidders who qualified financially and the names of the first

three bidders with the price quoted by them and their respective ranks

are set out herein below:

Name Price Rank

[i] United Air Express Rs. 1552683638.14 L1

[ii] FSNL Private Limited Rs. 1552916575.50 L2

[iii] Metal Traders Processing Co. Rs. 1553401218.49 L3

6. According to the writ petitioner, their financial bid was within 15%

of both United Air Express [L1] and FSNL Private Limited [L2] and as

such they, being an MSME, was entitled to be declared as the lowest

bidder or at least to be given an opportunity to match the price of the L1

bidder.

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7. It was the case of the writ petitioner that although he was willing to

match the L1 price in terms of the tender conditions of the said tender,

no such opportunity was extended either by GeM or by SAIL. In the writ

petition the following reliefs were prayed for:

“c) A writ and/or writs in the nature of Mandamus do issue,

commanding the Respondent Authorities to invite the Petitioner

to match the price of the United Air Express being a sum of Rs.

1,55,34,01,218.49/- as proposed in the communication dated

7th March, 2026;

d) A writ and/or writs in the nature of Mandamus do issue,

commanding the Respondent Authorities to forthwith reconsider

the bid of the Petitioner and offer the Petitioner to match the bid

of the L1 bidder i.e. the bid of the said United Air Express;

e) A writ and/or writs in the nature of Mandamus do issue,

commanding the Respondent Authorities not to issue any Work

Order and/or Letter of Intent and/or Letter of Award in favour of

United Air Express, until the pendency of the present proceeding;

f) A writ and/or writs in the nature of Mandamus do issue,

commanding the Respondent Authorities to recall and/or cancel

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and/or revoke any Work Order and/or Letter of Intent and/or

Letter of Award, if issued in favour of United Air Express in

derogation to the aforesaid national policy of Union of India as

well as of the internal guidelines of the Respondents and in the

bid invitation document;

g) A writ of or in the nature of certiorari directing the Respondent

Authorities to remit all records pertaining to the present case

before this Hon'ble Court so that conscionable justice may be

rendered;”

8. The writ petition was taken up for consideration by the learned

Single Judge on April 9, 2026 and His Lordship directed the writ

petitioner to implead United Air Express, being the successful bidder, as

a party respondent. The writ petition was thereafter taken up by His

Lordship on April 27, 2026 and His Lordship, inter alia, passed the

following order:

“13. By relying upon the said judgment, learn ed counsel

appearing for the private respondents submits that the

authorities have found that the petitioner has not given the

preference of the MSME during the bid process and accordingly

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the petitioner was considered as a Non-MSME and LOA has

been issued to the private respondents.

14. Learned counsel for the petitioner has relied upon a

communication dated 26th March, 2026 issued by the SAIL

wherein it is mentioned that though the LOA has been issued to

the private respondents but the SAIL has extended the contract

of the earlier contract form till 30th September, 2026. He submits

that though LOA issued by the private respondent has not

commenced the writ and he prays for interim order by directing

the respondent authorities not to award any work to the private

respondents.

15. Heard the learned counsel for the respective parties and

perused the materials on record.

16. At the time of hearing, learned counsel appearing for the

GeM Portal has submitted that the letter dated 9th March, 2026

provides that the buyer not opted the MSE/MII preference during

the bid creation. He submits that in the said letter the buyer is

the SAIL and not the bidder and though the buyer has not opted

the MSE/MII purchase preference during the bid creation.

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17. Considering the submissions made by the learned counsel

for the respective parties, this Court finds that the SAIL authority

while processing the bid process through the website have not

opted the MSE/MII purchase preference during the bid creation

as a result bidder could not avail the MSE/MII purchase

preference during participation.

18. On the other hand, the SAIL has given the benefit to the

petitioner with regard to the MSME, the petitioner has not

deposited the earnest money in terms of the contract as the

petitioner is a MSME.

19. This Court finds that though the LOA has been issued to the

private respondents but the private respondents have not

commenced any work. At the same time earlier cont ract has

been extended till 30.09.2026.

20. The respondents are directed to file affidavit-in-opposition

within two weeks. Reply, if any within two weeks thereafter.

21. In the meantime, the authorities are directed not to give any

effect/further effect to the LOA issued to the private

respondents.

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22. This interim order is passed only on the basis of the

communication dated 26th March, 2026 wherein it is mentioned

that the earlier contract is extended from 1st April to 30th

September, 2026.”

9. The said writ petition was finally taken up for consideration by the

learned Single Judge and by a judgment and order dated September 1,

2026, His Lordship, inter alia, passed the following:

“26. Neither SAIL nor GeM or the added respondent has brought

to the notice of this Court whether the authorities have modified

the guidelines in terms of the order of the Hon'ble Supreme

Court. On the other hand, the SAIL has published tender notice

in terms of the guidelines dated 23rd March, 2012, by

incorporating the terms and conditions in bid documents

including the additional terms and conditions of the contract and

the added respondent after having knowledge has participated

in the said tender process.

27. Though the work order is issued to the added respondent

but the SAIL has not given effect to the said work order as the

SAIL has issued a letter dated 26th March, 2026, wherein the

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SAIL maintained the continuity of the said work with the earlier

contract till 30th September, 2026.

28. This Court finds that the SAIL has not opted for the MSE/MII

purchase preference during bid creation due to which the

petitioner could not avail the MSE/MII purchase preference

during participation through GeM portal. The respondent nos. 1

to 4 are directed to invite the petitioner to match the price of the

added respondent as proposed in the letter dated 7th March,

2026, being Annexure "P-9" at page 298 of the writ petition

within a week from the date of this order and if the respondent

nos. 1 to 4 finds that the petitioner is able to match with the L1

bidder in terms of the Government of India procurement policy to

pass appropriate order and to recall the work order issued in

favour of the added respondent.”

10. United Air Express / the added respondent [hereafter ‘the

appellant’], being aggrieved by the judgment and order dated September

1, 2026, has preferred this appeal.

11. Mr. Dutta, learned counsel appearing for the appellant submitted

that the scope of judicial review under Article 226 of the Constitution of

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India was limited and that a writ court should not interfere with the

decision of the buyer not to opt for the MSE/MII purchase preference in

respect of a particular tender. Such decision was within the buyer’s

permissible discretion. It was submitted that the learned Single Judge

changed the terms of the bidding process by imposing the new

mechanism which was beyond the basis for conclusion of the reverse

auction. The learned Single Judge could not have taken into

consideration the discovered price of the appellant and use the said price

as the base for the writ petitioner to match. The learned Single Judge

could not have used the appellant’s contract price, to order price

matching, thereby, directing the respondent Nos. 2 to 4 to allow the writ

petitioner to match the said price, manually. The appellant had already

mobilised resources and had incurred heavy overhead costs on a daily

basis. The learned Single Judge ignored the said fact and also ignored

the right that had vested in the appellant to execute the work. The

learned Single Judge could not have destroyed the sanctity of the

competitive bidding process by directing the L3 bidder to match the L1

bidder’s price, thereby vitiating the close reverse auction already

conducted through the GeM portal.

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12. Mr. Jishnu Chowdhury, learned Senior Advocate appearing for the

SAIL, referred to Rule 149 of the General Financial Rules, 2017 which is

reproduced herein below:-

Rule 149. Government e-Market place (GeM). Government of

India has established the Government e-Marketplace (GeM) for

common use Goods and Services. GeM SPV will ensure adequate

publicity including periodic advertisement of the items to be

procured through GeM for the prospective suppliers. The

Procurement of Goods and Services by Ministries or Departments

will be mandatory for Goods or Services available on GeM. The

credentials of suppliers on GeM shall be certified by GeM SPV.

The procuring authorities will certify the reasonability of rates.

The GeM portal shall be utilized by the Government buyers for

direct on-line purchases as under:

13. He further submitted that from the documents on record, it

appeared that the GeM portal treated the appellant as a non-MSME or a

regular bidder due to some technical issue and therefore SAIL should not

be held liable in any manner.

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14. Mr. Sakya Sen, learned Senior Advocate for the writ petitioner

submitted that there was no infirmity in the order passed by the learned

Single Judge and as such the appeal was liable to be dismissed.

15. The question which falls for our consideration is whether SAIL, by

not treating the writ petitioner as an MSME and further by not extending

an opportunity to them to match the L1 price in spite of their

willingness, committed any procedural impropriety.

16. Before considering the issue in question, it is relevant to reproduce

the applicable terms and conditions of the said tender:

“7. PURCHASE PREFERENCE: (BOTH FOR INDIGENOUS AND

IMPORT TENDERS)

7.1.1 Any purchase preference to Make in India Suppliers and

MSE Suppliers, shall be based on the extant guidelines of Govt.

of India and guidelines of SAIL Plants/Units.

1) Micro and Small Enterprises (MSES): In line with the Public

Procurement Policy (PPP) for Micro & Small Enterprises (MSEs)

Order 2012, issued vide Gazette Notification dated 23.03.2012

and amendments thereof the tenderer who is registered as

Micro/small Enterprises must submit valid self-certified copy of

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Udyam Registration Certificate (URC) issued after registering on

the Udyam Registration Portal i.e.

https://udyamregistration.gov.in

In case Udyam Registration Certificate (URC) is not provided,

they shall not be eligible to the benefits admissible under the

Act.

14. Purchase preference to MSE parties shall be applicable

as per MSE guidelines. In case the order cannot be split, the

100% order will be placed on the MSE party if their quoted price

is within<L1+15%, with acceptance of the MSE party to match

the L1 price.”

17. A bare perusal of the aforesaid terms and conditions clearly shows

that the writ petitioner had a right to be treated as an MSME and had a

further right to match the L1 price provided their quoted price was

within L1+15%.

18. In order to ascertain whether SAIL or GeM extended such

opportunity to the writ petitioner, it will be prudent to refer to the three

communications between SAIL and GeM.

19. The first e-mail dated March 3, 2026 is reproduced herein below:

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“From: Pankaj Sharma

To: R MISHRA

Date: Tue, 03 Mar 2026 16:25:49 +0530

Subject: Regarding GeM Bid No: GEM/2025/8/6974725, dated

08.12.2025 (RA Number: GEM/2026/R/631912)

Dear Sir,

Against the subject GeM bid (GEM/2025/8/6974725), 8 (Eight)

offers viz. of 1) M/S. FSNL Private Limited, 2) M/s. GSW Mining

& Recycling Private Limited, 3) M/S, KRL Inf ratech (India)

Limited, 4) M/s. Metal Traders & Processing Company, 5) M/s.

Neha Construction Private Limited, 6) M/s. Shree International

Vyapar Private Limited, 7) M/s. Shree Krishna Earthmovers and

8) M/s. United Air Express were received within the extended

due date i.e., 08.01.2026.

As per GeM rules, the H-1 bidder viz. M/s. Neha Construction

Private Limited was eliminated before RA and vide RA Number:

GEM/2026/R/631912, Reverse Auction (RA) was conducted on

the GeM portal for the subject tender from 2 6.02.2026 to

03.03.2026.

After H-1 elimination, a total of 7 (seven) bidders were eligible for

participating in the RA. Out of which, 5 (five) bidders had

participated in the said RA. Names of the bidders along with

their Ranking in RA are as mentioned below:

1) M/s. United Air Express (L-1)-Non-MSE bidder (Participated in

RA)

2) M/s. FSNL Private Limited (L-2) Non-MSE bidder (Participated

in RA)

3) M/s. Metal Traders & Processing Company (L-3) MSE bidder

(Participated in RA)

4) M/s. Shree Krishna Earthmov ers (L-4) MSE bidder

(Participated in RA)

5) M/s. Shree International Vyapar Private Limited (L-5) Non-

MSE bidder (Participated in RA)

6) M/S. KRL Infratech (India) Limited (L-6) Non-MSE bidder (Did

not Participate in RA)

7) M/s. GSW Mining & Recycling Private Limited (L-7) MSME

(Medium) bidder (Did not Participate in RA)

As per the tender terms & conditions:

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a) Purchase preference as per the extant MSE policy and Make

In India (MII) guidelines are applicable.

b) The bid cannot be split. Number of sources of procurement

shall be 1 (One) only. In case L-1 is non-MSE and preference is to

be given as per MSE/MII guidelines, 100% order shall be placed

on the eligible MSE/MII vendor as per the extant guidelines.

However, there is no option available on the GeM portal to

launch the price-matching event for the subject GeM Bid (after

RA). GeM Bid and GeM screenshots have been attached for

ready reference.* In view of the above, it is requested to kindly

take up with GeM to provide the following for further processing

of the subject GeM tender:

i) Original Bid Price (before RA) of all the above-mentioned 8

(eight) bidders.

ii) Price-matching option, if applicable, to be made available as

per the extant MSE policy/guidelines.

Kindly note that all the 8 (eight) bidders are "Class-I local

supplier", as per the MII declaration submitted by them in the

GeM portal.

Thanks & Regards,

Pankaj Sharma

Senior Manager | Steel Authority of India Limited

Contract Cell

IISCO Steel Plant.”

20. The second e-mail dated March 3, 2026, sent by SAIL to GeM,

reads as follows:

“From: R MISHRA

To: "Sayantan Roy

Date: Tue, 03 Mar 2026 16:59:35 +0530

Subject Fwd: Regarding GeM Bid No. GEM/2025/B/6974725,

dated 08.12.2025 (RA Number: GEM/2026/R/631912)

Dear Sir,

As per bid terms of Service Bid no. GEM/2025/B/6974725,

purchase preference is to be given to MSEs as the L1 Bidder is

non-MSE.

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May kindly advise asap whether the Buyer can proceed with

offline price-matching as the "Price-Matching" tab is not available

on the Buyer's Dashboard.

Regards

RK Mishra GM (MM), SAIL/CMMG ”

21. The third e-mail dated March 5, 2026 is reproduced herein below:

“From: Sayantan Roy

Thu, 05 Mar 2026 9 45 06 AM +0530

To R MISHRA

Dear Sir,

We would like to inform you that for ITC enabled bids purchase

preference to MSEs is not available as of now through the

system. We would request to kindly do the price matching the

MSEs offline and share it with GeM with the break-up ITC wise.

Thanks,

Sayantan Roy

Director Category Management

Government e Marketplace”

22. It is clear from the aforesaid correspondences that on the GeM

portal the bids purchase preference for MSMEs was not available and

under such circumstances it was suggested by GeM to SAIL, to complete

the price matching process offline. Such communication was received by

SAIL on a query of SAIL whether it could proceed offline for the price

matchup. Unfortunately, such opportunity was not afforded to the writ

petitioner. In any event, no legally protected right of the appellant has

been violated. The appellant, having participated in the said tender

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process knowing fully well of the ‘price matching term’ applicable to

MSMEs, is estopped from raising any demur in this regard.

23. The terms and conditions of the tender were framed by SAIL and it

was SAIL’s duty to adhere to such terms and conditions. Any deviation

from the terms and conditions which infringes the rights of a bidder is

liable to be set aside. The writ petitioner did not get a chance to match

the L1 price due to a technical issue in the GeM portal. Despite a query

having been made by SAIL to complete the process offline, the said

process was not explored for the reasons best known to them. Under

such circumstances, we have no hesitation in holding that a gross

procedural infirmity was committed by the respondent authorities.

24. We are mindful of the law settled by the Hon’ble Apex Court that, in

a tender matter, the court while exercising the power of judicial review,

can interfere if there is an infirmity in the decision-making process. [See:

Tata Cellular Vs. Union of India, reported in 1994 [6] SCC 651 and

Silppi Constructions Contractors Vs. Union of India and Anr. ,

reported in 2020 (16) SCC 489].

25. We agree with His Lordship that the tendering authority had

erroneously granted the contract in favour of the appellant without

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complying with the tender conditions. The MSME/the writ petitioner,

who had qualified upon fulfilment of the eligibility criteria, was required

under the tender conditions to be given an opportunity to match the

price of the L1 bidder. This process was not followed by the tendering

authority.

26. The GeM portal had clarified that their system did not provide for

such price matching mechanism and had asked the respondent

tendering authority to manually allow such price matching in the offline

mode. Such clarification was given by GeM upon a query raised by SAIL.

This query raised by SAIL would indicate that SAIL was also conscious

that the tender conditions provided for such price matching and the

same should be made available to the successful MSME.

27. In spite of knowing that the tender conditions would be breached, if

the price matching was not allowed to the MSME/writ petitioner, the

contract was awarded in violation of the tender conditions. Thus, the

award of the tender by the tendering authority in favour of the appellant

was vitiated. No right could be created in favour of the appellant to

execute the work on the basis of a contract which was awarded in

violation of the terms. Such violation was ex facie available from a bare

perusal of the tender document.

28. However, with regard to the contentio n of Mr. Dutta that the

appellant has suffered loss on account of mobilization of resources and

recurring overhead charges, we are of the view that the appellant, at best

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has a remedy by way of damages . He can always approach the civil

court, but the writ court did not commit any error of jurisdiction as

alleged by the appellant.

29. In view of the above, we do not find any infirmity in the judgment and

order dated September 1, 2026. The learned Single Judge correctly

addressed the issue and decided it in accordance with the tender terms.

The writ petitioner could not have been made to suffer either due to the

inability of GeM to upgrade its portal or the failure on the part of SAIL to

have a more robust system so that tender terms could be adhered to.

30. We were informed by the learned counsel appearing for the writ

petitioner that pursuant to the order passed by the learned Single Judge,

the writ petitioner was given an opportunity by SAIL to match the L1

price. The writ petitioner, by a letter dated September, 2, 2026

expressed their unconditional consent to match the L1 price. The order

of the learned Single Judge is upheld.

31. The appeal is dismissed along with the connected application.

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32. Urgent Photostat certified copies of this judgment, if applied for, be

supplied to the parties upon fulfilment of requisite formalities.

I agree.

(Arjun Ray Mukherjee, J.) (Shampa Sarkar, J.)

Later,

33. After pronouncement of the judgment the learned counsel appearing

for the appellant seeks stay of operation of the judgment.

34. Same is considered and rejected.

I agree.

(Arjun Ray Mukherjee, J.) (Shampa Sarkar, J.)