“Comfort-Based Procurement” Struck Down: Healthium Medtech Ltd. v. UT of Jammu & Kashmir (2025)

1. Introduction

WP(C) No. 2808/2024 placed before the High Court of Jammu & Kashmir and Ladakh at Jammu challenged the award of a major multi-year suture-supply tender (NIT JKMSCL/SUTURE MATERIAL/604, dated 16-10-2023). Healthium Medtech Ltd.—an Indian manufacturer with global credentials—alleged that the Jammu & Kashmir Medical Supplies Corporation Ltd. (JKMSCL) arbitrarily discarded its technically responsive bid and perpetuated a 35-year monopoly of two multinational vendors (Johnson & Johnson Pvt. Ltd. and S.R. Technomed/Medtronic).

Key Issues

Whether the Technical Evaluation Committee (TEC) could rely solely on doctors’ “comfort” with certain brands without comparing samples of other bidders.
Whether repeated extensions and selective opening of financial bids violated Articles 14 & 19(1)(g) of the Constitution (equality and freedom of trade).
The scope of judicial review over government contracts when allegations of arbitrariness and favouritism arise.

2. Summary of the Judgment

Justice Moksha Khajuria Kazmi quashed:

(i) the TEC minutes (02-09-2024) rejecting Healthium’s bid;
(ii) the opening of financial bids restricted to Respondents 5 & 6;
(iii) the Letters of Intent and two-year Rate Contracts already issued.

The Court ordered a fresh tender with unambiguous conditions and mandatory sample evaluation of all bidders. Pending that exercise, JKMSCL may procure sutures only through transparent interim measures.

3. Detailed Analysis

3.1 Precedents Cited & Their Influence

Tata Cellular v. Union Of India (1994) 6 SCC 651 – bedrock principle that judicial review examines the decision-making process, not the merits. The Court invoked this to scrutinise TEC’s process, not medical efficacy.
Johnson & Johnson Ltd. v. State of J&K (2010 SCC OnLine JK 12) – earlier DB judgment had upheld J&J’s selection because other bidder’s quality was doubted. Justice Kazmi distinguished it: here no complaint existed against Healthium; quality was never tested.
Subodh Kumar Singh v. Chief Executive Officer, 2024 SCC OnLine SC 1682 – clarified that arbitrariness, bias and non-application of mind attract writ jurisdiction even in contractual matters; heavily quoted on “comfort-based” arbitrariness.
Ramana Dayaram Shetty v. International Airport Authority (1979) and ABL International v. ECGC (2004): relied upon for extending Article 14 standards to government contracts.
Other tender cases (Maa Binda Express, Banshidhar Construction, etc.) were cited by parties for general tender-law propositions but were secondary to the above core rulings.

3.2 Court’s Legal Reasoning

Violation of Tender Conditions
- Clause 16 required every bidder to file samples within 10 days; TEC never called for or tested samples before evaluation.
- Clause 13 mandated that after price-discovery, L2/L3 bidders be given an opportunity to match L1; bypassed when only two vendors were considered.
Structural Illegality of TEC The 3rd Board Meeting (2016) mandated a Deputy Drug Controller & two specialists. Instead, 16 unnamed “experts” were video-conferenced, while the statutory Drug-Control representative rank was diluted.
“Comfort” ≠ Quality Test Reliance on decades of familiarity (“time-tested”) without laboratory or sample evaluation was termed “comfort-based procurement”—inherently anti-competitive and arbitrary, especially after 35 years of single-vendor dominance.
No Public-Interest Justification Price bids revealed Healthium quoted significantly lower rates for multiple SKUs. TEC never balanced cost against alleged quality, breaching the “best at the cheapest” dictum of the 2010 DB case itself.

3.3 Impact of the Decision

Anti-monopoly Signal: Government buyers must avoid entrenched brand monopolies created by their own inertia or expert “bias”.
Mandatory Sample Testing: In medical procurement, empirical evaluation & documented scoring replace subjective comfort.
Strengthened Judicial Review: Even non-statutory rate contracts may be quashed where the process is opaque.
Reinforced Procurement Drafting: Authorities must harmonise tender clauses, publish grievance-disposal notes, and record cogent reasons; failure triggers annulment.
Transitional Supply Mechanism: Court allowed interim ad-hoc purchases, balancing patient-care continuity with legal compliance.

4. Complex Concepts Simplified

Technical Evaluation Committee (TEC) – a panel that screens bidders’ credentials & product quality before price bids are opened.
L1, L2, L3 – shorthand for the lowest (L1) and subsequent lowest price bidders.
Rate Contract – a standing agreement fixing item prices for a specified period; individual purchase orders are drawn against it.
Judicial Review – the court’s power to test the legality (not expediency) of executive action.
Arbitrariness – State action lacking rational basis, violating Article 14.
Comfort-based procurement – award of contracts purely because end-users are familiar or “comfortable” with certain brands, without objective comparison.

5. Conclusion

The J&K High Court has articulated a clear doctrine: Government buyers cannot hide behind expert familiarity to sidestep competition, especially when tender rules themselves prescribe objective testing. By striking down three-decade-old procurement inertia, the judgment reinforces transparency, equal opportunity, and empirical evaluation in public health acquisitions. Future tenders—within J&K and beyond—must demonstrably derive quality decisions from data, samples and recorded reasons, not from habit or brand loyalty.

“Comfort-Based Procurement” Struck Down: Healthium Medtech Ltd. v. UT of J-&-K (2025)