Original Equipment Manufacturer (OEM) Authorization Is Mandatory, Not a Technicality: Punjab & Haryana HC Upholds Rejection of Bid in PGIMER Tender
Case Name: M/s Jyoti Electricals & Another v. Post Graduate Institute of Medical Education & Research (PGIMER), Chandigarh & Others
Date of Judgment: 24.03.2026
Citation: CWP-39639-2025
Bench: Hon’ble Mr. Justice Deepak Sibal and Hon’ble Ms. Justice Lapita Banerji
Held: The High Court held that submission of a valid OEM authorization certificate is an essential condition of a tender. Absence of such authorization renders a bidder ineligible, and rejection of the bid cannot be termed hyper-technical or arbitrary.
Summary: The petitioners challenged the rejection of their technical bid by PGIMER in a tender process relating to installation and maintenance of a gas-based fire suppression system.
Under the tender conditions, bidders were required to submit an authorization certificate from the Original Equipment Manufacturer (OEM), confirming technical support and supply of spare parts for at least seven years. This requirement was treated as a mandatory eligibility condition.
The petitioners relied on an OEM certificate dated 15.05.2025, which had been submitted in response to an earlier tender (first NIT). However, for the second NIT issued in November 2025, no fresh authorization was obtained. Upon verification, the OEM itself clarified that it had not issued any authorization in favour of the petitioners for the second NIT.
The petitioners argued that since the work under both tenders was identical, reliance on the earlier certificate was sufficient and that rejection of their bid was a hyper-technical approach, especially when they had quoted a significantly lower price.
The Court rejected these submissions and held that each tender process is independent. Even if the work is identical, compliance with eligibility conditions must be assessed afresh. The requirement of OEM authorization was not a mere procedural formality but a substantive condition ensuring that the bidder had technical backing to execute and maintain the project.
The Court emphasized that without OEM support, execution of the contract would be uncertain, thereby defeating the purpose of the tender. It also noted that the Institute had followed a uniform and transparent process by verifying OEM authorizations of all bidders.
On the issue of judicial review, the Court reiterated settled principles that courts must exercise restraint in tender matters and should not interfere unless the decision is arbitrary, mala fide, or perverse. It held that rejection of the petitioner’s bid was neither arbitrary nor irrational but strictly in accordance with the tender conditions.
The allegation of mala fides was also rejected, as the decision had been taken by an expert committee and not by any individual against whom bias was alleged.
Decision: The High Court dismissed the writ petition and upheld the rejection of the petitioner’s technical bid. It held that the absence of valid OEM authorization for the second tender rendered the petitioner ineligible and that the tendering authority had acted fairly, transparently, and in accordance with the essential conditions of the NIT.