Authority: Calcutta High Court (High Court at Calcutta)

Order Date: 17 September 2026

Case Overview

  • Parties: Appellant – United Air Express; Respondent No. 1 – Metal Traders Processing Company (proprietor Sanjay Kumar Agarwal, an MSME with UDYAM registration); Respondent No. 2 – Steel Authority of India Limited (SAIL); additional respondents include the Government e‑Marketplace (GeM) portal and other private respondents.
  • Tender: SAIL issued a tender on 5 December 2025 via GeM for handling, processing and management of scrap/slag at the IISCO Steel Plant. Tender terms mandated a 15 % financial‑turnover relaxation for verified MSMEs and required that if the L1 bidder was non‑MSME, a 100 % order could be placed on an eligible MSME provided its bid was within L1 + 15 % and the MSME could match the L1 price.
  • Bids: After the reverse auction, the seven financially qualified bidders were ranked as follows:

1. United Air Express – Rs 1,552,683,638.14 (L1, non‑MSME)

2. FSNL Private Limited – Rs 1,552,916,575.50 (L2, non‑MSME)

3. Metal Traders Processing Co. – Rs 1,553,401,218.49 (L3, MSME)

  • The MSME petitioner’s bid was within 15 % of the L1 and L2 bids, entitling it to be declared the lowest bidder or at least to be offered a chance to match the L1 price under the tender conditions.
  • The petitioner sought multiple writs, including a mandamus directing SAIL/GeM to invite it to match the L1 price, to recall any work order issued to United Air Express, and to produce all case records.
  • The Single Judge (dated 1 September 2026) directed SAIL not to give effect to the Letter of Award to the private respondents and ordered SAIL to invite the petitioner to match the L1 price within a week.
  • United Air Express appealed, arguing that the Single Judge exceeded judicial review, altered the bidding process, and ignored its incurred overhead costs.
  • SAIL cited Rule 149 of the General Financial Rules, 2017, emphasizing that GeM is the mandatory procurement portal and that the buyer (SAIL) had not opted for the MSE/MII purchase preference during bid creation.
  • The appellate court examined the tender’s purchase‑preference clause (Section 7.1.1) which required a 100 % order on an MSME if its price was within L1 + 15 % and the buyer had not opted for MSE preference.
  • Email correspondence (03‑03‑2026 from Pankaj Sharma, Senior Manager, SAIL) showed that GeM identified United Air Express as a non‑MSE L1 bidder and listed the MSME bidders, noting that the portal lacked a “price‑matching” option.
  • A subsequent email (03‑03‑2026 from RK Mishra, GM, SAIL) asked GeM whether offline price‑matching could be used; GeM replied (05‑03‑2026, Sayantan Roy, Director, Category Management, GeM) that price‑matching for ITC‑enabled bids was not available and suggested offline matching.
  • Despite GeM’s suggestion, SAIL did not provide the petitioner an opportunity to match the L1 price.

Final Outcome

  • The appellate bench (Justices Shampa Sarkar & Arjun Ray Mukherjee) held that SAIL’s failure to facilitate offline price‑matching constituted a gross procedural infirmity, violating the tender’s terms.
  • The court affirmed the Single Judge’s order, directing SAIL (and respondents 1‑4) to invite Metal Traders Processing Co. to match United Air Express’s L1 price within one week and, if successful, to recall the work order issued to United Air Express.
  • The appeal by United Air Express was dismissed along with the connected application.
  • A subsequent application for a stay of the judgment was considered and rejected.
  • No damages were awarded to United Air Express; the court noted that any claim for loss due to mobilisation costs must be pursued in a civil court.

Topics: Legal Appeal, Government Procurement, MSME Preference