In Brief
The State of Orissa's tender conditions reserved 269 drugs for large manufacturers and only 20 for small scale units, requiring a 10-crore annual turnover to qualify. The High Court struck down this clause as violating industrial policy. The Supreme Court allowed the State's appeal and remitted the case, holding that the High Court failed to examine two critical issues: whether the turnover requirement was backed by empirical data, and whether the drug allocation was proportionately fair. The Court emphasised that tender conditions can only be challenged if wholly arbitrary or discriminatory, requiring complete examination of the policy's justification and comparative performance records."
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