In a significant ruling impacting government tenders and digital PDS reforms, the Supreme Court has upheld the Himachal Pradesh Government’s cancellation of the Letter of Intent (LoI) issued to OASYS Cybernetics Pvt. Ltd. for supplying upgraded Aadhaar-enabled ePoS devices statewide. The Court held that the LoI was purely conditional, created no binding contract, and could be validly withdrawn because the company failed to meet mandatory preconditions like NIC software compatibility testing, live demo certification, and full cost disclosure.
While dismissing allegations based on past blacklisting as irrelevant, the Court found the vendor’s non-compliance sufficient to justify cancellation. The High Court order restoring the LoI was struck down. The State may now float a fresh tender, and must reimburse OASYS only for actual equipment or services used, not for loss of profits.
This judgment reinforces the principle that public procurement must ensure fairness without compromising administrative discretion, especially in welfare-critical systems like the Public Distribution System (PDS).
State of Himachal Pradesh & Anr. v. M/s OASYS Cybernetics Pvt. Ltd., 24-11-2025