The Patan Appellate Court has directed the Nepali Army (NA) not to procure ‘High Energy Biscuits’ from Pashupati Biscuits Industries,  saying that the agreement for the procurement violated the spirit of the Public Procurement Act.

Pashupati Biscuits Industries is a subsidiary of the Chaudhary Group.

Issuing an interim order in response to a writ filed by Pemba Sherpa of Mark Suppliers, a division bench of Judges Til Prasad Shrestha and Saranga Subedi on Thursday directed the Army not to implement the agreement unless a final decision on the case is made.

The NA on December 13 had reached an agreement with Pashupati Biscuits Industries sans bidding to buy biscuits needed for around 100,000 personnel.

As per the deal worth around Rs 1.6 billion, the Duhabi-based company was to supply biscuits from January 15, 2016 to January 14, 2019.  

In the agreement, the Army has claimed that the Pashupati Biscuits Industries was selected as it was the only company in the country which could produce ‘High Energy Biscuits”. The national defence force claimed that around Rs400 million would have been saved had the procurement been done directly with the company.

“… it is against the principle of transparency and credibility, therefore don’t implement the agreement until the final verdict,” reads the decision of the Appellate Court issued in the name of NA.

The court said the agreement is against Clause 41 (1) of Public Procurement Act 2006, which makes bidding mandatory to procure anything that costs more than Rs6 million.

The court has said the NA wrongly interpreted the Act while reaching the agreement with the biscuit company.