Karnataka High Court
M/S. Technomed India vs State Of Karnataka on 19 November, 2013
Author: A.S.Bopanna
Bench: A S Bopanna
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 19TH DAY OF NOVEMBER 2013
BEFORE
THE HON'BLE MR. JUSTICE A S BOPANNA
WRIT PETITION No.20047/2013 (GM-TEN)
Between:
M/s. Technomed India,
Having its office at No.B-142,
Sector-3, DSIDC Industrial area,
Bawana, Delhi - 110 039,
Rep. by its Authorized Signatory,
Shri Mayigaiah,
Aged about 43 years,
Son of late Kalegowda. ... Petitioner
(By Sri B.M. Arun, Adv.)
And:
1. State of Karnataka
By its Secretary,
Department of Health and
Family Welfare,
Vikasa Soudha,
Dr.Ambedkar Veedhi,
Bangalore-560 001.
2. Karnataka State Drugs Logistics
and Warehousing Society®,
A Government of Karnataka Enterprises,
Having its office at No.1,
Siddaiah Puranik Road,
(Magadi Road), K.H.B. Colony,
Bangalore-560 079.
3. M/s Medion Healthcare Pvt. Ltd.,
A company incorporated under the
2
provisions of the Companies Act, 1956,
having its Head Office at B-302,
Pratik Industrial Estate,
Near Fortis Hospital,
Goregaon Link Road, Mulund (W),
Mumbai-400 080. ... Respondents
(By Smt. M.C.Nagashree, Adv. for R2,
Sri H.V.Manjunath, AGA for R1,
Notice to R3 D/w. V/o. Dt. 01.10.2013)
This Writ Petition is filed Under Article 226 of the
Constitution Of India, with a prayer to issue a writ of
mandamus and reject the tender of R-3 as non-responsive
pursuant to the tender notification Dt. 5.1.2013 in
No.KDL/EQPT. Equipment and Instrument/46/2012-13
(Ind.175), under e-tendering system as per Karnataka
Transparency in Public Procurement Act, 1999, vide Annx-A
and consequentially & declare that the petitioner is a
successful bidder.
This writ petition having been reserved for Orders,
coming on for pronouncement this day, the Court
pronounced the following :
ORDER
The petitioner is before this Court in this writ petition seeking for the following reliefs;
a) Issue Writ of Mandamus and reject the tender of 3rd Respondent as non-responsive pursuant to the Tender Notification dated 05.01.2013 in No.KDL/EQPT/Equipment & Instrument/46/2012-13 (IND-175), under e-Tendering system as per Karnataka Transparency in Public Procurement Act, 3 1999, vide Annexure-'A' and consequentially,
b) Declare that the Petitioner is as successful bidder,
c) Grant such other orders or direction as this Hon'ble Court may deem fit under the facts and circumstances of the case, in the interest of justice,
d) To set aside the Proceedings of the Tender Accepting Authority dated 01.07.2013 (Annexure -Q), in so far it seeks to set aside the procurement of Ambulance Equipments and directed to call for Fresh Tenders as a package for Interior Fabrication, Exterior Designing and Ambulance Equipments.
e) To set aside the Tender Notification dated
31.07.2013/01.08.2013in No.KDLWS/
IND-186 and the Corrigendum dated
08.08.2013 in No. KDL/EQPT/AMB-FAB-
Instrument & EQPT/10/2013-14, issued
by the 2nd Respondent, vide Annexure-R & S, respectively.
2. The facts in brief are that the second respondent had issued Tender notification dated 05.01.2013 seeking response for supply of equipments for Ambulance in package consisting of 21 items. The 4 petitioner and the third respondent had submitted their bids in addition to one another. The technical bids were opened on 11.02.2013 and said three bids were held to be responsive. The petitioner raised certain objections with regard to the bid of the other two being considered as responsive. The demonstration of the equipments were undertaken only by the petitioner and the third respondent. In respect of the Ambulance vehicles, though it was a part of the process under distinct Tender, it was proposed to purchase under DGS & D rate contract and purchase order dated 19.03.2013 was issued to M/s. Tata Motors. With regard to the equipments, the Procurement Portal of the second respondent is stated to have shown the name of the petitioner as selected as on 16.07.2013. The grievance is that despite the same, it is contended by the second respondent that the Tender Accepting Authority had in the proceedings held on 01.07.2013 decided to set aside the proceedings. Thereafter fresh Tender notification for Ambulance Interior Fabrication, Exterior Designing, supply and Installation of Equipments as at 5 Annexure-R and the Addendum/Corrigendum as at Annexure-S are issued. The petitioner therefore claiming to be aggrieved by the issue of Fresh Tender Notification is before this Court assailing the same and also seeking benefit under the initial tender notification.
3. The second respondent has filed the objection statement. The issue of two short tender notification for purchase of 200 numbers of Ambulance with interior fabrication and equipments was issued based on the requirement indicated by the Programming Officer, National Rural Health Mission (for short the 'NRHM'). The process with regard to pre-bid meeting of the technical bids being opened and demonstration of ambulance equipments being held, there is no dispute. However, since there was change with regard to procurement of Ambulance, a meeting of the Tender Accepting Authority was held on 01.07.2013 to explore the possibility of asking the L-1 bidder to provide Ambulance equipments. However, since the price of individual items was not available, the Tender Accepting 6 Authority accordingly, decided to set-aside the procurement of Ambulance equipments and directed to call for fresh Tenders including interior fabrication, exterior designing and revised list of Ambulance equipments. The petitioner has not participated in the fresh Tender. Since only Ambulance vehicles without interior fabrication were procured under DGS & D rate contract, the same was intimated to the indenting authority viz., NRHM who have revised the 21 equipments to 17 equipments. This was done keeping in view the requirement as the Ambulance is to be used only to drop the healthy mother and baby from the hospital to the residence as emergency service. The Tender Accepting Authority therefore set-aside the Tender for Ambulance equipments and called for fresh Tender for Ambulance interior and exterior equipments. In respect of the fresh Tender, the pre-bid meeting was held on 07.08.2013 and the corrigendum was uploaded on 08.08.2013. The Tender has been opened on 23.08.2013. The petitioner not having participated in the same cannot question it is the contention. Further, 7 the petitioner should be relegated to alternate remedy of appeal under Section 16 of the Karnataka Transparency in Public Procurement Act, 1999 (for short the 'KTTP Act') is also the contention. With regard to the annual turnover fixed in the Tender, it is stated that in order to get competent bidder, the same was fixed at Rs.31 crores and reduced to Rs.15 crores after the pre-bid meeting. Hence, it is contended that the petition be dismissed.
4. Head Sri B.M. Arun, learned counsel for the petitioner, Sri H.V. Manjunath, learned Government Advocate for the first respondent and Ms. M.C. Nagashree, learned counsel for the second respondent.
5. At the outset, with regard to the maintainability of the petition as urged by the learned counsel for the second respondent, it is not the contention that the subsequent Tender process has been completed and work order has been issued to any successful bidder. Hence, I am of the view that an appeal under Section 16 of the KTPP Act is not 8 contemplated at this stage. Further, on the contention that the petitioner cannot assail the Fresh Tender dated 31.07.2013/01.08.2013 and Corrigendum dated 08.08.2013 without participating in the process is also not sustainable in the instant facts. That is due to the reason that the petitioner is seeking to sustain the earlier Tender process in which they had participated and in that context, are seeking to assail the subsequent Tender. Hence, the contentions on merits would have to be adverted.
6. Though the prayers (a) and (b) made in the petition relate to the initial Tender notification dated 05.01.2013 and the right claimed thereunder, the question as to whether the petitioner should be preferred over the third respondent would arise for consideration only if the case of the petitioner relating to the alleged invalidity of the proceedings dated 01.07.2013 and the subsequent Tender dated 31.07.2013/01.08.2013 is accepted. Hence, the question as to whether the second respondent was 9 justified in cancelling the earlier Tender and calling for fresh Tender is to be addressed first.
7. Before adverting to the facts involved in that regard, it would be appropriate to notice the decisions relied on by the learned counsel for the petitioner so as to assimilate the legal position in order to appreciate the facts in that background. The cited decisions are;
(i) The case of Union of India & Others -vs- Dinesh Engineering Corporation and Another [(2001) 8 SCC 491] wherein, in the circumstance of change in policy of procurement, it was held that though the Court will not ordinarily interfere since policies are normally formulated based on expert knowledge but that would not mean that Courts have to abdicate their right to scrutinize whether it is done keeping in view all relevant facts. If relevant facts are not considered, it would be arbitrary decision and violative of the mandate of Article 14 of the Constitution.
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(ii) The case of Shimnit Utsch India Private Limited & Another -vs- West Bengal Transport Infrastructure Development Corporation Limited & others [(2010) 6 SCC 303] wherein it is held that the Government policy can be changed with change in circumstance and the Government has a discretion to adopt a different policy or alter or change, but like any discretion exercisable it must be in conformity with Wednesbury reasonableness and free from arbitrariness, irrationality, bias and malice.
(iii) The case of Michigan Rubber (India) Limited -vs- State of Karnataka and Others [(2012) 8 SCC 216] wherein an earlier decision explaining judicial review of administrative action is referred. Therein, it is held that if the process adopted or decision made by the authority is malafide or intended to favour someone or if it is so arbitrary and irrational or if it affects public interest, there should be interference under Article 226 and not otherwise.
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(iv) The case of M/s. Dwarkadas Marfatia and Sons -vs- Board of Trustees of Port of Bombay [(1989) 3 SCC 293] wherein it is held that any State action must be reasonable and taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action, Article 14 springs in judicial review and strikes down such action. If a Government policy or action even in contractual matters fails to satisfy the test of reasonableness, it would be unconstitutional.
8. The cumulative reading of all the decisions noticed above would indicate that the underlying principle of judicial review of State action is to examine whether such action, be it policy decision, contractual matter or otherwise is fair and reasonable. Further, it should be ensured that it does not suffer from the vice of arbitrariness, irrationality, bias, malice and should not be against the public interest. If it suffers from any of the above, interference of the Court is warranted, but 12 not otherwise. Keeping this in perspective, the factual matrix herein needs to be examined.
9. In the instant case, the second respondent has sought to justify their action of inviting fresh tender by referring to change in the requirement towards procurement based on the other attendant circumstance and the decision of indenting authority i.e., NRHM due to the altered situation. In that regard, a perusal of the papers will disclose that the genesis of the process is the Short Term Tender Notification dated 07.01.2013 (Annexures- R1 and R2). The same depicts that though two Tender Notifications, both dated 05.01.2013 are referred and one relates to Ambulance and Fabrication; the other for Equipment and Instruments, they are interdependent. The petitioner has responded only to the notification relating to Equipment and Instruments and this certainly is dependant on the manner in which the Tender process relating to the Ambulance and Fabrication had concluded. Since, the rate quoted by the responsive 13 bidder was more than the DGS & D rate contract, it was decided to purchase TATA Winger Ambulances through M/s. TATA Motors Ltd., which was found to be financially beneficial. Purchase Order dated 19.03.2013 (Annexure-R7) was accordingly placed which has become final and is without dispute.
10. The said decision of the Tender Accepting Authority had an impact on the procurement relating to the Equipments and Instruments to which the petitioner had responded. From the file made available to the Court by the learned counsel for the second respondent, it is seen that in the changed circumstance relating to purchase of Ambulance, in the meeting of the Committee of NHRM held on 25.06.2013 this was considered and the internal equipments of the 'Drop back' ambulance is recorded to have been discussed in detail and total equipments were reduced to 17 from 21 in the package. The decision taken was forwarded to the second respondent by the communication dated 01.07.2013 of NHRM. Accordingly, in the proceedings 14 of the Tender Accepting Authority held on 01.07.2013, reference was made to the same. Since the earlier quotation was for the package and the price for individual items were not secured, the Tender Accepting Authority has observed that though it wanted to explore the possibility of asking L-1 bidder to supply the ambulance equipments as per the revised list of equipments, that was not feasible. As such, it decided to set-aside the procurement of Ambulance equipments and directed to call for fresh tender as a package for the revised Interior Fabrication, Exterior Designing and Ambulance Equipments. Pursuant thereto, the Fresh Tender Notification dated 31.07.2013 (Annexure-R) has been issued and after the pre-bid meeting, the Addendum/Corrigendum dated 08.08.2013 (Annexure-S) is issued.
11. Learned counsel for the petitioner no doubt has made reference to the facsimile copy of the e-procurement Portal (Annexure-P) to contend that as on 16.07.2013, it depicts that the petitioner's bid is 15 selected. In my opinion, the said entry can only be considered as an error and no right could be attached when the other documents on record would disclose that as on 25.06.2013 itself the indenting authority i.e., NRHM had resolved to revise the list of equipments and had conveyed the said decision to the Tender Accepting Authority on 01.07.2013 and the Tender Accepting Authority had also held proceedings on 01.07.2013 and had decided to call for fresh Tenders. Further, the reference made by the learned counsel for the petitioner to Clauses-26 to 29 of the Tender Condition also would be of no avail to the petitioner as the Tender has been cancelled before the Tender Accepting Authority deciding to award the contract, nor has any communication been addressed to the petitioner bestowing any right.
12. Therefore, if all the above factual aspects are taken into consideration and decision of the Hon'ble Supreme Court referred to supra is kept in perspective, in the instant case, the sequence of events will disclose 16 that the alteration made towards procurement of Ambulance equipments is due to the change made in the very Ambulance vehicle which has been procured. Even with regard to the decision to procure the smaller vehicle also cannot be faulted keeping in view the purpose for which such Ambulance is being deployed. In that regard, the file would disclose that in the meeting held by the indenting authority i.e., NRHM on 08.11.2012 itself, it was decided that 200 Ambulances is for the 'Drop Back' facility of the mother and the baby. In such circumstance, when the indenting authority has pruned the list of equipments, the Tender Accepting Authority, left with no other alternative had to call for Fresh Tenders. Hence, neither the decision of the indenting authority or the second respondent can be termed as arbitrary, unreasonable or with bias. On the other hand, reduction in value of procurement of Ambulance and correspondingly, that of the equipments is in public interest. When that is the position and the second respondent has issued the fresh Tender Notification which has already been proceeded further 17 and when the petitioner has not responded to the same, the objection to the terms therein, more particularly with reference to the turnover provided therein would not arise for consideration at the instance of the petitioner.
Hence, for all the aforesaid reasons, I find no merit in the petition. The writ petition is accordingly dismissed with no order as to costs.
Sd/-
JUDGE hrp/bms