Andhra HC (Pre-Telangana)
Vet India Pharmaceuticals Ltd. vs Government Of Andhra Pradesh & Anr. on 21 July, 1997
Equivalent citations: 1998(3)ALD284
Author: B. Sudhrshan Reddy
Bench: B. Sudhrshan Reddy
JUDGMENT
1. The petitioner's Company is engaged in the manufacture and sale of Veterinary Medicines and has registered itself as a Small Scale Industry with the Government of Andhra Pradesh. It is one of the Rate contract supplier of Veterinary medicine. The petitioner claims that it has a net-work of selling Veterinary medicine outside the State also, throughout country. There has been never any complaint against the quality of standard of the Veterinary medicine supplied by the petitioner is the claim of the petitioner.
2. The Department of Animal Husbandry, Government of Andhra Pradesh appears to have evolved the system of maintaining a panel of Rate Contract supplier every year for the purpose of purchasing veterinary medicine and Therapeutics at the specified rates subject to such terms and conditions specified in the contract. The second respondent herein through tender notification in the newspapers invited tenders for registration of rate contract supplier for the year 1997-98. The last date for submission of tenders was 28-4-1997. According to the notification, the tender should consist of technical bid (dealing with the technical evaluation) and a price bid (financial bid). The financial bid should indicate the rates in respect of each given medicine. The financial bid of those tenderers alone who qualify the technical bid will be considered for finalisation of rate contract. The tenderers are required to furnish documentary evidence wherever necessary and all the documents/enclosures/ literature etc. have to be furnished along with technical bids (Part I of the tender) only. Tenderers qualification and eligibility to financial bids (Part II of the tenders) will exclusively depend on the scrutiny of the documents enclosed to technical bids. The financial bid shall consist of only details of rates offered. The petitioner having purchased the tender form has submitted the same on 28-4-1997. The tenders were opened by the second respondent on 30-4-1997 in the presence of representatives of the tenderers. The financial bid were to be opened on 16-5-1997 and the financial bid of the petitioner was opened along with other tenderers on 16-5-1997 in the presence of the representative of the petitioner's Company. Obviously the technical bid of the petitioner was found valid. It is asserted by the petitioner that it is folly qualified for being considered for grant of the rate contract for the present year, as the petitioner has fulfilled all the requirements for being analysed as a rate contract supplier for supply sale of Veterinary products for the year 1997-98. The financial bids were opened on 16-5-1997 and finalisation of the tenders did not take place. The matter was postponed for consideration. The petitioner filed the writ petition apprehending that the second respondent under the instructions of the first respondent was likely to ignore the tender submitted by the petitioner. It is the case of the petitioner that without passing any order and disclosing the reason for non-consideration of his tender, the Company is being eliminated from consideration for the purpose of awarding the contract. The petitioner suspects that such a decision was taken by the respondents as a measure of victimisation for the petitioner, has approached this Court and filed Writ Petition No. 1748 of 1996 for a direction seeking payment of the value of the medicine supplied by the Company during October, 1994. Inspite of the directions in the said writ petition, the respondents have dis-obeyed the interim order passed by this Court and the petitioner was constrained to file Contempt Case No. 184 and 185 of 1996 against the respondents. It is on account of the malice the respondents have chosen to eliminate the petitioner from consideration. The action of the respondents in eliminating the petitioner from consideration is not only unfair but arbitrary. It is further submitted that there is no reason whatsoever on the part of the respondents to eliminate the petitioner from consideration.
3. The counter affidavit filed on behalf of the first respondent would reveal that tenders were opened on 30-4-1997 as per schedule programme in the presence of the representatives of the tenderers. Thereafter the technical bid Committee constituted by the Government scrutinised all the technical bids of all the participating firms on 14-5-1997.
Thereafter the financial bids of the technically qualified tenderers haw been opened on 16-5-1997 in the presence of the representatives of the tenderers. It is further stated in the counter affidavit that there are 90 qualified firms in the technical bids and a comparative statement for 634 items have to be prepared which would take considerable time for preparation and finalisation of financial bids. The fact remains that financial bid Committee met on 3-7-1997 and finalised the tenders.
4. It appears that the petitioner herein along with five other firms have agreed to supply deworming Medicines meant for distribution amongst poor Shepherds on the basis of subsidy and entered into agreement with the respondents for the year 1994-95. It is the case of the respondents that the petitioner's firm along with other firms failed to supply the same but submitted their invoices and got the entries made in the stock registers in the respective officers to the effect as if the medicines were actually supplied. The matter is, stated to be under the investigation of the A.C.B. and the report submitted by the A.C.B. alleged to reveal bills running into almost one crore were submitted without supplying medicine by some suppliers including the petitioner herein. The petitioner Company is stated to have raised invoices for the supply of medicines and drugs in the month of October, 1994 at Medical Stores of Joint Director of Animal Husbandry, Cuddapah without actually supplying the Drugs and Medicines to a tune of Rs. 11,26,455/-. However, entries were got made in the stock register and on verification the medicines and drugs were found not available in the stores of Joint Director of Animal Husbandry, Cuddapah during the inspection on 22-10-1994.
5. On the basis of the material available on record, a show-cause notice was issued calling upon the petitioner as to why the firms should not be black-listed by the Government vide show cause notice dated 20-3-1995. The petitioner is stated to have submitted his explanation and the matter is under the active consideration of the Government, No decision yet is taken by the respondents.
6. In the counter-affidavit, it is admitted in categorical terms that the Government keeping in view the advice of the Vigilance Commission has issued directions to the Director of Animal Husbandry vide Memo No.12936/AH.III(1)/94-34 dated 1-7-1997 not to accept the tenders/quotations for supplying the veterinary medicines or drugs to the Animal Husbandry Department from some firms including the petitioner herein.
7. The respondents placed reliance upon para 9.22 of the terms and conditions of the tender which empowers the Director of Animal Husbandry to accept or reject any of the tender including the lowest tender without assigning anyreason. The Director would bewail within his jurisdiction to reject the offer of the petitioner even if it is the lowest. It is stated that tenders are already finalised on 3-7-1997, by the Committee which arc constituted for the purpose by the Government.
8. In the additional counter-affidavit, it is stated that the petitioner's offer was considered by the technical bid Committee on 14-5-1997 and the same has been referred to the financial bid Committee on 3-7-1997 itself. While the matter was under the consideration of the financial bid Committee, the first respondent issued Memo No. 12936/AH.III(1)/ 94-34 dated 1-7-1997 instructing the Director of Animal Husbandry not to accept the tender/ quotation for supply of veterinary medicines or drugs by the petitioner. The sum and substance of the counter-affidavit is that the second respondent herein has chosen not to accept the tender/offer of the petitioner in view of the directions issued by the first respondent-Government. Whether any relief is to be granted to the petitioner or not may depend upon variety effectors. But the Court in this case is left with a feeling that the respondents have not stated the complete facts as they are required to state in the counter-affidavit. The second respondent also should have filed counter revealing the details as to what transpired before each of the Committee constituted for the purpose of scrutinising the tender. It is stated in the counter affidavit that the bids were already finalised on 3-7-1997 itself and it is not clear from the counter affidavit as to whether the petitioner's bid was considered by the financial bid Committee and as to whether any decision is taken by the Director in rejecting the tender/quotation of the petitioner. Obviously the respondents are with-holding some information from the Court. Such an attitude on the part of the respondents cannot be countenanced by the Court, The respondents are duty bound to bring all the facts that are available on record and place them before the Court. The counter-affidavit is filed suggesting as if the respondents are more interested in getting the interim order granted by this Court on 4-7-1997 vacated or modified rather than placing all the facts before the Court. The respondents shall in future exercise due care and caution in preparing the counter-affidavit and submitting them into the Court. The misconception in the minds of the respondents that they can make any statement before the Court and get away with the same is required to be dispelled. It would be appropriate to refer a portion in the additional counter-affidavit filed on behalf of the respondents and reads:
"The petitioner's firm products have been taken into comparative statement for consideration of Financial bid Committee. While considering the matter by the Financial bid Committee the 1st respondent issued Memo No. 12936/AH.III(1)/94-34 dated 1-7-1997 instructing the Director of Animal Husbandry not to accept the tenders/quotations for supply of Veterinary Medicines and Drugs."
Thus the authorities considered the tender schedule of the petitioner's firm. But the same has not been accepted in view of the previous irregularities committed by the firm. It is not clear from the said averment as to whether the Director had taken an independent decision in the matter, keeping in view of the alleged previous irregularities of the petitioner's firm or as to whether the financial bid Committee itself refused to clear of the petitioner's firm? Whether the Director has taken an independent decision in rejecting the claim of the petitioner or whether he merely followed the directions of the Government and rejected the offer/ quotation is also not clear from the counter-affidavit. The status of the petitioner in the comparative statement depending upon the rate offered by him is also not clear in the debate. It is entirely a different matter that the respondents may be entitled in law to assert their right to reject the claim of the petitioner s firm for good reasons if any. But they have no right to with-hold the information from the Court. The respondents are duty bound to reveal every aspect of the matter and place the same before the Court. The attitude exhibited by the respondents and the manner in which the facts are presented by them give rise to unnecessary suspicion that there is something more than meets the eyes.
9. Be that as it may, the question is as to whether this Court can compel the respondents to accept the tender/offer of the petitioner even if the rate offered by the Company are favourable?. Can it be said mat the respondents have no right whatsoever to reject the offer of the petitioner in view of the facts and circumstances? Would the Director be justified in taking into consideration the instructions of the Government not to consider the petitioner's offer? Can it be said that such an action would tantamount to black-listing the petitioner.
10. It is submitted by Sri Vedula Venkataramana, learned Counsel for the petitioner that the action on the part of the second respondent in refusing to consider the petitioner's bid/offer is totally unfair and arbitrary. The exclusion of the offer made by the petitioner would amount to black-listing the petitioner without following the procedure. It is true, the petitioner is served with a show cause notice dated 21-3-1995 by the first respondent calling upon the petitioner as to why it should not be black-listed and the petitioner is stated to have submitted his explanation which is under the active consideration of the first respondent-Government. The Government is yet to take a decision in the matter. It would be inappropriate to express any opinion as to what action would betaken by the Government against the petitioner.
11. However, a perusal of the record would indicate that the Government Memo No. 12936/AH.III(1)/94-34 dated 1-7-1997 was placed before the financial bid Committee presided over by the Director himself and the financial bid Committee following the instructions of the Government contained in the said Memo refused to consider the offer made by the petitioner. The Director himself in his capacity as the person authorised to approve or disapprove the offer also took the view that the petitioner's case need not be considered in view of the instructions of the Government. It is thus clear that the financial bid Committee and the Director rejected the offer of the petitioner. Sri Vedula Venkataramana, learned Counsel submits that such an action on the part of the respondents would amount to black-listing the petitioner. The learned Counsel placed reliance upon Ms. Erusian Equipment and Chemicals Ltd. v. State of West Bengal and another, and placed particular reliance upon the following observation of the Supreme Court.
"Black-listing has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of black-listing indicates that the relevant authority is to have an objective satisfaction. Fundamentals of lair play require that the person concerned should be given an opportunity to represent his case before he is put on the black-list."
It is settled law that no person has a fundamental right to insist that the Government should enter into a contract with him. But the citizen has right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling. But the question in the instant case is as to whether the action on the part of the respondents in refusing to consider the offer of the petitioner can be said to be an act of black-listing. The Apex Court in the very case made an important observation: "The black-listing order docs not pertain to any particular contract. The black-listing order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transaction. The black-lists are "instruments of coercion". Whether the petitioner herein is to be black-listed and prevented in entering into any contract with the Government is yet to be decided by the Government pursuant to the show-cause already issued to the petitioner. The respondents have merely decided in this case not to accept the offer of the petitioner having regard to the facts and circumstances of the case. It is an admitted fact that the petitioner is facing some allegations which are grave in nature and serious consequences may entail, if those allegations are proved. In vie^v of their past experience, the respondents thought it fit not to enter into any transaction with the petitioner and few others who are similarly situated. It is not as if the petitioner alone is discriminated. On the other hand, the record would disclose that all similarly situated persons like the petitioner who are facing serious allegations were kept out of the zone of consideration. In such view of the matter, it cannot be said that refusal to accept the offer of the petitioner would amount to blacklisting. The performance record of the petitioner while transacting the business with the respondents during the previous year is certainly a relevant consideration in deciding whether to award the contract to the petitioner or not. Such consideration cannot be said to be arbitrary or unreasonable. The learned Counsel for the petitioner submits that the decision of the respondents is totally irrational as they have excluded the case of the petitioner from consideration. The learned Counsel placed reliance upon the judgment of the Apex Court in Ramana Dayaram Shetty v. The International Airport Authority of India & others, . The Supreme Court observed:
"It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily as its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not .arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts quotas; licences etc. must be confined and structured by rational, relevant and non-discriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but as based on some valid principle which in itself was not irrational, unreasonable or discriminatory."
It is true that the respondents cannot act arbitrarily at their sweet will like a private individual. But it is settled law that the right to refuse the lowest or any other tender is always available to the Government and the right to choose cannot be considered to be an arbitrary power. Even if it is to be accepted that the petitioner's offer is lowest, the respondents action in refusing to accept the same cannot be said to be arbitrary. It is not as if the respondents have refused to consider the offer of the petitioner without any material before them. It is settled law that the Government and its authorities are not bound to accept the lowest offer and even lowest offer can be rejected for good reasons. It is not as if there are no reasons for taking such a decision, the past conduct of the petitioner is obviously taken into consideration by the first respondent-Government and accordingly issued directions to the second respondent not to accept and consider the offer of the petitioner.
12. It is however, urged by the learned Counsel for the petitioner, though not raised in the writ petition that the first respondent Government could not have issued instructions to the second respondent not to accept the offer made by the petitioner. It is urged that it is the second respondent who is required to lake decision either to accept or reject the offer and he cannot surrender his discretion to the Government. It is submitted that the second respondent merely acted at the dictation ofthe first respondent without applying his mind to the facts and circumstances of the case. Even according to the tender conditions, it is the second respondent who is empowered to reject even a lowest offer and not the Government. I am not impressed by the submission made by the learned Counsel for the petitioner. It is to be remembered that the second respondent herein was not exercising any statutory function. The power to accept or to reject the offer made by the tenderer is stipulated by one ofthe terms and conditions ofthe tender itself. The actions of the second respondent, admittedly a subordinate to the Government are definitely liable to be supervised and corrected by the Government. Such Supervision and interference is not prohibited by any principle. It is true that the first respondent could not have been interfered in the matter at all in case if the power exercised by the second respondent is traceable to any statute or any statutory instrument. Such is not the case on hand. The Government in exercise of its executive power can always issue necessary directions to its officers functioning under its control in public interest unless the decision is required to be taken by any authority under any statute and the discretion is conferred upon the authority by the statute. The principles of administrative law such as rule against surrender of discretion and abdication of duty has no application in the facts and circumstances of the case.
13. For the aforesaid reasons, I do not find any merit in the writ petition and the same is accordingly dismissed. No costs.