Gujarat High Court
Centurion Laboratory & vs Gujarat Medical Services Corporation ... on 13 June, 2017
Bench: M.R. Shah, B.N. Karia
C/SCA/20478/2016 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 20478 of 2016
For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
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1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
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CENTURION LABORATORY & 1....Petitioner(s)
Versus
GUJARAT MEDICAL SERVICES CORPORATION LTD....Respondent(s)
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Appearance:
MR BS PATEL with MR CHIRAG B PATEL, ADVOCATE for Petitioners
MR MITUL K SHELAT, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 13/06/2017
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] By way of this petition under Article 226 of the Constitution of India the petitioner has prayed for an appropriate writ, direction and order to quash and set aside the impugned order dated 02.09.2016 passed by the respondent (AnnexureA) by which the petitioner is debarred for a period of 3 years from business relation with the Page 1 of 11 HC-NIC Page 1 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT respondent Gujarat Medical Service Corporation Limited (hereinafter referred to as "Corporation").
[2.0] Facts leading to the present Special Civil Application in nutshell are as under:
[2.1] It is the case on behalf of the petitioner that the petitioner No.1 is a registered company incorporated since last more than 25 years and dealing in pharmaceutical items and also participating and submitting tenders with various State Governments and also with foreign countries' Governments since last 10 to 12 years. That the respondent issued the tender notice online from reputated manufacturers / directimporters for supply of different drug items mentioned in the said tender notice, to be supplied for a period of 2 years on rate contract basis. That two drugs for which tenders were invited were Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg. That it appears that the petitioner submitted the bids for different drugs including the aforsaid tablets. That the petitioner produced the certificate issued by the Food Drug and Control Administration, Gujarat State issued on 13.01.2011 in support of its case that it has obtained the license to manufacture the aforesaid two drugs with required power i.e. Deferasirox Dispensible Tablets 100 mg and Deferasirox Dispersible Tablets 400 mg. Therefore, it was submitted on behalf of the petitioner that petitioner fulfills all the tender conditions and is fulfilling the requisite eligibility criteria. It is the case on behalf of the petitioner that though the other items submitted by the petitioner - Company accepted the aforesaid two items have been found in conformity, not only the petitioner has not been awarded the contract for the remaining items but by impugned order the petitioner has been debarred / blacklisted for a period of 3 years from business relation with the respondent Corporation on the ground that the Page 2 of 11 HC-NIC Page 2 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT petitioner had submitted the wrong and fraudulent data / documents pertaining to Deferasirox Dispensible Tablets 200 mg and Deferasirox Dispersible Tablets 50 mg alongwith the tender documents.
[2.2] Feeling aggrieved and dissatisfied with the impugned order passed by the respondent Authority in debarring the petitioner for a period of 3 years from business relation with the respondent Corporation, the petitioner has preferred the present Special Civil Application under Article 226 of the Constitution of India.
[3.0] Shri B.S. Patel, learned Advocate has appeared on behalf of the petitioners and Shri Mitul Shelat, learned Advocate has appeared on behalf of respondent No.1.
[4.0] Shri Patel, learned Advocate appearing on behalf of the petitioners has vehemently submitted that in the facts and circumstances of the case, the impugned order of blacklisting / disqualifying the petitioner is absolutely illegal, most arbitrary and too harsh.
[4.1] It is submitted by Shri Patel, learned Advocate appearing on behalf of the petitioners that the impugned order blacklisting the petitioner has been passed on the premise that the petitioner has produced fraudulent document / data alongwith the tender document. It is submitted that infact the petitioner had not submitted any fraudulent documents more particularly permission / license granted by the Commissioner, Food and Drugs Control Administration dated 01.02.2011. It is submitted that infact the Food and Drugs Control Administration specifically stated that they cannot opine whether the license / permission dated 01.02.2011 has been issued by their office or not. It is submitted that therefore unless and until it is established that Page 3 of 11 HC-NIC Page 3 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT the said license / permission dated 01.02.2011 by which according to the petitioner the petitioner was granted the permission to manufacture Deferasirox Dispersible Tablets 400 mg and Deferasirox Dispersible Tablets 500 mg is forged one, Authority is not justified in passing the impugned order.
[4.2] It is further submitted by Shri Patel, learned Advocate appearing on behalf of the petitioners that as such the petitioner was granted the permission to manufacture Deferasirox Dispersible Tablets 400 mg and Deferasirox Dispersible Tablets 500 mg, by the Office of the Commissioner, Food and Drugs Control Administration. It is submitted that it is true that thereafter the said permission was not extended after 2013. It is submitted that however the employee of the petitioner due to inadvertent mistake submitted the tender for Deferasirox Dispersible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg instead of Deferasirox Dispersible Tablets 100 mg and Deferasirox Dispersible Tablets 400 mg.
[4.3] It is further submitted by Shri Patel, learned Advocate appearing on behalf of the petitioners that as such there is a distinction between wrong document and forged document. It is submitted that in the present case, the petitioners clarified vide communications dated 07.06.2013 and 14.06.2016 the circumstances of submitting wrong documents. It is submitted that infact the Food and Drugs Control Administration, Gandhinagar could not deny the affixed stamp of the Department and the document dated 31.01.2011 with respect to list of additional product for which the permission has been granted by the Food and Drug Control Administration. It is submitted that therefore neither the said document nor the permission dated 01.02.2011 can be said to be forged document. It is submitted that therefore the impugned Page 4 of 11 HC-NIC Page 4 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT order is passed on a wrong premise and therefore the same deserves to be quashed and set aside.
[4.4] It is further submitted by Shri Patel, learned Advocate appearing on behalf of the petitioners that infact due to inadvertent mistake the tender for Deferasirox Dispersible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg was submitted. It is submitted that it was also pointed out that there was an inadvertent mistake on the part of the employee. It is submitted that while pasing the impugned order the aforesaid aspect has not been considered at all and such harsh punishment of debarring / blacklisting the petitioners from all items has been passed.
[4.5] It is further submitted by Shri Patel, learned Advocate appearing on behalf of the petitioners that except the aforesaid two drugs the petitioner is found eligible for other medicines manufactured/procured by the petitioner. It is submitted that despite the above the petitioner is debarred/blacklisted for all the medicines / drugs.
[4.6] It is further submitted that while passing the impugned order the respondent Authority has not considered the repurcussions / consequences of debarring the petitioner for a period of 3 years. It is submitted that the petitioner No.1 Company is having approximately 300 workers at present and by virtue of the impugned order, the petitioner No.1 is likely to be affected seriously. That the petitioner No.1 Company is likely to loose its trade through other government organizations also.
Making above submissions, it is requested to allow the present petition.
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C/SCA/20478/2016 JUDGMENT
[5.0] Present petition is vehemently opposed by Shri Mitul Shelat, learned Advocate appearing on behalf of the respondent. It is submitted by Shri Shelat, learned Advocate appearing on behalf of the respondent that the impugned order has been passed after complying with the principles of natural justice and after giving opportunity to the petitioner. It is submitted that the impugned order cannot be said to be illegal. It is submitted that the tenders were invited for Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg. It is submitted that though the petitioner No.1 Company at the time of submission of the tender was not having the requisite permission / license to manufacture Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg, the petitioner submitted the marketing standing data of Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg and suppressed the material facts and furnished the wrong marketing standing data. It is submitted that even the Director of the petitioner Company submitted an affidavit and provided wrong information on oath and submitted the marketing standing data of Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg. It is further submitted by Shri Shelat, learned Advocate appearing on behalf of the respondent that despite the fact that the petitioner did not possess the license to manufacture the aforesaid practice, the petitioner No.1 produced undertaking of the Director of the Company on affidavit asserting that it has a license for and has manufactured and sold both the aforesaid products since the year 2011; provided sales figures as evidence of sale of both the above products since the year 2011 as well as under the signature of the Chartered Accountants; produced a false document suggesting that the petitioner had a license to manufacture and sell the aforestated products since 31.01.2011. It is submitted that after 2013, the petitioner was not having a license to manufacture and sell the aforestated products. It is Page 6 of 11 HC-NIC Page 6 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT submitted that despite the above, to mislead the Authority and without disclosing the fact that after 2013 the petitioner is not having the license to manufacture and sell the aforestated products, the petitioner produced the socalled license / permission dated 01.02.2011 as if the petitioner had a license to manufacture and sell the aforestated products since 31.01.2011 and till the submission of the tender.
[5.1] It is further submitted by Shri Shelat, learned Advocate appearing on behalf of the respondent that looking to the seriousness of the matter more particularly when aforestated drugs/medicines is required for cancer patients and is a very sensitive drug, when it was found that the petitioner had misrepresented, misled and submitted the wrong data and though not having the permission / license to manufacture Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg, represented that they are having the license to manufacture the aforestated drugs, the respondent Authority has rightly blacklisted the petitioner for a period of 3 years.
[5.2] It is further submitted by Shri Shelat, learned Advocate appearing on behalf of the respondent that as such subsequently the petitioner had admitted having furnished the wrong / false data, however subsequently it tried to shift the burden upon the unnamed lady Officer of the Company. It is submitted that aforesaid explanation is nothing but an afterthought after having been caught. It is submitted that in any case the undertaking on oath was of the Director of the Company and even the certificate of Chartered Accountant was also produced by the petitioner No.1 Company. It is submitted that even the petitioner No.1 Company provided sales figures as evidence for sale of both the above products since the year 2011 under the signature of the Director of the Company as well as the Chartered Accountant. It is submitted that Page 7 of 11 HC-NIC Page 7 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT therefore the petitinoer No.1 Company cannot disown such affidavits and/or cannot shift the burden only upon the unnamed lady Officer of the Company.
Making above submissions it is requested to dismiss the present petition.
[6.0] Heard the learned Advocates appearing for respective parties at length.
At the outset it is required to be noted that by the impugned order the petitioner has been blacklisted / debarred for a period of 3 years from business relations with the respondent No.1 - Corporation. It is not in dispute that the impugned order has been passed after the showcause notice and after giving opportunity to the petitioner. Therefore, as such it cannot be said that the impugned decision is in breach of principles of natural justice.
[6.1] From the showcause notice as well as the impugned order it appears that the petitioner is debarred / blacklisted for a period of 3 years on the ground that the petitioner Company has submitted the wrong and fraudulent data / documents pertaining to Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg alongwith the tender document.
[6.2] It is not in dispute that the tenders were invited for supply of Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg. Despite the fact that at the time of submission of bid / tender though the petitioner was not having the license / permission from the Food and Drugs Control Administration to manufacture Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg, the petitioner No.1 submitted the wrong and fraudulent Page 8 of 11 HC-NIC Page 8 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT data / documents pertaining to Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg alongwith the tender document. Though the petitioner No.1 was not having the permission to manufacture the Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg after 2013, the petitioner deliberately produced the socalled license / permission dated 01.02.2011 and represented that the petitioner Company is manufacturing / procuring Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg. Deliberatly the petitioner No.1 Company did not submit that after 2013 they are not having any permission / license to manufacture Deferasirox Dispensible Tablets 250 mg and Deferasirox Dispersible Tablets 500 mg and by producing the license / permission dated 01.02.2011 alleged to have been issued by the Food and Drugs Control Administration, an impression was given that the petitioner No.1 Company is manufacturing aforestated drugs since 2011.
[6.3] Not only that even the petitioner No.1 Company produced the undertakings of the Director of the Company on affidavit asserting that it has a license for and has manufactured and sold both the aforestated products since the year 2011. The petitioner No.1 Company also provided the sales figures as evidence for sale of both the above products since the year 2011, under the signature of the Director of the Company as well as the Chartered Accountant. It is also required to be noted that as such the petitioner tendered apology for submitting the wrong data and accepted their mistake. It is required to be noted that if the inquiry would not have been initiated, in that case the petitioner would not have accepted the mistake and would not have admitted submitting the false / wrong data after having caught the petitioner Company has tried to shift the burden upon unnamed lady employee. However, considering the aforesaid documents produced alongwith the tender agreement Page 9 of 11 HC-NIC Page 9 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT which were signed by the Director of the Company and the Chartered Accountant, such a defence cannot be accepted and is not rightly accepted.
[6.4] Condition No.3C of the tender document provides that wrong / fraudulent data submission may lead to disqualification / debarring and it provides to ensure that the bidder furnishes correct data. Under the circumstances and considering the above, it cannot be said that the impugned decision debarring the petitioner for a period of 3 years is illegal. The aforesaid is absolutely in consonance with the terms and conditions of the tender document.
[6.5] Now, so far as the submission on behalf of the petitioner that with respect to other drugs the petitioner is found to be eligible and the petitioner has been debarred for a period of 3 years for having any business relation with the respondent Corporation and therefore, the impugned decision is too harsh is concerned, at the outset it is required to be noted that drugs in question are very sensitive drugs and for cancer patient. Any wrong information / data with respect to such drug cannot be taken lightly. A seroius view is required to be taken. Under the circumstances, the impugned order debarring the petitioner for a period of 3 years is not required to be interfered with by this Court in exercise of powers under Article 226 of the Constitution of India. The submission on behalf of the petitioner that by such debarrment / blacklisting the petitioner No.1 is likely to be affected is concerned, it is required to be noted that when the petitioner submitted the wrong / false data and misrepresented before the Authority while submitting the wrong / false data and in the tender notice itself there is a mention that wrong submission of the data may lead to cancelation / debarring, the petitioner ought to have known the consequences of submitting the Page 10 of 11 HC-NIC Page 10 of 11 Created On Sun Aug 13 23:07:08 IST 2017 C/SCA/20478/2016 JUDGMENT wrong / false data. The necessary consequences as per tender condition must follow.
[7.0] In view of the above and for the reasons stated above, we see no reason to interfere with the impugned order of debarring the petitioner for a period of 3 years. Under the circumstances, present petition fails and the same deserves to be dismissed and is, accordingly, dismissed. Notice is discharged. Adinterim relief granted earlier stands vacated forthwith.
At this stage, Shri Patel, learned Advocate appearing on behalf of the petitioner requests to extend the Adinterim relief granted earlier. Prayer is opposed by Shri Shelat, learned Advocate appearing on behalf of the respondent.
Having heard learned Advocates appearing for respective parties at length, we are of the opinion that extending the interim relief or stay of further implementation and operation of the impugned order of blacklisting the petitioner would tantamount to allowing the petition, which as such is found to be devoid of merits, if the order of debarring is stayed, the petitioner can be held eligibile to participate in other contracts. Under the circumstances, the prayer is rejected.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Ajay Page 11 of 11 HC-NIC Page 11 of 11 Created On Sun Aug 13 23:07:08 IST 2017