Gujarat High Court
Jay Formulations Ltd. vs State Of Gujarat And Anr. on 13 April, 2004
Author: D.N. Patel
Bench: D.N. Patel
JUDGMENT J.N. Bhatt, J.
1. Rule. Service of notice of rule is waived by Mrs. Harsha Devani, learned Assistant Government Pleader for the respondents.
2. By this petition, the petitioner has sought relief and direction against the respondents by invocation of provisions of Article 226 of the Constitution of India to the effect that the tender of the petitioner should be considered and to award the contract if the price quoted by the petitioner-Company is found competent, by quashing and setting aside the order dated 20-02-2004.
3. A skeleton projection of few material and relevant facts giving rise to this petition may be narrated at the first stage. The petitioner-Company was holding a Drugs Licence for manufacture of drugs and other pharmaceutical formulations, such as tablets and capsules, since the year 1993. Respondent No. 1 is the State of Gujarat and respondent No. 2 is the Director of Central Medical Stores Organisation ("C.M.S.O.", for short). Respondent No. 2 is authorised to purchase medicines and other drugs from various suppliers for the purpose of supplying said goods and articles to various hospitals in the State of Gujarat is, also, in-charge of inviting tenders from the manufacturers.
4. Pursuant to the tender-notice for the supply of goods to respondent No.2 for the year 2001-2002, petitioner-Company had submitted its tender along with other documents. There was a Rate-Contract, which was valid upto, 31-03-2002, and thereafter, as per the terms and conditions of the tender, the petitioner had supplied the goods till May 2002.
5. A show-notice came to be issued by respondent No.2, on 12-04-2002, for black-listing the petitioner-Company for the supply of medicines and drugs. Commissioner, Foods and Drugs Control Administration, upon investigation, found that the goods were manufactured in the company-premises of the petitioner. From the record maintained by the petitioner, same was found to be manufactured, with objectionable irregularities.
6. During the course of the proceedings of this petition, amendment came to be made since respondent No.1-State, upon report and recommendation of respondent No.2, passed the order dated, 20-01-2004, blacklisting the petitioner-Company. The said order was preceded by show-cause notice dated 12-04-2002. It was issued by respondent No.2-Director. Reply to the show-cause notice was also tendered by the petitioner-Company, on 18-04-2002, followed by personal hearing to the petitioner-Company. The petitioner was explained about the allegations in the show-cause notice during the personal hearing. It will, also, be interesting to mention that the Commissioner of Foods and Drugs Control Administration had also taken action against the petitioner-Company, directing it to close the factory and, as such, the factory was closed down from 14-02-2002 to 20-04-2002. The licence was kept under suspension from 10-05-2002 to 09-06-2002.
7. Earlier, one writ petition at the instance of the petitioner-Company came to be filed, being Special Civil Application No. 11573 of 2003, challenging the action of the respondents, wherein the statement came to be made by the respondents that the Committee shall consider the petitioner's tender not being influenced by any submissions that may have been made in the affidavit-in-reply of the Deputy Director filed in that writ petition about the apprehension of the petitioner. The proceedings of the earlier writ petition came to be concluded on the basis of the said statement.
8. Mr. Yatin Oza, learned Senior Counsel, has, seriously, and vehemently criticised the action of the respondent-Authority in placing the petitioner Company's name in the black list, whereby it is debarred from having any business relations or dealings with the State Government for a period of 3 years with respondent Nos. 1 and 2, on the premise of breach of the terms and conditions, namely, Condition No.13 of the Tender-Contract and Condition No.27 of Rate-Contract. What was alleged in the show-cause notice was found to be proved after consideration of the report and the hearing afforded to the petitioner-Company. It was, also, alleged that there was a breach of Condition No.13 during the pendency of Rate-Contract and in not having valid Certificate of `Good Manufacture Practice' ("G.M.P. Certificate", for short), after 30-01-2002. He, also, placed reliance on several decisions to which reference will be made, at an appropriate stage, hereinafter.
9. On behalf of respondent No.2, Dr. P. M. Joshi, Deputy Director, C.M.S.O., has filed affidavit-in-reply. Rejoinder is also filed on behalf of the petitioner-Company. Additional affidavit is filed by Mr. A. J. Patel, Managing Director of the petitioner-Company. The pleas and averments raised in the petition are traversed. On behalf of respondent No. 2, it is denied that the impugned order of blacklisting the petitioner-Company is recorded without observing the relevant provisions or any breach of principles of natural justice is caused. Action of black-listing the petitioner-Company is strongly defended.
10. Condition No.13 makes it very clear that failure to execute the purchase orders after entering into contract, due to non-supply of certificate, will be viewed seriously and will also entail disqualification. There is no dispute about the fact that the manufacture of drugs was directed to be discontinued and it remained, as such discontinued, for a period between 14-02-2002 to 31-03-2002. The petitioner-Company had also existing Rate-Contract in respect of 20 items. A substitute Rate-Contract for Ciprofloxacin 500 Mg was subsisting, till 30-04-2002, and a parallel Rate-Contract for Metonidazol Tablets 400 Mg. was existing, till 31-05-2002. The petitioner-Company did not hold valid "G.M.P. Certificate" for the period between 31-01-2002 to 23-01-2003.
11. In support of the passing of impugned order of black-listing against the petitioner, reliance is placed on violation of Condition No.13 of the tender-notice and Condition No.27 of the Rate-Contract. Before passing any impugned order of black-listing the petitioner-company precluding it from business dealings and relationship with the Government for a spell of 3 years, the respondent-authority has followed requisite procedure prescribed, so as to afford, an opportunity of hearing to the petitioner-company. There is no dispute about the fact that the tenders of the parties, who satisfied the technical bid, were opened on 28-01-2004. However, the tender of the petitioner had not been opened in view of the order passed on 20-01-2004 of black-listing the petitioner-Company for three years. It is denied that the order dated 21-01-2004 has been in any way illegal, arbitrary or violative of principles of natural justice.
12. Mr. Oza, learned Senior Counsel, has, vehemently, attacked, on the order, dated 20-01-2004, of blacklisting the petitioner-Company, whereby, the petitioner-Company is black listed for a period of three years in commercial transactions with the Government, which is the main reason why the tender of the petitioner-Company was not opened. However, there is a multi-pronged attack by Mr. Oza, learned Senior Counsel. In that, it has been submitted that it is violative of principles of natural justice as the competent authority has not passed the said order, it was heard by respondent No.2 and the impugned order was passed by respondent No.1; it is vague; it is based on trivial breach like want of `Good Manufacture Practice Ceritificate' ("G.M.P. Certificate"); there was a valid Drugs Licence which covers various aspects and requirements; and that `black-listing' would tantamount to a double jeopardy, as the licence was also suspended earlier.
13. The aforesaid submissions are countenanced by the Ms. Harsha Devani, learned Assistant Government Pleader submitting that the impugned order of black-listed is passed by the competent authority after giving sufficient opportunity of hearing, and there is no illegality or infirmity. It is further submitted that any breach or lapse or for that purpose any infraction of terms and conditions or violation of provisions ought to be viewed seriously, as it pertains to the delicate issue of health care of the patients in the hospitals.
14. As per the procedure evolved by the Government, the suppliers are registered by the Central Stores Purchase Organisation ("C.S.P.O.", for short) for supply of goods to the various departments of the Government and the petitioning Company came to be registered with C.S.P.O. since about last one decade and the last renewal was made on 18-09-2001, which was valid for a period of three years from the date of its issue. The registration purpose is to show that the registered party is an approved contractor with C.S.P.O. for which an application is required to be preferred in the prescribed proforma with other incidental conditions of deposit, etc.
15. It is spelt out from the record that the Director, C.M.S.O., had called for certain particulars and information regarding the validity of "G.M.P. Certificate" in respect of certain firms from the Commissioner of Foods and Drugs Control Administration, Gujarat State, who in turn addressed a communication dated, 14-03-2002, to the Director along with the statement showing particulars and details of the said firms. It was revealed that the petitioner had made an application for renewal of "G.M.P. Certificate". The Director, from the said information, found that there was a violation of the provisions of Drugs and Cosmetics Act, 1940, as a result of which, "G.M.P. Certificate" was not issued. Not only that, by a letter, dated 14-02-2002, production was also directed to be stopped.
16. It is in this context, the Director, C.M.S.O., had issued a show-cause notice, dated 12-04-2002, to the petitioner-Company, mainly, on the ground that there was a breach of Condition No.13 of the Tender-Contract and Condition No.27 of the Rate-Contract. It will be, also, material to state that despite there being existing Rate-Contracts in respect of several items with the petitioner-firm and despite the production having been directed to be stopped, the petitioner-Company had not informed the respondent-authority since the petitioner did not have a subsisting "G.M.P. Certificate", after 31-01-2002. The petitioner was asked and directed to withdraw medicines thereafter for want of a valid "G.M.P. Certificate". There is no dispute about the fact that accordingly the petitioner-Company had withdrawn medicines already supplied.
17. It is, also, noticed from the affidavit-in-reply that the petitioner-Company was invited for personal hearing, on 16-04-2002, and in response to the said notice, representative of the petitioner-Company remained present before the authority, on 18-04-2002, with a written explanation in which, `inter-alia', it was stated that there was no subsisting Rate-Contract with the Department. The explanation was tendered that in the light of terms and conditions of the tender, there had been no mention that absence of "G.M.P. Certificate" should be notified to the authority and thus, there was a `bona-fide' mistake in not furnishing information in this regard. This contention is countenanced by the respondent-authority in affidavit-in-reply contending that condition regarding "G.M.P. Certificate" not only requires that the said certificate should be attached along with the tender, but also requires a valid "G.M.P. Certificate". The contention is, also, advanced on behalf of the respondent that even the "G.M.P. Certificate" has to be valid throughout the period during which the contract subsists.
18. Since question is of breach of interpretation of Condition No.13 of Para I of the terms and conditions of the tender, it would be expedient at this juncture to refer the same which reads, here, as, under:
"13. The tenderer must satisfy that he/his principal is in possession of the requisite permissions / licenses / permits required for the manufacture / supply / sale / distribution of the items as per the specifications for which the offer is made. FAILURE TO ENTER INTO CONTRACT IF SELECTED OR TO EXECUTE THE PURCHASE ORDERS AFTER ENTERING INTO CONTRACT FOR WANT OF PERMISSION / LICENCE OR DUE TO NON SUPPLY OF CERTIFICATES / DOCUMENTS WILL BE VIEWED SERIOUSLY AND WILL ENTAIL FORFEITURE OF E.M.D. / RISK PURCHASE / DISQUALIFICATION WITHOUT ANY FURTHER REFERENCE."
19. Like-wise, it would, also, be profitable to make a reference to condition No. 27 of the Rate-Contract. It reads here as under:
"27. Should you fail to abide by any of the terms and conditions of this contract, the failure on your part shall constitute a breach of the contract and action as deemed proper shall be taken against you."
20. It can very well be visualised from the plain text and tenor of both the conditions that condition No. 13 makes it evident that failure to execute purchase orders after entering into the contract due to non supply of certificate shall be viewed or could be viewed seriously and could entail disqualifications. During the period when the manufacture or production was stopped, the petitioner-Company had existing Rate-Contracts in respect of 20 items. A substitute Rate-Contract for Ciprofloxacin 500 Mg was, also, subsisting till 30-01-2002 along with parallel Rate-Contract for Metonidazol Tablets 400 Mg that was existing, till 31-05-2002. It is not in dispute that there was no valid "G.M.P. Certificate" for the period between 31-01-2000 till 23-01-2003 i.e. for almost a period of one year. It is in this context, it is highlighted in the affidavit-in-reply that the petitioner-Company had committed irregularities and illegalities.
21. It is, also, denied in the affidavit-in-reply that the petitioner-Company had not committed any breach of Condition No.27 of the Rate-Contract. It is the case of the respondent-authority that there was a breach of Condition No.27 of the Rate-Contract. Therefore, a show-cause notice came to be noticed by the respondent-authority to the petitioner-Company after following due procedure and followed by an order dated 20-01-2004. The petitioner-Company was placed in the black-list, whereby, it came to be precluded from having business relations with the Government for a period of three years and it is in this context, the tender submitted by the petitioner-Company was not opened although commercial bid was opened on 28-01-2004.
22. The respondent-authority has, therefore, contended that the action of placing the petitioner-Company in the black-list was taken after observing required procedure initiated by show-cause notice and calling the petitioner company's representative for personal hearing and considering the written explanation in the meeting of Medical Stores Purchase Committee, held on 19-04-2002, wherein, following members were present:
i. Deputy Director, C.M.S.O. ii. Financial Advisor, Health and Family Welfare Department. iii. Additional Director (Medical Education) iv. Representative of the Commissioner, Health, Medical Services and Medical Education.
v. Commissioner, Food and Drugs Control Administration.
vi. Director, Employees State Insurance Scheme.
23. The Committee, after due consideration and deliberations, reached to a conclusion to send a proposal to the State Government for debarring the petitioner-Company from business transactions and deals for a spell of three years. The proposal, therefore, dated 13-05-2002 came to be made and the impugned order of black-listing passed on 20-01-2004 whereupon the petitioner-Company came to be debarred from entering into business deals and transactions with the State Government for a period of three years. In other words, the petitioner-Company came to be treated as a debarred Company for a period of three years.
24. There can be no dispute about the proposition advanced that the principles of natural justice and sufficient opportunity of hearing ought to be given to the company or the person proposed to be placed in black-list or sought to be placed in a debarred list from the government contracts for a stipulated time. The question, which requires to be considered and adjudicated upon is as to whether the procedure followed in the present case is vulnerable either on account of non-fulfilment of the requisite procedure or non-consideration by the competent authorities.
25. The rights of persons or contractors, who submit tenders for government contracts, have been coming up increasingly before the Courts in the recent years. Several propositions have been innovated and settled by now. The Government cannot reject a tender arbitrarily or without following due process. Likewise, it is, also, imperative for the Government to follow requisite procedure and principles of natural justice for black-listing a party, a person or a contractor. No person can be visited with civil or evil consequences, at the instance of the Government, without affording an opportunity of hearing to such person. As found hereinbefore, on behalf of the petitioner, it has been contended that the procedure undertaken by the respondent-authority in not opening the tender and black-listing the petitioner-Company, is not only improper, but, also, not permissible, which is strongly opposed on behalf of the respondent-authority `inter-alia' contending that principles of natural justice are observed, as well as, requisite procedures are, also, undertaken. We had called the file and read the confidential Circular dated 04-11-1986 and we are satisfied.
26. It is a settled proposition of law by now, insofar as government contracts realm is concerned, that the Government is not and should not be free like an individual in selecting the respondents of its largesse. Whatever its activity or deal, still the Government is and will be subject to restraints inherent in a democratic set-up. Nobody can question a proposition that in a democratic set-up, Government cannot lay down arbitrarily or capriciously standards or criteria regarding the choice of a person with whom it would like to deal with. It is to be in consonance with just and reasonable standards and parameters. It is, therefore, rightly, said that the Government cannot move like free roman knight. More so, the Right of Equality under Article 14 of the Constitution and the guaranteed freedom to every person in a democratic set up to carry on the business, commerce or trade, subject to reasonable restrictions in the public interest or in the larger interest have, time and again, been interpreted and construed to lend support to the above approach of the Courts and in case, if the Court upon judicial scrutiny, finds that such an action, deal or transaction is affecting adversely the citizen of the country, the Court would readily invalidate such administrative action. In short, wherever and whenever the governmental action is found to be improper, unreasonable, unjust, or in violation of principles of natural justice, the Court is bound to invalidate it as it is armed with a powerful weapon of judicial review in its armoury of administration of justice.
27. The question, which, now, requires our threadbare consideration is, as to whether the impugned action and order of the respondent-authority in not opening the tender of the petitioner-Company and declaring the petitioner-Company as `black-listed' or `debarred Company' from dealing with the government contracts for a spell of three years is sustainable or not, or whether it is vulnerable or maintainable. In support of this contention, the learned Counsel for the petitioner has placed reliance on several decisions. We have dispassionately examined the proposition laid down in the case-law relied on behalf of the petitioner-Company. The proposition, which is evolved in the entire case-law, for observing procedure to Black-list, can hardly be questioned by other side as we noticed hereinabove, that even apart from the clear and specific provisions relating to the Right of Equality, no action of the Government should prejudice or affect adversely the rights of its subjects, more so, when it impinges upon its subjects' right relating to commerce and political interests. It is, therefore, not necessary for us to deal with and articulate the said proposition laid down in the case-law relied on, as those principles are not disputed as such.
However, the sum and substance and the entire remit and ambit of the case-law relied on is that the blacklisting process is a serious phenomenon affecting adversely the civil consequences for future business of a concerned person, party or company. Person affected by such an order has a right of being heard and making representation against the order even though at times, rules do no provide so expressly. Principles of natural justice are sought, when a subject of the State cannot enjoy the freedom and liberty and equality-right, more so, in a democratic governance. Principles of natural justice, as it is said, were born with the man-kind and shall survive, so long as, man survives, for maintenance, sustenance and growth of a civilised society and regulated governance and more so, in Judicial Review. It is in this context, since the proposition evolved in the case-law relied on is indisputable, we do not deem it expedient to divulge meticulously and individually case-law wise.
28. The jurisdictional sweep of this Court, while dealing with an issue of judicial scrutiny with the aids of the provisions of Article 226 of the Constitution of India, has time and again been defined and reiterated. The very expression, "Judicial-Review" or "Superintendence of Power" to overview the commission and omission of the public authorities as well as the Government denotes that this Court does not sit as an appellate forum over the administrative decisions and policies or the impugned action of the public functionaries. What is required to be examined, analysed and evaluated upon a challenge placed on the anvil of judicial scrutiny under Article 226 of the Constitution of India by the Court is required to consider whether the authority has acted fairly, reasonably and justly to the decision which is under challenge. It means that the Court has to consider the decision making process and examine as to whether it is in any way adulterated, polluted or affected by extraneous considerations, including bias, mala fide and unreasonableness, unfairness, and in violation of Principles of Natural Justice.
It is the content and the colour of the decision making process and not the quality that should be in the focus. The satisfaction of the authority in reaching a conclusion or in taking decision if it is, at all, vulnerable upon being considered on these parameters simply because, different perceptions could have been reached or better qualitative decision could have been taken by the authority - should not come in the way of such decisions or by characterising the impugned decision as invalid, if it is objectively made upon subjective considerations, as it is inherent in the expression of `perception' and process. We, therefore, make it very clear that we are not required to examine the quality or the merits of the decision unless one of the aforesaid aspects or parameters is attracted, which would, indubitably, invalidate it.
29. Again, our attention has been drawn to the recent decision of the Hon'ble Apex Court, highlighting what should be the approach and what should be the considerations of the Court in exercise of its powers under Article 226 of the Constitution of India. The decision by a three Judge Bench of the Hon'ble Apex Court in "Union of India Vs. S.B. Vohra, AIR 2004 SC 1402" is the latest one, relied on and emphasised by the learned Assistant Government Pleader.
30. In para 18, the scope and the ambit of the judicial review in the context of the grant of contract has lucidly been expounded in this decision. We, therefore, would like to place in focus with profit the entire paragraph wherein the celebrated proposition of administrative law and judicial review canvassed and propounded by the Prof. Wade, has also been taken into consideration. We, therefore, quote it hereinbelow:
"JUDICIAL REVIEW:
18. The scope of judicial review in the context of grant of contract has been the subject-matter of a decision of this Court in Sterling Computers Limited v. M/s. M and N Publications Limited and others [(1993) 1 SCC 445] wherein this Court noticed the commentary of Prof. Wade in his well known treatise "Administrative Law" in the following terms:
"It is true that by way of judicial review the Court is not expected to act as a court of appeal while examining an administrative decision and to record a finding whether such decision could have been taken otherwise in the facts and circumstances of the case. In the book Administrative Law, Prof. Wade has said:
"The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the Court must not usurp the discretion of the public authority which Parliament appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. If it passes those bounds, it acts ultra vires. The Court must therefore resist the temptation to draw the bounds too tightly, merely according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices which legislature is presumed to have intended. The decisions which are extravagant or capricious cannot be legitimate. But if the decision is within the confines of reasonableness, it is no part of the Court's function to look further into its merits. With the question whether a particular policy is wise or foolish the Court is not concerned it can only interfere if to pursue it is beyond the powers of the authority."
But in the same book, Prof. Wade has also said:
"The powers of public authorities are, therefore, essentially different from those of private persons. A man making his Will may, subject to any rights of his dependents, dispose of his property just as he may wish. He may act out of malice or a spirit of revenge, but in law this does not affect his exercise of his power. In the same way, a private person has an absolute power to allow whom he likes to use his land, to release a debtor, or, where the law permits, to evict a tenant, regardless of his motives. This is unfettered discretion. But a public authority may do none of these things unless it acts reasonably and in good faith and upon lawful and relevant grounds of public interest.
There are many cases in which a public authority has been held to have acted from improper motives or upon irrelevant considerations, or to have failed to take account of relevant considerations, so that its action is ultra vires and void."
The Court further noticed:
"While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the "decision making process." In this connection, reference may be made to the case of Chief Constable of the North Wales Police V. Evans where it was said that (p.1441a):
"The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the Court."
31. The decision in "Grosons Pharmaceuticals (P) Ltd. and Anr. Vs. State of U.P. and Ors., (2001) 8 SCC 604" is also relied on in support of the impugned order of black-listing. In this decision, it has, succinctly, been propounded that the order of black-listing, an approved contractor results in civil consequences and in such a situation, in absence of statutory rules, the entire requirement of law, while passing such an order, was to observe the principles of `audi alteram partem', which is one of the facets of principles of natural justice.
32. It is also held that it is not incumbent upon the respondent-authority to have supplied the material on the basis of which the charges against the errant party were based as it was not the requirement of the principles of `audi alteram partem'. It was sufficient requirement of law that an opportunity of showing the cause was afforded, which was duly considered and observed before the company or Authority came to be black-listed. Further, the company-appellant was given an opportunity of showing cause and it did reply to the show-cause notice, which was duly considered by the State Government. Therefore, the procedure adopted by the respondent-authority, while blacklisting the company-appellant, was in conformity with the principles of natural justice. The contention was also advanced on the ground that the impugned order did not contain any reasons and, therefore, it should be declared invalid. Elaborate reasons like a judgment of the Court could not be said to be the requirement of the doctrine of `audi alteram partem'. This decision, also, clearly propounds that the contention that as the impugned order of black-listing the company did not contain reasons, and therefore, was invalid, was not accepted.
Not only that, it is also, clearly, observed that though the order did not contain elaborate reasons, whereby, party came to be black listed and debarred from the government contracts, the High Court had summoned the entire record and found that elaborate reasons came to be recorded by the State Government while passing the order of black-listing the company. Even in absence of such reasons in the impugned order of black-listing, the satisfaction of the Court, from the file, wherein positive findings were recorded in details was held to be in consonance with the principles of natural justice and doctrine of `audi alteram partem'. In short, in this decision, in absence of any statutory provisions, the general principles of doctrine of `audi alteram partem' are required to be followed and the Court is required to be satisfied that the same is followed.
33. After having taken into consideration the overall picture and profile of the facts emerging from the record of the present case, as well as, the record of the Government placed before us, following aspects have emerged unquestionably:
i. The petitioner-Company did not have the "G.M.P. Certificate" from 31-01-2000 to 23-01-2003.
ii. The Commissioner, Foods and Drugs Control Administration, upon investigation, found that the goods were manufactured by the petitioner-Company in its premises, not in consonance with the terms and conditions, whereby direction came to be issued to close the factory and as such, the factory premises of the petitioner-Company remained closed under order of the Commissioner from 14-02-2002 to 20-04-2002.
iii. The licence of the petitioner-Company to manufacture was kept under suspension from 10-05-2002 to 09-06-2002.
iv. An earlier writ petition, at the instance of the petitioner-Company, being Special Civil Application No.1157 of 2003, challenging the action of respondent-authority, came to be concluded upon a statement made on behalf of the respondents that the concerned Committee shall consider the petitioner's tender uninfluenced by the points and pleas raised in the affidavit-in-reply of the Deputy Director. We, painfully, observe this, without going into the arena, as to under what circumstances and how and why on behalf of the Government, such a bold statement came to be made, but we record and note it as a factum.
v. There was a breach of Condition No.13 of the Tender-Contract.
vi. There was a breach of Condition No.27 of the Rate-Contract.
vii. A show-cause notice, highlighting the grounds on which the petitioner-Company was proposed to be black-listed, was served on the petitioner-Company and the petitioner-Company had tendered its explanation and reply, which was considered. The petitioner-Company was, therefore, called for personal hearing and the representative of the Company was also heard.
viii. The Purchase Committee, as observed hereinabove, consisting of high ranking officers, whose designations are highlighted above, took the decision upon full-fledged consideration of the charges alleged against the Company, the explanation tendered and the terms and conditions of the Rate-Contract as well as the tender-notice.
ix. No allegation of mala fide is made in the petition.
34. A circular issued by the Government dated 04-11-1986, which is placed on record for our consideration, out of original record submitted to us on direction, undoubtedly, reveals:
a. that in a contingency, like the one involved in the petition, which officer should give a show-cause notice;
b. manner of considering the reply;
c. which authority should approve the action or proposal of awarding the punishment like black-listing a company; and, d. which authority should issue orders regarding the punishment and within what time and period.
35. After having taken into consideration all these aspects, we have no hesitation in finding that all the material requisites of the circular dated 04-11-1986, have been not substantially but fully complied with. Again, in the circular dated 13-02-1979, in following the procedure for issuance of show-cause notice and making a decision for punishment like black-listing, what mechanism or frame shall be observed, is, also, articulated. We have gone through the said Circulars from the original File placed before us and in our opinion, the process undertaken by the respondent-authority, as highlighted in the affidavit-in-reply, is, also, in consonance with the administrative decision and policy of the Government and it is not shown to be vulnerable. Apart from that fact, there is no any statutory provision or mechanism for undertaking the exercise for black-listing a company, a person or a firm, from dealing with the government in terms of business, commerce or trade; the administrative mechanism provided in the aforesaid circulars and the procedure prescribed have been followed. Nothing has been successfully shown or spelt out from the record, which would even remotely affect the merits of the decision of black-listing the petitioner-Company. In an impersonal mechanism, process to black-list emanated from circulars and policy has remained unassailable.
36. Aforesaid three notable deviant objectionable actions on the part of the company and breach of Condition No.13 of the tender-notice and Condition No.27 of the Rate-Contract and the action of the Commissioner of the Foods and Drugs Control Administration, upon investing, directing the Company to close-down the production and also, suspending the licence to manufacture the drugs, are sufficient indices and basis for taking an action, debarring the petitioner-Company and black-listing it. Since the petitioner-Company was excepted to deal with and supply medicines and drugs to the ailing persons and patients in the Government Hospitals in the State of Gujarat, affecting their health care, in deciding to black-list anybody, including the petitioner-Company, found or noticed to have made any detour or divergent action, jeopardising the health care of the people of the State, the respondent-authority not only has acted reasonably, prudently, but responsibly also.
The impugned action, therefore, of blacklisting the petitioner-Company and the resultant action, putting it under the debarred list for three years from dealing with the government contracts in supply of medicines and drugs, cannot be said to be in any way, unjust, unreasonable, perverse, requiring interference of this Court in exercise of its extraordinary, plenary, equitable, writ jurisdiction of judicial review with the aids of Article 226 of the Constitution of India. It may be remembered that there are certain submissions and arguments that the petitioner-Company is subject to double punishment or double jeopardy in which we have found no substance, as the suspension of licence or closure of production under the order of the Commissioner and the decision of the Director, are in different realms and cannot be clubbed saying that they would tantamount to double jeopardy. Similarly, it must, also, be remembered that even in a criminal trial, as provided in Code of Criminal Procedure, 1973, certain procedural aspects are curable, what to talk about reaching a decision for black-listing a party from dealing with government contracts on breaches of certain terms and conditions, even if it is shown to be irregular, which is not so in backdrop of factual profile of case on hand.
37. It is, also, found from affidavit-in-reply filed by Dr. P. M. Joshi on behalf of respondent No.2, that as per the tender norms, a tenderer is required to furnish along with his forms, a copy of valid "Good Manufacturing Practice Certificate" ("G.M.P. Certificate") over and above a valid Drugs Licence and only those vendors who satisfy this specific condition are entitled to be considered. During the currency of the contract, if awarded, the vendor should ensure that till the end of the contract period, the said "G.M.P. Certificate" remains valid. So far the case on hand is concerned, during the currency of the previous contract, which the petitioner-Company was awarded by respondent No.2 herein, inspite of its "G.M.P. Certificate" having been expired and the competent authority vide its letter dated 14-02-2002 having, already, advised the petitioner to stop production of pharmaceuticals under the "G.M.P. Certificate", the petitioner did not bother to disclose this crucial and vital fact to respondent No.2 herein, thereby, contravening not only the provisions of Drugs and Cosmetics Act, 1940, but also the relevant conditions i.e. Condition Nos.13 and 27 of the Contracts. It will be further interesting to find that as a matter of fact, the competent authority in the Foods and Drugs Control Administration refused to renew the said "G.M.P. Certificate" on the ground that the petitioner was not complying with the various provisions of the said Act. We are extremely unable to find any substance that hearing was before one authority and decision by the other. It is not factually and legally permissible. Decision challenged is in consonance with the Government Policy, the said Circulars and within the doctrine of Principles of Natural Justice.
38. After having taken into consideration the overall picture emerging from the record of the present case, the entire spectrum of facts and the relevant proposition of law coupled with the design and desideratum of placement of a party or a person or a company in so-called `black-list' or debarring it from dealing with the commercial transactions for a specified spell of time, we have no hesitation in finding that the material breaches and serious violations and irregularities committed by the petitioner-Company and the view taken upon such breaches and entire factual and legal spectrum, in any way requires no interference, since the scope and ambit of our jurisdictional sweep is circumscribed to a very narrow compass to overview as to whether the decision-making process in reaching a decision is in any way affected or influenced by extraneous consideration or not, and not the quality of the decision taken, as if sitting in an Appellate Court nor we can substitute, factually, the decision reached by respondent or the authority concerned upon the profile of the facts, more so, when mala fides are not even sated and if otherwise in consonance and pursuance of the provision of law. We are, therefore, of the clear opinion that the challenge against the impugned decision is without any merits and requires to be dismissed by rejecting the petition. Accordingly, this petition shall stand rejected with costs. Rule discharged.