Andhra Pradesh High Court - Amravati
Indukuri Venkata Rama Raju, vs The State Of Andhra Pradesh, on 31 July, 2019
Author: C.Praveen Kumar
Bench: C.Praveen Kumar, M.Satyanarayana Murthy
HON'BLE THE ACTING CHIEF JUSTICE C.PRAVEEN KUMAR
AND
HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY
WRIT PETITION (PIL) No. 126 of 2018
ORDER:(per Hon'ble the Acting Chief Justice C.Praveen Kumar)
1) The present Writ Petition (PIL) is filed by one Indukuri Venkata Rama Raju seeking to issue an order, more particularly, one in the nature of writ of mandamus with the following reliefs:
i)Declaring the continuation of 12th respondent as service provider who is executing the contract of Operation of Medical Equipment Maintenance Services" obtained through the Request for proposal (ROP) 25.07.2015 vide Tender No.7.1/APMSIDC/2015-16 through APMSIDC i.e., the 7th respondent for Bio-medical Equipment Maintenance in the State of Andhra Pradesh, in view of Commission of several irregularities and illegal activities, as illegal, invalid and opposed to public interest; and
ii)Declaring the action of the 9th respondent in not investigating further in pursuant to the complaint of the petitioner dated 18.12.2017 regarding the irregularities committed by the 12th respondent 2 with the connivance of the official respondents in execution of the biomedical equipment maintenance contract, as illegal;
iii)Direct either the 10th respondent or any other central investigating agency to cause detailed investigation in the matter of embezzlement of huge public funds allotted by the central government under NHM Scheme for implementation of biomedical equipment;
iv)And consequently set-aside the allotment of work in favour of the 12th respondent by the 2nd respondent given in pursuant to the request for proposal (ROP) 25.07.2015 vide Tender No.7.1/APMSIDC/2015-16 through APMSIDC i.e., the 7th respondent for Bio-medical Equipment Maintenance in the State of Andhra Pradesh i.e., "Operation of Medical Equpipment Maintenance Services" (hereinafter referred to as "Project") for a period of 5 years extendable to 7 years, as illegal, arbitrary, opposed to public interest,
v) And pass such other order or orders as this Hon'ble Court may deem fit and proper.
2) The main argument of Sri P.Gangaiah Naidu, learned Sr.counsel for the petitioner is the inaction of the 9th respondent 3 i.e., Anti Corruption Bureau, Andhra Pradesh in not investigating into the allegations made in the complaint dated 18.12.2017, regarding the irregularities committed by the 12th respondent with the connivance of the official respondents. A direction was also sought against the 10th respondent i.e., Central Bureau of Investigation, New Delhi to investigate into the matter, as huge public funds allotted by the Central Government under NHM Scheme for implementation of biomedical equipment are embezelled and consequently to set-aside the allotment of work given in favour of the 12th respondent by the second respondent vide Tender No.7.1/APMSIDC/2015-16.
3) The allotment of work in favour of the 12th respondent would be consequent to the investigation done and the findings arrived at and the material collected while filing the final report.
Hence, we feel that the request of directing the authorities to set-aside the allotment of work would be pre-mature and cannot be ordered as a matter of the course.
4) The facts in issue are as under:
National Health Mission (NHM) launched a special
programme under Department of Health and Family Welfare. The said programme was aimed at achieving universal access to health care by strengthening the Health systems, institutions and capabilities in India. The said mission consists of two Sub- Missions i.e., i)National Rural Health Mission (NHRM) and
ii)National Urban Health Mission (NUHM), which were launched 4 in 2013 for taking care of Rural Health and Urban Health respectively. It is stated that as per the action plan of NHM the State Governments should implement the specified action plans designed by NHM and also formulate plans suitable for the particular state. The state Project Implementation Plan (PIP) shall spell out the strategies, activities undertaken, budgetary requirements etc. The Central Government allocate funds for Ministry of Health and Family Welfare (MoHFW), Government of India and in turn MoHFW allocates funds to NHM for implementation of the formulated schemes in the specied areas. It is averred that in the financial year 2017-18, an amount of Rs.53,294 crores were allotted to the Ministry of Family, Health and Welfare and allocation made to NHM was 26,691 crores. It is alleged that pursuant to the tender issued through the 7th respondent, for Bio-medical Equipment Maintenance in the State of Andhra Pradesh, four entities including the 12th respondent participated. The 12th respondent was declared as a successful bidder for offering Rs.38.22 crores for the first year @ 7.45% maintenance charges on each equipment. A letter of intent was signed on 21.10.2015 by the successful bidder expressing his willing to take up and maintain equipment as per the terms and conditions laid down by the Government. The first respondent herein issued G.O.Rt.No.660 Health Medical & Family Welfare (E2) Department dated 04.11.2015, according permission to the Special Commissioner of Health and Family 5 Welfare, A.P., Hyderabad and Executive Director, National Health Mission and Project Director, APSACS (AP State Aids Control Society) to enter into an agreement with the 12th respondent for maintenance of bio-medical equipment for a period of one year. It is alleged that the 12th respondent committed various irregularities in connivance with the officers of the Government. It is averred that amongst the several irregularities, some of the irregularities noticed are i) drawing more maintenance charges by drastically escalating the prices of the equipment ii) drawing maintenance charges for the equipment which is still within the period of warranty iii) non- calibration of assets as per the tender conditions iv) claiming maintenance charges on fudged values and v) fraud in billing process. Various statistics were referred to in the affidavit to show the drastic increase in the value of the assets. It is also alleged that the payments came to be made bypassing the normal procedure. The writ petitioner referred to an incident in his affidavit wherein a simple Glucometer (digital sugar test machine) which costs Rs.1,500/- maximum was shown with inflated value of Rs.5,08,000/- per Glucometer and extracted Rs.8.195% for the 2nd year of contract as service charge. Similarly the MRI scan machine at Kurnool GGH which was installed by M/s.Gemini Medicals, Hyderabad under PPP mode, as Rs.3.5 crores instead of its original value of Rs.1.69 crores. Similar such incidents were referred to, which we do not intend 6 to go into, since the main request of the petitioner is only to enquire into the allegations made in the complaint to ACB on 18.12.2017.
5) However counters came to be filed by all the respondents disputing the averments made in the affidavit filed in support of the Writ Petition.
6) The Special Chief Secretary to Government Health, Medical and Family Welfare Department, A.P. Secretariat, Velagapudi, Amaravathi, filed the affidavit on behalf of the first respondent in the month of March 2019 (kept the date blank) denying the allegations made in the affidavit filed in support of the PIL. He denies the allegation that out of four bids the bids of M/s.Kirloskar Technologies Pvt. Ltd and M/s.TBS India Telematic and Biomedical Services Pvt. Ltd.,(12th respondent) was treated as responsive. It was found that only 12th respondent and Biomedical Services Pvt. Ltd., alone was found as responsive. The allegation that the successful bidder would charge 7.45% maintenance charge on each and every equipment available in Government hospitals irrespective of whether there is any call from the concerned hospital for repairing the equipment was denied. It is stated that the Government of Andhra Pradesh seeks to engage supplier for maintenance of biomedical equipment with an aim to provide 24X7 and achieve 365 days uptime of 95% for all medical equipment in teaching hospitals and district hospitals. It is said 7 that it is a comprehensive contract to maintain all equipment in all Hospitals and contractor will be paid Rs.38.22 crores in the first year. It is stated that under no circumstances, the total payment will exceed the value. The statistics as to the cost of the equipments, expenses incurred etc., are stated in the counter. It is stated that at the time of calling tenders, thousands of equipment were under repair and dysfunctional. After the service provider was engaged, as on today, upkeep time of functional equipment is more than 96%. The allegations with regard to corruption in awarding contract and payments made violating the procedure, are denied. It is said that the contract was awarded in November, 2015 and the programme was launched by the Hon'ble Chief Minister on 01.01.2016. The service provider was advised to divide the state into circles, first circle covering all the Teaching hospitals for tagging and so on, as the number of equipment to be tagged are huge and spread over 1400 facilities. It is stated that tagging is not an overnight process as it is a very systematic process, wherein the details of equipment will be captured with details of District facility type, make, model, name of the Department, Serial Number, Number of equipment, date of purchase etc., and an unique number maintenance process tracking identification number (MPT-ID) is generated for the every equipment that is tagged and the process will take a lot of time for every equipment. The allegation that the service agency failed to tag the assets within 8 3 months time, and that finally in October, 2017 the assets count came to 51889 which inclues the machines with warranty period and also those which are declared as BER (Beyond Economical Repair) are denied. The counter encloses the number of assets repaired, value of the assets repaired in each district. Further, the dysfunctional equipment repaired in 2016 by TBS, equipment repaired in 2017 etc., etc. Having regard to the averments it is pleaded that the writ petitioner failed to make out a case on facts or law for interference of the Hon'ble Court.
7) The third respondent represented by Union Secretary, Ministry of Health and Family Welfare, filed his affidavit denying the allegations made except to those that are admitted by him. His affidavit only refers to the scheme about al National Health Mission and number of programmes which are under law. Insofar as the allegations made in paras 10 to 23 of the affidavit which mainly relate to the misconduct, misappropriate and negligence, he pleads that the State authorities are the proper persons to answer the same.
8) The 12th respondent herein filed counter stating that the averments made in the petition are incorrect. It is stated that the contents of the petition show that the same appears to be motivated and instigated at the instance of unknown persons or entities so as to malign the reputation of and services being provided by the Answering respondent. It is stated that the 9 12th respondent has been tasked with maintenance and service of assets/equipment in the entire State of Andhra Pradesh and there are presently more than 1000 primary health centres/hospitals under the Answering respondent's scope of operations. The total number of medical assets in the state of Andhra Pradesh are 54696, out of which 52379 assets are maintained and serviced by the 12th respondent. It is stated that out of 52379 assets maintained and serviced by the 12th respondent, more than 98% of the assets have been identified as fully functional, whereas thee are currently only 1036 assets which are non-functional and are being attended. It is said that out of 2317 assets which are under warranty, 2227 assets are fully functional and 90 assets are currently non-functional. The 12th respondent further states that they have received 47201 calls for repair of equipment. Out of the same, 46073 calls have been attended and completed. It is stated that the 12th respondent not only provides maintenance and related services for identified equipment/assets but also operates call centres for complaints and resolutions and manages a real-time data platform/portal accessible over the interest. It is stated that the 12th respondent is a part of the Global TBS group of companies solely dedicated to providing integrated healthcare technology management services. It has its presence in about 12 countries across the world. In the year 2015 the 12th respondent was selected to provide services for maintenance of 10 biomedical equipment in the State of Andhra Pradesh pursuant to a competitive tender process vide Tender No.7.1/APMSIDC/2015-16 and the allegations which are now made are all baseless and frivolous and the same has to be rejected at the threshold. All the allegations made with regard to the excalation of billing charges, billing process and the manner in which the invoice/bills are raised, are all denied. It is stated that process as contemplated under the business rules are being followed on every aspect. The counter running into 25 pages came to be filed explaining in detail the method of operation and disputing the manner in which the allegations made are false with statistical figures. Answering the issues raised with regadrd to MRI machine at Kurnool, the 12th respondent states that they are not aware that the same was under PPP model and that the same was billed at a value based on the make, model and features of the machine as per the market standards. It is said that on coming to know about the same, the same has been removed from the billing list. Insofar as the valuation of the Glucometers are concerned, it is stated that by mistake the asset was invoiced at a wrong amount and on coming to know about the same, communication dated 20.12.2017 came to be issued to the representatives of respondents 2 and 7 admitting its mistake and removing the same from its billing list.
11
9) From a reading of the affidavit of the 12th respondent, it is clear that the over price pointed out in the bill are corrected only on coming to know the same, but by which time amounts must have been released on all counts. But, it may not be proper for us to go into these factual aspects and hold as to whether there was any act of misappropriation, misconduct or negligence etc.
10) On 26.07.2018 after hearing the Senior Counsel for the writ petitioner, Government Pleaders and Standing Counsel for A.C.B., this Court passed the following order : -
"We have heard the learned Senior Counsel for the petitioner, learned Government Pleader for the Department of Medical and Health (AP), and the learned Standing Counsel for Anti Corruption Bureau (ACB) for respondent No.9.
It is pointed out that Ex.P-5 is the complaint made by the petitioner to the ACB making allegations against certain officers touching the award of contract to M/s.TBS India Telematic & Biomedical Services Private Limited.
Learned Government Pleader referred to G.O.Rt.No.187 dated 17.05.2018. But, we see that the said Government Order related to the construction activities of A.P.Medtech Park (AMTZ) and has nothing to do on the issue in hand.
Learned Standing Counsel for ACB will have a report placed on record by the ACB touching the pendency or disposal and consideration of the allegations in Ex.P-5."
11) The learned Advocate General placed on record the report submitted by ACB pursuant to the directions issued by the High Court of Andhra Pradesh and Telangana on 26.07.2018. The said report was directed to be kept in a sealed cover in the 12 custody of the Registrar (Judicial). On that day the matter was adjourned to next day with an understanding that main writ petition would be heard.
12) At this stage, Sri C.V.Mohan Reddy, learned Senior Counsel for the petitioner would submit that since the Court is likely to pass an order basing on the report submitted, they are entitled to a copy of the report submitted by the A.C.B. The same is opposed by the learned Advocate General stating that this report is submitted to the Court pursuant to the direction given pm 26.07.2018 and it is for the perusal of the court. Before dealing with the same, it would be necessary to refer to the allegations made in the complaint, which is placed on record as Ex.P-5, as the request of the petitioner is only to get the matter investigated by an appropriate authority. The said report dated 18.11.2018, was addressed to the Director General, A.C.B., referring to various allegations, which form part of the affidavit. One of the allegations, which has been insisted upon, is as under:
"7. As per tender conditions equipment under warranty shall not be added to the asset value but service provider added the values of assets which are under warranty.
8. By inflating the value of asset from Rs 300 Cr to Rs 500 Cr, Rs 7.45 Cr X2 = Rs 14.90 Cr benefit provided to the service provider for the year 2016-17. For the year 2017-18 payments made up to November @ Rs 8.195 per annum Hence excess of Rs 8.195 CrX 2X8/12 = Rs.10 Cr. i.e, Total Rs. 24.90 Cr excess paid to service provider due to inflating the total asset value form Rs 300 Cr to Rs 500 cr. MD National Health Mission AP, Smt 13 Poonam Malakondaih and State Programme Manager, Stri Vasudev Rao Bio Medical Engineer & Nodal Officer for BME Maintenance Smt Rohini never verified the total assets value by the department officials or by the concerned Heads of the departments. This verification was not done by them purposefully to make undue advantage to the service provider."
13) The complaint/report also refers to the over payments made to the 12th respondent by inflating the asset cost for more than 200 crores. The details are as under:
"M/s.TBS India Limited processed the bills with inflating the assets cost for more than Rs.200 Cr. This can be illustrated with few example for which proof is exhibited here.
Name of the Number of Cost of Cost Excess Total excess
Equipment equipment equipment claimed per cost asset value
as per PO unit by the claimed claimed
per unit M/s.TBS
India PVT
Limited
(inflating
Asset value)
Ventilator 159 Rs.7.10 Lakh Rs.11.00 Rs.3.90 Rs.17.05 Cr
Lakh Lakh
Glucometer 12 Rs.840/- Rs.5.08 Rs.5.07 Rs.60.96
Lakh Lakh Lakh
MRI at GGH 1 Rs.1.7 Cr. Rs.3.5 Cr Rs.3.5 Cr Rs.3.5 Cr
Kurnool But it is
under PPP
mode hence
shall not be
considered
for asset
value
These are the examples after verification of equipment in two teaching hospitals and three types of medical equipment. We can imagine inflation of asset value done by the TBS for 51000 medical equipment
14) As observed by us earlier, this excess payments also find place in the affidavit filed in support of the PIL and the same came to be answered. Insofar as the supply and functioning of MRI in Government General Hospital, Kunrool is concerned, the 14 12th respondent pleaded ignorance, while over-price Glucometers is concerned, it is stated that the amount was wrongly mentioned. That being the position, we feel that the matter requires to be investigated by the competent authority to find out the truth.
15) Though Sri C.V.Mohan Reddy, learned Senior Counsel insisted that they are entitled for a copy of the report, but we are not inclined to accept his request for morethan one reason viz., i)the court never looked into the report submitted by the ACB in detail since the allegations in the complaint itself prima facie disclose commission of the cognizance offence. Moreover
ii)this report came to be submitted only for the purpose of information pursuant to the orders passed by the Division Bench on 26.07.2018 which is not made the basis to pass the order.
Therefore, the request of Sri C.V.Mohan Reddy, learned Senior Counsel for a copy of the same and making it a part of record is rejected.
16) Since the allegations in the complaint, according to us, prima-facie disclose commission of the cognizable offence, the authorities have no other option except to follow the judgment of the Apex Court in Lalitha Kumari vs. Government of Uttar Pradesh and others1, wherein a constitutional Bench of the Apex Court while dealing with the same held as under: 1
2014(2) SCC page 1 15 "Therefore, in view of various counter claims regarding registration or non-registration, what is necessary is only that the information given to the police must disclose the commission of a cognizable offence. In such a situation, registration of an FIR is mandatory. However, if no cognizable offence is made out in the information given, then the FIR need not be registered immediately and perhaps the police can conduct a sort of preliminary verification or inquiry for the limited purpose of ascertaining as to whether a cognizable offence has been committed. But, if the information given clearly mentions the commission of a cognizable offence, there is no other option but to register an FIR forthwith. Other considerations are not relevant at the stage of registration of FIR, such as, whether the information is falsely given, whether the information is genuine, whether the information is credible etc. These are the issues that have to be verified during the investigation of the FIR. At the stage of registration of FIR, what is to be seen is merely whether the information given ex facie discloses the commission of a cognizable offence. If, after investigation, the information given is found to be false, there is always an option to prosecute the complainant for filing a false FIR.
Conclusion/Directions:
111) In view of the aforesaid discussion, we hold:
i) Registration of FIR is mandatory under Section 154 of the Code, if the information discloses commission of a cognizable offence and no preliminary inquiry is permissible in such a situation.
ii) If the information received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain whether cognizable offence is disclosed or not.
iii) If the inquiry discloses the commission of a cognizable offence, the FIR must be registered. In cases where preliminary inquiry ends in closing the complaint, a copy of the entry of such closure must be supplied to the first informant forthwith and not later than one week. It must disclose reasons in brief for closing the complaint and not proceeding further.
iv) The police officer cannot avoid his duty of registering offence if cognizable offence is disclosed. Action must be taken against erring officers who do not register the FIR if information received by him discloses a cognizable offence.16
v) The scope of preliminary inquiry is not to verify the veracity or otherwise of the information received but only to ascertain whether the information reveals any cognizable offence.
vi) As to what type and in which cases preliminary inquiry is to be conducted will depend on the facts and circumstances of each case. The category of cases in which preliminary inquiry may be made are as under:
a) Matrimonial disputes/ family disputes
b) Commercial offences
c) Medical negligence cases
d) Corruption cases
e) Cases where there is abnormal delay/laches in initiating criminal prosecution, for example, over 3 months delay in reporting the matter without satisfactorily explaining the reasons for delay.
The aforesaid are only illustrations and not exhaustive of all conditions which may warrant preliminary inquiry.
vii) While ensuring and protecting the rights of the accused and the complainant, a preliminary inquiry should be made time bound and in any case it should not exceed 7 days. The fact of such delay and the causes of it must be reflected in the General Diary entry.
viii) Since the General Diary/Station Diary/Daily Diary is the record of all information received in a police station, we direct that all information relating to cognizable offences, whether resulting in registration of FIR or leading to an inquiry, must be mandatorily and meticulously reflected in the said Diary and the decision to conduct a preliminary inquiry must also be reflected, as mentioned above.
17) Since the averments in the reports prima-facie disclosed commission of the cognizable offence; having regard to the nature of the allegations made and reply of the 12th respondent and in view of the law laid down by the Apex Court, in the 17 judgment referred to above, we direct the authorities of ACB, State of Andhra Pradesh to enquire into the allegations made in the complaint and proceed in accordance with law. Since this Court has not taken into account the contents of the report, which was called for earlier, we feel that it is not necessary to furnish a copy thereof, to the petitioner. Registry is directed to return the report to the concerned, under proper acknowledgment.
18) With the above observation, the Writ Petition is disposed of. No order as to costs. Miscellaneous Petitions pending if any in this Writ Petition shall stand closed.
__________________________________ ACTING CHIEF JUSTICE C. PRAVEEN KUMAR ______________________________ JUSTICE M. SATYANARAYANA MURTHY Dated:31.07.2019 GM