Jammu & Kashmir High Court
Mediciti Health Services Private Ltd vs J&K Medical Supplies Corporation Ltd on 21 July, 2023
Author: Rajnesh Oswal
Bench: Rajnesh Oswal
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Reserved On: 07.06.2023.
Pronounced On: 21.07.2023.
WP(C) No. 854/2022
CM No. 2564/2022
c/w
CCP(S) No. 158/2022
Mediciti Health Services Private Ltd. .....Appellant(s)/Petitioner(s)
Through: Mr. Kunal Saini, Advocate.
Vs
J&K Medical Supplies Corporation Ltd. ..... Respondent(s)
Trikuta Nagar Jammu and others
Through: Mr. Amit Gupta, AAG
Mr. R. K. Jain, Sr. Advocate with
Mr. Pranav Jain, Advocate.
Coram: HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE
JUDGMENT
1. The respondent No. 1 issued Notice Inviting Tender in the shape of e-Bid-
Request for Proposal bearing No. JKMSCL/Biomedical Equipment Maintenance/JKMSCL/Tend/512 dated 15.01.2022 for hiring service provider for Bio-Medical Equipment Maintenance in the Govt. Medical College, Jammu and the Govt. Medical College Srinagar, for an estimated inventory value of Rs. 400 crores for a period of five years subject to annual review, extendable to another term of maximum five years.
2. The RFP subsequently was amended and certain terms and conditions were also incorporated, as provided by the corrigendum No. JKMSCL/Corg/2022/4703-04 dated 08.02.2022. Five bidders participated in the tendering process out of which two bidders were declared as technically qualified and were called for power point presentation. They 2 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 made their power point presentations. The financial bids were opened on 14.03.2022. The petitioner was declared as L-2 whereas the respondent No.5 was declared as L-1. Before the proposal of L-1 bidder could be accepted, the petitioner submitted a representation with the respondent No. 2 thereby demonstrating that the respondent No. 5 was in breach of the conditions prescribed by RFP mentioned above and thus was ineligible on account of its failure to qualify for the technical bid. The representation submitted by the petitioner was forwarded to the respondent No. 5 for its response. The respondent No. 5 submitted its response. After taking into consideration the response of the respondent No. 5, the offer of the respondent No.5 was accepted.
3. The petitioner through the medium of this writ petition has approached this Court for directing the official respondents to declare respondent No. 5 as ineligible on account of its inability to fulfill the terms and conditions prescribed for qualifying technical bid and for directing the official respondents to award the contract of service provider for Bio-Medical Equipment Maintenance in both the medical colleges to the petitioner.
4. The petitioner is seeking the disqualification of the respondent No. 5, in respect of the technical bid submitted by the respondent No. 5 on the following grounds:
(i) That point 6 of serial No. 1 of the corrigendum prescribes a mandatory requirement that in order to be eligible for technical bid, the bidder should have neither been debarred or blacklisted by any Central or State Government/PSUs nor been prematurely exited 3 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 from the contract and not declared as an NPA by any bank or financial institution in India. The respondent No. 5 was issued a notice of termination dated 13.09.2019 by the Government of Andhra Pradesh wherein the services to be rendered by the respondent No. 5 were put to an end with effect from 01.01.2020, as the respondent No. 5 failed to provide services and lot of inconvenience was caused due to non-maintenance of critical and other treatment related equipments.
(ii) That the respondent No. 5 was in breach of the conditions in Clause 3.4.1.7 of RFP as the Format 4 affidavit requires that the bidder should submit an affidavit as a part of qualification proposal for eligibility stating that entity has not been barred/blacklisted by the Govt. of India from participating in any project. In the instant case, the license of respondent No. 5 has been suspended by NABL which is constituent board of Quality Council of India.
(iii) That the Hon'ble High Court of Andhra Pradesh had ordered the registration of FIR in response to a PIL alleging major irregularities by the respondent No. 5 to maintain all functional medical equipment/machinery available in govt. hospitals, leading to misappropriation of funds, cheating, criminal conspiracy, breach of trust and other offences, resulting in FIR under section 420, 406, 477(A) read with Section 120-B of IPC registered with Police Station, CID Amravati, Andhra Pradesh.
4 WP(C) No. 854/2022CM No. 2564/2022
c/w CCP(S) No. 158/2022
5. The official respondents have filed the response wherein it has been stated that the respondent No. 5 has neither been debarred or black listed by any Central or State Government/PSUs nor has been prematurely exited or declared NPA by any bank or financial institution of India, however, investigation is being carried out by the Agencies of the Andhra Pradesh Government and the respondent No. 5 has been asked to convey the outcome of the investigation to the authorities of J&K without fail, on the basis of which the contract shall be reviewed. It is further stated that the Technical Evaluation Committee and the nominated experts from GMC Jammu, GMC Srinagar and NHM J&K accepted the recommendations made by the Sub-Committee. The power point presentations were made by the short listed bidders and the petitioner and respondent No. 5 were declared as qualified bidders for opening of the financial bid. After opening of the financial bid, the respondent No. 5 was found as L-1 whereas the petitioner was found as L-2. Thereafter, the petitioner submitted a representation with the official respondents and stated that the contract awarded to the respondent No. 5 was terminated in Andhra Pradesh and also raised issues that the respondent No. 5 has furnished false undertaking. It was also alleged that the FIR was registered against the respondent No. 5. The above representation of the petitioner was communicated to the respondent No. 5 for its response and the respondent No. 5 replied to the same. The queries replied by the respondent No. 5 were examined in light of terms and conditions of RFP and it was found that the firm has not been presently barred, debarred and 5 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 black-listed. However, the Government of Andhra Pradesh had issued a termination notice dated 13.09.2019 which was suspended by the High Court of Andhra Pradesh vide its order dated 13.12.2019. The proposal was placed in the Purchase Committee Meeting held on 29.03.2022 and after due deliberations the rates of L-1 bidder i.e. the respondent No. 5 were accepted with the condition that since the case of the respondent No. 5 is under investigation in Andhra Pradesh, the respondent No. 5 shall communicate to the official respondents about the outcome of the investigation and accordingly the contract shall be reviewed in light of the outcome of case/investigation. After the approval of the Purchase Committee, the letter of intent was issued to the respondent No. 5.
6. Reply stands also filed by the respondent No. 5 wherein besides raising preliminary objection with regard to maintainability of the present petition, it has been stated that the petitioner after participating in the tendering process when remained unsuccessful to finally qualify, filed the present petition on totally false, concocted and frivolous grounds just to halt the process of finalization of the tender for maintenance of Medical Equipment which is of great public importance. The respondent No. 5 denied that the respondent No. 5 ever failed to perform its contractual obligations in respect of the Government of Andhra Pradesh and also denied that the conduct of the respondent No. 5 suffers from malafide to the extent that Government of Uttarakhand had issued a notification with regard to false claim. Respondent No. 5 also denied that National Accreditation Board for Testing and Calibration Laboratories has 6 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 suspended the license of respondent No. 5. Respondent No. 5 also stated that it has neither been debarred nor blacklisted by any Central or State Government/PSU nor has prematurely exited from the contract for any act or omission on the part of respondent no 5. The Government of Andhra Pradesh initially issued a notice of termination dated 13.09.2019 for termination of agreement dated 02.11.2015 on false and unsubstantiated grounds and the said notice has been stayed by the Hon'ble High Court of Andhra Pradesh vide its order dated 13.12.2019. In view of the deliberate attempt on part of the Government of Andhra Pradesh for non release of due payments in favour of the respondent No. 5 as per the terms of the contract, the respondent No. 5 on its own stopped providing their services to the Government of Andhra Pradesh, since huge outstanding dues of more than Rs. 90.00 crores were payable by the Government of Andhra Pradesh since January 2018 and the respondent No. 5 was finally constrained to file a petition under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator and the same is pending disposal before the Hon'ble High Court of Andhra Pradesh. It is further stated that the respondent No. 5 is not guilty of any misappropriation of funds, cheating, criminal conspiracy or breach of trust as alleged by the petitioner. Infact, when the respondent No. 5 claimed the huge outstanding amount from the Government of Andhra Pradesh, in order to scuttle the claim of the respondent No. 5, a plea was raised by the State of Andhra Pradesh regarding the alleged commission of cognizable offence by the respondent No. 5 and on that submission, there is an 7 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 investigation which is being conducted by the CID Andhra Pradesh. It is further submitted that the investigation is continuing and till date nothing adverse has been found against the respondent No. 5. It is also stated by the respondent No. 5 that there is huge difference between the respective bids of the petitioner and the respondent No. 5 and the present petition has been filed only to deprive the respondent No. 5 the award of contract as the respondent No. 5 has been declared L-1 with huge difference of financial bid. The respondent No. 5 has infact denied all the allegations leveled against it by the petitioner. The respondent No. 5 has placed on record the order of staying the operation of the notice dated 13.09.2019 and also other documents supporting its contentions.
7. Mr. Kunal Saini, learned counsel for the petitioner during the course of arguments restricted his arguments only to three issues:
(i) That as per the corrigendum the bidder should neither have been debarred or black listed by any Central or State Government/PSU nor have prematurely exited from the contract and not declared as NPA by bank or any financial institution of India whereas the Government of Andhra Pradesh had issued a notice of termination dated 13.09.2019 against the respondent No. 5. More so, FIR has also been registered against the respondent No. 5.
(ii) That National Accreditation Board for Testing and Calibration Laboratories has suspended the license of respondent No. 5.
(iii) That the respondent No. 5 has failed to provide performance certificates of two states as the certificates issued by the State of 8 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 Assam and Meghalaya are not the performance certificates but are service certificates and more so, the authority which provided the same for the State of Meghalaya is below the rank of Director or Equivalent.
8. Mr. Amit Gupta, learned AAG for the official respondents submits that the notice of termination of contract dated 13.09.2019 issued by the Government of Andhra Pradesh was stayed by the Hon'ble High Court of Andhra Pradesh. He further submitted that the National Accreditation Board for testing and Calibration Laboratories has issued certificate in favour of the respondent No. 5 having its validity from 08.12.2020 till 07.12.2022. He further argued that the performance certificates as required by the corrigendum are in accordance with the corrigendum issued by the official respondents. He further submitted that the grievances projected by the petitioner through the medium of representation, were duly taken note of by the Committee and thereafter the contract was awarded to the respondent No. 5.
9. Mr. R. K. Jain, learned senior counsel appearing on behalf of respondent No. 5 has reiterated the submissions made by Mr. Amit Gupta, learned AAG and submitted that the tender has been allotted to the respondent No. 5 with the condition that the respondent No. 5 shall inform the official respondents about the outcome of investigation in the FIR.
10. Heard and perused the record.
11. From the record it is evident that the e-NIT bearing No. JKMSCL/Biomedical Equipment Maintenance/JKMSCL/Tend/512 dated 9 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 15.01.2022 was uploaded on 15.01.2022. After the pre-bid meeting, the necessary corrigendum was issued vide No. JKMSCL/Corg/2022/4703-04 dated 08.02.2022. The following bidders participated in the tendering process:
S. No. Name of the firm
1. M/s Cyrix Healthcare Pvt. Ltd.
2. M/s Mediciti Healthcare Services Pvt. Ltd.
3. M/s AOV International LLP
4. M/s Mass Bio Medicals Pvt. Ltd.
5. M/s TBS India Telematic and Biomedical Services Pvt. Ltd. Sub-Committee was constituted vide No. JKMSCL/GM/2022/4863-68 dated 22.02.2022 to assist the Technical Evaluation Committee of JKMSCL. After evaluating the minor infirmities, the Sub-Committee submitted the report and the following firms were recommended/not- recommended:.
S. No. Name of the firm Remarks
1. M/s Mass Bio Medicals Pvt. Ltd. Not Recommended
2. M/s Mediciti Healthcare Services Pvt. Ltd. Recommended
3. M/s Cyrix Healthcare Pvt. Ltd. Not Recommended
4. M/s TBS India Telematic and Biomedical Recommended
Services Pvt. Ltd.
5. M/s AOV International LLP Not Recommended
10 WP(C) No. 854/2022
CM No. 2564/2022
c/w
CCP(S) No. 158/2022
Thereafter, the recommended bidders were directed to appear before the Technical Evaluation Committed for power point presentation. The power point presentations were made by the petitioner and the respondent No.
5.The financial bids were opened on 14.03.2022 at 02.00 P.M. Details of the BOQ have been mentioned as under:
S. Estimate Name of the Rate Taxes Rate % Bid
No d Rate Bidder without with Value Rank
. Tax Tax
1 400.00 M/s TBS India 192000000 34560000 26560000 5.664 L1
Crores Biomedical
Services Pvt. Ltd.
M/s Mediciti 399200000 71856000 471056000 11.8 L2
Healthcare
Services Pvt. Ltd.
The petitioner made a representation on 17.03.2022 with the official respondents against the respondent No. 5 stating therein about the termination of contract vide notice dated 13.09.2019 by the Government of Andhra Pradesh and also that FIR bearing No. 7/2021 dated 01.04.2021 has been registered against the respondent No. 5 in Police Station, Amrawati, Mangalagiri, Andhra Pradesh. The respondent No. 5 replied to the said representation as directed by the official respondents wherein it was stated that notice of termination has been stayed by the Hon'ble High Court of Andhra Pradesh and further that investigation by CID was pending and till then there had been no development in that matter except to the extent that the officials of respondent No. 5 were directed to participate in the investigation. It was also stated that respondent No. 5 has filed a petition under Section 11 of Arbitration and Conciliation Act against the Department of Health and Family Welfare for appointment of Arbitrator. It was also stated that the respondent No. 5 was not black 11 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 listed by any Government Agency and also had not suppressed or concealed any material information from the Government of Jammu and Kashmir. The representation made by the petitioner as well as the reply submitted by the respondent No. 5 were taken note of by the Purchase Committee of JKMSCL in the meeting held on 29.03.2022 and the Purchase Committee accepted the rates of the respondent No. 5 and it was also decided that the representative Principals of Govt. Medical College Jammu and Govt. Medical College, Srinagar shall be requested to execute agreement/contract with the L-1 bidder strictly as per the conditions prescribed by NIT. It was further decided that the respondent No. 5 shall intimate the official respondents in respect of the outcome of case/investigation pending in Andhra Pradesh and after the outcome is communicated, the contract shall be reviewed.
12. Issue No. 1:-
Serial No. 1 (6) of the corrigendum i.e. JKMSCL/Corg/2022/4703-04 dated 08.02.2022 reads as-The bidder should have neither been debarred or blacklisted by any Central/State Government/PSUs nor been prematurely exited from the contract and not declared an NPA by any bank or financial institution of India. The contention of the petitioner is that Government of Andhra Pradesh has terminated the contract of respondent No. 5 vide notice dated 13.09.2019 as the respondent No. 5 failed to provide services and lot of inconvenience was caused due to non maintenance of critical and other treatment related equipments. The notice dated 13.09.2019 upon which much reliance has been placed by Mr. 12 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 Kunal Saini, learned counsel for the petitioner has already been stayed by the Hon'ble High Court of Andhra Pradesh. Effort was made by the petitioner to persuade this Court that the respondent No. 5 infact has prematurely exited from the contract. The notice dated 13.09.2019 issued by the Government of Andhra Pradesh to the respondent No. 5 has been stayed by the High Court of Andhra Pradesh and once the matter is pending adjudication, so at this stage it cannot be said that the respondent No. 5 has voluntarily exited from the contract, particularly when the respondent No. 5 has also resorted to the arbitration proceedings against the Government of Andhra Pradesh. Thus, there is no force in this contention of the petitioner that the respondent No. 5 has voluntarily exited from the contract, as such, the respondent No. 5 was not entitled to award of contract under reference, therefore, this contention of the petitioner is rejected.
13. Issue No. 2:-
Serial No. 1 (3) of the corrigendum i.e. JKMSCL/Corg/2022/4703-04 dated 08.02.2022 reads as- The bidder should have valid SIO 9001:2015 ISP 13485:2016 registration certificate issued by the reputed certification and NABL accreditation Bio-Medical Equipment and AERB-QA certifications for Radiology Equipments. In respect of this contention, it was vehemently argued that the license of the respondent No. 5 has been suspended by the NABL. In order to buttress his submission Mr. Kunal Saini has placed reliance upon the list of suspended labs i.e. Annexure VI, page No. 147 to the writ petition. However, learned counsel for the 13 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 petitioner was taken aback and went in to defensive mode, when Mr. Amit Gupta, learned AAG submitted that the certificates for testing and calibration have been issued by NABL in favour of the respondent No. 5 and the learned counsel for the petitioner in a pensive mood submitted that document placed on record in the form of list of suspended labs was downloaded from internet. The valid certificates have been issued by the NABL in favor of the respondent No.5. Therefore, this contention of the petitioner that the license of respondent No. 5 was suspended by NABL is without any basis, as such, the same is rejected.
14. Issue No. 3:-
Serial No. 1 (2) of the corrigendum i.e. JKMSCL/Corg/2022/4703-04 dated 08.02.2022 reads as- Bidders should have completed three years of continuous service under BEMMP in at least two states supported by Centralized call centre with toll free numbers managing the bio medical equipment maintenance activity and the same should be certified by State level authority, not below the rank of the Director or equivalent. It is submitted by the petitioner that the respondent No. 5 is in breach of the mandatory requirement mentioned above, as such, lacked the eligibility to participate in the bidding process. It is contended that the certificates from the state of Assam and Meghalaya have not been issued by the competent officer and also the service certificates are not the performance certificates. Before this issue is considered by this court it would be apt to take note of the judgment the Hon'ble Apex Court in 'Silppi 14 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 Construction Contractors v. Union of India1, 2019 SCC Online SC 1133', wherein it has been held as under:
"20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."
(emphasis added) After perusing the record, this Court finds that the performance certificates have been issued by Mission Director, NHM Assam and Additional Director (MCH&FW) Cum Jt. MD NHM Govt. of Meghalaya and once the author of the NIT has accepted the said certificates, there appears to be no reason for this court to sit as a court of appeal over the decision of the official respondents. In 'Galaxy Transport Agencies v. New J.K. Roadways2, 2020 SCC Online SC 1035', the Hon'ble Apex Court held as under:
18. Insofar as Condition No. 27 of the N.I.T. prescribing work experience of at least 5 years of not less than the value of Rs. 2 crores is concerned, suffice it to say that the expert body, being the Tender Opening Committee, consisting of four members, clearly found that this eligibility condition had been satisfied by the Appellant before us. Without therefore going into the assessment of the documents that have been supplied to this Court, it is well settled that unless arbitrariness or mala fide on the part of the tendering authority is alleged, the expert evaluation of a 1 2019 SCC Online SC 1133 2 2020 SCC Online SC 1035 15 WP(C) No. 854/2022 CM No. 2564/2022 c/w CCP(S) No. 158/2022 particular tender, particularly when it comes to technical evaluation, is not to be second-guessed by a writ court.
(Emphasis Added) In light of the certificates and the judgments (supra), the contention raised by the petitioner loses its relevance.
15. In view of what has been discussed above, this Court is of the considered view that there is no merit in the petition, as such the same is dismissed.
16. Dismissed. Record be returned to Mr. Amit Gupta, learned AAG.
17. In view of the order passed in the main petition, contempt proceeding are closed and the contempt petition bearing CCP(S) No. 158/2022 is accordingly dismissed.
(RAJNESH OSWAL) JUDGE Jammu 21.07.2023 Sahil Padha Whether the order is speaking: Yes/No. Whether the order is reportable: Yes/No.