Gujarat High Court
C.K. Gauze Bandage Mfg. Co. And Anr. vs State Of Gujarat And Ors. on 16 February, 1989
Equivalent citations: (1989)2GLR836
JUDGMENT P.R. Gokulakrishnan, C.J.
1. The petitioners are appellants in this letters patent appeal. The appellants filed Special Civil Application No. 8395 of 1988 for issue of a writ of mandamus or any other appropriate writ to quash and set aside the decision of the respondent Nos. 1 and 2 to offer tender for supply of bandage cloth in favour of respondent Nos. 3 and 4. There is a further prayer for directing the respondent Nos. 1 and 2 to accept the tender of the appellants after due negotiation for supply of bandage cloth in pursuance of the Tender Notice No. CMSO/ INST/F-98/RC/Bandage Cloth/87-88 dated 10-2-1988. There is also a consequential prayer for stopping the operation and execution of the impugned decision to offer the tender for supply of bandage cloths in favour of respondent Nos. 3 and 4 and also prohibiting the respondent Nos. 3 and 4 from commencing the work of supply of bandage cloth in pursuance of the tender notice. The short facts of the case for the purpose of hearing the letters patent appeal for admission arc that the respondent No. 2, who is the Director of Central Medical Stores Organisation, invited the offers for supply of the bandage cloths on the rate contract basis for a period of one year. For that purpose, tender notice was issued on 10-2-1988. In response to the tender notice, the appellants with certain other persons submitted their tenders. In all. there were 13 parties, who had submitted the tenders in response to the lender notice. Among the 13 tenderers, only 4 parties were found upto the required standard and quality by the Government Drug Laboratory, and they are: (1) M/s. Bipson Surgical Industries, Gandhinagar, (2) M/s. C.K. Gauze Bandage Mfg. Co., Ahmedabad, (3) M/s. Zenith Corporation, Meerut and (4) M/s. Ronson Surgical Dressing Mfg. Co., Ahmedabad. These four parties who were in the zone of consideration, quoted the following rates:
M/s. Bipson Surgical Industries, Gandhinagar. : Rs. 54.54 per pkt.
M/s. Zenith Corporation, Meerut. : Rs. 59.50 per pkt. M/s. C.K. Gauze Bandage Mfg. Co., Ahmedabad : Rs. 60.80 per pkt. M/s. Ronson Surgical Dressing Mfg. Co., A'bad. : Rs. 60.80 per pkt.
2. The appellants, inter alia, contended that respondent Nos. 3 and 4 are not entitled to get the tenders inasmuch as the goods of respondent No. 3 are of sub-standard quality; that respondent No. 3 has not submitted the marketing data; that respondent No. 3 has not submitted the S.S.I. certificate along with the tender; that performance of respondent No. 4 on a prior occasion was unsatisfactory, and that the appellants have reduced their price by negotiation, which fact has not been considered by the Secretaries, Purchase Committee.
3. The learned single Judge, after observing that the terms and conditions of tender do not mention that the tenders of only those tenderers shall be considered whose samples are approved by Government Drug Laboratory, Baroda and if the authority, on overall consideration of the facts and circumstances of the case, consider that on certain grounds the tender need not be rejected, it cannot be said that the respondent authority is acting with discrimination against the appellants, dismissed the Special Civil Application. It is as against this order, the present letters patent appeal is filed.
4. Mr. Thakkar, the learned Counsel appearing for the appellants contended that the Gem Surgical Private Ltd., Baroda could not have been within the zone of consideration in view of the fact that their product was found to be sub-standard. The learned Counsel further stated that the respondent No. 3 has not satisfied the quality test. It is the next contention of Mr. Thakkar that the respondent No. 3 has not fulfilled Condition No. 32 of the General Terms and Conditions of Invitation of Tenders and Instructions to Tenderers. Clause 32 of the conditions states:
Tenderer should quote for such items only as per being marketing lor at least one year from the due date of tender. Necessary documents to support the same should be submitted alongwith the tender failing which the lender shall be liable for rejection. The quotation will be accepted if the Director of C.M.S.O. is satisfied about the production, sale and performance of the tenderer. The tenderer should submit the following documents alongwith the tender, without fail in support of their marketing the terms specified in tender enquiry:
(1) Certificate of Chartered Accountants as per Annexure 'B' for the Category of Drugs quoted-or-Certificate as per Annexure 'E' from Drugs authorities for the category of Drugs Quoted Or Affidavit of Marketing Data for the Category of Drugs quoted.
(2) Attested copy of the rate contract with this organisation or any other reputed organisation for supply of the item quoted by them.
5. As a third contention, as far as the respondent No. 3 is concerned, Mr. Thakkar contended that S.S.I. Certificate has not been submitted before the Purchasing Committee and as such the rate quoted by the respondent No. 3 should be calculated at the higher rate. As regards respondent No. 4, Mr. Thakkar submitted that his past performance was unsatisfactory since this respondent failed to supply the goods conforming to the quality required under the terms and conditions of the tender. As a result thereof, there were large-scale complaints. Therefore, all the consignments of the goods supplied by the respondent No. 4 on a prior occasion came to be seized and some of the goods were rejected due to inferior quality. Thus, according to Mr. Thakkar, the past performance of the respondent No. 4 was unsatisfactory and hence, he could not have been offered the contract. Mr. Thakkar, reading Clause 43, Item No. 18 which states that the tender can be rejected for unsatisfactory past performance, of the tenderers, submitted that the past performance of respondent No. 4 was unsatisfactory and as such the tender ought to have been rejected. It is the contention of Mr. Thakkar, the learned Counsel appearing for the appellants that the respondent-State authorities have taken decision under the influence of one M.L.A., Shri Prakash Brahmbhatt and offered the tender to respondent No. 3 in violation of procedures and rules and as such the offer of tender in favour of respondent No. 3 should be quashed. In this connection Mr. Thakkar pointed out the Test Report pertaining to respondent No. 3 and stated that the report is against respondent No. 3 as regards the goods be has to supply. As regards the remarks of the test report pertaining to the third respondent it is stated: "Not acceptable as does not comply with thread as per dm weft width and Fluoroscene". But as to the reason as to why it has not been considered, in the test report it is stated, "Not stands for consideration as marketing data not provided". Rule 124-C of the Drugs and Cosmetics Act, 1940 states. "The standards for Surgical Dressings shall be such as are laid down in Schedule P(III)".
6. It is the case of the appellants that the Government Laboratory, Baroda found the material of the respondent No. 3 not up to the mark and that the sample was rejected in the quality testing. The appellants further contened that inasmuch as the product of respondent No. 3 firm has been rejected in the quality testing as sub-standard the said product cannot be purchased by the Government. Pointing out the Condition No. 32 of the tender whereby it is stated that the tenders should submit the marketing data, the appellants staled that the respondent No. 3 got the product licence on 1-3-1988 while the tender was submitted by the respondent No. 3 on 7-3-1988. Further, the firm got its S.S.I. provisional registration on 18-3-1988 and S.S.I. permanent registration on 16-12-1988. The S.S.I. Certificate was submitted by the respondent No. 3 to respondent No. 2 only on 17-12-1988. In view of this fact, the appellants stated that the party could not have made any sales at all and as such the tender should not have been considered in the absence of marketing date as per Condition No. 32.
7. As far as the respondent No. 4 is concerned, the main thrust of the argument of Mr. Thakkar, learned Counsel appearing for the appellants is that there was unsatisfactory past performance by this respondent and as such his tender should be rejected considering Clause 43, Item 18 of the General Terms and Conditions of Invitation to Tender and Instruction to Tenderers.
8. We can dispose of the averments against the respondent No. 4 by referring to paragraph 9 of the affidavit-in-reply filed by Shri S.G. Darji who is the Assistant Director (Industries) Central Medical Stores Orgn. Gujarat State, Ahmedabad. In paragraph 9 of his affidavit in-reply it is stated as follows:
I say that so far as allegation made by the applicants/petitioner against respondent No. 4 herein firstly it relates to non-supply of this item by respondent No. 4 against past rate contract and while finalising this tender, his representation for non-supply of this item against past R/C was put up before the Committee, it was accepted and it was decided to recover late penalty or to do the risk purchase and recover amount. To take this action, it is very necessary to award the Rate Contract against present tender enquiry by respondent Nos. 3 and 4 to decide the amount for risk purchase. Secondly, allegations relate to another item Gauze, also and the said dispute is pending in the competent Court and as such I am advised not to deal with the same.
9. Thus it is clear from this averment that the respondent No. 4 was neither black-listed nor rendered himself unsuitable for getting the tendor. The unsatisfactory past performance, in our opinion cannot go to the root of the matter so as to disqualify the respondent No. 4 for consideration. The Purchase Committee, which is an expert body considered the advisability of offering the tender to respondent No. 4 both on the ground of the price structure and the quality and such a finding cannot be dislodged for a trivial violations which is not germane for considering the tender of respondent No. 4. Hence we are of the view that the appellants have not made out any case against respondent No 4 for rejecting his tender.
10. As regards the respondent No. 3, we do not find in the lest report anything to show that the quality of the materials of respondent No. 3 is of sub-standard. The reference to Rule 124-C of the Drugs and Cosmetics Act, 1940 prescribes the standards for surgical dressing and that will not in any way give a clue regarding the quality of the materials since there is nothing in Rule 124-C which spells out the standard of quality the materials must possess for the use on patients. The letter by the Deputy Secretary, Health and Family Welfare Department. Gujarat State dated 26-12-1988 clearly makes out that the samples of materials bearing I.P., B.P. and U.S.P. standard may not be sent for testing in advance. Even the test report referred by Mr. Thakkar, as we have observed already, does not speak about the quality of the bandage except stating that the material of respondent No. 3 does not comply with thread as per dm weft width and Fluorescence The said report also states that the material of respondent No. 3 does not stand for consideration as marketing data not provided. The Purchase Committee has taken into consideration the relevant directions for the purpose of accepting the tender of respondent No. 3 and its resolution dated 6-12-1988 in Agenda Point No. 173.19 clearly spells out that it had all particulars before it including the delayed submissions of S.S.I, and marketing data. That is why the Medical Stores Purchase Committee by the abovesaid resolution referred the matter of the respondent No. 3 along with respondent No. 4 and others to Secretaries, Purchase Committee for condoning the delayed submission of S.S.I, and marketing data. It is clear from the facts of the case that marketing data was placed before the Secretaries, Purchase Committee which consisted of Shri K. Rammoorthy, Additional Chief Secretary to Government, Health and Family Welfare Department, Shri V.B. Buch, Secretary to Government (IMED), Shri C.P. Sampath, Secretary to Government, Financial Department, Gandhinagar. The papers were circulated to each member of the said Secretaries, Parchase Committee and ultimately on 30th December, 1988 decision was taken by Secretaries, Purchase Committee condoning late submissions of S.S.I. Registration Certificate and Marketing Data by respondent No. 3. Since Secretaries, Purchase Committee condoned to deficiency, it was decided to award the rate contract to respondent No. 3 who was the first lowest and a parallel rate contract to respondent No. 4 who was the second lowest. From the abovesaid facts which we have been made clear by the documents and also in the affidavit-in-reply, we do not think there is any substance in the contention put forth by Mr. Thakkar as regards the failure of supply of S.S.I. report and marketing data by respondent Nos. 3 and 4.
11. It is seen from the price comparative statcment-cum-remarks of test report of quotations received, that the quality of the material of the respondent No. 3 was not in question and the remark 'not stand for consideration' is due to the fact that he has not provided the marketing data. From the facts narrated above, it is clear that such data was available before the Secretaries, Purchase Committee and since it was provided after some delay, the matter was sent to the Secretaries, Purchase Committee for condoning the same. It is on record, that such condonation was made by the Secretaries, Purchase Committee and the respondent No. 3 was duly considered. As correctly contended by Mr. Tanna, the learned Counsel appearing for respondent No 4 and by Mr. S.D. Shah the learned Counsel appearing for respondent No. 3. the materials of the respondent Nos. 3 and 4 bear I.P., B.P. and U.S.P. standards and as per the letter dated 26-12-1988 written by the Deputy Secretary, Health and Family Welfare Department, Gujarat State, it is clear that, sample of material bearing I.P., B.P. and U.S.P. standards may not be sent for testing in advance. It is further seen from Clause 29 of the general terms and conditions governing the rate contract fixed by the Central Medical Stores Organisation that, if any stores supplied against the rate contract are found to be of not of standard quality on inspection and analysis by competent authority, the contractor shall be liable to replace the entire quantity or make full payment of the entire consignment (batch) against the particular invoice irrespective of the fact that part or full quantity (batch) of the store supplied, may have been consumed. Thus, there is no question of sending the material in advance for the quality test and even if that has been done. Clause 29 provides ample safeguard for checking the quality at any time during the currency of the rate contract. The Table furnished with the affidavit-in-reply filed by the Assistant Director (Industries) of the Central Medical Stores Organisation clearly makes out that, respondent No. 3, M/s. Gem Surgical Private Ltd., Baroda has quoted a rate of Rs. 53.47 ps. per packet, while the appellants have quoted Rs. 60.80 ps. per Packet. The respondent No. 4 has quoted Rs. 54.54 ps. per packet. No doubt, Mr. Thakkar wants to make out that, in the absence of S.S.I. Certificate, it cannot be reconsidered that the respondent No. 3 is the lowest bidder. We have already discussed the availability of S.S.I. certificate and marketing data for respondent Nos. 3 and 4 and as such we do not find any substance in this argument. Considering the Table given in this affidavit-in-reply, the appellants nowhere come near the respondent Nos. 3 and 4.
12. Mr. P.M. Thakkar, learned Counsel for appellant submits that appellant though quoted price Rs. 60.80 ps. per Packet, the shown willingness to reduce it to Rs. 54.54 ps. per packet and had informed Director by letter dated June 14, 1988 and even then before Committee of Secretaries, it was staled that appellant had quoted Rs 60.80 ps. price. If at all that fact would have been brought to notice of Secretaries, Purchase Committee, the appellant would have been given. contract. It is clear that lowest quotation of respondent No. 3 was Rs. 53.47 ps. and therefore from view point of rates the respondent. No.3 is rightly preferred. Appellant had never quoted rate Rs. 53.47 ps. So far as the respondent No. 4 is concerned, had quoted Rs. 54.54 ps. rate and therefore it was decided by departmental Purchase Committee and Secretaries, Purchase Committee that Respondent No 4' should be given parallel rate contract, if they match the rates with 'respondent No. 3'. The grievance of appellant is mainly against the rate contract given to respondent No. 3 and it was never stated by appellant that he was prepared to match his rates with rates quoted by respondent No. 3. Giving parallel rate contract to appellant, therefore. did not arise. It is, however, submitted by Mr. P.M. Thakkar. learned Counsel for appellant, that if at all it would have been brought to notice of Secretaries, Purchase Committee the appellant would have been considered for parallel rate contract along with respondent No. 4. For this the offer to reduce rate made by appellant be considered. By letter dated June 1, 1988 the Director inquired from tile appellant as to whether he was agreeable for supplying 20 meter x 100 cm. packet at Rs. 54.54 ps. F.O.R. destinational rate as that rate was quoted by first lowest tanderers. In petition the appellant clearly staled that it was prepared to reduce price to Rs. 54.54 ps. At the hearing it was contended by learned Counsel for respondent Nos. 3 and 4 that contention in petition on this point is vague and no reply letter was produced by appellant and therefore at the last leg of arguments appellant filed affidavit of V.L. Damadia along with copy of letter dated 14-6-1988. In that letter appellant did not accept offer unequivocally and stated that rate quoted by appellant was Rs. 60.80 ps. however, if the tenderer of first lowest is prepared to supply at rate of Rs. 54.54 ps. of bandage 100 cm. x 20 mt. then in that case they were prepared to supply at that rate but in case tenderer for first lowest was not prepared to supply at that rate then they stick to tender rate of Rs. 60.80 ps. It is, therefore, clear that the acceptance was not unambigous and unequivocal. As such it was not clear quotation of rate at Rs. 54.54 ps. F.O.R. destination. It was not stated that they were prepared to supply at that rate F.O.R. destination. In view of this fact, the appellants cannot make grievance to the effect that the offer at the rate of Rs. 54.54 ps. per packet has not been placed before Secretaries, Purchase Committee. For that reason the contract cannot be set aside on ground of non-consideration of rate quoted by appellant or on the question of discrimination.
13. Mr. Thakkar states that, the matter may be placed before the Secretaries, Purchase Committee with all the available date as on date and the same may be processed once over again. It was strongly objected by the Government Pleader as well as the learned Counsels appearing for the respondent Nos. 3 and 4. that such procedure will open up the flood-gates and many will be agitating for having their matters placed before the Secretaries, Purchase Committee. Inasmuch as we do not find any infirmity in the award of tender, it is not necessary for us to suggest that the tenders may be placed again before the Secretaries. Purchase Committee.
For all the reasons stated in paragraph supra and also agreeing with the reasoning and finding of the learned single Judge against which the present letters patent appeal has been filed, this Letters Patent Appeal is dismissed.