Dentro Pharmaceuticals (P) Limited v. The State of Tamil Nadu and Another
1994-09-29
K.A.SWAMI, SOMASUNDARAM
body1994
DigiLaw.ai
Judgment :- K.A. Swami, C.J. This appeal is preferred against the order dated 27th September, 1994, passed by the learned single Judge in W.P.No.16806 of 1994, rejecting the writ petition. The petitioner/ appellant has established an Industry for manufacturing I.V. saline products and those products are supplied in bottles. The 2nd respondent called for tenders for supply of drugs and other products for the use by the Government Hospitals in the State. The 2nd respondent is under the direct control of the 1st respondent and the tenders have been called for the supply of drugs, medicines, etc., for the period from the date of acceptance of the tender till 30th September, 1995. One of the conditions of the tender, as stated in condition No.21, is as follows: “....I.V.Fluids supplied should be manufactured under Form Fill Seal technology in good quality polyethelene containers.” The petitioner has sought for quashing the aforesaid condition and also for a direction to the 2nd respondent to consider its tender and accept the same in accordance with law. The learned single Judge has rejected the writ law. The learned single Judge has rejected the writ petition on the ground that the petitioner has no right to insist that the 2nd respondent should invite tenders from those I.V. saline manufacturers, who supply the same in bottles and not from those manufacturers, who supply the I.V. saline in polyethelene containers. 2. It is contended by Mr.Gandhi, learned Senior Counsel appearing for the appellant that the petitioner/appellant has established the Industry and has also received subsidy from the Government thereby promising that I.V. saline manufactured and supplied in bottles by the petitioner/appellant company will also be purchased by the State for their supply to the Government Hospitals. Therefore, the tender, notice confining the supply of I.V. saline fluids in polyethelene containers alone, amounts to violating the promise made to the petitioner/ appellant who, acting upon such promise, have invested huge amounts and are manufacturing and supplying that drug in bottles. According to the learned counsel, the tender condition, referred to above, will enable the executive to exercise its authority arbitrarily and as such, it is unreasonable, that the right to carry on the trade guaranteed under Art.19(1)(g) of the Constitution of India, is affected by reason of confirming the tender to the supply of I.V. Saline fluids in polyethelene containers.
According to the learned counsel, the tender condition, referred to above, will enable the executive to exercise its authority arbitrarily and as such, it is unreasonable, that the right to carry on the trade guaranteed under Art.19(1)(g) of the Constitution of India, is affected by reason of confirming the tender to the supply of I.V. Saline fluids in polyethelene containers. Learned counsel has placed reliance on the decisions reported in Shri Sachidanand Pandey v. The State of West Bengal, A.I.R. 1987 S.C. 1109, Union of India v. Bhilai Engineering Corporation, A.I.R. 1994 S.C. 988 and Tapti Oil Industries v. State, A.I.R. 1984 Bom. 161: (1984) 56 S.T.C. 193: (1984)2 Comp. L.J. 228 (F.B.). 3. It is not possible to accept any one of the aforesaid contentions. It is one thing to offer a subsidy for establishing an Industry for the manufacture of I.V. saline fluids in bottles and it is quite another thing for the 2nd respondent to call for tenders for the supply of I.V. saline fluids in polyethelene containers. It is not as though the tender is intended to favour one manufacturer in the State or in the country. Nor is it the case of the petitioner appellant that there is only one manufacturer of I.V. saline supplying the same in polyethelene containers. The tender is open to all such manufacturers in the country. That being so, merely because the petitioner/ appellant is provided with subsidy, it is not necessary that whatever he manufactures, should be purchased by the State. The entire market is open to him to sell the drug in bottles, as the sale of I.V. saline fluids in bottles is not prohibited. Therefore, it is not possible to hold that there is any scope for applying promissory estoppel to the case on hand. 4. It is also not possible to hold that condition No.21 of the tender conditions would, or, is likely to enable the authority to exercise its power arbitrarily, as long as it is not the case of the petitioner/ appellant that it is intended to favour one or two manufacturers and exclude others. It is also not possible to appreciate how the right to trade guaranteed under Art.19(1)(g), of the Constitution of India, is affected in any manner by condition No.21 of the conditions of tender. The petitioner/ appellant is not prevented from manufacturing and selling of I.V. saline fluids in bottles.
It is also not possible to appreciate how the right to trade guaranteed under Art.19(1)(g), of the Constitution of India, is affected in any manner by condition No.21 of the conditions of tender. The petitioner/ appellant is not prevented from manufacturing and selling of I.V. saline fluids in bottles. However, it is submitted that by non-purchasing this drug by the respondents from the appellant, the business of the petitioner/ appellant would be considerably affected and thereby it would result in loss or reduction in profit. As such, it is contended that such a condition operates as an unreasonable restriction on the right to carry on the trade by the petitioner/ appellant. All that we can say is that such an argument is far fetched and unfounded. 5. In the case of Shri Sachidanand Pandey v. The State of West Bengal, A.I.R. 1987 S.C. 1109, as stated in para 5 of the judgment, the court was concerned with the validity of the proceedings in granting an extent of four acres of land out of eight acres known as Begumbari land situated in the heart of Calcutta City to Taj Group of Hotels for the construction of a Five Star Hotel. It is not possible to see how any of the propositions laid down in that decision will be of any help to the petitioner/ appellant. 6. In Hindustan Development Corporation, A.I.R. 1994 S.C. 988, it has been observed that “the Government in a welfare State, has got wide powers in regulating and dispensing of special services like leases, licenses and contracts etc. The magnitude and range of such Governmental function is great. The Government while entering into contracts or issuing quotas is expected not to act like a private individual, but should act in conformity with certain healthy standards and norms. Such actions should not be arbitrary, irrational or irrelevant. In the matter of awarding contracts inviting tenders is considered to be one of the fair ways.
The Government while entering into contracts or issuing quotas is expected not to act like a private individual, but should act in conformity with certain healthy standards and norms. Such actions should not be arbitrary, irrational or irrelevant. In the matter of awarding contracts inviting tenders is considered to be one of the fair ways. If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory.” It may be pointed out that it is open to the Government or its Department to call for tenders according to its requirements and a manufacturer or a supplier cannot claim any right that the tender conditions should be such that he should be eligible to apply. Therefore, the appellant cannot claim that I.V. saline fluids manufactured and supplied in bottles must also be included in the tender conditions and the tender condition No.21 should be deleted. It is not at all open to the manufacturer to insist that the conditions of tender should be in a particular manner. As long as the conditions of the tender are not violative of Art.14 of the Constitution of India and are not shown to be opposed to any other law, it is not possible to interfere with the same. As far as Tapati Oil Industries case, A.I.R. 1984 Bom. 161: (1984) 56 S.T.C. 193: (1984)2 Comp. L.J. 228 (F.B.) is concerned, it considered the question of promissory estoppel. We have already pointed out that there is no scope for applying promissory estoppel in this case. 7. Hence, we see no reason to admit the appeal. Accordingly, the appeal is rejected. Consequently, C.M.P. No.14654 of 1994 is also rejected.