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2003 DIGILAW 1201 (AP)

Rajasthan Drugs and Pharmaceuticals limited, Jaipur v. Government Of A. P.

2003-09-22

D.S.R.VERMA

body2003
D. S. R. VARMA, J. ( 1 ) IN all the three writ petitions, since the issue to be decided is common, though matters are listed under the caption "interlocutory", with the consent of both the parties, the writ petitions are being disposed of by this common order. ( 2 ) THE petitioners in all the three writ petitions seek the following relief:"to issue a writ or order or direction more particularly one in the nature of the writ of mandamus declaring the condition no. 2 (i) of G. O. Ms. No. 101 Health medical and Family Welfare (MI) department, dated 19. 4. 2003, of the 1st respondent, thereby resolving to procure Antibiotic Drugs from such public Sector Undertakings, Multinational companies and Small Scale Industries which possess Good Manufacturing practices Certification of World Health organization for each of the products they manufacture and the consequential Tender notification in Tender Notice No. 3/ hmhidc/drugs-Wing/2003-4, dated 22. 4. 2003, published in Daily News Paper viz. , Deccan Chronicle, dated 27. 4. 2003, as arbitrary, illegal, unjust and unfair. " ( 3 ) THE undisputed facts are that the 1st respondent-Government of Andhra pradesh, have issued G. O. Ms. No. 101, health, Medical and Family Welfare (MI) department, dated 19-4-2003, with regard to procurement of antibiotic drugs from the public Sector Undertakings, Multinational companies and Small Scale Industries which possess Good Manufacturing Practices certification of World Health Organization for each of the products they manufacture. In that regard, certain guidelines have been framed. One of the said guidelines is to the effect that the aspiring Public Sector undertakings, Multinational Companies and small Scale Industries shall possess whogmp for each product. Following the said guidelines, the 4th respondent- corporation, which is the agent for the said procurement of drugs, issued a tender notification, dated 22. 4. 2003, wherein a condition was imposed to the effect that the public Sector Undertakings, Multinational companies and Small Scale Industries having WHOGMP Certificate only are eligible to participate in the tender, as contemplated under G. O. Ms. No. 101, dated 19. 4. 2003. The said condition incorporated in the said G. O. , and the consequential tender notification, dated 22. 4. 2003, are under challenge on the ground that imposing such a condition is arbitrary and illegal. No. 101, dated 19. 4. 2003. The said condition incorporated in the said G. O. , and the consequential tender notification, dated 22. 4. 2003, are under challenge on the ground that imposing such a condition is arbitrary and illegal. ( 4 ) SRI M. Ravindranath Reddy, the learned Counsel appearing for the petitioners, contents that imposing such a condition is totally unfair inasmuch as the petitioners are possessing GMP certificates only, which are valid for supplying the drugs to all the hospitals. The said GMP certificates have been issued by the Drug Controlling Agency of the State in compliance with the provisions of the Drugs and Cosmetics Act, 1940 (for short "the Act"), and the petitioners have been supplying their respective products to various hospitals through the respective agencies of the Government. It is also not in dispute that the petitioners in W. P. Nos. 7933 and 9166 of 2003 have been supplying their respective products to the 4th respondent for quite sometime. Now, it is contended that by virtue of this condition imposed in the tender notification issued pursuant to the g. O. Ms. No. 101, they will become ineligible to participate in the tenders. However, the petitioners have approached the 3rd respondent-Central Government, which is empowered to issue the certificates, seeking whogmp certificates. The 3rd respondent, in response to the applications made by the petitioners, responded through a letter, dated 27-9-2000, stating that WHO GMP certificates are normally issued for the products of firms for international Commerce (export) whenever the importing country desires, and not for local marketing. It was further stated therein that, however, such certification as per WHO GMP guidelines, can be considered if the petitioners produce any document, which shows their intent to export their products. Therefore, it is contended by the learned Counsel for the petitioners that since the 3rd respondent, who is the competent authority, to issue whogmp Certificates had refused to issue such certificates, there is no other way for them except to approach this Court seeking the present reliefs. ( 5 ) SRI Ramesh Ranganadhan, learned additional Advocate General appearing on behalf of Respondent 1 to 4, contends that this issue had already fallen for consideration before a learned Single Judge of this Court (Hon ble Sri Justice V. V. S. Rao) in WP nos. ( 5 ) SRI Ramesh Ranganadhan, learned additional Advocate General appearing on behalf of Respondent 1 to 4, contends that this issue had already fallen for consideration before a learned Single Judge of this Court (Hon ble Sri Justice V. V. S. Rao) in WP nos. 22113 of 2001 and 22293 of 2002, wherein it was held that it is the policy decision of the Government to impose such a condition. The learned Judge further observed that there are various reasons placed before this Court by respondents 1 to 4 and keeping in view the overall circumstances and in the interest of the general public such a condition had been imposed to ensure the international standards. Hence, in the said judgment, the learned Judge had observed that since the said policy decision had been taken based on special reasons, which are on record, imposition of such a condition is not arbitrary. ( 6 ) ON the other hand, the learned counsel for the petitioners vehemently contends that the action of the respondents 1 and 4 is arbitrary and in support of his contention, he relies on the judgments of the learned Single Judge of this Court rendered in WP Nos. 22113 of 2001 and 22293 of 2002. It is also not in dispute that challenging the said judgments of the learned Judge, writ appeals are filed and the same are pending consideration before a Division bench of this Court. However, it is brought to the notice of this Court that no interim directions have been granted by the Division bench. Hence, both the judgments of the learned Judge are still in force. ( 7 ) I have gone through both the judgments of the learned Judge. ( 8 ) THOUGH the facts in the present writ petitions on hand and the facts in the two decisions of the learned Judge, sought to be relied upon by the learned Counsel, are different with each other, I am of the view that it is inexpedient to express any opinion about the applicability of either of those two judgments rendered by the learned judge, inasmuch as both the judgments are under challenge before the Division Bench of this Court in writ appeals. ( 9 ) THE 4th respondent, who is the contesting party, filed a counter-affidavit, wherein one crucial factor had been pointed out and the same is being highlighted by the learned Counsel for the petitioners. ( 10 ) AT Para No. 13 of the counter-affidavit, it is stated as under:"it is submitted that in order to manufacture drugs for sale, licensees are required to comply with the conditions of Schedule "m" of the Drugs and Cosmetics Act, 1945. The "good Manufacturing Practices (GMP)" certificates, though not contemplated under the provisions of the Drugs and Cosmetics act, or the Rules made thereunder, are being issued by the Drugs Control Administration at the request of manufacturers to meet the requirements of the purchasers. The Good manufacturing Practices Certificate is a Non- statutory Certificate and has no legal sanction either under the Act or the Rules made thereunder. The Government of A. P. , has also not authorized the issuance of gmp Certificate. Schedule-M of the Drugs rules was amended by GSR 735 (E), dated 24-6-1998, which lays down that each licenser shall evolve a methodology and procedure to achieve the objectives listed in Schedule-M which include physical infrastructure, efficient equipment, purity of raw materials, personal hygiene of workers etc. It is relevant to submit that the Drugs and Cosmetics Rules have been amended to bring them in conformity with WHO standards. The government of India, in exercise of the powers conferred by Sections 12 and 33 of the Drugs Act promulgated the Drugs and cosmetics Amendment Rules, 2001 in GSR 894 (E), dated 11-12-2001. It was however clarified that the amended Schedule-M shall apply prospectively and shall not apply to the present licensed manufacturers for the period upto 31-12-2003. As a result of the amendment to the Drugs and Cosmetics rules, the said Rules are now in conformity with W. H. O. G. M. P. standards. " ( 11 ) FROM the above, it is clear that by virtue of the amendment brought out to schedule-M of the Act, from 1-11-2004, there will not be any two standards namely whogmp and GMP for the competent authority to procure the standards of whogmp and GMP and the same will be erased and all the manufacturers shall have to maintain the WHOGMP standards alone, as required under the Rules. ( 12 ) IN such an event, the petitioners also have to maintain the WHO standards with effect from 1-1-2004. ( 13 ) WITHOUT going to the controversy as regards the illegality and arbitrariness or otherwise in imposing such a condition in the tender notification and also having regard to the fact that the 3rd respondent did not consider the applications of the petitioners for issuance of WHOGMP Certificate on the mere ground that such certificate is not necessary for those who does marketing within the country. Suffice it to note that the refusal to grant such a certificate cannot be understood as a rejection on merits. In other words, only in case of companies, which intend to export depending upon the need of the importing country, this certificate will be issued. The stand of the 3rd respondent cannot be treated as a refusal to issue a WHOGMP Certificate. What all he said is that there is no need or necessity for issuance of such certificates inasmuch as the petitioners are intending to supply their products within the country only and those products are not meant for export. ( 14 ) THIS is the reason for the petitioners to approach this Court by way of present writ petitions. ( 15 ) IT is also not in dispute that the petitioners have been supplying their respective products to the 4th respondent for quite sometime and now by virtue of the controversial condition imposed in the said g. O. , and in the tender notification, the petitioners are being deprived of the opportunity of participating in the tenders. It is also to be noted that the petitioners are the undertakings of Government of india. Though the genuineness of the products as regards GMP standards, prima facie, need not be doubted, still it has become imperative for them to possess the WHOGMP certificates by virture of the policy decision of the 1st respondent and the consequential notification issued by the 4th respondent. ( 16 ) BUT, in the present peculiar facts and circumstances, particularly in the light of the amendment to the Schedule-M of the rules, which is going to be given effect from 1-4-2004 and only one standard will be recognised, in my considered view, there is no total justification for the 4th respondent to oust the petitioners from participating in the tenders. ( 17 ) AT the cost of repetition, it is to be noted that the petitioners being the undertakings of Government of India would normally be expected to maintain the required standards and only because of the present change in the policy decision of the Central government, they are being debarred from participating in the tenders. It is imperative for the 4th respondent to encourage the government Undertakings also, which are in the race. There is no basic doubt as regards the quality that is maintained by the petitioners. Nevertheless, the policy of the central Government and the 4th respondent, at the same time, cannot also be held to be arbitrary having regard to the facts set out in the counter-affidavit. The public interest had been given primacy basing on various reports of different committees. But, inasmuch as the petitioners who are government Undertakings cannot be thrown out so easily because the standards of their products have never been doubted. ( 18 ) IN a short span of giving three months, particularly when the applications of the petitioners were not considered by the 3rd respondent, in my considered view, it is expedient to permit the petitioners in WP nos. 7933 and 9116 of 2003 to participate in the tenders pursuant to the notification, dated 22-4-2003. ( 19 ) FOR the aforementioned reasons, wp Nos. 7933 of 2003 and 9116 of 2003 are disposed of with the following directions:" (1) The petitioners in WP Nos. 7933 of 2003 and 9116 of 2003 shall be permitted to participate in the tenders. (2) The petitioners in WP Nos. 7933 of 2003 and 9116 of 2003 must fulfil all the formalities required under the notification, dated 22-4-2003. (3) In the event of the petitioners in WP nos. 7933 of 2003 and 9116 of 2003 being found as successful tenderers, the contract may be awarded to them on their obtaining WHOGMP certificates, within two months. (4) The 3rd respondent shall process and consider the cases of the petitioners in WP Nos. 7933 of 2003 and 9116 of 2003 for the issuance of WHOGMP certificates, subject to fulfilment of the required standards, within a period of two months from the date of submission of applications and presentation of the copy of this order, notwithstanding the fact that the products are not meant for export. 7933 of 2003 and 9116 of 2003 for the issuance of WHOGMP certificates, subject to fulfilment of the required standards, within a period of two months from the date of submission of applications and presentation of the copy of this order, notwithstanding the fact that the products are not meant for export. (5) In case of failure on the part of the petitioners in obtaining the WHOGMP certificates, within the period prescribed, it is open for the 4th respondent to proceed with the tender and award the same to the lowest tenderer who has WHOGMP certificate. " ( 20 ) WP No. 8790 of 2003 is dismissed as not maintainable. ( 21 ) HOWEVER, there shall be no order as to costs.