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2005 DIGILAW 806 (PAT)

Ganapati Drugs v. Pes Installation Pvt. Ltd.

2005-09-08

M.L.VISA, NAGENDRA RAI

body2005
Judgment Nagendra Rai, J. 1. These eight appeals have been filed against the common judgment and order dated 26.5.2005 passed by the learned Single Judge whereby four writ applications, bearing C.W.J.C. Nos. 4930, 4915, 5294 and 5308 of 2005 filed by the same petitioner M/s Pes Installations Pvt. Limited who is respondent no. 1 in all the appeals challenging the tender notice/ bill of quantity issued under the signature of Superintendent of four Medical Colleges, namely, Nalanda Medical College and Hospital, Patna (hereinafter referred to as Medical College, Patna), Jawaharlal Nehru Medical College and Hospital, Bhagalpur (hereinafter referred to as Medical College, Bhagalpur), Anugrah Narain Medical College and Hospital, Gaya (hereinafter referred to as Medical College, Gaya) and Sri Krishna Medical College and Hospital, Muzaffarpur (hereinafter referred to as Medical College, Muzaffarpur) for the purpose of installation of Pipe Gas Supply System have been allowed and accordingly, tender notice/bill of quantity and the contract made in favour of the appellants in four appeals, namely, BOC India Limited and M/s Ganpati Drugs have been cancelled and a direction has been issued to publish a fresh tender notice without putting any discriminatory or restrictive clause as was done in the earlier tender notice/bill of quantity. With regard to three medical colleges, namely, Medical College, Gaya, Medical College, Bhagalpur and Medical College, Patna tender of the appellant BOC India Limited was accepted and in case of Medical College, Muzaffarpur, tender of M/s Ganapati Drugs, the Consignment Agent of M/s Uttam Air Products Private Limited, Muzaffarpur was accepted which, as stated above, has been cancelled by the learned Single Judge. 2. All is not well with the education system in this State, whether it is medical education, engineering education or general education and as such the Medical Council of India, an expert body to monitor the Medical Colleges, with a view to see whether the norms laid down for running the medical Colleges are fulfilled or not inspected the Medical Colleges of the State of Bihar including the four Medical Colleges of Patna, Gaya, Bhagalpur and Muzaffarpur and submitted its inspection report dated 19th and 20th December, 2003. The expert body raised certain objections and deficiency in different departments of the aforesaid Medical Colleges and accordingly notices were issued to them to show cause as to why steps should not be taken to derecognise the Colleges for the award of MBBS degree as per provisions of Section 19 of the Indian Medical Council Act, 1956, hereinafter referred to as the Act. The Medical Council of India gave one months time to remove the deficiency otherwise to face the consequences. 3. Deficiency were also found in the department of Anaesthesia in the aforesaid four Medical Colleges. The Government woke up from slumber and took steps for preventing derecognition of the aforesaid Medical Colleges and sanctioned sufficient amount to the Anaesthesia Department of each Medical Colleges for installation of gas pipeline system. 4. The Superintendent of the four Medical Colleges were authorised to issue short tender notice inviting tenders. Accordingly, short tender notice was published in Hindi daily Hindustan on 4.11.2004. However, by another publication date of submitting tenders was extended till 6.12.2004. At this stage, it is necessary to mention that in the tender papers it was clearly stated that the tenderers have to be registered under the provisions of the Bihar Finance Act apart from other conditions. It was also stated that the details about the requirements of machines/instruments or any other necessary papers may be obtained from the office of the Superintendent before submitting the tender papers. In the bill of quantity it was stated that in the Anaesthesia Department Gas Pipeline Medical System should have high tension standard materials for flow of oxygen, N20, compressed air and vacuum unit for suction with all accessories (ISO and ISI) (Tank system and manifold system as per need of requirement suitable for institution). It was also clearly mentioned that preference would be given to those firms who have their manufacturing unit for gases/liquids complying with latest India Pharmacopeas standards. It was also clearly mentioned that the firm should conduct a survey of sites in the Hospital premises to access the requirements and accordingly quote the cost of 100 outlets approximately with their running and completing accessories. It was also mentioned that the firm who wouid ensure the uninterrupted supply of gases/ liquid to the institution would be preferred. Other details have also been given with regard to the requirements. 5. It was also mentioned that the firm who wouid ensure the uninterrupted supply of gases/ liquid to the institution would be preferred. Other details have also been given with regard to the requirements. 5. BOC India Limited and M/s Ganpati Drugs alongwith other tenderers submitted their tenders without complaining any doubt about the shortage of specification or vagueness in the tender notice or bill of quantity. The writ petitioner-respondent no. 1 though claims to have obtained the tender papers but it neither applied in terms of the tender notice/bill of quantity nor made any written complaint to any authority about the vagueness or lack of specification or other grievances with regard to imposition of condition of registration under the Bihar Finance Act in the tender notice nor it made any complaint about the addition of further conditions in the bill of quantity. 6. Admitted fact is that the tenders were invited on 30.10.2004 and by subsequent publication the last date for submission of tenders was extended upto 6.12.2004. On 10.12.2004 the tenders were opened and works had been allotted in favour of the appellant BOC India Limited t with regard to three Medical Colleges, namely, Medical College, Patna, Medical College, Gaya and Medical College, Bhagalpur and appellant M/s Ganpati Drugs with regard to Medical College, Muzaffarpur in the month of January/February, 2005. Agreements have also been signed and all processes have been completed in the month of January/February, 2005 itself. The writ applications have admittedly been filed on 19.4.2005. The writ petitioner-respondent did not raise any objection anywhere with regard to the same and came to this Court after everything was over. The case of the respondents-appellants in four appeals as well as the State of Bihar is that in pursuance of the tender, work has been allotted and the awardees of the contract have purchased the materials, machines and invested huge money and thereafter the writ applications have been filed at the instance of those tenderers who were unsuccessful. 7. The writ petitioner-respondent no. 7. The writ petitioner-respondent no. 1 has challenged the issuance of tender notice/bill of quantity and subsequent allotment of work in favour of the awardees on three grounds; firstly, that the condition for registration under the Bihar Finance Act as a condition precedent for submitting tender is arbitrary; secondly, in the bill of quantity additional condition that preference will be given to those tenderers who have also manufacturing unit of gas is also discriminatory and arbitrary as manufacture and supply of gas has nothing to do with the installation of machines and plants for gas pipe line system in the Medical Colleges and thirdly, in the absence of clear specification in the tender notice and bill of quantity the entire matter was in the realm of vagueness and thus arbitrary and discriminatory. 8. Learned Singie Judge accepted all the three points and held that on these three grounds issuance of tender notice/bill of quantity and acceptance of tender and subsequent allotment of work are vitiated in law. 9. At this stage, it will be proper to state about the case of the appellants State and the awardees of the contract. Their case is simple. The case of the State and its officers is that on the threat of derecognition they had to comply with the requirements in hurried manner and as such a short tender notice was issued inviting tenders indicating the nature of the work and it was clearly mentioned in the tender notice that before submitting the tender papers the tenderers would visit the office of the Superintendent of the Medical Colleges to know the details about the installation for the simple reason that each Medical College has different need and different requirements and as such after verification the tender papers had to be submitted. The bill of quantity clearly mentioned the nature of work and other details and since the supply of gas is necessary in a Medical College for the patients a condition was put for giving preference to those tenderers who have manufacturing unit of gas so that there should be uninterrupted supply of gas. It is neither arbitrary nor discriminatory one, but on the other hand, that was done on administrative ground with a view to make supply of gas uninterrupted to the Medical Colleges to meet the need of the needy patients. It is neither arbitrary nor discriminatory one, but on the other hand, that was done on administrative ground with a view to make supply of gas uninterrupted to the Medical Colleges to meet the need of the needy patients. As the installation and supply has to be made in the State of Bihar, the requirements of registration under section 3 of the Bihar Finance Act is mandatory and as such putting such a clause is neither arbitrary nor discriminatory. Many of the tenderers who were outsiders and who had registration under the provisions of Bihar Finance Act also applied. Such clear requirements have been given in the bill of quantity and directions were issued for inspection in the Medical Colleges to find out the need with regard to installation in the Anaesthesia Department with a clear indication that the tenderers had to be made aware about the requirements and thereafter to submit tender papers and as such there is no doubt or vagueness about the specification. 10. In view of the urgency, the matter was expedited and tenders were opened and works have been allotted to two companies, as stated above, having very good record in the field. Nothing has been alieged on behalf of the writ petitioner respondent to show either malafide or favouritism or nepotism in the matter of settlement. This apart, the conduct of the writ petitioner respondent in not submitting the tender, sleeping over the matter and coming to this Court after everything was over is a clear indicative of the fact that it has not come to this Court on its own but has been set up by somebody else i.e. the unsuccessful tenderers to come to this Court. 11. Two awardees of the contract, namely, BOC India Limited and M/s Ganpati Drugs apart from stating the aforesaid stand, have said that there was no confusion about the specification and everything was clearly mentioned in the document and need of every Medical College was open to inspection and thereafter tenders were to be submitted and they had inspected the same and submitted their tender papers. The case of BOC India Limited is that the company has reputation of installing Medical Gas Pipe Line System in 2500 hospitals in India out of 3500 hospitals having this kind of facility. Same is the case with the other company, namely, M/s Ganpati Drugs. The case of BOC India Limited is that the company has reputation of installing Medical Gas Pipe Line System in 2500 hospitals in India out of 3500 hospitals having this kind of facility. Same is the case with the other company, namely, M/s Ganpati Drugs. There was no vagueness in the statement. It was clearly stated that the Gas Pipe Line System was required for 100 outlets approximately. The terms of the tender required intending tenderers to conduct survey in the hospital to access the requirements of the hospitals. After acceptance of the tender, contract has been executed. They have spent huge money and at this stage if the contract is cancelled by the order of this Court, not only they will be at loss but the Government will also be sufferer not only in terms of delay but in terms of money etc. 12. Learned counsel appearing on behalf of the appellants i.e. the awardees of the contract and the State of Bihar submitted that the view taken by the learned Single Judge in coming to the conclusion of discriminatory and arbitrary clause in the tender notice and bill of quantity is not consistent with the well settled law dealing with the matter with regard to grant of contract by the State or its instrumentalities. They submitted that the Government in the case of commercial transaction is free to choose any person keeping in view the requirements in the particular matter and at the same time it has to act fairly and in reasonable manner. At the same time, the Government has absolute discretion in the matter of selection and only because the Court finds that a different view can be taken in the matter will be no ground to upset the acceptance of contract for the simple reason that the Court cannot sit as arbitrator or appellate authority over the decision of the Government or its officers. The view taken by the learned Single Judge shows that she was sitting in appeal over the decision of the authority. The requirement of registration under the Bihar Finance Act is with a view to smooth installation of the Gas Pipe Line System and uninterrupted supply of gas. Gas Pipe Line System has to be installed in the State of Bihar and as such the registration under the Bihar Finance Act is necessary. The requirement of registration under the Bihar Finance Act is with a view to smooth installation of the Gas Pipe Line System and uninterrupted supply of gas. Gas Pipe Line System has to be installed in the State of Bihar and as such the registration under the Bihar Finance Act is necessary. Similarly, nothing was said in the bill of quantity which was contrary to the tender notice. Tender notice only mentions the nature of work and the details have to be had from the office of the Superintendent of the Medical Colleges on inspection. Putting a condition that preference will be given to the tenderers having manufacturing unit of gas cannot be said to be arbitrary and discriminatory condition. The grievance with regard to specification is also unfounded in view of the opportunity having been given to verify the requirements of each and every Medical Colleges before submitting the tenders. 13. Lastly, it was submitted that the writ petitioner-respondent by its own conduct has disentitled itself from getting any relief by this Court in exercise of power under section 226 of the Constitution of India for the simple reason that it did not submit tender papers. It was having a very deep sleep and it woke up after everything was over and filed writ petitioner in the High Court. 14. Learned counsel appearing on behalf of the writ petitioner-respondent reiterated the three very grounds on which the learned Single Judge has interfered in the matter. According to him, the specification in the bill of quantity and tender notice are vague and not specific and as such the tenderers were in the state of confusion to submit their tenders with regard to the requirements of work. Putting a condition for registration under Bihar Finance Act as well as giving preference to the Gas Manufacturing Unit are other arbitrary clauses which deprived the writ petitioner-respondent to participate in the tender. 15. Before proceeding to discuss the submissions advanced at the bar, it would be apt to state in the beginning the law governing the contract in nutshell. The settled law with regard to the scope of judicial review in a case of contract awarded by a public authority can be resorted to only to prevent arbitrariness or favouritism. However, right to choose between two claimants cannot be said to be arbitrary power. The settled law with regard to the scope of judicial review in a case of contract awarded by a public authority can be resorted to only to prevent arbitrariness or favouritism. However, right to choose between two claimants cannot be said to be arbitrary power. If the Government or its instrumentalities have acted fairly even if it has faulted in its wisdom, the Court cannot act as an appellate body and upset the decision. Only requirement is to see if the terms and conditions of the tender notice or the rules if any are substantially complied with and the action is fair and not the result of taint or unreasonableness. In other words, if the action of the State Government is fair and in substantial compliance of the rules and regulations then the decision taken by it cannot be nullified unless the court comes to the conclusion that it has not met the requirements of Wednesbury Principle of reasonableness or the same is arbitrary, discriminatory and malafide or actuated by bias. The Government must have a free hand in the matter of inviting tenders and must have reasonable play in its joints. The Court cannot interfere with the terms of the tender prescribed by the Government only on the ground that some other terms should have been better or reasonable. However, if the Court finds that the policy is arbitrary, discriminatory, malafide or the tenders have been issued with a view to show favouritism or is full of arbitrariness, it can interfere in the matter. 16. instead of citing numerous decision of the Apex Court. I think it proper to refer to the recent decision of the Apex Court in the case of Directorate of Education vs. Educomp Datamatics Ltd. reported in (2004)4 Supreme Court Cases 19, wherein, relying upon the decisions of the Apex Court in the case of Tata Cellular vs. Union of India, (1994)6 Supreme Court Cases 651. Air India Ltd. vs. Cochin International Airport Ltd., (2002)2 Supreme Court Cases 617 and Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation, (2000)5 Supreme Court Cases 287, in para-12 of the judgment the Apex Court has held as follows: "12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny, the same being in the realm of contract. That the Government must have a free hand in setting the terms of the tender, it must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide." 17. Coming to the facts of the case, the Court cannot lost sight of the fact that the action was taken by the Superintendent of the Medical Colleges to meet the deadline fixed by the Medical Council of India on the threat of derecognition. Tenders were published in the newspaper. Tenderers submitted their tender papers. While the process of acceptance of tender was going on, no tenderer complained of any vagueness or doubt about the specification in view of the enough opportunity having been provided for inspection of the hospitals and other specifications having been provided in the bill of quantity. Only because some other hospitals while inviting tenders had given some more details cannot be a ground to come to the conclusion of discrimination. Question of discrimination and arbitrariness has to be judged with reference to the facts situation. The writ petitioner-respondent at no point of time raised any objection on the ground that because of confused state of affairs with regard to specifications it has been prevented from submitting the tenders. Thus, there is no material to come to the conclusion that the specifications were vague or arbitrary. 18. Uninterrupted gas supply has to be made in the hospital to save the patients in emergent cases and if the Government took a decision to give preference to the manufacturer of the gas, by no stretch of imagination such decision which administratively is beneficial can be termed as arbitrary or discriminatory. 18. Uninterrupted gas supply has to be made in the hospital to save the patients in emergent cases and if the Government took a decision to give preference to the manufacturer of the gas, by no stretch of imagination such decision which administratively is beneficial can be termed as arbitrary or discriminatory. In the realm of contract the Government has to choose the best and if any person is ready to give uninterrupted supply of gas to help the poor patients in the hospital, the same cannot be said to be the preferential treatment to some tenderers with a view to deprive other tenderers. In the days of competition everybody needs better service, so, if the Government wants better service, can it be said to be arbitrary or discriminatory? In my considered view, inclusion of the said condition is a wise decision taken by the respondent State and its officers for the betterment of the medical services in the State Medical Colleges. Thus, on the said ground also the said clause cannot be said to be arbitrary, discriminatory or impermissible in the realm of contract. Admittedly, supply of instruments and gas have to be made in the State of Bihar. In that view of the matter, requiring registration under the Bihar Finance Act also cannot be termed as unreasonable or improbable condition. All the tenderers who had applied had fulfilled the conditions and thereafter the tenders were considered. So, the said clause also is necessary for the smooth installation and uninterrupted supply of gas in the Medical Colleges. Thus, all the three grounds given by the writ petitioner-respondent, in my view, are not tenable in view of the settled law dealing with the matter in the realm of award of contract through tenders. 19. The most crucial ground to defeat the writ petitioner-respondent is that the tenders were opened on 10.12.2004, the processes have completed in the month of January and February, 2005 and the awardees of contract have spent huge money to purchase instruments etc. for the purpose of installation of gas pipe line system and thereafter the writ petitions were filed in the month of April, 2005. In my view, the Courts are meant for those who are vigilant and not for those who are sleepy and indolent. for the purpose of installation of gas pipe line system and thereafter the writ petitions were filed in the month of April, 2005. In my view, the Courts are meant for those who are vigilant and not for those who are sleepy and indolent. If the writ petitioner respondent found any deficiency in the tender notice or bill of quantity, it should have sent written objection to the authority under registered cover and in case of no reply it should have come to this Court at the time when the process was going on, but admittedly, the writ petitioner-respondent has not done so. It awaken only when every process was over. This shows that the writ petitioner-respondent has not taken its own initiative to come to this Court but has filed writ petitions at the instance of those who were unsuccessful tenderers. At this stage when the rights and liabilities have been created and the respondents appellants have changed their position by making huge expenditure, if this Court interferes in such matter, this will not only delay the execution of the scheme which has been undertaken to prevent derecognition of Medical Colleges but it will also put the respondents appellants to a great loss. 20. Thus, on the ground of delay in approaching this Court and the other grounds as indicated above, the writ petitioner-respondent has failed to make out any case for interference by this Court. Accordingly, the impugned order passed by the learned Single Judge is set aside and the writ petitions filed by the writ petitioner respondent no. 1 i.e. M/s PES Installations Pvt. Ltd. are dismissed with cost of Rs. 10,000/- which is to be deposited in the High Court Legal Services Committee within a period of two months. 21. In the result, all the appeals are allowed. M.L.Visa, J. 22 I agree.