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Allahabad High Court · body

2017 DIGILAW 1147 (ALL)

WIPRO GE HEALTHCARE PVT LTD. v. STATE OF U. P.

2017-05-01

A.P.SAHI, SANJAY HARKAULI

body2017
JUDGMENT By the Court.—These two writ petitions relate to the same subject-matter of the acceptance of bids by the respondent Medical Department of Government of U.P. offered by the respondent No. 4 M/s. Blue Star Engineering and Electronics Limited for the purpose of 23 CT scanners (16 slice) through a short term tender notice dated 26.4.2016. The last dates of receipt of the bids was 16.5.2016 on which date the technical bids were to be opened. The invitation for the offer has been filed as Annexure-1 to both the writ petitions. 2. The challenge raised is on the ground that the model offered by the respondent No. 4 is deficient on several counts with regard to the technical specifications as specified and therefore the acceptance of technical bid is absolutely contrary to the terms and conditions specified in the bid offer hence the same deserves to be quashed. Dr. L.P. Misra alongwith Sri Vikas Singh learned counsel for the petitioners in both the writ petitions has taken the Court through various documents filed alongwith the record of the affidavit in response to urge that the technical bid was accepted overlooking the specified specifications of the concerned model and without there being any certification of the model offered by the respondent NO. 4 under the (United States Food and Drug Association) conditions as specified in the tender notice. After the arguments were heard further affidavits were required, as is evident from the order dated 6.3.2017, and 8.3.2017 that were filed on 20.3.2017 and the matter was heard again on 29.3.2017 whereafter the arguments could not conclude and on 29.3.2017 the following order was passed : “Heard Dr. L.P. Misra learned counsel for the petitioner, Sri Jaspreet Singh for the respondent No. 4 and Sri H.P. Srivastava learned Additional Chief Standing Counsel for the State. After the arguments of the petitioner and the respondent No. 4 had concluded the Court proposes to verify the status of the chart that was appended as Annexure 1 to the counter-affidavit to the Writ Petition No. 28140 (MB) of 2016 in order to verify the contents of the said chart from the original proceedings of the Technical Bid Committee. Learned Additional Chief Standing Counsel prays that the original record pertaining to the said chart shall be put up tomorrow. Put up tomorrow i.e. on 30.3.2017” 3. Learned Additional Chief Standing Counsel prays that the original record pertaining to the said chart shall be put up tomorrow. Put up tomorrow i.e. on 30.3.2017” 3. The arguments were heard on 20.4.2017 and the judgment was reserved after exchange of affidavits as requested for by the learned counsel for the parties. At the conclusion of the arguments, Dr. L.P. Misra for the petitioners formulated the arguments as follows : I. Clause 18 of Section V-Technical Specification (page 59 of WP) provides that quoted model should be USFDA certified and Clause 12 of Section V-Technical Specification (page 59 of WP) provides for image storage capacity of at least 500 GB while the OP No. 4 (the tenderer) as against at least 500 GB storage capacity, has only 310 GB as certified by USFDA (Page 167 of WP). Addition of 1 TB memory externally is not certified by USFDA. Para-7 read with para 2-Supplementary affidavit Dt. 8.3.2017 and 24 of WP :- (i) para 14 of counter-affidavit of State of Government in W.P. No. 28140 (M/B)/ 2016 and its Annexure CA-1. II. Clause 16 of Section V-Technical Specification (page 59 of WP) provides that software mentioned in Cl.16 (a) to (m) should be an original product of principal firm. As against this the software (c), (h), (j), (k), (l) and (m) are third party software. Para-7 and 25 of writ petition :- (i) para 14 of counter affidavit of State Government in W.P. No. 28140 (M/B)/ 2016- no reply by State. (ii) para 18 of counter-affidavit of opp. party No. 4- no specific reply. III. Clause 6 of Section V- Technical Specification (page 58 of WP) provides for ‘High Contrast Resolution’ that it should be minimum 15 lp/cm. As against 15 lp/cm, for the OP No 4, USFDA certified same 14.7 lp/cm at 10% MTF and 12.2 lp/cm at 50% MTF but the USFDA has not certified the model at 0%. MTF but the model at 0% MTF has 17 lp/cm. Para-7 and 26 of writ petition :- i) para 14 of counter affidavit of State Government in W.P. No. 28140 (M/B)/ 2016- admitted by State. ii) para 19 of counter-affidavit of opp. party No. 4. IV. MTF but the model at 0% MTF has 17 lp/cm. Para-7 and 26 of writ petition :- i) para 14 of counter affidavit of State Government in W.P. No. 28140 (M/B)/ 2016- admitted by State. ii) para 19 of counter-affidavit of opp. party No. 4. IV. Clause 15.2 (ii) of instructions to bidders (Page 36 of WP) is applicable upon authorized agent for supplying manufacturing and testing similar machines upto at least 25% of the quantity (minimum 15% in India) in any one of the last three years and should be in satisfactory operation as on date of bid opening. (Since the OP No 4 is the authorized agent of Hitachi, therefore this clause is applicable) Since 23 number 16 Slice CT Scan machines are to be supplied, therefore in terms of this clause, the 25% of 23 machine would be 5.75 (rounder figure 6) and 15% of 23 machines would be 3.45 (round figure 3) but the OP No 4 has not supplied minimum 3 machines in India or 6 overall in terms of this clause in any one of the last 3 years. Cl. 15 of instructions to bidders (Page 36 of WP) provides for documents establishing bidder’s qualification i.e. Cl. 15.2 is applicable upon manufacture for supplying manufacturing and testing similar machines upto at least 60% of the quantity (minimum 25% in India), required in any one of the last three years and should be in satisfactory operation as on date of bid opening. Para-8 and 27 of writ petition :- (i) para 15 of counter affidavit of State Government in W.P. No. 28140 (M/B)/ 2016 read with Annexure CA-2. (ii) para 21.4 of counter-affidavit of opp. party No. 4- Neither the State Government nor the opposite party No. 4 denied as agent that opposite party No. 4 had not supplied over all 6 and minimum 3 in number in India similar i.e. the machines as per the specification. (ii) para 21.4 of counter-affidavit of opp. party No. 4- Neither the State Government nor the opposite party No. 4 denied as agent that opposite party No. 4 had not supplied over all 6 and minimum 3 in number in India similar i.e. the machines as per the specification. V Fraud committed by the O.P. No. 4 on the Technical Bid Committee as also misleading of this Hon’ble Court A. In regard to non satisfaction of Cl.15 :- -para 21.6 and Pages 36 to 41 of CA of the O.P. No. 4 (2) (ii) of Instruction To Bidders Suppl.RA Dated 20.3.17 :- - para 3 (iii) (h) of 3- Machines mentioned on page 40 of CA of O.P. No. 4 not at all supplied/ installed/commissioned before offering or opening of Technical Bid B. In regard to non satisfaction of Cl.4 (d) of Sec. V- Technical : - -As against requirement of 5MHU tube the machines except one Specification claimed to have been supplied by O.P. No. 4 and also that by manufacturer of only 2MHU The acceptance of the Technical Bid of the Opposite party No. 4 is, thus, wholly illegal and arbitrary on one hand and is to recoil on the public health very adversely on the other hand, which is not permissible at all at the hands of a Welfare State. 4. The main thrust of the argument of Dr. L.P. Misra is that the acceptance of the bid of respondent No. 4 by modifying the terms of the technical bid amounts to violation of tender conditions. He submits that the model offered by the respondent No. 4 did not have the certification of USFDA standards for at least 500 GB image storage capacity. The certification that was uploaded alongwith the bid document of respondent No. 4 was only of 310GB. His second argument is with regard to the software that it should be of the original firm whereas the respondent No. 4 is only an agent. Thirdly one of the technical specifications of High Contract Resolution was not in conformity with the specifications as indicated above and fourthly, the experience with regard to the supply of such machines in relation to and applicable for authorized agents was not fulfilled and incorrect information has been tendered. Thirdly one of the technical specifications of High Contract Resolution was not in conformity with the specifications as indicated above and fourthly, the experience with regard to the supply of such machines in relation to and applicable for authorized agents was not fulfilled and incorrect information has been tendered. For this reliance has been placed on certain paragraphs of the counter-affidavit and the supplementary rejoinder-affidavit as indicated in the arguments noted hereinabove. 5. Sri H.P. Srivastava, learned Additional Chief Standing Counsel has urged that the model required to be supplied is clearly specified that of a CT scanner (16 slice technology) of latest technology and currently under production as per Clause 1 of the technical specifications under Section V of the schedule of requirement. He has further submitted that the certification is of the model supplied by the Hitachi Company through the respondent No. 4. The model offered is of the latest capacity of 1TB and specifications which is being supplied throughout the world as is evident from the specifications that were placed before the Technical Bid Committee and in such circumstances any plea raised about the deficiency in technical specification is incorrect. He further submits that the component of image storage capacity is very much there and the certification is of that model of the machine offered by the respondent No. 4 is possessed of a higher storage image capacity. It is nobody’s case that the image storage capacity of the model offered by the respondent No. 4 is less than 500 GB. It is only the certification part which is being disputed. Sri Srivastava submits that it is the certification of the model that is necessary and the image storage capacity being a technical accessory component remains undisputed. The offer cannot be rejected merely on the ground that the certificate of the model is only of 310 GB capacity. The same certification applies to the model with a higher image storage capacity. He submits that there is no material on record produced by the petitioner to support that the model offered by the respondent No. 4 is technically deficient and is not possessed of the minimum storage capacity or is of a variant technical quality so as to disqualify the technical bid. He submits that there is no material on record produced by the petitioner to support that the model offered by the respondent No. 4 is technically deficient and is not possessed of the minimum storage capacity or is of a variant technical quality so as to disqualify the technical bid. He submits that the State Government reserves within its power to accept the said model when it fulfils the entire specifications as required and the same has been accepted on the basis of report of the Technical Bid Committee comprised of experts in the matter. Consequently, any such deficiency as pointed out, is incorrect. 6. The other arguments have also been refuted by pointing out relevant paragraphs and contending that the product is of the original firm of Hitachi of which the respondent No. 4 is the agent/distributor and the software is the original product of the principal firm. He further submits that High Contract Resolution as is specified, fulfils the technical requirement and the certification being of an earlier period, the said certificate does not in any way reflect that the model offered by the respondent No. 4 is lesser in quality or deficient as desired under the bid conditions. He has invited attention of the Court to the affidavit filed on behalf of the State as also the records that were placed before the Court and which facts have also been stated in the counter-affidavit filed on behalf of the respondent No. 4. 7. Sri Jaideep Narain Mathur, learned Senior Counsel for the respondent No. 4 and Sri Jaspreet Singh have advanced their submissions and have pointed out that this Court would only examine as to the legality of the decision making process and any error of law and violation of principles of natural justice and even otherwise a decision about the reasonableness of which can be tested within the specified parameters of the judgments of the Apex Court. They have cited the judgments in the case of Jagdish Mandal v. State of Orissa, 2007 (14) SCC 517; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation, 2016 SCC Online SC 940; and the judgment in the case of M/s. Uttam Sucrotech International Pvt. Ltd. (Writ Petition No. 29835 (M/B) of 2016). The technical specifications having been accepted by the experts is not liable for judicial scrutiny. 8. The technical specifications having been accepted by the experts is not liable for judicial scrutiny. 8. They submit that the petitioner having fully participated and having not raised any objections during the pre-consultation bid meets, cannot be permitted to raise technical objections after the technical bids have been opened when the petitioner himself relies on similar certification of USFDA. They submit that the model offered by the petitioner also did qualify for technical bid but at the same time, the petitioner was also relying on certain USFDA certified software at par with that of the answering respondent. The petitioner therefore cannot now turn around and raise an argument on the basis of the issue of certification of USFDA. They also contend that the supply made by the answering respondent as an agent/distributor is absolutely in accordance with the bid conditions and there is no deficiency with regard to the information tendered by the answering respondent. The petitioners have furnished information which is incorrect on record and therefore the plea raised by the petitioners deserves rejection. 9. Sri Jaspreet Singh has invited the attention of the Court to paragraph 17 of the counter-affidavit dated 15.2.2017 filed in Writ Petition No. 2272 (M/B) of 2017 and its sub-paragraphs to urge that the US Food and Drug Administration Guidelines itself provide that while taking a decision in relation to a specification of a product any such change or addition in capacity of a device as in the present case the image storage capacity, does not require any further approval as the model offered by the answering respondent has the capacity to operate a higher image storage capacity that has been offered by the answering respondent which is of 1TB (1000 GB). For this, he relies on the guidelines dated 10.1.1997 which specifies that a change or modification in the device that could significantly affect the safety or effectiveness of the device may require approval but not otherwise. The aforesaid condition of image storage capacity and the other technical conditions in respect of the participating bidders namely, the petitioners themselves were found compliant of the aforesaid guidelines. The equipments offered by the respondent No. 4 were physically evaluated and it was confirmed by the Technical Bid Committee that the model offered by the answering respondent did have the technical specifications as mentioned in the bid documents. 10. The equipments offered by the respondent No. 4 were physically evaluated and it was confirmed by the Technical Bid Committee that the model offered by the answering respondent did have the technical specifications as mentioned in the bid documents. 10. It has further been stated that the technical bids are supported by relevant documents that have been filed alongwith the counter-affidavit as Annexure CA-2. In respect of the software being the original product of the firm it has been indicated that M/s. Hitachi Limited has registered trade marks and patent in so far as the software offered by it is concerned and also such software that are the original licensed version of the principal firm. 11. The third argument in relation to High Contrast Resolution also according to the respondent No. 4 is not correct inasmuch as the petitioner has culled out an incomplete data and the tender conditions only specify the measurement of the image resolution without any linkage to MTF. To the contrary, the image resolution ratio of the machines offered by the respondent No. 4 had 0% MTF that is higher than the criteria as prescribed. In respect of the last argument, it has been urged by inviting the attention of the Court to para 17 of the counter-affidavit that a performance statement about the supply in various hospitals and diagnostic centres alongwith necessary details is on record. The answering respondent No. 4 being an agent/distributor has the obligation of supplying 25% of the machines globally and 15% of such machines should be in India. According to the respondent No. 4, the statement which has been filed alongwith the counter-affidavit would establish that in the financial year 2015-2016, the answering respondent had supplied 8 machines in India and 9 machines were installed in various countries other than India in the same financial year. 12. In rejoinder, Dr. L.P. Misra has invited the attention of the reply filed by the respondent No. 4 to the supplementary-affidavit filed by the petitioner to urge that it is now established that the US Food And Drug Association certification for minimum 500 GB is absent to which the reply of the learned counsel for the respondent is that the component of image storage and its different specifications do not constitute new intended use. There are no physical changes in the characteristics the designs criteria of these elements and performance of these systems do not substantially affect the safety and effectivity of the model as stated by the US FDA authorities themselves. Thus, the said guidelines as already indicated above are a complete answer to the argument of the learned counsel for the petitioner. The main thrust of the argument of the learned counsel for the petitioner appears to be about the absence about the certification by the USFDA relating to the extra 1TB as against the model that has been referred to in the comparative chart that was furnished by the learned standing counsel on the strength of the instructions received from the officials attending to the case in question. This chart is Annexure-CA-1 to the counter-affidavit already filed in Writ Petition No. 28140 (M/B) of 2016. It is taking a clue therefrom that it has been urged that the said comparative chart indicates that the respondent No. 4 has additionally offered a hard disc drive capacity of 1000 GB which is not the component of the model duly certified by the USFDA. 13. In this regard, the Technical Committee appears to have taken into consideration that this offer of the capacity of 1000 GB is not an additional component but according to the model specification itself, the document whereof is on record, specifies that the said model contains a 1000 GB-1TB capacity. The respondents have remarked that the selection is commonly available with such outputs, and it meets the device specification requirement, which point was considered and was equally applied in respect of all the bidders who were found to be technically successful in the technical bid including the petitioners. The petitioners having failed in the financial bid have now turned around and tried to question the correctness of these technical specifications after the bids were found to be technically correct. 14. We therefore find that the petitioner and the respondent No. 4 were evenly placed in the matter of technical bids and no objection had been taken in this regard prior to the opening of the financial bids. 14. We therefore find that the petitioner and the respondent No. 4 were evenly placed in the matter of technical bids and no objection had been taken in this regard prior to the opening of the financial bids. The model specified by the respondent No. 4 and the complete data in respect of the said model with its specifications is Annexure CA-1 and CA No. 1-A to the counter-affidavit of the respondent No. 4 in Writ Petition No. 2272 (M/B) of 2017. The specifications mentioned therein therefore could not be successfully countered by the petitioner to be non-compliant or having been unreasonably accepted by the respondents for accepting the bid of the respondent No. 4. The reply given by the respondent No. 4 and as indicated above in para-17 to 21 of the counter-affidavit therefore clearly establishes that with these technical specifications the model offered by the respondent No. 4 was substantially compliant with tender condition without any breach that would allow us to sit as an expert and invalidate the offers made. 15. Dr. L.P. Misra learned counsel for the petitioner submitted that had these specifications been indicated to be negotiable, the petitioner would have also made such additional offer. This argument cannot be accepted inasmuch as it was open to the petitioner to have specified his offer at the pre-bid consultation stage itself and it was open to the petitioner to have brought about any such objections or any offer to be made by the petitioner to match with that of the respondent No. 4. The petitioner failed to do so and was in spite of this found to be successful in the technical bid. It is therefore evident that this turn around at the stage of financial bid in respect of objections relating to the technical bid has been culled out with a view to affect the supply of the items that are urgently required for furnishing these equipments in the hospitals. 16. We therefore in view of the guidelines laid by the Apex Court cited at the bar are unable to sit as an expert to find out any technical flaw relating to the subject-matter of the tender bids that has been finalized by an Expert Committee reporting substantial compliance of the technical specifications. 16. We therefore in view of the guidelines laid by the Apex Court cited at the bar are unable to sit as an expert to find out any technical flaw relating to the subject-matter of the tender bids that has been finalized by an Expert Committee reporting substantial compliance of the technical specifications. In view of the aforesaid background the petitions do not warrant any interference by this Court and both the petitions are hereby dismissed.