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2017 DIGILAW 628 (GAU)

ORION HEALTH FOODS PRIVATE LTD. v. STATE OF MIZORAM

2017-05-22

MICHAEL ZOTHANKHUMA

body2017
JUDGMENT Michael Zothankhuma, J. Heard Mr. C. Lalramzauva, learned senior counsel for the petitioner. Also heard Mr. Rosangzuala Ralte, Government Advocates for respondent No. 1 to 4 as well as Mr. Samuel Vanlalhriata Chhangte, learned counsel for the respondent No.5. 2. The petitioner has filed the present writ petition due to the rejection of his bid for supply of Energy Densed Fortified Food submitted in pursuance to the Short Tender Notice dated 16.11.2017. 3. The petitioner's case in brief is that a short tender notice (STN) dated 16.11.2017 had been issued by the Director of Social Welfare Department, notifying eligible manufacturers for supply of Energy Densed Fortifed Foods. The bids were to be considered on the basis of a 2 (two) bid system i.e. Technical Bid and Financial Bid. 4 (four) Bidders submitted their tender in response to the STN dated 16.1.2017. The Petitioner's technical bid was disqualified on the ground that the petitioner had submitted a list of factory equipments instead of a list of quality control laboratory equipments, as had been stipulated by Clause a A.8 of the STN dated 16.01.2017. The Technical Bids of two other tenderers, excluding the respondent No. 5, were also disqualified as they did not submit their list of technical personnel as per Clause A.8. Clause A.8 of the STN dated 16.01.2017 states as follows:- "The bidder should have in house quality control facilities, its own quality control laboratories equipped with appropriate laboratory facilities infrastructure for testing the parameters prescribed in Food Safety and Standard Act and as per specification of the tender. Bidder must submit list of equipments, list of technically qualified personnel engaged in quality control." 4. The petitioner's counsel submits that Clause A.8 of the STN dated 15.01.2017 is vague and ambiguous. He submits that a reading of the said Clause shows that the same can have different interpretations and that it also includes calling for a list of factory Equipments. 5. The petitioner's counsel submits that the petitioner had submitted a list of factory equipments as required by Clause A.8 and in Serial No. 23 and 24 of the list of factory equipments, the petitioner had specifically stated that he had a fully equipped and operational chemical as well as microbiological laboratory system. 6. 5. The petitioner's counsel submits that the petitioner had submitted a list of factory equipments as required by Clause A.8 and in Serial No. 23 and 24 of the list of factory equipments, the petitioner had specifically stated that he had a fully equipped and operational chemical as well as microbiological laboratory system. 6. The petitioner's counsel submits that even it is assumed that the list of equipments submitted by the petitioner is not in conformity with Clause A.8, the contents of Serial No. 23 and 24 of the list of equipments submitted by the petitioner implies that the petitioner has got all the necessary quality control laboratory equipments/facilities. 7. The petitioner's counsel submits that as there remained only one valid bidder (respondent No. 5), after opening of the Technical Bids of the 4 (four) tenderers and in view of the fact that only one advertisement had been issued with respect to the supply of Energy Densed Fortified Food for the year 2017, the State respondent could not have opened the Financial Bid of the lone remaining bidder, i.e. the respondent No. 5, as it was in violation of Clause 17 of the O.M dated 14.03.2013, issued by the Finance Department , Government of Mizoram. Clause 17 of the O.M dated 14.03.2013 states as follows:- "17. For consideration of the SPAB/DPAB, the Department shall prepare a comparative statement of all the quotations, whether valid or invalid. There should be at least 3 (three) quotations for 1 (one) item. However, if there are only one or two valid quotations even after the quotation had been floated twice, decision to consider such quotation(s) will be at the discretion of the Board." 8. The petitioner's counsel also submits that Clause 3 of the STN dated 16.01.2017 required the manufacturers to have fully automated functional manufacturing plants with technical expertise in preparation of blended food, ensuring zero contamination and Certificates were to be enclosed. 9. The petitioner's counsel submits that certificates ensuring zero contamination of manufactured foods was enclosed in the petitioners tender and the same was in compliance with the requirement of submitting a list of Quality Control Laboratory Equipments, as per Clause A.8. 10. 9. The petitioner's counsel submits that certificates ensuring zero contamination of manufactured foods was enclosed in the petitioners tender and the same was in compliance with the requirement of submitting a list of Quality Control Laboratory Equipments, as per Clause A.8. 10. The petitioner's counsel also submits that the CVC guidelines requires that the terms and conditions of an advertisement should be ambiguous and specific and as the contents of Clause A.8 was ambiguous and vague, the petitioners could not be faulted for not submitting a list of Quality Control Laboratory Equipments. 11. The petitioner's counsel thus prays that the decision of the State respondents in rejecting the Technical Bid of the petitioner should be set aside and he should be allowed to participate in the tender process. 12. Mr. C. Lalramzauva, learned senior counsel has in support of his submission relied upon the judgments of the Apex court, in the case of Commissioner of Police, Bombay v. Gordhandas Bhanji reported in AIR 1952 SC 16 (19), in the case of Rashmi Metaliks Limited and Anr v. Kolkata Metropolitan Development Authority and Ors reported in (2013) 10 SCC 95 and in the case of Maa Binda Express Carrier and Anr v. North East Frontier Railway and Ors reported in (2014) 3 SCC 760 . 13. Mr. Rosangzuala Ralte, learned Government Advocate submits that a reading of Clause A.8 of the short tender notice goes to show that the tenderers have to submit their list of Laboratory Equipments with regard to its quality control facility. He submits that all the other tenderers, except for the petitioners, submitted their list of quality control laboratory facility. The petitioner on the other hand submitted a list of factory equipments and he did not submit a list of quality control laboratory equipments. 14. The Government counsel thus submits that the disqualification of the petitioner's technical bid suffers from no infirmity. The learned State counsel also submits besides the petitioners not submitting his list of quality control laboratory equipments, the petitioner did not submit his Annual Turnover Statement as was stipulated in Clause A 1 (vii). He also submits that the petitioner did not submit his proven track record of supplying at least 50% of the intended procurement of Energy Densed Fortified Foods under various Government Schemes, during the last 3 years to the State Government, thereby violating Clause A1-(iv) of the STN dated 16.01.2017. He also submits that the petitioner did not submit his proven track record of supplying at least 50% of the intended procurement of Energy Densed Fortified Foods under various Government Schemes, during the last 3 years to the State Government, thereby violating Clause A1-(iv) of the STN dated 16.01.2017. The learned Government Counsel also submits that prior to the issuance of the STN dated 16.01.2017, an earlier advertisement dated 18.08.2016 had been issued. Tenderers had also submitted their quotations for the same. However, the said advertisement dated 18.08.2016 was recalled due to the absence of Clause A.8. He submits that only after insertion of clause A.8 has the present STN dated 16.01.2017 been issued. 15. The State government counsel also submits that pregnant women and lactating mothers require supply of Energy Densed Fortified Foods and in view of the proceedings of this case the supply of the same has been delayed, thereby causing irreparable harm to the general public. The learned Government Advocate also submits that the respondent No. 5 has been issued the supply order on 21.03.2017 for supply of Energy Densed Fortified Foods at the rate of 51.83 per kg F.O.R , Aizawl and at the rate of 53.63 per kg F.O.R, Lunglei. 16. The Government counsel submits that on the other hand, the State of Manipur have given supply orders for the same product on 07.04.2016 at the rate of Rs. 139.50 per kg F.O.R, Imphal. He thus submits that the rate accepted by the Government for supply of the Food Supplement is reasonable. 17. The respondent counsel submits that due to the reasons stated above, the writ petition should be dismissed. 18. I have heard the learned counsels for the parties. 19. The very fact that the earlier advertisement dated 18.08.2016 had been withdrawn and the present advertisement dated 16.1.2017 had been issued with Clause A-8 goes to show that Clause A-8 is an essential condition of the contract and that the said clause is an essential condition of eligibility, which cannot be deviated from. 20. A careful reading of Clause A-8 goes to show that the bidder has to submit his list of equipments and list of technical qualified personnel pertaining to quality control. The last sentence of Clause A-8 reflects the fact that the 2 (two) lists to be submitted have to be in relation to quality control. 20. A careful reading of Clause A-8 goes to show that the bidder has to submit his list of equipments and list of technical qualified personnel pertaining to quality control. The last sentence of Clause A-8 reflects the fact that the 2 (two) lists to be submitted have to be in relation to quality control. The first line of the Clause also states that the bidder should have in-house quality control facilities. Thus, the entire clause gives the inescapable conclusion that what is required of the bidder is to submit a list of equipments with regard to quality control and list of technical qualified persons engaged in quality control. The petitioner not having submitted his list of quality control equipments, has violated one of the essential conditions of eligibility and in that respect, the State respondents cannot be faulted for insisting upon the strict literal compliance of Clause A-8. Thus, the petitioner's counsel's submission that the contents of serial No. 23 & 24 of the list of equipments submitted by the petitioner, which states that the petitioner had got "fully equipped and operational chemical/microbiological laboratory" cannot be accepted by this Court. There is a huge difference between giving a list of quality control equipments and simply stating that a bidder has a fully equipped and operational laboratory. The Clause having asked for a list of equipments, strict literal compliance of the condition is an essential condition of eligibility. 21. Clause 4 of the STN dated 16.01.2017 states as follows: "4. The bidder should have the capability to supply the food item in strict compliance to the guidelines issued by Ministry of Women and Child Development and the judgement of the Hon'ble Supreme Court in the Shagun Mahila Case to ensure quality and hygiene standards of micronutrient fortified energy densed food". This further fortifies the fact that Clause A-8 is an essential condition of eligibility. 22. This further fortifies the fact that Clause A-8 is an essential condition of eligibility. 22. A perusal of the comparative chart made by the State respondents in respect of all the 4 (four) bidders goes to show that not only did the petitioner not submit his list of quality control equipments, but also did not submit documents to prove his experience in supplying the item earlier to the Government, as required under Clause A 1-(iv), wherein it has been stated as follows: "(iv) The bidder should have a proven track record of supplying at least 50% of what is intended to be procured (approx 138000 kgs of Energy densed fortified food manufactured and supplied under various Government Schemes during the last three years to Central/State Government). Copies of supply order and other proof should be enclosed". 23. In the case of Commissioner of Police, Bombay v. Gordhandas Bhanji (Supra) and Rashmi Metaliks Limited and Anr v. Kolkata Metropolitan Development Authority and Ors (Supra), the Apex Court has held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of an affidavit or otherwise. This is the law laid down by the Apex Court. The 2 (two) cases mentioned above have no applicability in the present case. 24. In the case of Maa Binda Express Carrier and Another v. North East Frontier Railway and Others(Supra), the Apex Court in para 11 has stated as follows: "11. In Michigan Rubber (India) Ltd. v. State of Karnataka the legal position on the subject was summed up after a comprehensive review and principles of law applicable to the process for judicial review identified in the following words: "23. From the above decisions, the following principles emerge: (a) the basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities; (b) fixation of a value of the tender is entirely within the purview of the executive and courts hardly have any role to play in this process except for striking down such action of the executive as is proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited; (c) in the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted; (d) certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and (e) if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a fundamental right to carry on business with the Government. 20. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: 'the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached'? and (ii) Whether the public interest is affected? If the answers to the above questions are in the negative, then there should be no interference under Article 226." 25. This Court, on reading Clause A-8, finds that the petitioner has not followed the essential condition of eligibility as he has not furnished his list of equipments pertaining to quality control. This Court also finds that Clause A-8 is not vague and ambiguous. This Court, on reading Clause A-8, finds that the petitioner has not followed the essential condition of eligibility as he has not furnished his list of equipments pertaining to quality control. This Court also finds that Clause A-8 is not vague and ambiguous. Assuming that the said Clause was vague and ambiguous, the petitioner had the time to ask for clarification from the State respondents, which he has not done. 26. Besides the above, the petitioner has made a challenge in this Writ petition only in the context of Clause A-8. He has not made any challenge/averment with regard to the disqualification of his bid for violation of Clause A-1(iv), by which the petitioner had to prove he had a proven track record of supplying at least 50% of the item to be procured by the Government, by way of the present advertisement. 27. The petitioner having not made any challenge to the rejection of his bid on the basis of Clause A-1(iv), which is reflected in the comparative statement (annexed in the affidavit-in-opposition submitted by the State respondents), this Court is not inclined to exercise its discretion, especially when the petitioner has not been able to show that the process adopted or decision made by the State respondents is malafide, arbitrary or irrational. There is nothing to show that public interest has been affected adversely in awarding of the contract to the respondent No. 5. 28. With regard to the petitioner's counsel's contention that the Clause 17 of the O.M dated 14/03/2013 has been violated, this Court finds that the said Clause does not bar the taking of a decision by the SPAB/DPAB even if a quotation has been floated only once. There is no bar for the respondents to consider the only/ one valid quotationer, even if only one advertisement is issued, as per Clause 17 of the O.M dated 14/03/2013, as there were at least four quotationers to the STN dated 16-11-2017. 29. In the present case, the petitioner not having complied with Clause A-8 and Clause A 1-(iv), there is no infirmity with the State respondents rejecting the technical bid of the petitioner. As such, there was no violation of any of the petitioner's enforceable right. 29. In the present case, the petitioner not having complied with Clause A-8 and Clause A 1-(iv), there is no infirmity with the State respondents rejecting the technical bid of the petitioner. As such, there was no violation of any of the petitioner's enforceable right. As Article 226 of the Constitution pertains to the power of the High Court to issue directions, order or writs for enforcement of any of the rights of the citizens, which in this particular case is lacking on the part of the petitioner, this Court is of the view that no interference of this Court is called for. 30. In view of the above reasons, this Court does not find any merit in the present Writ petition and accordingly the same is dismissed.