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2018 DIGILAW 1043 (JK)

Unique Trading Company v. State of J&K

2018-12-28

RAJESH BINDAL

body2018
JUDGMENT : RAJESH BINDAL, J. 1. The petitioner has filed the present petition for quashing of impugned order bearing endorsement no. SMD/TCDS/2018/18946-55 dated 6.9.2018 issued by respondent no. 2 for the supply of Soya refined oil with Vitamin A&D in favour of M/s. N.E. Enterprises-respondent No. 14. 2. Mr. Jehangir Iqbal Ganai, learned senior counsel for the petitioner submitted that the Government of Jammu and Kashmir invited e-tenders for procurement of Soya refined oil (with vitamin A and D) of 15 litres tin pack with tentative quantity of 18,000 tins. The e-tender was issued on 02.8.2018. As per the procedure prescribed in the tender document, the bidder had to furnish the bid in two parts, namely technical bid and financial bid. With the technical bid, besides other documents, scanned copy of analytical report from Government approved laboratory, indicating the name of the brand of the item, was also to be annexed. The samples of the product to be supplied were also to be deposited. The petitioner submitted his bid along with the sample analysis report from Government approved laboratory. The petitioner was found to be technically qualified. Total five bidders qualified. The financial bids were opened. The petitioner was at L-1 in the bid, while the respondent no. 14, NE Enterprises, was at L-3. Despite the fact that the petitioner was found to be fulfilling the basic requirements to be eligible to participate in the financial bid, still the tender was not allotted to him though he had offered the minimum rates. The tender was allotted to respondent no. 14 @ Rs. 1466/- per tin though the price initially offered by him was Rs. 1476/-. 3. Referring to judgment of Hon'ble Supreme Court in Maa Binda Express Carrier and Anr. v. Northeast Frontier Railway and others, 2014 (3) SCC 760 , learned senior counsel for the petitioner submitted that this court can always exercise its powers of judicial review in a contractual matter, if the state has not acted bona fide and in public interest. As a result of award of tender to respondent No. 14, the state will have to suffer of more than Rs. 10 lakhs without any justification, especially when the quality of product to be supplied by both the parties is same. 4. Learned state counsel submitted that the power of judicial review cannot be invoked in the present case. As a result of award of tender to respondent No. 14, the state will have to suffer of more than Rs. 10 lakhs without any justification, especially when the quality of product to be supplied by both the parties is same. 4. Learned state counsel submitted that the power of judicial review cannot be invoked in the present case. He relied upon a judgment of this court passed in OWP No. 1604/2018 Wani Brothers and Anr. v. State of J&K and Ors. decided on 30.11.2018. He further submitted that the reason as to why the petitioner has not been allotted the tender has been mentioned in reply to para 7 of the petition. It is submitted that the shelf life of the oil to be supplied by the petitioner was merely six months whereas the item to be supplied by L-3 was branded. Negotiations were also held with respondent no. 14 and he was persuaded to reduce the price from Rs. 1476/- to Rs. 1466/- per tin (15 litres). Money is not the only consideration. 5. On the other hand, learned counsel for private respondent submitted that there is no denial of the fact that the petitioner was L-1. However, he submitted that there was misquoting of brand by the petitioner. Merely because the petitioner was L-1 he cannot claim allotment of the tender as a matter of right as condition no. 14 in the terms and conditions attached to the tender document clearly provides that the State Level Purchase Committee (hereinafter referred to as 'the committee') reserves the right to accept or reject any tender or part thereof, without assigning any reason and that the Committee shall not be bound to accept the lowest tendered rates. Further, the committee reserves the right to accept or approve even higher rates on the basis of quality of the product/goods to be supplied. It is submitted that the goods to be supplied by the respondent no. 14 were found to be of better quality as compared to that of the petitioner. It was a case where the health of the children, pregnant ladies and nursing mothers, is to be taken care of. He placed reliance upon the judgment of the High Court of Punjab and Haryana in M/S S.C.T. Limited and Anr. v. Punjab State Electricity Board and others 2005 (3) PLR 728. It was a case where the health of the children, pregnant ladies and nursing mothers, is to be taken care of. He placed reliance upon the judgment of the High Court of Punjab and Haryana in M/S S.C.T. Limited and Anr. v. Punjab State Electricity Board and others 2005 (3) PLR 728. He further submitted that even if a tenderer is L-1, he only gets right of consideration. This can be one parameter but not the sole one for allotment of the tender. The competent authority has to apply its mind and then award the tender. It was further submitted that prior to filing of the writ petition, even the supply-order had been issued in favour of the respondent no, 14. However, the petitioner has not assailed the same. 6. It was further contended that in terms of communication dated 20.2.2018 from Controller of Drugs and Food Control Organisation, J&K, Jammu, only fortified food articles are to be procured under ICDS scheme. He had referred to a D.O. dated 10.7.2017 from Ministry of Women & Child Development on that issue. The list of fortified products in open market was annexed with the communication. He further submitted that the incremental cost of fortification is merely 10-12 paisa per meal per child, which was negligible. In the list of items the product of the respondent no. 14 was mentioned, whereas it does not contain the product manufactured by the petitioner. 7. In response, learned senior counsel for the petitioner submitted that the pleas raised by the respondents are totally misconceived. A fortified food item should contain vitamin 'A' & 'D'. The analysis report submitted by the petitioner is evident of the fact that the product offered by the petitioner in the brand name "suman" contained vitamin 'A' & 'D'. He further submitted that reference to communication of Controller of Drugs and Food Control Organisation dated 20.2.2018, regarding the product to be fortified has not been made basis by the State for the purpose of rejection of the tender of the petitioner. It is brainchild of respondent no. 14 only. The only plea raised by the State is that the product has shelf life of six months and it is not branded. This cannot be a valid reason for rejection of the tender of the petitioner. In case the respondent no. 14 could be called for negotiations, why not the petitioner. It is brainchild of respondent no. 14 only. The only plea raised by the State is that the product has shelf life of six months and it is not branded. This cannot be a valid reason for rejection of the tender of the petitioner. In case the respondent no. 14 could be called for negotiations, why not the petitioner. He could also have participated in the process and so the other eligible tenderers whose technical bids were accepted. Even L-2 was not considered though the price offered by him was less than respondent no. 14 (L-3). He further submitted that the petitioner had no knowledge of the supply order issued in favour of respondent no. 14, hence, could not challenge the same. However, the same is inconsequential as the order accepting the tender of respondent no. 14 has been challenged. It was further argued that none of the tenderer was the manufacturer of the product. All are traders, hence, even the petitioner could have offered any other product, may be at a lesser price, in case opportunity was given. 8. Heard learned counsel for the parties and perused the paper book. 9. The facts as are evident from the paper book are that, the Government of Jammu and Kashmir issued a notice inviting tenders for procurement of nutritional items for ICDS projects of Kashmir Division except Leh and Kargil for the year 2018-19. One of the items to be procured was Soya refined oil (with vitamin A & D). The product was specified to be in packing of 15 litres tin to conform to the standards of Food Safety Act. Tentative quantity was 18,000 tins. The tender was to be submitted in two parts, namely technical bid and financial bid. The technical bid was to be opened on 10.8.2018 and the financial bid of only those tenderes was to be opened who qualified the technical bid stage. With the technical bid, besides other documents, the bidder was required to annex a scanned copy of the analytical report of a Government approved laboratory indicating the name of the brand of the item tendered besides the contents of the product. 10. With the technical bid, besides other documents, the bidder was required to annex a scanned copy of the analytical report of a Government approved laboratory indicating the name of the brand of the item tendered besides the contents of the product. 10. The bidder was required to deposit the sealed samples of 5 litre packs or one litre/5 kg pack or five packs of one kg each, duly signed by the bidder accompanied with analytical test report from the government approved laboratory with respect to nutritional value of the product offered. The department could send the samples for testing to ensure that the goods offered conformed to the food safety standards. The samples without depicting the nutritional values and other information were liable to be rejected. Every supply of the item is to accompany fresh analytical report. Without that the supply was not to be accepted. The department was also at liberty to test check the supplies. The committee had the right to accept or reject any tender without assigning any reason. Further it was not mandatory to accept the lowest tendered rate. Successful bidder was not to be allowed to sublet the contract or a part thereof. 11. After analysis of the technical bid, five bidders qualified, namely-Gokul Agri International Ltd., M/s. Parvaiz Ahmad Aijaz Ahmad, M/s. Unique Trading Co, NCCF of India Ltd., Srinagar and NE Enterprises. The petitioner was L-1 whereas the respondent no. 14 was L-3. The supply order was issued in favour of respondent no. 14 vide communication dated 06.09.2018 at a price of Rs. 1466/- per tin (15 litres). It is for Soya refined oil of Nature Fresh brand, 15 litre tin pack. Even order was also placed on him for supply of the part of the material on 18.09.2018. 12. Before the arguments of learned counsel for the parties are analysed on merits, it would be appropriate to refer to the provision of Food Safety and Standards (Fortification of Foods) Regulations, 2017 (hereinafter referred to as 'the Regulations'). The Regulations have been framed under the Food Safety and Standards Act, 2006 (for short referred to as 'the Act'). The term "fortification" has been defined in Regulation's 2 (c) to mean deliberately increasing the content of essential micronutrients in a food so as to improve the nutritional quality of food and to provide public health benefit with minimal risk to health. The term "fortification" has been defined in Regulation's 2 (c) to mean deliberately increasing the content of essential micronutrients in a food so as to improve the nutritional quality of food and to provide public health benefit with minimal risk to health. 'Fortified food' defined in Regulations 2 (e) means food that has undergone the process of fortification as per the provisions of the Regulations. General principles for food fortification have been provided for in Regulation 3. The Regulation 4 provides that any manufacturer who fortifies food shall ensure that the level of micro-nutrients in such fortified food does not fall below the minimum level specified in the Schedule attached to the Regulation. Even the maximum limits are not to be exceeded. In Schedule-I, attached to the Regulations standards for fortification of different food items and the minimum level of the nutrients to be added therein, have been provided. 13. Office of the Controller of Drugs and Food Control Organisation J&K had issued a letter to the Mission Director ICDS, J&K, on 20.2.2018 on the subject of procurement of fortified food articles under ICDS scheme. The ICDS scheme was launched in the year 1975 to function as Integrated Child Development Scheme. It is unique and only childhood development programme aimed at addressing the mal-functioning, health and also development needs of young children, pregnant ladies and nursing mothers. The scheme is sponsored by Ministry of Women and Child Development. Vide aforesaid communication, D.O. letter dated 10.7.2017 from Ministry of Women and Child Development was brought to the notice of Mission Director ICDS. The aforesaid communication directed all the States to procure the fortified items under ICDS scheme. Even a list of the items along with brand names was also enclosed. The letter dated 20.2.2018 farther stipulated that the standard of the fortified food items are prescribed in the Regulations. The incremental cost of fortification of five commodities of ICDS was estimated at 10-12 paisa per meal per child. The list of fortified products available in the market included the products manufactured by Cargill India Private Limited, the manufacturer of the brand 'Nature Fresh' Soya refined oil. 14. Coming the facts of the case, there is no dispute that the petitioner submitted his bid along with analytical report from a government approved test house stating therein that vitamin 'A' and 'D' are present in the Soya refined oil of 'Suman' brand name. 14. Coming the facts of the case, there is no dispute that the petitioner submitted his bid along with analytical report from a government approved test house stating therein that vitamin 'A' and 'D' are present in the Soya refined oil of 'Suman' brand name. The testing laboratory in the specifications against vitamin 'A' & 'D' merely mentioned that these shall be present but without specifying the minimum standard. The petitioner was found to be technically qualified along with four other bidders. The financial bids were opened. The petitioner was found to be at L-1. The rate offered by him was Rs. 1397/- per tin of 15 litres. It has also come on record that the shelf life of the oil offered by the petitioner was merely six months. The committee, after considering the products being offered by the successful technical bidders, came to the conclusion that the 'Nature Fresh' brand of Soya refined oil would be the most appropriate to be purchased keeping in view minor difference in the prices offered by first three bidders. After the product was approved, on negotiations respondent No. 14 even reduced the rate from Rs. 1476/- to Rs. 1466/- per tin of 15 litres. The Soya refined oil offered by respondent no. 14 is stated to be fortified containing minimum required levels of vitamin 'A' & 'D'. The Ministry of Women and Child Development which is sponsoring the scheme had also impressed upon the authorities supervising the ICDS scheme to go for fortified food items even if that costs little more. The idea is to give more nutrition to the growing children, pregnant ladies and nursing mothers. The aforesaid consideration for awarding tender to respondent no. 14 cannot be said to be an arbitrary exercise of power which requires interference by this court in writ jurisdiction. Even in terms and conditions of the tender document such a right is reserved with the Committee whereby higher rate could be offered to a tenderer on the basis of quality of the product. 15. For the reasons mentioned, I do not find any merit in the present writ petition. The same is dismissed.